Eadwig
06 May 2017
Re: Great prospects here I'm hoping it moves up long before sales start, the more coverage it gets the better it will do I think because the move to production is so fast that all the usual catalysts of a junior-miner life-cycle should come along in very quick order. Its quite fascinating actually, academically, and I'm hoping it proves equally profitable. The next catalyst, I believe, will be the 9th May (evening) when the CEO is one of the speakers at a small mining presentation in London. I expect him to announce, and hopefully make a big deal of, the fact that production has already started. Consequently I expect the next big rise to be Friday May 10th and during the following week, so long as any media coverage on Friday and the Weekend press isn't drowned by some unlucky conjunction with any major news stories.Newsflow will be critical to supporting the price and pushing it further as production continues, parts of the processing plant arrive and start to be assembled on site, the first running and training on the processing plant, then the first actual processing and production of concentrate, and hopefully the first sale of concentrate before the end of 2017.We've already had the initial IPO and associated interest in January and February followed by a drop off (when I bought), then a single Motley Fool article seemingly responsible for the recent rise, along with quite noticeable volumes.There are already a couple of major Institutional Investors on board (Legal & General being one) and any large Institution buying in towards the end of the year as sales approach will be classic catalysts and part of the standard life-cycle. If everything can be squeezed in to such a compressed and busy time period.The big money is likely to be made over the short-term (18 months) during the progress from launch to early production and sales and any further finds justifying a Go decision in terms of extending the project from trial mining to full production.As to the long term viability of the project, I think it has a good chance, but I'm not very interested once it settles into steady production and dividend payments.If there is a trade dust-up with China and rare earths exports are restricted once again then expect any source of REEs external to China, including RBW's smallish contribution to supply, to sky-rocket in share price.I currently give RBW a STRONG BUY before May 10th with a hopeful price target of @17p-22p some time this month, with a little help from the media external to the industry periodicals.
coldascheese
05 May 2017
Great prospects here Share price has been moving up nicely and I am not surprised why. They will be selling rare earths this year after starting production with very low costs . Have a feeling this could really move up this year especially on start of selling product in quarter 4 and that should bring the share onto investors radar.
spudmurphy1
25 Apr 2017
Director buys I see that our 2 top bods have 'aquired' a juicy 8mill and 333thou (nice number) of shares between them. It would give the right signal to the market if they stumped up the cash for a significant number more.I noticed the 400k sell going through this afternoon, Nicely managed as the sp barely flinched. Volume over the last 2 days speaks volumes!!Spud.
spudmurphy1
25 Apr 2017
i'm in. Ticking up nicely...Spud.
Eadwig
25 Mar 2017
Interview with CEO [link] Eales, CEO, interviewed for a podcast (Interview starts at 26 minutes 8 seconds)Interesting to hear a little more that I'm sure came out of the recent presentation, but I've seen no sign of a transcript, recording or video of that and obviously wasn't present myself.Just a couple of little extras in there that you don't get from the presentation document, like sale before the end of 2017 is a stiff target they have set themselves (I agree) and the hope that 2018 will see 5,000t of production, which will be profitable on an operating basis. That is encouraging.10k tonnes per year can be easily handled with no extra expenditure on plant.Also mentions how 'opaque' the REO markets are (as said in the prospectus) and that every bit of production will be negotiated separately. This is looking like where tk R.M. come in - and not processing the ore concentrate themselves as I had assumed previously. However, they believe they have customers for as much as RBW can produce, especially as Eales says they hope to be in the top 25% of global producers in terms of cost, allowing them to be competitive.I have also noted since I last posted that the off-take agreement with tk only applies to concentrate 54% pure or greater. That means processing the tailings that has been spoken of will probably mean RBW marketing that stuff themselves, if its worthwhile.the way, the fact tk RM are selling the material on RBW's behalf, if I have understood that correctly, gives some explanation as to the 3.5% cost allowance for marketing.Listen to it yourself and see if you draw the same conclusions.PS. Eales expects production to start in April, although the plan is to stockpile it until the plant is ready - which makes sense, they are costly things to run.The processing plant is commissioned in 4Q2017. He does expect regular news flow about production, and also various components of the processing plant arriving on site.He says the plant is off-the-shelf components, but I'm sure some on site fitting will be required. The company 'supplying' the plant seems to just be ordering it from their own third party suppliers, which seems a bit wasteful to go with a middle man.
