AMN - BURUNDI – Gakara rare earth production on track

Rainbow Rare Earths continues to ramp-up towards full production at the Gakara project in Burundi. During the June quarter, the company sold 350 tonnes of rare earth concentrate from Gakara, up from 125 tonnes in the previous quarter.

All sales were through thyssenkrupp Materials Trading (TK), under the terms of the company's offtake agreement, and were delivered to two cornerstone customers.

Initial feedback from customers is extremely positive and Rainbow is confident that there is strong demand for all forecast production.

Gakara is one of the highest grade rare earth element mining projects globally, with an estimated in-situ grade of 47-67% Total Rare Earth Oxide (TREO).

There were 275 tonnes of concentrate produced and exported in the quarter, an increase of 10% compared to the previous quarter and largely as expected.

Both mine and concentrate production were impacted slightly in the quarter. This was partly due to heavier than average rainfall in April which at times diverted mining fleet and manpower to repair local roads to assist transportation access for Rainbow and the local population.

It was also partly the result of operating teams being temporarily stood down as a precautionary measure around the referendum in Burundi on May 17, 2018, which in fact proceeded without major incident.

Mining rates at Gasagwe improved significantly in June, following implementation of an upgraded mine plan and monthly concentrate production is now expected to increase by 50-100% above the levels achieved in the first six months of 2018.

Production costs increased slightly in the period to US$2,534 per tonne as a result of an increase in the size of the mining fleet, including certain items of rented equipment, and a lag in the production of concentrate tonnes following the increased rate of mining activity at Gasagwe.

Production costs per tonne are expected to fall considerably in subsequent quarters, as production increases to the target of 400 tonnes per month by the end of 2018.

Rainbow’s CEO Martin Eales said: "A 180% increase in tonnes of concentrate sold from the previous quarter is a clear indication that there is strong demand for our Gakara concentrate which is currently the only rare earths production from Africa.

"Having implemented an upgraded mine plan at Gasagwe towards the end of the quarter we saw mining rates improve significantly in June, and we anticipate seeing an increase in concentrate production by 50-100% on a monthly basis over the next quarter. As a result, production costs will fall considerably in the next six months as we approach our monthly target of 400 tonnes by the end of the year.

"This has been a highly active quarter on the ground, evidenced by our expansion initiatives.

“Phase 1 of our maiden exploration drill campaign was successfully completed during the period with exciting results, and with phase 2 already underway, we look forward to delivering a code-compliant resource by the end of the year.

“Additionally, we are delighted to have advanced our second mining area, Murambi, which mirrors Gasagwe’s mineralogy and exceptionally high grades (48-60% TREO) with almost double the strike length, with a view to commencing mining operations in early Q4 2018.

"I am also proud to report that in June we reached the milestone of 1 million Lost Time Injury-free man hours since operations commenced at Gakara in March 2017 which is testament to our fantastic team on the ground."

www.rainbowrareearths.com