Rainbow Rare Earths (LSE:RBW) — Investor Update

0:01 Good morning, ladies and gentlemen, and welcome to the RAINBOW RARE EARTHS LIMITED Investor Presentation. Hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all of the questions submitted today and publish responses where it's appropriate to do so.

0:30 Before we begin, I would like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I'd now like to hand you over to CEO, George Bennett. Good morning, sir. Good morning, and welcome to 2023, and let's hope it's gonna be a fantastic year. I think it is gonna be a good year for all of us compared to last year, and RAINBOW certainly looks forward with what we've got on the cards for 2023.

0:57 Just the disclaimer, and I'm gonna go straight into our presentation about RAINBOW and why I think it's a unique investment opportunity. As the audience may or may not be aware, in the last quarter of last year, in October last year, we released our PEA on the Palabur flagship project that we have in RAINBOW, and these numbers are unsupported for a project of this nature and size. We've got a post tax NPV of $620 odd million, IRR of over 40%. EBITDA margin at spot pricing, I must stress, spot pricing, lots of rare studies coming out over the last year have been using forecast pricing to justify justify their returns. We had spot prices. We have an EBITDA for life of project of $195,000,000 per annum, a margin of 75 plus percent. And based on our CapEx, which is below $300,000,000 for this project, it's a payback of two years.

1:55 As I said, this is a very strategic asset. It's near term production compared to a Hard Rock Rare Earth project. We believe it's been derisked by the release of the PEA, and I must stress it was a very high level PEA. In other words, was closer to a feasibility study than a PEA. And the the those financial numbers confirm that. We're using a unique unique intellectual property developed with our partners, KTEC, in The US and Florida, which has been applied to other phospho gypsum projects around the world. These guys have got over twenty odd years of phospho gypsum IP. And we also believe we've got a pathway to growing demand for these magnet rare earths as they turned, being neodymium, prasidinium, terbium, and dysprosium with the pipeline of other projects, which I'll allude to later. And very importantly, we've got a very experienced team with a proven history of delivery.

2:53 If we have a look at the investment opportunity for our viewers, And as I said, you know, the RAINBOW market cap at the moment is around about $6,570,000,000 dollars, yet we've got a a NPV at $627,000,000, post tax NPV at spot pricing. And you've got to ask yourselves whether you think RAINBOW will be able to close that gap. You know, if we close that gap by 50%, it's a five bagger. If we close that gap all the way, it's a 10 bagger in the in in the in fund managers' terminology. Well, I believe we do have a team that can deliver that. If you look at myself, successfully sold a partner in the business. We sold to HSBC as my early stage of my career as investment banker, then successfully listed Chanticleer in London.

3:47 Then I started MDM Engineering out of a bankrupt engineering business with my technical director, Dave Dodd, the original dean MDM. And and we listed MDM in 2008 very successfully, paid a dividend every six months we were listed even during the two thousand and eight financial crisis subsequent years. And, basically, over that period, you know, Dave and and myself combined have done over a 100 feasibility studies. And in MDM engineering alone, we built 22 mine projects around the world, process plants, and Dave collectively has done over 80 around the world successfully designed and built. And I must stress that two of those mines, we did at MDM Engineering or process points. Did with gold and uranium mines. We'll be dealing with continuous ion exchange and materials of construction similar to what we see in this RARE EARTHS project and and some of the technology that we're using in this RARE EARTHS project. So I think we've got a very experienced team. Also, I have Chris Leroux, ex chief metallurgist at Goldfields.

4:53 He also worked for me at RAINBOW. He's been involved in two rare studies. We did an MDM engineering, the Loft Rare studies, and the peak resources rare studies. So we have Chris Chris' experience in uranium and rarest with us. And Ru joined us in the last quarter from Senate Engineering, and Senate were responsible for the bankable feasibility study for the Mukango project in Malawi, and Ru was the lead process engineer on that study. So we got a very experienced team with lots of rare earth experience and relevant experience through uranium, as I've mentioned. And then our chairman, Adonis Prullis, has successfully listed and developed a number of mining projects on the London and Toronto markets, got a long track record and strategic vision for growth. And then Pete Gardner, very importantly, our CFO, has been involved in a number of development projects, financing them, taking them through to production from a from a a financial aspect as well as been involved in the sale of Amara some years ago, a well known gold mining company. So as I said, I think we've got the right team and lots of junior miners out there will battle to find the track record, I believe, that we've got here.

