Rainbow Rare Earths (LSE:RBW) — Preliminary Economic Assessment Investor Presentation

0:01 Good morning, ladies and gentlemen, and welcome to the RAINBOW RARE EARTHS LIMITED investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time via the Q and A tab that's just situated on the right 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 that are submitted today and publish responses where it is appropriate to do so. 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 all the viewers this morning. We RAINBOW published our PEA on Monday, and this is a presentation just on those numbers, which are extremely encouraging and very, very strong, which I'll go into the detail. There's our usual disclaimer.

0:59 And here are some of the highlights from the PEA.

1:04 Basically, we've been able to show that this is a very, very robust and strong project, and it's a breakthrough in terms of of RAINBOW as a company, and it's a it's a very exciting part that we're on now. Our base case NPV sits at for the project sits at, you know, 200 627 odd million dollars. And when I say the base case, this is based on 2023 RARE EARTHS forecast prices, which are lower than twenty twenty two's current pricing for the year. We have an IRR of 40%. Very importantly, we've got an EBITDA margin of 75%, and this is EBITDA margin for life of the project based on base case pricing. And then we've got a payback of two years, which is exceptionally good for a mining project.

1:51 And I say mining project loosely because, essentially, this is a chemical processing plant that we'll be building. If we look at the year to date average prices, if we use these in our economic model, we've got an NPV of almost $1,000,000,009.30 dollars odd million for the project. We've got an IRR of over 50%, an EBITDA margin of over 80%, and our payback then is just one point seven years. So these are obviously very encouraging numbers. And I think it's the best real project out there in the market and development right now, and these numbers prove that. We've also come out with a very, very low operating cost OpEx, which is obviously driving our margin, our EBITDA margin. And this is the lowest that we can see of any Western Rare Earth producer or separated rare earth oxide. And I must stress, RAINBOW are one of the very few developmentcom companies out there that are going all the way through to separated rare earth oxides.

2:47 The only other company in production that goes all the way through to separated rare earth oxides in the world right now is LIMITED in Australia. And if you look at their cost per per kilogram for of their product, that NDPR product, we are far lower than them. So this is very encouraging for RAINBOW. Just to talk about our business model going forward, we are looking to a strategic focus, which is going to be based on extracting RURS from phosphoryl gypsum opportunities around the world. And we've developed RP in conjunction with KTEC, which enables us to do that. I must stress that the back end of the of our process flow sheet is already patented by KTEC, and it's proven and it's and they have used many or this this technology in many instances in around the world. And that that's a key key derisk for RAINBOW. And then the upfront part of the process flow sheet that we've developed jointly with KTEC, we're now going through a patent process, which also gives us a very significant position in the market to look at these other opportunities out there apart from what we have at Paloborra.

4:03 One of the key reasons why we are able to have a low OpEx and a low CapEx for the type of production we are doing compared to other rare earth projects is we've got no mining, we've got no milling, we've got no crushing. We've got no flotation to produce a mixture of concentrate, which most of those projects have to do. Well, all projects start with producing a mixed concentrate, then you have to crack this concentrate, then you have to from the cracking, you got you either produce a mixture of carbonate or a mixture of oxides, and that's where most projects stop around the world. We're going one step further. We're going to all the way to separated earth oxides, which enables us to capture the published RE oxide process published by the bulletin boards without suffering any discount. And this is a major advantage for the project as well.

4:54 Just to take viewers who are not affiliated with the rare earth market, just to give them a bit of background on why this is such a strategic and critical mineral is that all projects have roughly 17 earth elements in them. But only a few of those earth elements are key for the green green the green economy as everyone talks about. And basically neodymium and bristadinium, which are key for permanent magnets, and permanent magnets go into electric cars and wind turbines. Now each wind turbine, three megawatt wind turbine takes about two tons. That's per turbine, two tons of neodymium, prasidinium magnets, and each electric car takes between two and three kilograms.

5:40 And if you look at all the targets that the Western world has put out there in terms of electric vehicle penetration, wind turbine power generation in terms of of of green power, that means there's a significant demand that's been driven by legislation for rheors. And also two other key components of permanent magnets are dysprosium and terbium. You need them in smaller quantities, but they're very important in permanent magnets. Unfortunately, at Pelabor, we have all four of these rears in the economic quantity that we will be extracting. In fact, 95% of the value of our basket is made up of these four rears. And that's why we're only gonna target the four rears with the KTEC technology to separate them out, and we'll be then selling them into this grain market, which is going to very much a supply deficit going forward.

