Rainbow Rare Earths Ltd. · LSE:RBW
Rainbow Rare Earths — Investor Presentation (April 2023)
25 slides from Rainbow Rare Earths's investor presentation, Apr 3, 2023
Slide 1: Driving Decarbonisation: Unlocking Secondary Sources of Rare Earths
RAINBOW RARE EARTHS DRIVING DECARBONISATION: UNLOCKING SECONDARY SOURCES OF RARE EARTHS 3 APRIL 2023
Slide 2: Disclaimer
DISCLAIMER These Presentation Materials are for information purposes only and must not be used or relied upon for the purpose of making any investment decision or engaging in any investment activity and should not be construed as, an offer for sale or subscription of, or solicitation of any offer to
Slide 3: Unique Investment Opportunity
RAINBOW RARE EARTHS UNIQUE INVESTMENT OPPORTUNITY PHALABORWA BASE CASE1 NPV10 US$627m CRITICAL MINERALS: Demand for rare earths (RE) will rise significantly to meet decarbonisation; urgent need for non China supply Investment opportunity IRR 40% STRATEGIC ASSET: Near-term RE production from a second
Slide 4: Strong Leadership Team
STRONG LEADERSHIP TEAM WITH TRACK RECORD THROUGH PROJECT DEVELOPMENT TO PRODUCTION EXPERIENCED MANAGEMENT AND TECHNICAL TEAM • CEO George Bennett established MDM Engineering which delivered multiple processing plants and feasibility studies under his tenure Phalaborwa NPV10 Strong leadership team •
Slide 5: Rare Earth Elements Essential for Global Decarbonisation
RARE EARTH ELEMENTS ESSENTIAL FOR GLOBAL DECARBONISATION CRITICAL BUILDING BLOCKS TO REACH NET ZERO • Rare earths (RE) are a group of 17 elements – Neodymium and Praseodymium (together NdPr), Dysprosium (Dy) and Terbium (Tb) are economically important and account for 95% of global consumption1 • Use
Slide 6: Accelerating Global Demand for Rare Earths: Offshore Wind
ACCELERATING GLOBAL DEMAND FOR RARE EARTHS A 3MW OFFSHORE WIND TURBINE REQUIRES ~2T OF PERMANENT MAGNETS1 OFFSHORE WIND POWER CAPACITY ADDITIONS (GW) 55GW of new off-shore wind in 2031 will require ~37kt of Offshore wind rare earth magnets turbine market is forecast to grow at ~21% per annum Appendi
Slide 7: Accelerating Global Demand for Rare Earths: EVs
ACCELERATING GLOBAL DEMAND FOR RARE EARTHS THE AVERAGE HYBRID OR EV USES 2-5KG OF RARE EARTH MAGNETS1 RISING GLOBAL EV SALES FORECASTS (MILLION UNITS) 44.6 million EVs in 2032 will require ~134kt of EV market is rare earth magnets2 expected to grow by 25% per annum 2026: expected from 2020 to 20321
Slide 8: Long Term Supply Deficit Expected for Rare Earths
LONG TERM SUPPLY DEFICIT EXPECTED FOR RARE EARTHS MAGNET RE SUPPLY WILL NEED TO GROW BY 8% PER ANNUM TO MATCH DEMAND FORECAST RARE EARTH SUPPLY DEFICIT / PHALABORWA PRICE1 26kt Rare earth 120 2026: expected Phalaborwa production 400 supply prices grew Steady state production of 1,848t magnet deficit
Slide 9: Creating a Responsible, Western, Independent Supply Chain
CREATING A RESPONSIBLE, WESTERN, INDEPENDENT SUPPLY CHAIN URGENCY MOUNTING TO MEET GROWING DEMAND SUPPLY DEFICIT IS LIKELY DUE TO TRADITIONAL RARE “THE MIDDLE EAST HAS OIL; EARTHS MINING CHALLENGES: CHINA HAS RARE EARTHS.” • Many development projects have complex challenges to overcome including low