6:08 Now talking about the market now, we all know that are critical in in in what we call permanent magnets. There are 17 elements, but only four of those elements are really critical. The two main ones are neodymium and presidinium, and to a lesser extent, dysprosium and terbium. They are regarded as permanent magnet rare earths. And in Petabore, we've got all four of these rare earth elements. They count for 95% of of global ROE consumption in terms of value. And permanent magnets are the most important rare earth permanent magnets are the most important components in wind turbines to enable them to have a very high output from from their their their motors. And then the electric cars, permanent magnets give the batteries further range because your motor is able to have greater output for less draw on your battery. So the less draw on your battery, the more range you've got for the same power output enabled by permanent magnets. And every electric vehicle has between three to five kilograms of magnets in in their in their vehicles. And every three megawatt wind turbine has two tons of permanent magnets, and 60% of those permanent magnets are neodymium, per sedenium.

7:23 So very, very important. And if we're gonna achieve, as we know, what the world's looking to achieve, net zero in 2050 in terms of carbon emission, and that's only gonna be driven by wind turbines, electric vehicle penetration, and to a certain extent, as or to a large extent, solar as well. And and there are some components of of rare elements that are used in solar panels as well. So we see very, very strong demand, and this has been legislated globally or certainly by the the the major Western economies in the world. And we also see government policy being driven by COP twenty seven, and and this is gonna continue to create demand for these rare earth magnets. Basically, the as you can see from this chart here, forecast for the rare supply deficit, which is which is there's not one forecaster or analyst in the world right now who doesn't see a supply deficit of these rare earth magnets, and you can see the rainbow basket there in the red line, which is we had a peak in 2022, which is last year because there was extra wind turbine demand out of China, which required a massive amount of permanent magnets of neodymium and percidinium being installed in these wind turbines, and that's what you saw the price jump in 2022, came back as those wind turbines demand sort of tapered off. And now we see continued forecast growth for these elements, and you

8:56 see the price of our basket continuing to grow. If you have a look when in 2026, when we expect it to come into production, our our basket is still rising, and it rises all the way through to twenty twenty thirty sorry, to 2030, which is which where we see the price of our basket increasing quite significantly. But even at spot prices, we have a very, very robust project.

9:22 Unfortunately, China controls this market. Some of you may or may not know that in 1992, Deng Jiping of China made an announcement that The Middle East has oiled in China as rare earths. Already thirty years ago, the Chinese realized the strategic nature of rare earths, and they decided to try and dominate this market, which they successfully have done over the last thirty years. So we've got 60 odd percent of primary production being dominated by the Chinese and 90% of the downstream processing being dominated by the Chinese. And with the geopolitical forces at play, you know, Russia, we don't need to talk about. And even with the stress around China, the whole Western world realizes that these critical areas, we can't rely on Chinese supply chain, and they've been looking for independent supply chain outside of China. And the very, very few projects that are gonna be able to deliver independent supply chain outside outside of China, and we believe RAINBOW is one of those projects, especially the Parabola project.

10:25 There are long lead times for hard rock mining projects to come into production. If you if you look if you Google historically from discovery of of a of a asset to to production, you're looking at anywhere between twelve, fifteen to twenty five years for projects, and that's that's your typical timeline. Now we only secured the Paraboura project in November 2020. I started RAINBOW working on it in January 21. And so effectively, we've we've delivered a lot over the last two years from January 21 to where we were at the end of last year, and we're forecasting to be in production in 2026. So that's a very, very short time line. It's the nature of the project because we're not mining hard rock for our rare earths.

11:11 We're processing existing gypsum tailings, and this is why our time line is far shorter than other rare earth projects. And you can see from our numbers that we have the ability to sustain lower rare earth pricing and a lot of hard rock projects, to be honest with you, we don't believe of that ability to sustain lower pricing. As I said, most of them are using much higher forecast pricing and their feasibility studies to be able to justify their their so called returns on their projects. This is where RAINBOW sits in this rare earth supply chain and and rare earth manger supply chain. So upstream, you've got mining, which entails drilling and crushing sorry, hard rock mining with drilling and blasting, then you'll have to transport that to your process plant where you've got crushing, you've got milling, you've got flotation, then you produce a re earth concentrate.

12:04 That real earth concentrate then has to be floated and to and then it has to be cracked into into a chemical form. And once it's cracked in the chemical form, can it go into separation? And these are often done in in different plants. If you look at a a couple of projects in Africa, they're they're talking about producing a mineral concentrate in their jurisdictions and then shipping that mineral concentrate to The UK where it has to be cracked in another plant, and then it has to go to a further plant for to go to separated earth oxides before you can supply magnet manufacturers. This midstream area is done mainly because the magnet sorry. Before the magnet manufacturer, it has to go to metal and and and and alloy plants, which then will turn the separated oxides into into metal then an alloy, and that alloy then has to be fed into a magnet manufacturers before it goes further downstream to the OEMs.