6:35 Just once again to now look at our resource in Palaboura. It's very importantly, 29.1% of our basket, our roof basket sits in the two key rears, neodymium and prestidinium. This is higher than most roof projects out there in the world, and it's higher than the two big roof companies in production, the Mountain Pass in America and LIMITED in Australia. NDPR is very, very high. It's very much at the top end. And as I said, we've also got dysprosium and Turbium in significant economic quantities. If we look at how we stack up against some of the other RARE EARTHS projects out there, the reason why PALABOW excited us when we secured the project was because we compared this to an ironic clay project because ironic clay has got very low mining costs, and we've got very low mining costs at Palabur as well.

7:32 Basically, we'll be remining these these residue stacks using hydraulic hoses similar to how you mine tailings deposits in South Africa. And with that very low mining cost, you then can compare to your ironic clay deposits around the world now and and in China. Now ironic clay deposits are typically north point north six to north point north 8% grade TREO. We sit at point 43%, which is six to 10 times higher grade than ironic clay deposits. And very importantly, if you look at our neodymium, precedent in parts per million, you see how we stack up. The next base ironic clay project out there, we're still 600 times higher in terms of NDPR content in our resource, so very significant. And then if you compare us to hard rock deposits out there in the world, we stack up very favorably.

8:22 In fact, in terms of grade, we're higher than some hard rock deposits out there in the world, and need to need per seidinium percentage or parts per million is exceptionally high. And then another key

8:35 consideration for RARE EARTHS project is uranium and thorium because all RARE EARTHS projects have a certain amount of uranium and thorium. Our uranium and thorium content is exceptionally low at Balaboa, means which means we don't have to do anything special to try and reduce the uranium and thorium in our resource and which a lot of other projects suffer from having to to separate uranium and thorium out of their their resource and do something with it. Uranium and thorium content, it's in our PEA, is below one bcm unit. And if you want to export into China or or export concentrate on the high seas, you need to be below 10 bcmol units. So we are less than 10% of what of the benchmark that is set in the world. So, basically, the radioactivity in Palobora is so low that you've got more radioactivity in your microwave oven at home. So very significant for our project as well.

9:35 Just to once again look at the project economics, we've got a life of mine of fourteen odd years. We're going to be treating 2,200,000 tonnes per annum. And over the life of the project, we'll be producing 26,000 tonnes of our targeted rivers. Our capital costs are, at the moment, $295,000,000, and we anticipate some optimization of this capital number in the next phase of feasibility study. And our OpEx per kilogram of rare separates oxides produced is $338.06 US dollars per kilogram, which, as I say, is the lowest that we can see anywhere in the world, in the Western world. That is we we it's it's very difficult to get numbers out of China. They don't publish their numbers. And even if they did publish their numbers, you know, we'd have to question them.

10:25 The other thing is looking at our our project economics. As I said, our base case pricing, which is conservative. On year to date pricing, projects got an NPV of over $900,000,000 and on forecast pricing, the NPV is over $1,000,000,000. If you went and took the latest forecast numbers, were updated just on Monday, so too late for our PEA to be published. But if we put those latest forecast numbers into our financial model, the EBITDA for this project, I mean, goes up to about 88% life of project, and and the NPV goes to about $1,600,000,000. So as as as I say, RAINBOW have been very conservative with our forecast numbers, and and we believe this is we'd rather be conservative and have numbers which are realistic and not PEA, which can only improve going forward.

11:21 So we're very excited of all the developments that will take place in the next stage of feasibility study. That's just the, the forecast, in in graphic of the cash flow, for Pellebo and also our the basket price of our of, RARE EARTHS basket.

11:43 Once again, as I said, we've been conservative, and this project is very robust in terms of OpEx and CapEx numbers. So we've done a bit of some scenarios. And as you can see, this is the NPV is insensitive to 10% moves in OpEx and also in terms of of CapEx as well. We still have a very robust NPV. And as I said, going forward, if you use new forecast numbers, this NPV jumps quite significantly. But also importantly, we anticipate further optimization to improve these numbers going forward in the next feasibility stage. One of the reasons why we are able to have such a low operating cost and capital cost base for the size of the project we offer there, if you look at various projects out there in the world that are on development, you know, their their CapEx numbers start in the 500 to $1,000,000,000 for the kind of revenue and EBITDA that we'll be producing. So so RAINBOW is very, very robust from that point of view.

