Rainbow Rare Earths, the rare earths company with assets in South Africa and Burundi, today announces an amendment to the Agreement for Co-Development (the “Agreement”) of the 38.3Mt Phalaborwa Rare Earths Project (the “Project” or “Joint Venture”) with Bosveld Phosphates (Pty) Ltd (“Bosveld”).

When the Joint Venture was announced in November 2020, a mechanism was included in the Agreement to allow for Rainbow’s Joint Venture ownership to vary from 60% to 85%, dependent on results of the Pre-Feasibility Study. The amended agreement, signed on 18 January 2022, confirms Rainbow’s shareholding in the Joint Venture at 70%, with the remaining 30% held by Bosveld. This amendment removes any downside uncertainty concerning the potential to dilute the Company’s share within the Joint Venture, as well as assuring Rainbow’s material share in future revenue.

Technical work carried out to date has confirmed an Inferred Mineral Resource Estimate at Phalaborwa of 38.3 million tonnes at 0.43% total rare earth oxides (“TREOs”) contained within gypsum tailings stacked in unconsolidated dumps, derived from historic phosphate hard rock mining. High-value Neodymium (“Nd”) and Praseodymium (“Pr”) (together “NdPr”) oxide represent 29.1% of the total contained rare earth oxides, with economic Dysprosium and Terbium oxide credits enhancing the overall value of the rare earth basket contained in the stacks.

Metallurgical test work has confirmed that the phosphogypsum at Phalaborwa is amenable to direct leaching with acid to extract the contained rare earths. Utilising the technology exclusively licenced to the Company for Southern Africa from K-Technologies Inc. Rainbow plans to deliver separated rare earth oxides at the Phalaborwa site, allowing the full value of the contained rare earth oxides to be realised for the benefit of shareholders.

Rainbow Rare Earths CEO, George Bennett, commented:

“This amendment serves to underscore our belief in the significant potential of the Phalaborwa rare earths Project and removes any uncertainty surrounding the benefit derived by Rainbow by fixing our majority shareholding at 70%. We are therefore delighted to have been able to cement the terms of our Joint Venture with Bosveld and together remain enormously encouraged by test-work carried out  to date, which further underpin our confidence in achieving positive results from the Project.

Test work has indicated that the project has the capacity to be developed as a low capital, low operating cost asset with high yields, reaching producing stage on an accelerated timeline. This is due to the unique nature of the Project, with the rare earths contained in a ‘cracked’ chemical form in the phosphogypsum, requiring no significant costs associated with mining, crushing and grinding, or chemical cracking of the underlying rare earth minerals, which tend to form the majority of the cost base for traditional hard rock rare earth mining projects. The amendment reflects our confidence in the Project and is the next step in Rainbow’s overarching strategy to become a globally significant producer of NdPr and Rare Earth Elements.”