13:01 That's to go into the motor vehicles or the wind turbines or the drone manufacturers of the world. China dominates us all the way down all the way through to the midstream. And as I say, RAINBOW on a unique position because we're dealing with a crack chemical concentrate, We don't have to do so many processes beforehand. We are just going straight into producing a solution, which we're then going to separate all the way into separated growth. Oxide is one of the few projects in the world right now doing this. LIMITED in Australia are one of the few hard rock operations that are operating in the world right now that go through all the way to separated rearth oxides. We are doing that without all the prerequisite processes. So that's why the RAINBOW CapEx for a project of this size is far lower than a project you'll see to produce the same amount of separate real thought size that we're gonna be separating, and this gives us very, very strong fundamentals from a financial point of view that you've seen in our study.

14:04 Now we'll go to look at the actual project in Palobor. Now Palobor is a mining plant in the Far North of South Africa. You can see the photographs here. These are the two gypsum stacks that we are going to be processing for the rivers. Next door in the top right hand corner, you'll see the mothballed phosphoric acid plant that Sasol ran. Now the reason why this is unique is that you've got a phosphate mine next door run by Foscol, the government mining company. They produce phosphate rock, which is then concentrated into slurry.

14:37 That slurry was then fed next door to a phosphoric acid plant where they added sulfuric acid and heat to enable them to produce phosphoric acid for the fertilizer industry. As a byproduct of that, so the rheos that were in the host rock that were mined by Foscor were concentrated, as I said, in the in the phosphate slurry. And then in the in the process of producing phosphoric acid, you produce a gypsum residue, and the rears were slightly upgraded further than the gypsum residue. And this gypsum residue then created these two stacks that you see there, which are 30 odd million tons

15:16 in size, which gives us a project life of just over fourteen odd years for this project. What's important, as I said, is that when the phosphoric acid was created or produced, you use sulfuric acid and heat. Now if you go to a hard rock project and if you look at any hard rock process to crack your rare earth elements before you can go further downstream, produce a mixture of carbonate or a mixture of oxides, which you then have to go into separate and to produce separated rare earth oxides, you need to add sulfuric acid and heat. And these two elements have been done in the project at zero cost to the project, which is why we now have a OpEx that you can see there at US$338.06 per kilogram, which is we believe probably the lowest OpEx for separated earth oxides in the world. You can look at the LIMITED's website, you'll see what their price is. It's a lot higher than this. And compared to our basket price per kilogram, our revenue per kilogram of our basket price, you can see then why our EBITDA margin is so high. Another important point is that because this is in an existing mining town with three operating mines, we've got skilled labor available.

16:33 All the infrastructure associated with the phosphoric acid plant that has been that's mothballed, in other words, workshops, two train sidings, high voltage switchyards, machine shops, laboratories, admin offices are still available to RAINBOW to this project, which has kept our capital price for the project low. As I said, it's sub $300,000,000 and we believe that our bankable feasibility study that we are we will conduct in this year in RAINBOW that we will possibly be able to optimize that CapEx number even lower, which makes us it will further enhance the project economics of this project.

17:14 So to look at where we are and what we're looking at in 2023, so in the last quarter of twenty twenty three, the highlights with publication of our feasibility, our PEA feasibility study, which delivered very strong numbers as I've mentioned. And we also strengthened our technical team with the with the acquisition of of RAW from Sennett with he's got very relevant uranium and and RAWRTH experience. And now looking at 2023, what we're doing is that we in the first quarter of twenty twenty three, we will be coming up with a resource update, and we will also have commenced the the bankable feasibility study, the work streams for our bankable feasibility study, and some of those have already started, and I might get to talking about them a bit later. And then we're gonna be be basically building our our pilot plant, which will be a continuous pilot plant to to to create design data for the for our final commercial plant.

18:25 And like any project of this nature, it's important, we believe, to have a pilot plant. We know we're very com comfortable with our process. It's been proven at lab and sort of bench and lab scale, but we want to put it through a continuous pilot plant just to get design information. And then there'll be a permitting update, and we will be hopefully completing our bankable feasibility study at the end of twenty twenty three or the latest, the first quarter of twenty twenty four. And then we, as I said, we're expecting production in 2026.