12:49 And and one of the reasons is that we don't have all the steps of typical hard rock mining project. We don't have to drill and blast. We don't have haulage. We don't have hot we don't have the the the crushing and the milling. We don't have to have huge stockpiles that run of mine stockpiles. We don't have flotation necessary to produce a rare earth concentrate. And then then once you produce a rare earth concentrate, you have to lead some of those the the the the unfriendly rears out of there, like uranium and thorium. You have to take that out of your your your product, and then you have to crack it. And and once you've cracked it, only then can you start leaching and and and going to to securing the rears out of out of your your your your cracked concentrates.

13:37 And at we're fortunate at Paloborua where is that the the Paloborua residue stacks, phosphogypsum residue stacks, came about as a result of hard rock mining next door with Foscor, the government mining company, mining a hard rock carbonatite next door that was had real elements in it, trace elements, but very low grade. By by a flotation process at Foscor, they produce a phosphate concentrate, celery concentrate, and the rears were upgraded in this phosphate celery concentrate, which was then pumped next door to a phosphoric acid production plant, which was last owned, well, by by SASL. And SASL were forced to sell it a couple of years ago to Bossos Phosphates, are the the now owners of the project and who we did this deal with. But in the production of phosphoric acid, you actually add heat and phosphoric acid to this phosphate slurry, two key re key two key re ingredients when you you're cracking a real mineral concentrate.

14:39 And, basically, by adding phosphoric acid and heat, they were able to produce phosphoric acid with one or two other reagents added, of course, but then you had this gypsum residue. And the gypsum residue sits in these chemical stacks at in cracked chemical form. So we are basically two thirds of the way through a flow sheet for a normal rare earth mining project and we start and that's why our capital and our OpEx is as low as it is and that's why this project is quite unique. Going forward, you can look at this on our website at your own leisure, but it's basically a block flow diagram of our process flow sheet. And this explains all the work that we've done to get to a point where we have twenty months of work to produce our PEA.

15:32 And, you know, a while ago, people were saying, why is the PEA taking so long? PEA took a little bit longer because we needed to optimize our flow sheet to make sure that the PA came came out with numbers, which we knew would be very good. And we had we wanted to reduce our upfront flows, which would reduce our reagent consumption, which would reduce the flows into the KTEC section of the back end, and that would reduce the capital. And we wanted to to make sure that we could come out with with a flow sheet that was was proven at lab scale and that

16:03 we we knew would be successful, and we've been able to achieve this. And it's not just twenty months of work. If what RAINBOW was able to do is we're able to draw on all the MINTECH work that was done by SASL. So SASL had MINTECH looking at extracting rivers out of phosphorylipsum, And these twenty years of of of of development that we're able to access, we're able to access, SASL's own, development. In fact, SASL built a pilot plant here in twenty eleven, twenty twelve that successfully extracted three tons of mixed carbonates from the phosphoric acid solution, live solution at Pellebora. So we always knew the rheus could be extracted, but we wanted to make sure they could be extracted with a decent recovery, which drives your economics and, obviously, at a decent OpEx cost, which drives the economics of the prob of your project. So we spent a lot of time, but it's not just twenty months. It's it's twenty odd years of backup. And then we fortunately were able to partner with KTEC as our technology and IP partner with the back end and also on the front end. And KTEC bring fifty years of phosphoryl gypsum experience in Florida, which is the heart of phospho gypsum mining in The United States to RAINBOW. So as I said, there's many, many years of background development that led to the twenty months when we really got involved and produced what we have been able to produce for

17:34 RAINBOW. As I said, this is efficient and patented technology. And basically, by doing this, we've reduced our capital and operating costs. On the screen there, you can see a continuous ion exchange, continuous ion chromatography units that that are have been commercially built by by KTEC and are in in production around the world. So these units are in production. There are numerous facilities around the world, you know, mining, chemical, food, biotech. And very importantly, the size of the unit you see there is in fact, is commercially in commercial production right now, is actually larger than the size of the unit we're going to be requiring for Paloborra. So these units are all, as I said, have been used commercially, and that derisks the project significantly for Balaburra as well. The resin we're using in continuous ion exchange is basically a commercially available resin that's manufactured by three commercial companies in The United States.

