Rainbow Rare Earths (LSE:RBW) has released a maiden mineral resource estimate of over 1.2 million tonnes of ore for its Gakara rare earths mine in Burundi, East Africa.
From the mineral resource estimate, Rainbow has established that three areas of Gakara — called Gasagwe, Murambi South and Gomvyi Centre — are very high-grade vein stockwork deposits that contain 12,491 tonnes of the mineral resource at a total rare earth oxide (TREO) grade of 55 percent.
Alongside those three deposits at Gakara is Kiyenzi, a very large yet lower-grade mineralized deposit that contributes almost 1.2 million tonnes at an average grade of 2.2 percent TREO.
According to Rainbow CEO Martin Eales, the first three deposits alone will provide over two years of head feed for the project’s planned ramp up to 5,000 tonnes of concentrate.
“These results will provide us with confidence in our ability to obtain near and medium-term sources of ore, but more importantly point to the existence of a truly unique deposit, which we will continue to explore in the future,” Earle said in a statement on Monday (December 17).
The resource estimate is based on four of the 28 mineralized prospects across Rainbow’s mining license for Gakara, which is giving the company faith that future exploration will be fruitful.
Rainbow began rare earths concentrate production at Gakara in 2017’s fourth quarter, and acquired a 10-year distribution and offtake agreement with Thyssenkrupp Materials Trading in 2015 for at least 5,000 tonnes per year of concentrate from the project.
China has long been the world’s most dominant producer of rare earths by far, and many companies are interested in establishing secure supply from other nations. Rainbow is currently one of companies few operating outside the Asian nation.
With the completion of the resource estimate, Rainbow is planning to begin “exploitation” of the Gomvyi Center deposit in 2019. The company will also be exploiting the Kiyenzi deposit in 2019, as it has already found encouraging yields and recoveries through test processing ore from the prospect.
Rainbow’s share price closed Monday at GBP 5.20, up 6.67 percent.
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Securities Disclosure: I, Olivia Da Silva, hold no direct investment interest in any company mentioned in this article.