19:00 In terms of RAINBOW's business model, we are as I said, we we do have a just to to talk about our project in Burundi, which the market does know we have. We have a hard rock mining project in Burundi. It's a very high grade project. I'm not talking about it because it's it's on care and maintenance because it's been suspended by the Burundi government. We are in negotiations with the Burundi government to get this project exporting concentrate stockpile there as well as get our trial mining operation going again. And but as I said, the timeline with the Brundi government, I don't want to give the market a timeline because we've been in negotiations with them for a number of months now. And as soon as we have clarity on resolution, we will inform the market. We do believe we will have resolution because the government has come to us and said we wanna now resolve this, and they've we are we we had discussions with them in November last year, but now we'll have to see how we can conclude those in 2023.

20:03 But failing, as I said, failing to talk further about Burundi because, as I said, it's it's a much smaller project in the life of RAINBOW. Burundi has got a long way to go to commercial production. And Paloborah, a project that at spot prices will produce sort of circa $200,000,000 of EBITDA, and that's where our focus is. And there's also we also want to leverage the IP we've developed for other opportunities similar to Perabua. And that's why I say we've got other near term opportunities and different jurisdictions that we're derisking Perabua from further projects in different countries. And but importantly, it's using our RPN that we've generated in the phosphoryl gypsum to to pursue these other opportunities.

20:48 The one was the the major chemical process in South Africa that has got a lot of phosphoric acid stream with rare elements in it because it's using the same feed feed rock that comes off or slurry that's produced by Foscor and Palaboa. They're used for their phosphoric acid production. We're busy with conducting testing with KTEC and Florida as we speak. And then we signed a master agreement with Morocco, the world's leading producer of phosphate projects, and UMP Sixth University in Morocco to co co develop flow sheet to extract the rare earths that we know are present in in their in their in their phosphory gypsum. It's not in their sedimentary phosphory gypsum that we're targeting, but it's in their live upgraded phosphory gypsum stream that we believe is the opportunity in Morocco. And as I said, Morocco is a very exciting opportunity for RAINBOW. It creates project diversification, country diversification, And we are we've signed two NDAs with two other look alikes in another continent. I don't wanna talk about which continent and give because, you know, we have signed these NDAs. I don't wanna we can't talk much more than that, but we we signed NDAs initially with OCP and with with the chemical producers in South Africa, and that led to stronger agreements, which we're now pursuing. And likewise, we signed

22:18 two Indias. It's a very strong step into hopefully concluding two agreements to do JVs with these two Paloborra type opportunities in in another continent in the world. So we believe we've got a pipeline for growth. These other opportunities are much longer lead times. They're sort of twenty five plus year life of projects. So RAINBOW RARE EARTHS PADD ABOW is an exciting fossil gypsum opportunity, which is a fourteen year life. We have got a number of other opportunities that are that have got a very, very long life. So this is gonna enable RAINBOW RARE

22:58 EARTHS OXIDES in the world. Just to talk about the paddleboard production, if you look at the PEA, we're gonna produce amongst the four separated rare earth oxides about 2,000 tonnes per annum, which is currently a third of the size of Linus in in Australia. And LIMITED is producing circa 6,000 odd tons of these permanent magnet rivers. You know, they've got a market cap, I think, of about 4 or 4 to $6,000,000,000 So we're going to be a third of the size. And so I don't need to explain to you what that means for our market cap down the line if we get this right. So as I said, I think RAINBOW is uniquely positioned for growth in in a great market. We've got the right strategy. We've got the right technology, we believe, and the right skills, very importantly, because it's all very well having a great project. They've got the right skills to bring online.

23:56 You know? We know how many disasters are out there in terms of of of projects not coming on not being brought to bear. We've got an exceptional flagship asset as as you can see from the PA numbers. And so we've got a pipeline for growth, and we've got strong institutional support, I believe, in RAINBOW. So it it makes us very excited about the year ahead. I believe it's gonna be a very important year in RAINBOW's life. We're gonna be able to

24:26 close that value gap between our market cap and the NPV of our project and potentially some of the other projects that we'll be able to get further definition on as the year progresses. So just to conclude, if you look at the Pellet Borough forecast in terms of when we're in production, what those forecast numbers are for RARE EARTHS pricing. At forecast pricing, we've got an NPV post tax of over $1,000,000,000, an hour of over 44%. We'll be generating $20,000,000 of EBITDA at 2026 prices when we forecast to be in production, and we'll have a margin of over 83%, which will be phenomenal for any project of this nature. So I conclude that I think this is a great project. We're very, very confident that we'll be able to deliver this to the market. As I say, we've got a track record of delivery, and we I don't believe we're gonna let the market down, the team and myself. And as I said, the team is very important.