18:41 We don't have any special sort of solutions or reasons that have been specifically created and haven't been applied commercially before. So everything in our flow sheet has been applied commercially and has been built commercially. It's the unique way that we put it together that we have been able to do a patent on the front end. And as I said, the back end is already patented. And basically, the fact that the KTEC RP is able to select the rears that we require, just the four rears we require, and none of the other rears that will then just be pre will be bagged and and stored is very much more efficient than your your normal RARE EARTH project, which requires what they call mixer settlers. And literally, you'll have a football field of mixer settlers to extract your RARE EARTHS compared to what we're gonna have at PALABOW. So very exciting for RAINBOW.

19:36 So just to to conclude in terms of our next steps, there will be a resource update. They will we will be going into full feasibility study, and and we'll be updating because the the site is largely permitted, but we will be updating Brownfield's permits that are already in place. And we'll be applying for a new permit for the for the new stack site that we will have to have at Balaburra, which which and and we're already going to be starting the the permitting process because we it's one of the critical part items for the full feasibility study process, and we've recognized this and that we're starting. And then finally, we will be going into an extensive pilot continuous pilot plant operation to to once again derisk the the flow sheet even further.

20:25 And and we are we are we are 100% convinced that the the the the continuous lab scale, which will be so will be developed into both piloting will be successful. But we're doing this just to give investors 100% satisfaction that this project is completely dearest. We believe it's dearest already at RAINBOW, but I don't expect you to take my word for it. We'll prove it further for the investor and for potential investors. One thing I'd like to add as well is that we signed two other agreements over the last three months. We signed an MOU for a major diversified chemical company in South Africa to look at extracting the roofs from their phosphoric acid production that's that's occurring in South Africa. The reason why we signed this MOU is because we recognize that this current phosphoric acid production process uses the same feedstock from Palaboa from Foscol that is that for the the phosphoric acid production. And, therefore, it's got the same earth elements that we have in our Palaboa project, and we are so we signed an MOU. It's very exciting. So we've got further project diversification.

21:45 And then we signed an MOU with OCP in Morocco, which is to investigate, once again, extracting the areas out of the phosphoryl gypsum opportunities they have at in Morocco. Morocco is the largest producer of phosphoric acid in the world and the largest producer of phosphoryl gypsum in the world. So this is also a very exciting opportunity. And with that, it gives RAINBOW further project diversification and, very importantly, country diversification. So this further derisks RAINBOW as an investment case. And, you know, we the only real company I'm aware of in the world has got multiple projects and multiple countries that we are now operating in and and developing. Thank you. George, that's great. If I may just jump back in there, 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 top 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.

22:59 George, we did receive a number of presubmitted questions ahead of today's event as well as as you can see in the q and a tab, a number of questions have been submitted throughout today's presentation itself. So firstly, thank you to all of those on the call for taking the time to submit their questions. And, George, if I could just hand back to you to run through the q and a tab to respond to those questions where it's appropriate to do so, and then I'll pick up from you at the end. Thank you.

23:35 Okay. Alright. So just to have a look. Can you hear me? Yes, sir. We can hear you. Yeah. So just to have a look at the pre submitted questions, it's you know, do we still intend to start with trial processing plant while it's a pilot plant? Yes. We do intend to do this, as I mentioned earlier, we will be looking to be doing the the design of that plant by the end of this year, hopefully. And early early in the New Year, we'll be we'll be basically going into the manufacturing and the construction of a pilot plant. We have some very unique ideas around this, and, yeah, it'll be very positive for the pilot plant.

24:25 The next thing is that are the interested parties who are encouraging us to go straight into full production? To be honest with you, there are interested parties who would like us to go straight to full production, but the pilot plant is is just part of of of of the bankable feasibility study. It's not gonna slow us going into full production. We need to do a bankable feasibility study, and the pilot plant will run-in in parallel with that bankable feasibility study. And by the time we finish our bankable, we'll have run the pilot plant enough to know that there are no gremlins in the process and that we're 100% confident in our bankable flow sheet. So our intention is to have a bankable feasibility study. At this stage, The timeline still has to be confirmed, but we're looking at towards at the end of twenty twenty three, at the worst first quarter of twenty twenty four, and then we will be looking to start construction in the latter half of twenty twenty four and completion of the plant by the end of twenty twenty five with commissioning starting before the end of twenty twenty five so we can go into full production 2026.