Slide 10: Phalaborwa: Exciting, Near-Term Growth Opportunity
PHALABORWA: EXCITING, NEAR-TERM GROWTH OPPORTUNITY DELIVERY OF SEPARATED MAGNET RARE EARTH OXIDES ON SINGLE SITE FROM HISTORIC GYPSUM STACKS Total Resource1 of THE RESOURCE SITS AT SURFACE THEREBY 30.4 Mt at 0.44% TREO ELIMINATING TRADITIONAL MINING RISK • Project is largely permitted and positioned
Slide 11: Rainbow's Position in the Rare Earth Magnet Supply Chain
RAINBOW’S POSITION IN THE RARE EARTH MAGNET SUPPLY CHAIN UNDERLINES PHALABORWA’S UNIQUE ADVANTAGE Upstream Midstream Downstream Usually lengthy process with many stages Predominantly in China OXIDE TO END USE MAGNET COMPONENT MINING CONCENTRATION CRACKING SEPARATION METAL AND MANUFACTURE MANUFACTURE
Slide 12: Updated JORC Compliant Mineral Resource Estimate
UPDATED JORC COMPLIANT MINERAL RESOURCE ESTIMATE (MRE) PHALABORWA, SOUTH AFRICA UPDATED 20 MARCH 2023 Contribution of TREO by oxide Grade • Overall size of MRE % ppm confirmed at 30.4 Mt Tonnes TREO Nd Pr Dy Tb Other Th U comprising 0.44% TREO Mt % Stack A 20.2 0.43 23.4 5.6 1.0 0.3 69.7 50 2 • High
Slide 13: K-Tech Patented Separation Technology
K-TECH PATENTED SEPARATION TECHNOLOGY CONTINUOUS ION EXCHANGE (CIX) AND CONTINUOUS ION CHROMATOGRAPHY (CIC) RAINBOW HAS ACCESS TO K-TECH’S CIX AND CIC TECHNOLOGY FOR RECOVERY OF SEPARATED RARE EARTH OXIDES • Replaces traditional solvent extraction (SX) technology, which CIX/CIC technology uses toxic
Slide 14: Rare Earth Project Comparison
PHALBAORWA EST. EBITDA MARGIN OF 75% BASED ON CONSERVATIVE PRICING MUCH HIGHER GRADE THAN TYPICAL IONIC CLAY RARE EARTH PROJECTS WITH LOW LEVELS OF RADIOACTIVITY Project Style Owner TREO3 NdPr4 In-situ U5 ppm Th6 ppm % ppm REO US$/t1 Rare Earth Project Comparison Phalaborwa Gypsum stacks Rainbow Rar
Slide 15: Global Opportunity to Recover Rare Earths from Phosphoric Acid Production
GLOBAL OPPORTUNITY TO RECOVER RARE EARTHS FROM PHOSPHORIC ACID PRODUCTION LEVERAGING IP AND PORTFOLIO FOR LONG TERM GROWTH STRATEGIC FOCUS ON RECOVERING RARE GLOBAL PHOSPHATE PRODUCTION, MT EARTH OXIDES FROM SECONDARY USA, 22 SOURCES TO SUPPORT GLOBAL Africa share of global RoW, 31.5 DECARBONISATION
Slide 16: Responsible Production of Rare Earths
RESPONSIBLE PRODUCTION OF RARE EARTHS INTEGRATING STRONG ENVIRONMENTAL AND SOCIAL PRACTICES IN PHALABORWA’S DEVELOPMENT FOUNDED ON THE PRINCIPLES OF CIRCULARITY; RECOVERING RARE CREATING SOCIAL EARTHS FROM SECONDARY SOURCE VALUE BROWNFIELD REHABILITATION RECYCLING COMMUNITY Responsible production •
Slide 17: Strong Progress to Date
STRONG PROGRESS TO DATE DE-RISKS PHALABORWA PROJECT; UNLOCKS VALUE Q4 2022 Q1 2023 DEFINITIVE PRODUCTION TEAM PEA RESOURCE PILOT PERMITTING FEASIBILITY EXPECTED Progress and next steps STRENGTHENED PUBLISHED UPDATE PLANT UPDATED STUDY 20261 STRONG PROGRESS NEXT STEPS SUPPORTED BY POSITIVE PEA • PEA
Slide 18: Why Rainbow?