25:33 I'm just the the smartest clever guys behind me that will make sure we can deliver this. But I've got the right team, and that will be that will be a good result for RAINBOW. Thank you. I'll now hand over. George, that's great. And thank you very much indeed for your presentation this morning. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab that's situated on the right hand corner of your screen. But just while George takes a few moments to review those questions that were submitted already, I would like to remind you that a recording of this presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard. George, we did receive a number of pre submitted questions ahead of today's event. And as you can see there in the Q and A tab, we've also received a number of questions throughout your presentation itself this morning. So firstly, thank you to all of those on the call for taking the time to submit their questions.

26:25 And Tara, perhaps I could hand over to you to share the q and a session with George and respond to those questions where it's appropriate to do so. And then I'll pick up from you at the end. Thank you. Good

26:37 morning. We've received, as Jake has mentioned, a number of questions on across various sectors. But to start with questions on Paloborah. George, how will the energy crisis in South Africa affect production, do you think? Well, Balibor is quite lucky in the sense that compared to normal mining project where your energy as part of your OpEx is roughly 50%, we are a low energy consumer at Balibor compared to typical res mining project. And I stress, it's not a mining project per se. This is a chemical processing project. And it's a chemical processing plant we will be building. And as a result, you know, we don't have

27:21 we will just be viewed as as when all our license applications will be as a chemical producing company. But the so we we consume our power consumption is about 21% compared to a normal project, as I say, so it's low in comparison. And importantly, we believe by 2026, the energy crisis will be resolved to a certain extent. I don't say it'll be completely resolved, but we do have a power allocation at Paloboros because it's an existing Brownfield site with an existing high voltage switchyard, which is still operating today. And, basically, we also will be using solar power in the Paloboros, one of the hottest places in in in Southern Africa in terms of of solar radiation values.

28:10 It's very, very high, and we will be looking at supplementing the the the grid power with solar and with with battery with battery power as well. So we are not too phased about it, to be honest. And can you give an indication as to when the pilot plant will be operational or or and indeed how long it will be operational for? The pilot plant is forecast to be operational in the second quarter of this year, and it will be roughly a three month pilot continuous pilot operation. Three to four months, but it won't be longer than that. And will will there be a fundraise prior to the pilot plant being built? There will be. I've been very honest with the market when I did my last fundraise eighteen odd months ago that the money I raised in would not be to fund the pilot plant. Even then, I said we will we will need a pilot plant once we've got this flow sheet finalized.

29:07 We finalized the flow sheet and produced our PEA. And in my presentations in October, November last year, I reiterated to the market that we would be needing to come to the market to finance the pilot plant. And when do you think the feasibility study will commence? Well, we've actually commenced the feasibility study already. We've got funds, as I also mentioned, that for the feasibility study commencement, we started the certain EIA studies because the EIA permitting is on a critical path, and we've already started that as we speak this month. And so that has commenced. Thank you. Are you considering an offtake agreement from Palobao?

29:55 We you know, because these arrears are very critical to Western governments, We are gonna be looking at a combination of debt and equity to finance the project. We've already had indications that we would be able to bid 70, maybe even 75% debt on this project because the the financial numbers are so strong. And and we are looking at a number of ways of of of project finance for that. We've got strong interest out of the DFC in The US, which is a government financing institution in The US for project finance as well as other debt finances in South Africa as well as internationally. So and then there's also looking at the option. We are we have we're talking to your OEMs or looking at some kind of strategic stockpile of of RARE's, and, you know, they could be part of their financing mix. So we are looking at all avenues.

30:55 But there's lots of interest, as you can imagine, because there are very few RAREZ projects coming into production in the timeline that we are gonna be coming into production at the at top of pricing that we will be able to come in at in terms of of production costs. And that segues into when do you anticipate production to commence? As I mentioned earlier in our presentation, we if for for the all the what's all my hurdles are timelines are met, which is the pilot plant, the bankable feasibility study, I would be looking at 2026. Thank you. There's obviously significant risk and cost associated with development projects. And how can you provide comfort on RAINBOW's ability to succeed?

31:44 Well, I think you then have to look at your team. You know? And the team that I've got at RAINBOW, we're all at MDM Engineering together. Over Over my ten years in MDM Engineering, I built 22 mines and process plants. Not one of them was over budget. I did a number of fixed price contracts, which is e p known as EPC contracts in the mining world where you give the client a fixed price, and you if you are over that fixed price, you lose money. If you're under that fixed price, you make money. I made money in all my fixed price contracts, so I've got a lot of experience in making sure that when when I price a process plant of the nature of of that we'd be pricing at Perabua that we will be we will be on on track to, a, to meet the the CapEx budget for that project. And in terms of timelines, also got lots of experience, our team, in terms of the FOSTRAC projects.