25:33 It's a very quick timeline for for a a mining project. You know, when you consider we only really secured this project in, I think, with December 2020. We started working on it effectively January 2021. And most if this was a hard rock mining project, you're talking ten to twenty years, cradle to grave. So this is very exceptionally quick timeline. Are the basics in the p a in this p a applicable to other sites and which make future p a's on other sites easier. Well, yes, I've also sort of addressed that in the sense that, as I indicated, we've signed MOUs to look at other phosphorylipsum opportunities through phosphoric acid production process, the one with OCP and the one with the chemical company in South Africa.

26:27 So, yes, we've already started doing that, and a large part of our flow sheet development that we've have done for Paloborua will be applicable to those projects. So it will be quicker process to assess those projects and to get a preliminary economic assessment out on those projects, and it took us at Paloborua. And the last question, how many other sites are we now considering? Well, as I said, so far, we've got two other sites. So, yeah, that answers that question. Next question is congratulations on the great PA results. Is it is the pre FEE is now funded and underway? Well, the the next stage of feasibility study is funded for the start of that, and then we'll we'll assess that next year. But right now, we do we're not looking to raise any capital to kick off that feasibility study, and certainly, we're not raising any capital this year.

27:22 Is the approximate rare earth content in the phosphoric acid processing streams from P plants in Morocco. Do have a sense of what we're looking at in Morocco, but until we we formalize the test work program and do some more assay results, we don't want to say anything about about about the the rare content in the Morocco project just now. But we I can say that from our initial test work that we were SA results that we have done, we're very excited about the opportunity in Morocco, and we believe it could be very significant for RAINBOW. Okay. The next question I see here is from Terry. How is the patent going, and what future impact are the patent and all rights likely to have? Well, the patent is in process.

28:15 It's been it's been developed, and it will be launched shortly. In terms of impact on on on rights likely to, I'm not sure what there's no impact. I mean, if anything, it just puts RAINBOW in a very strong position with assessing other opportunities of a similar nature. As I

28:32 said, the back end is already subject to a patent by KTEC, and and we're now jointly patenting the front end. So it it doesn't have any impact other than being very positive for us. From Greg is an external reference for the discount rate for NPV. For the NPV. While we've used a 10% discount rate, which is very conservative considering this is essentially a chemical processing plant, we we could have used an 8% NPV rate, which will sorry, an 8% discount rate, which have which would have improved the numbers in our PEA, but we're happy with the conservative numbers, and we know there's upside to these numbers. And from Terry r, did you say we will supply the Paloborra project to China, or are we able to find other customers?

29:20 I think the market needs to understand that right now, the Chinese control 90 to 95% of downstream processing. So that means even Mountain Pass, the biggest producer of earth concentrates in the world right now sends all their product to China. The Western world has to go and develop the downstream portion of processing. So so even after we've produced a separated earth oxide, which is significantly further than most roof projects in the world right now, you then have to take that oxide and you have to turn it into metal and alloy, and then it gets fed into a a a magnet manufacturing plant. Now right now in the West, there's only one magnet manufacturing plant that I'm aware of in Europe that's called VAC magnets.

30:12 There's no magnet manufacturing that I'm aware of. In The US right now, they're talking about it. Certainly no magnet manufacturing in The UK. And the only other manufacturing outside of China is is Japanese, and the Japanese get all their feedstock from LIMITED. And LIMITED were the funders of of I mean, sorry, the Japanese were the funders of the LIMITED project many years ago. So there's a bit of of stuff happens in Vietnam and and but there's very little capability outside of of of China. So we'll be in production, I believe, before that capability is fully developed in the West. We are hoping it will be developed, and we are part of talks that will help initiate those developments of the downstream further downstream processing.

31:02 But until that gets fully developed and they can take all of Paloboros' product, the Chinese will buy everything we have. So that's what I'd like to say about it. We do have an offtake agreement with TISEN CREP for our product in Burundi, our mineral concentrate we produce there. But as I said, in the short term, we might have to sell to China until the until the RAINBOW market or the downstream processing of RAINBOW RAREZ gets developed in the West. We are hoping to be a supplier to the West of this of our strategic mineral. But as I said, it's a bit of a chicken and egg. We believe we'll be ahead of the actual production coming on stream in the West that we'll be able to take our product. But we'll see. We're moving very quickly, and hopefully, the rest of the market can move very quickly. But our focus has been one of the first to market with separated earth oxides and we believe we're a long way down the road.

