The company has secured 10 exploration claims in Zimbabwe and plans to start exploration in the new year, Bennett said.
The US Geological Survey in 2002 identified one of the sites, Kapfrugwa, as potentially containing the cerium and lanthanum rare earth elements, he said. The licenses will be held 100% by Rainbow’s Zimbabwe subsidiary.
Rainbow Rare Earths began production of rare earth concentrates in the fourth quarter of 2017 and has a ten-year distribution and offtake agreement with German industrial engineer Thyssenkrupp.
- The company raised £4m ($5.1m) in a share placing in London in July.
Bennett took over as CEO at the end of August.
In October, Bennett and Chairman Adonis Pouroulis spent about 160,000 pounds buying shares in the company. Between them, they hold about 27.5% of the stock. Bennett says he was willing to buy the shares having understood the “tremendous potential” of the company.
Gakara, originally discovered by a Belgian company in the 1930s, is Africa’s only working rare earths mine.
The mine, in which Burundi has a 10% stake, is about 45 minutes away from Burundi’s capital Bujumbura by tarred road, Bennett says, meaning that the company does not have any infrastructure problems.
The resource is weighted heavily towards magnet rare earths, which are used in motors, generators, wind turbines, and electric vehicles.
Bennett estimates that Gakara deposit has the potential to produce 10,000 tonnes of concentrated rare earth per year for a minimum of 10 years.
- Demand for its rare earths “remains strong”, the company said at the end of October.
- Gakara contains very low levels of radioactive materials, making material easier to ship, the company says.
- Grades of between 54% and 58% are among the highest in the world, Bennett says, pointing to the low mining costs as the rare earths at Gakara lie near the surface.
Bennett wrote in the company’s annual report to end June that a “conventional approach” for a new mining project had not been adopted at Gakara. Such an approach, he said, will be in place by the end of the first quarter of 2020.
He also wrote that the company would need new funding over the coming year, but declined to comment on how much would be needed, or when.
- Initial exploration costs in Zimbabwe will be minimal, he said.
- The US-China trade war, Bennett said, “highlights the strategic importance of rare earths and shows that they are in short supply.” China controls about 85% of the global market.
Bottom Line: Rainbow Rare Earths may be set to extend its resource base – but potential investors will want clarity on financing needs before taking the plunge.