32:43 We bought a number of of of large projects, you know, in in eighteen months in the middle of the jungle with the the DRC, Ghana, Tanzania, and we've been on so we've been on budget and on time. And we'll be building literally in South Africa, which with rail rail sidings right into our project site, Tard Road right to the project site, airport five minutes away. So to build a project in Perleboa by comparison will be a walk in the park. So I think, you know, we we don't foresee why we won't be able to deliver this project on the timelines and on the budget once we finalize our budget and the bankable feasibility study process. And one more on the presubmitted questions on Palabua.

33:32 How confident are you in obtaining the outstanding permits? Well, it's a brownfield site. It's already permitted. All we have to do is is make amendments to those permits. There's one greenfield permit that we have to apply for, and that's for a new stack site because what we have to do is as we process one stack site, we'll read the position onto a new clean stack site. And then once that stack site is depleted, we'll make that stack compliant with RFC and equated principles in terms of linings, and then we'll start processing the second stack. And that second stack site will then go onto the onto the the the stack site that we've cleared and we've we've done. So it's a brown it's a greenfields permit. But because this is a big environmental cleanup, one thing that I haven't mentioned is this has got huge environmental credits for any project of because you see the if I go back to this photograph here oops. Sorry. There.

34:33 The green you see on the top of those sites is actually acid water. We're gonna be and and that's a risk to an environment. That's why the environment environmental management plan and site over these states with environmental management fund funded by SASL to make sure that that this can be cleaned up. We, in fact, are gonna be doing this on behalf of SASL. We'll be and Boswell to be we engage with to do our JV on this project. We've got 70% of it, is that we're gonna be neutralizing all the stack water and using it in a close second now in our process plant. And any so the gypsum that's redeposited will be clean, benign. It'll be dry stacking, so there'll be no acid water associated with it. And then immediately means that the environmental risk associated with the new stacks is is totally negated.

35:22 And it also means that we over the life of the project, we will reduce environmental liability associated with the site to zero. So it's got huge credits from that point of view. And it's a very, very huge environmental cleanup project, which, once again, as I said, at some stage, we'll start getting credit for that as well. Thank you, George. And to move on to a few questions on the market, what are your what is your view on the demand and supply dynamics of the rare earth sector? Well, as I say, I'm very, very bullish on the rare earth sector, mainly mainly because we all know that demand for permanent magnets, are critical for, as I say, for electric cars, for their permanent for their motors, they create range for those electric cars, which means your your your battery can last longer.

36:11 And everyone's chasing range, you know, in in in EV batteries. And for your wind turbines, the reason why wind turbines need permanent magnets is because the new generation wind turbines or what's known as direct drive wind turbines, that means they have no gearboxes. That means they have minimal maintenance. And if all of these wind turbines are being situated hundred, two hundred kilometers out in the sea, and you can imagine the cost of trying to change a gearbox a 100 or 200 kilometers offshore, It's just the cost is phenomenal. So all the wind offshore turbines or direct drive wind turbines, they need those permanent magnets so they can get more power out of their motor for a smaller motor because of of the the power that you get from the permanent magnets. So so so this has been driven by legislation.

36:59 Government legislation, EV manufacturers, you say, by 2035 or 2030 or 2040, we're not gonna be making internal combustion engine motors. Governments are saying you won't be able to buy these internal combustion engine motors over these with these various timetables given to the world over the last eighteen months. I don't I believe those timetables will be moved out. But what we are sure about is that they are gonna be in place. And whether whether you think that there'll be no electric vehicles sold in 2030 or 2035 or even 2040, it doesn't matter. Eventually, there'll be no electric vehicles sold in France, in Europe, in The UK, and, you know, in places like Scandinavia, Australia, and so forth. So I think the the demand is there. We know there's not enough supply. We need new projects to come on stream, and there are a number of projects that are being developed. Only a few of those will be successful.

37:52 So so, you know, the the market is very strong, and I don't believe that's going away. And and my belief, as I said, is also, you know, from spending sixteen years in financial markets and trading in gold shares and dealing in in gold assets and and so forth, You know, if I ask you for a forecast on the gold price, 20 analysts will tell you it's gonna go to 3,000, and 20 analysts will tell you it's gonna go to $1,200 an ounce. There's not one forecaster, one analyst who who who is in is not in agreement that RARE EARTHS prices are going up. So I think we're very lucky that the macros the macro market for the forecast pricing is very, very strong. It's legislated. It's not going away. So we're very lucky from that point of view in my opinion.