32:07 It's what's RAINBOW's current cash position, and how do you plan to fund the development of the Palawar project? Well, first of all, our cash position is is we're comfortable at the moment. As I say, we don't need to raise any cash this year. And And I've always said when we build the pilot plant, I'll need to raise cash for the pilot plant. But but we we funded for the feasibility study phase at this at this stage. It's just a pilot plant that we and we might look at some some debt funding for the pilot plant there. So we won't need to come to the market for much equity for the pilot plant. And in terms of of developing the the Palaburra project, we're only gonna be looking at financing discussions at the end of the bankable feasibility stage, but we are having early discussions with debt funders. We would probably look for well, we know that we'll be able to secure at least 70% of debt for this project. The the payback is so quick that we know project finance will be readily available for this project. And as I said, we've already had people talk to us about debt financing for the project. So we don't see any problem there. And as I said, by the time we come to raise a bit of equity for that portion of the funding, we should be in a significantly better position from a market cap point of view. So we hope to have far less impact on any dilution at that point in time.

33:27 Might you send product to Pinsana in The UK? The answer is no. Pinsana need a mineral concentrate. We are going on one side all the way to a separated real real oxide. So that's what's unique about RAINBOW as well. You know, most other earth projects in the world out there, in fact, all of them right now are are producing a mixed earth concentrate or mixed earth carbonate or mixed earth oxide, and then they're sending it away to another jurisdiction to to be further beneficiated into separated with oxides. What's unique about Pellebora that we already have a chemical crack chemical feedstock so we can go straight away to mixed with carbonate and or separated oxides. We're going all the way to separated oxides.

34:13 Even LIMITED in Australia, they're producing a mineral concentrate in in in one one area, and they're sending it off to Malaysia to be further processed into into separated red oxides. RAINBOW has an unbelievable position in terms of that from their point of view. So no, we won't be doing that. How do you see the market for RARE's recycling developing? That's from Michelle. To be honest with you, we looked at doing a deal some eighteen longer, in fact, two years ago now, with guys some Swiss guys who had technology, which I said for downstream separation as as well as magnet recycling.

34:59 And I'm doing a lot of research into the magnet market and the potential for recycling, came to the conclusion that this market is maybe twenty years away. Because for a start, where are gonna get your your your your feedstock for your magnet recycling plant? At the moment, all the magnet recyclers, and they're all in China, by the way, apart from some in Japan and one one in Europe, they recycle all their own magnet offcuts and their own what they call swarf, which is, like, the fines from cutting magnets, similar to sawdust from a sawmill. So they all they recycle that themselves. So you're not gonna get feedstock from there. And now you look at electric vehicles. Well, electric electric vehicles are fairly new. These vehicles have few moving parts, less than an internal combustion engine. So as you know, your own car lasts for ten, fifteen, even twenty years or longer.

35:48 So electric cars are gonna are gonna last for a very, very long time. Now you're gonna take that electric car, and somebody has to somehow break that car apart to get the the the the small magnets out of the electric motors or or the windscreen or your or your seat or your or your or your window your your window magnet motors. Those are exceptionally small magnets that you're gonna have to try and get out. And then you go to the actual drive motor of the vehicle. Now you're gonna try and get one or two kilograms of of magnets of magnets out of that. So that's a long way from being developed. In other words, for anybody to be able to access a meaningful supply of of magnets from from from scrap people of electric cars. And then we next, we take wind turbines. Wind turbine direct drive wind turbines, which use permanent magnets, have only recently come into being being wind turbine fields have only recently started using direct drive wind turbines. Direct drive wind turbines have about two tons of magnets as I said in them, but these magnets are at these turbines are out in the sea. They're miles and miles offshore. They've got a twenty five to thirty year life before they they become redundant.