Eadwig
24 Mar 2017
Trial Mining Project Based on average samples from Gakara (First mine in production) Magnet REEs account for approximately 20% of the contained REOs within the Gakara ore, representing an average of over 80% of the contained value of REOs at current market prices Contained value of average REO content of Gakara concentrate samples c.US$6,000/t (on a separated basis).Opportunity to capture greater share of this value by adding downstream processing at a later date.ELEMENT - - - - % - %valueLanthanum - - - 31% - 8%Cerium - - - - - - 46% - 6%Praseodymium - 5% - 22%Neodymium - - -16% - 58%Other - - - - - - - - 2% - 6%Prices 31 Dec 2016Lanthanum metal ≥ 99% 7 US$/kgLanthanum Oxide ≥ 99.5% 2 US$/kgCerium metal ≥ 99% 7 US$/kgCerium Oxide ≥ 99.5% 2 US$/kgPraseodymium metal ≥99% 85 US$/kgPraseodymium Ox ≥99.5% 52 US$/kgNeodymium metal ≥ 99.5% 60 US$/kgNeodymium Oxide ≥ 99.5% 42 US$/kg2017 isn't expected to be much different to a slow 2016 rare earth sector according to Chris Berry of House Mountain Partners and the Disruptive Discoveries Journal.“I don’t expect much to change,” he said. “Demand for select rare earth elements ought to remain healthy but disconnected from overall price.”Similarly, Industrial Minerals notes Chinese supply will continue pulling down prices until there’s a firm policy in place to shutdown mines, or emergence of new demand.Still, the rare earth sector is expected to recover at some point, PR Newswire suggests. The publication says the focus of the rare earth sector in the coming years will “intensify” on neodymium deficit with a rise in prices over the next 5 years.“The long-term performance of this sector is threatened by potential substitution of NdFeB technologies in HEVS/EVs and wind turbines,” it says.Of course, the Chinese government’s plans to regulate R.E. production to 140,000 tons per year, beginning in 2020 will also impact the industry moving forward.That said, according to Research and Markets, the global permanent rare earth sector looks to reach $41.41 billion by 2022. In terms of rare earth supply, it’s “expected to remain stable after WTO intervention and international agreements providing opportunities for sustainable market growth.”As far as what investors should keep their eyes on, Berry said investors should pay attention to what’s happening in China. “Watch industrial policy in China, “he said. “Watch overall pricing data as this may crack open the door for financing for western R.E.E. projects to push forward.”
Eadwig
23 Mar 2017
Re: Problem with figures? The presentation document used to the major investors yesterday included the $280 figure, updated from $240, in operating costs, prompted by my enquiries.A new page added to the document shows some major institutional investors on board already - although this may have been announced elsewhere after the IPO. Very unusual at this stage of a mining project lifecycle.Sector: Mining Financial year end: 30 June. :Total issued share capital: 152,025,807 Ordinary Shares Total voting capital: 152,025,807 Ordinary SharesMajor shareholders:Name of Shareholder Number of Ordinary Shares % of Share CapitalAdonis Pouroulis 44,596,386 29.33% (Chairman)Malinova Holdings LLC 8,552,684 5.63%Legal & General Group Plc 8,000,000 5.26%BlackRock Investment Management (UK) Limited 8,000,000 5.26%Denis Ciza 3,968,745 2.61%James Burgess 3,739,471 2.46%
Eadwig
21 Mar 2017
Re: Operations Update RNS I'm doing it now ...· EPCM contract signed for Gakara ore processing plant. [EPCM - Engineering, Procurement and Construction Management]I think I detect the first potential slips in the trial project plan considering we're at the end of 1Q2017:Today's RNS"Obsideo Consulting Pty Limited of South Africa for the design, supply and construction of its ore processing plant with a capital equipment value of approximately US$1.5 million with the agreed *commissioning and handover date of the plant being in Q4 2017*, in order to meet Rainbow's stated objective of making its first sales of rare earth concentrate, through its sales and distribution partner tk Raw Materials, before the end of 2017." [My *emphasis* - Eadwig]From Investor Presentation:"As set out in the Company's IPO Prospectus production of ROM ore will be stockpiled for approximately six months prior to commissioning of the ore processing plant."CEO in RNS:"Rainbow has made great progress in delivering on the strategy we presented to investors, namely bringing our Gakara project to production and sales within nine months. "It looks very tight and dependent on the firm designing and constructing the processing plant. It is all supposedly made up of standard equipment, even so, I doubt its 'off-the-shelf' stuff exactly, especially just coming out of a contraction in the mining equipment industry.However, I'm more concerned with the cost of the plant at $1.5m and possible financial slippage.The investor presentation says US$2.23m cap-ex inc. plant and 'fleet'.But I'm not sure how that fits with the presentation's Project Economics:Infrastructure and civil works - $1,300,000Earth moving fleet - - - - - - - - - - $570,000Transport & shipping - - - - - - - - $160,000Other - - - - - - - - - - - - - - - - - - - $200,000Total - - - - - - - - - - - - - - - - - - -$2,230,000Where does a $1.5m processing plant fit into that? Perhaps the investor meeting tomorrow will make things a little clearer.