38:39 Thank you. And with that in mind, how do you see Western governments and OEMs engaging in the railroad sector in the coming years? As I said, they they are talking about engaging. This they've started engagement. We've had a number of conversations with members of of in the in the UK government responsible for this area as well as the US government, and there's definitely an initiative to try and create a strategic supply outside of China. We believe RAINBOW will be part of that solution. We, as I said, we are gonna we wanted a few projects that's going all the way through to separated red ox ides. And, of course, that means that we can start talking to metal and and metal manufacturers and and guys who take that metal into alloy because they they then have to feed the magnet manufacturers.

39:30 And the magnet manufacturers in the Western world are expanding. There are a number of expansion plans. Some of those have been announced. Some of them are going to be announced. So we see a strong sort of strong dialogue with with with these various governments. And I think they will be, hopefully, part of the financing solution, as I say, for the project when we are ready to to talk about that financing in 2024. And are there replacements for your prod for the products today? And if not, what are the risks of those being developed on a ten to fifteen year timeline? To be honest with you, it's gonna take ten, fifteen plus years to find a replacement for permanent magnets. Permanent magnets, these things were first looked come up the world came across them or the scientists came across them in the eighties, nineteen eighties, nineteen nineties.

40:27 We're now fifty years on on, and they are the best thing for this application available to the world. So, also, in the cost of an electric vehicle, a permanent magnet is one less than one percent of the cost of electric vehicle. So even if the price of a permanent magnet to the electric vehicle manufacturers doubles, it's only only 2% of the cost. So we don't believe that there's much substitution taking place in the foreseeable future. If it becomes a significant price, then yes, maybe. As I said, in wind turbines, I also see less risk because because of the fact that these wind turbines are being situated far out so far out at sea, they need direct drive motors and direct drive motors.

41:13 The only sort of thing that they that creates that that power for them are permanent magnets. So I I don't see much substitution. I'm not saying that's impossible, that substitution will take fifteen, twenty odd years to develop. We'll have depleted by the time there's a substitution for a permanent magnet. And, also, I went to a RARE EARTHS conference in Las Vegas in November last year, so it's very recent with with a very comprehensive presentation by Arnold Magnets, and one of the the the few permanent magnet manufacturers in The US. And they explained to us the difficulty in developing permanent magnets for applications in in terms of of how much research and development goes into that and how many years it takes. And once they once they design and and and agree on on the compound for the permanent magnet that will drive, you know, f one fighter jets and buying applications and and Boeing airliners and so forth, they are then not gonna change for many, many, many years. And so and and and so the the sense of substitution as we right now, I believe, is is very low.

42:20 One can never say impossible, but I believe it's very low. Thank you. And moving on to a couple of questions on RAINBOW and and the company. Ray RARE EARTHS are, in fact, not that rare. So how does the company how does RAINBOW differentiate itself from other developers, and how does the potential TREO compare with other companies and their assets? It's a good question. You're right. Rares are not particularly rare, but where there are rare is to be found in economic exploitable projects. So the if if you look at in two thousand and eight, nine, there's an explosion sorry. 2010, there's an explosion in rare earth pricing due to a spat between China and Japan, and that's what led to Japanese funding line is to create an independent source of separated earth oxides outside of China for their permanent magnet manufacturing capabilities in Japan.

43:19 And and something like over a thousand projects within suddenly came onto the market in terms of IPOs and and and and one or two private projects we're we're titled about in between 2010 and 2012. Out of those thousand projects, there's only one that's in production, and that's Linus. Now so so what I'm saying is that this is slightly different, this RARE EARTH, because that was what's been driving the the the price rise in RARE EARTHS is the is the, as I said, the the government legislation and the the the COP twenty six targets. So the demand and the and the strong pricing for RARE is not gonna gonna go away. So what killed all of those projects was the RARE EARTHS prices collapsed, and those projects were not economically viable.

44:11 So what I'm saying is that project economics of for rare earth projects to be successful are very, very key. If you look at our project economics, very strong. We can we we could sustain the halving of the price of of current growth pricing and we'd still be profitable, which is one of the reasons which makes RAINBOW, I believe, unique. Secondly, you look at our grade. You can't compare us to a hard rock project because we we gypsum or residue stacks above the ground. You compare us to an an anne clay project, which is what the Chinese mine and a few other anne clay projects around the world. When you compare us to anne clay projects, we're between six and ten times the grade of anne clays because iron clays are very low cost of mining. We have a very low cost of mining at Piloboa because we just are gonna hydraulically mine the the gypsum into the the process plant, which is very low cost. It's less than a dollar a ton. Mining cost, a hard rock project in terms of mining cost, anywhere from between $15.18 to 35 plus $40 a ton to get to where we are at Palabora.