37:04 So they've only been going for the last five or so years. So we're still twenty or thirty years away from from redundancy. Then somebody has to go and dismantle that wind turbine in the North Sea or in the Southeast Asia Sea of of Korea where they're building a massive wind, sea wind turbine farm. And and that's gonna take a whole new market's gonna develop before you can access those sorts of of redundant permanent magnet. So in in my research of of of the market, I came to the conclusion that, yes, it will be developed, but it's, as I said, twenty, thirty years away. So so this is not gonna be a source of rare of of of near the near presentinium from recycled magnets for a very, very long time. From David. Thank you, George. Very exciting. Given the troubles with Eskom, how how energy intensive is this project expected to be, and is it possible to produce your own energy? It's a good question, David.

38:02 So first of all, this is not energy intensive. If you read our PEA in detail, you'll we we actually make note of it. Only about 20% of our OpEx is is is energy, whereas a normal mining project, energy is at 50% plus of your of your OpEx. And so we very low from a energy point of view, we have a full grid high voltage switchyard in place at Pelobor. We have an allocation from Eskom. We know that's not reliable, but Pelobor is one of the hottest places in South Africa. So we are certainly we've already started looking at solar and generators and we can with battery storage to supplement the switchover from solar to generate a power. And at the current pricing of power from Eskom, we could probably use solar and support it by generators where needed at a lower cost than Eskom. So with a 99.9% uptime guarantee from these the solar providers. So I'm I'm I'm not worried about the the energy situation in South Africa in terms of of of powering our plant.

39:15 Ben says TechNet TechNet is a significant investor in RAINBOW. What value do they add to RAINBOW? Well, right now, RAINBOW Techmed only own 3% of of RAINBOW. So, you know, there's institutional fund holders who are who are bigger holders. We would like to see Techmed be a larger shareholder, and they have indicated they would like to be a larger shareholder in RAINBOW. And, basically, they bring funding from America, which is very important for RAINBOW to have them as a shareholder. So we are we would encourage RAINBOW I mean, sorry, Techmed to to become a larger shareholder in RAINBOW. And yes, they definitely add value from bringing American funding into the company, and we see that being important for RAINBOW going forward.

40:09 Are you able to give any update on progress and discussions regarding Gurkara? I can say that there were major political developments in Burundi three to four weeks ago where the prime minister and the shift to cabinet were replaced in Burundi. This has led to meetings with the president, and the president has indicated that he would like the impostor's rainbow to be to be resolved as soon as possible. I might add that it wasn't just RAINBOW that was targeted. All mining in Burundi was stopped. But now that there's been a major cabinet reshuffle, we believe the impediment to us making progress has been removed, and we see already that we are in touch with the president's new economic adviser. He's been tasked with getting the situation with RAINBOW resolved. So we look forward to this being resolved.

41:03 I can't give a timeline, but there is progress. That's all I can say on that. Given the lack of earth production in US, when does the process move to Florida? I'm not quite sure what Michael's referring to here, but, no, the process won't move to Florida. The gypsum in Florida that we can apply technology is unfortunately exceptionally low grade. And all those gypsum stacks are subject to strict environmental controls in Florida, you can't touch them. So even though it's an environmental problem, even if we said, look, we can clean up your environmental problem with our process, you actually can't. You can't get access to them. So so Florida is not a market for us. We've already, as I said, signed a deal with OCP in Morocco, and we're looking at other areas, but not in The US. And yes, the numbers are for 100% of the Paloboros project, and we own 70% of it.

42:09 I think that's all the questions I can see for now. So I think if there are any other questions, we'd like to conclude. Yep, George. Absolutely. 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 and then add any additional responses where it's appropriate to do so. George, perhaps before redirecting those on the call to provide you with 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 to wrap up with, that'd be great. Well, I think I've covered most of it other than you know, I think the RAINBOW share makes a compelling investment case for various reasons. As I said, it's unique in the sense of our cost base.

43:00 OpEx is the lowest as we can see of any rail project in the world or Western project in the world right now. We've got relatively low CapEx for the volume of RAREZ we're going to be producing and also for the EBITDA that we'll be generating per annum out of this project. We are we've got a unique patented process, which is creating other opportunities which steers this company for investors, I believe. And those other opportunities will certainly add value to RAINBOW. And we've got a very conservative NPV when we release our next feasibility study. I really believe our NPV will be significantly above the $1,000,000,000 mark for the project. And as I said, we are 70% of the project at this stage. So I think it's very exciting times ahead for RAINBOW.

43:56 We've got more opportunity, and we've got a great project. And I think you should be investing in us. George, that's great. And thank you once again for taking the time to update investors today. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations? It's gonna 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.