WHY RAINBOW? DRIVING VALUE FROM STRATEGIC SECONDARY SOURCES OF RARE EARTHS PHALABORWA UPSIDE FORECAST NPV10 US$1.0bn IRR Summary 44% EBITDA US$310m Margin2 83% 1. Based on the long-term price forecasts received from Argus, with the first year of production assumed to occur in 2026 and 18 Rainbow Rar
Slide 19: Thank You
RAINBOW RARE EARTHS THANK YOU Contact us: INVESTOR RELATIONS Cathy Malins Tel: +44 7876 796 629 Email: cathym@rainbowrareearths.com www.rainbowrareearths.com
Slide 20: Experienced Board and Executive Management
EXPERIENCED BOARD AND EXECUTIVE MANAGEMENT ADONIS POUROULIS GEORGE BENNETT NON-EXECUTIVE CHAIRMAN CEO • Mining engineer: an entrepreneur whose expertise lies in the discovery, exploration • 25 years in finance and management, including as partner in stockbroking/advisory firms in SA and development
Slide 21: Key Shareholder Information
KEY SHAREHOLDER INFORMATION BOARD SHAREHOLDINGS AND MAJOR SHAREHOLDERS (>3%) INFORMATION AS AT 29 MARCH 2023 Shareholder Holding Ticker Market Market Share Shares in Brokers cap price issue Adonis Pouroulis 14.5% RBW.L LSE £50.0m 9.25p 526m BERENBERG George Bennett 6.8% Robert Kampf 5.5% Appendices
Slide 22: Phalaborwa Preliminary Economic Assessment
PHALABORWA PRELIMINARY ECONOMIC ASSESSMENT EXPECTED TO BE ONE OF THE LOWEST COST PRODUCER OF SEPARATED MAGNET RARE EARTH OXIDES STRONG ECONOMIC RETURNS FROM PEA BASE CASE1 YTD AVERAGE PRICES2 • October 2022 PEA demonstrated the low-cost nature of the Phalaborwa development NPV103 NPV103 • Base case
Slide 23: Strong Returns with Low Sensitivity to Costs
STRONG RETURNS WITH LOW SENSITIVITY TO COSTS IN ANY FORESEEABLE PRICING ENVIRONMENT • Sensitivity analyses demonstrate robust EBITDA operating • Minimal impact on NPV due to changes in operating costs; margins in all pricing sensitivity scenarios beneficial in inflationary environment • Strong suppl
Slide 24: Phalaborwa Block Flow Diagram
PHALABORWA BLOCK FLOW DIAGRAM UNIQUE PROCESS DEVELOPED BY RAINBOW AND K-TECH HYDRAULIC PRE-LEACH PRETREATMENT PRETREATMENT RARE EARTH RE LEACH NEW PG STACK RECLAMATION DEWATERING PROCESS DEWATERING LEACH DEWATERING Benign gypsum Appendices deposited IMPURITIES RAPID REMOVAL CONSOLIDATION on new dry
Slide 25: Gakara: High-Grade Rare Earth Mineral Concentrate
GAKARA: HIGH-GRADE RARE EARTH MINERAL CONCENTRATE FROM LARGE MINERALISED SYSTEM IN BURUNDI PRE-2020 • 39km2 mining permit hosting large scale mineralised system • Exploration target provides opportunity for 262,000 -375,000t of high-grade vein hosted mineralisation grading 7.0% - 12.0% TREO plus 252
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