45:14 So we've got a very low cost of mining. And if you compare us to ironic clay deposits, as I've mentioned, we're sixty, ten times higher grade. So so very important. We've got and all mining projects, grade is king. We all know that. And then thirdly, if you look at our rare earth basket, 30% of our or 29.1% of RARE EARTHS basket is made up of two of the key two key RARE EARTHS elements, neodymium and precedinium, two of the key permanent magnet RARE EARTHS, and that's one of the highest percentages of any RARE EARTHS basket in the world. So with you put all those factors into account, I believe, you know, we have a unique position in RAINBOW, and that unique position in RAINBOW have identified with other phospho gypsum opportunities in the world. We we've we've signed an agreement with OCP and Morocco, and we've got India's two other similar paddleboard look alike projects. India has been signed with different continents around the world. It's not Africa. It's somewhere else. So, yeah, I think I think we're in a strong position.

46:17 Thank you for that. Sorry. Just reading questions. How can RAINBOW remain unique with the processing approach, and how easily can the flow sheet be replicated by upcoming companies? What are your thoughts on on that particular aspect? Well, that would mean that they would have to have access to other phosphoryl gypsum opportunities in the world. And I can tell you there aren't many opportunities out there. The three biggest opportunities in the world I've already identified, and we've got an agreement with one, the NDA signed with two of them. So I think that might give some color onto that question. But also importantly, the RP that RAINBOW has developed, the back end of that RP is already patented by KTEC.

47:04 It's continuous ion exchange and continuous ion chromatography. KTEC, the guys at KTEC who've developed this are still there. They've got over forty years of experience in phosphorylipsum, and they they in fact were the inventors of continuous ion exchange, which you use in the in the uranium plants around the world, and they're also with inventors of continuous ion chromatography. So we've got very strong IP at the back end and the front end using RAINBOW's very strong technical team. And the KTEC team, we've we've now developed a front end, which we're busy patenting. And that patent is in the process of being finalized and lodged, and we believe that gives us a very strong position in the market. Of course, over time, somebody could replicate it, but it'll take them years and years and years to to get there. And so like anything, you're the first mover. You've always got a big advantage.

48:04 You know? Nokia didn't make the first mobile phones in the world, but there was a mobile phone manufacturers in the world now. But they were the first mover in the mass market, and for many years, they dominated the mass market, and then they made mistakes. We all know about. So what I'm saying is having first mover advantage in this area of of IP and and to look at this opportunity gives us gives us, I think, a unique position in the marketplace. And last question. What are the major corporate objectives for RAINBOW to achieve in 2023? I've I've gone through that, to be honest with you. There we go. We've got a resource update. Our pilot plant will be built and up and running by the end of of the next quarter.

48:52 We already started the EIA permitting process. That's already started in conjunction with the start of our bankable feasibility study, and that will be delivering by the end of this year. So I think those are key targets for 2023, which will be very significant. George, Tara, perhaps if I just jump back in there, thank you very much indeed for being so generous of your time there and addressing all of those questions that came in from investors this morning. And, of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended for you to review. To then add any additional responses, of course, where it's appropriate to do so, we'll publish those out on the investment company platform. George, perhaps before redirecting those on the call to provide you their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments, that would be great.

49:45 Yes. I think just for the audience, this will be on our website, this presentation. There are a whole bunch of dependencies. There's a lot more information on the board, which is a very experienced board as well. Apart from the technical management team, we've got a very strong and experienced board, and you can, at your leisure, go through those dependencies. And but just to finish off, as I said, people invest in companies to make money, and, you know, I believe the reason why one should be looking at RAINBOW is that there's a massive value gap between our market cap and our NPV and the fact that we've got such strong metrics in terms of financial metrics of any project of this nature. As I said, RAINBOW is, we believe, gonna be the lowest cost producer in the world of separated rare earth hot sites, even below the Chinese that came out of my conference in Las Vegas last year.

50:41 And and as I said, we've got exceptionally strong metrics, and I believe that we've got the team to close that value gap. So I wanna leave the audience with those thoughts. George, that's great. And thank you once again for updating investors this morning. Could I please ask investors not to close this session? It shall now be automatically redirected for the opportunity to provide your feedback in order the management team can better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of RAINBOW RARE EARTHS LIMITED, we would like to thank you for attending today's presentation. That now concludes today's session. So good morning to you all. Thank you to the audience.