Eadwig
21 Mar 2017
Operations Update RNS Today 07
0 GMTOperations UpdateRBW is pleased to announce an update on its high grade Gakara Rare Earth Project in Burundi ('Gakara') following its US$8 million fundraising and successful IPO on the London Stock Exchange on 30 Jan 2017. Gakara is one of the highest grade (47-67% Total Rare Earth Oxide) rare earths projects globally and the Company is targeting first production and sales of concentrate by YE 2017.Highlights· Activity commenced at fully permitted Gakara project ahead of trial mining with local labour force recruited· EPCM contract signed for Gakara ore processing plant· Initial extraction of run of mine ore from high-grade veins commencing shortly· First sales to commence by YE 2017 through multinational sales and distribution partner, tk Raw Materials, part of the Thyssenkrupp Group· RBW now debt free following the final settlement of its loan facility post-IPO
Eadwig
20 Mar 2017
Re: Forgot to mention... If I put a STRONG BUY against something I do like to make clear if I think its speculative, and the high Opex cost of $810 per tonne worries me somewhat given that these veins are all at the surface, at least initially. Even at double the price of my original figures, that makes the trial dangerously close to only breaking-even at an operational level.The e-mail speaks to economies of scale later - but unless the site running cost figures are included in the Opex, I don't really see how that works. I wish I was going to be at the presentation, I have a lot of questions - some of which I included in the copies of my post below.Anyway, that's why I intend to trade around a position (assuming there is enough volatility to do that), with an aim to build an increasingly large position to gain as lower book cost as possible, as we get questions answered and, hopefully, confidence builds.I would have waited to buy if these presentations weren't coming up, but the life-cycle of this project, assuming all goes to plan, is so short comparative to most, we could see the swings of a normal project life-cycle happen very quickly. Or possibly not at all if trial production leads straight into commercial production which could lead to a share price graph nothing like the standard profile of a 'junior miner'. Or to put it another way, although I judge another cash call is likely for full commercial operations, it could be a straightforward funding of capital expenditure for additional capacity without the usual risks involving further exploration attached. I just hope if that situation is reached, the smaller shareholders are given a fair chance along with any larger investors coming on-board for the first time. Some research of the other companies in the chairman's group should give an indication of how that will be handled, unless someone reading already knows?
Eadwig
20 Mar 2017
Re: CPR Yes, A 'Competent Person's Report' is a standard thing that I know oilers have to have in order to be able to infer a certain level of reserves on a claim. It makes sense that something similar would exist for mining, especially when a complete survey hasn't been done.Its a bit typical that the industry uses an acronym like that without explicitly defining it in a presentation document (or e-mail in this case). Its in the document too though.Its easy to assume that others know what it means, plus such reports often pull together their info from presentation slides when someone is talking through it and probably spells it out the first time for a non-industry audience.Anyway, let's hope it is that because if it is "cardiopulmonary resuscitation" then it speaks to a lack of adequate breathing equipment being used on site that will eventually lead to heart-attacks! Not so uncommon in the mining industry, especially in Africa, South America and Indonesia, but fortunately not an issue in this particular project. In fact, one of the things the project has going for it is that the minimal on-site processing means no serious environmental issues (except possibly contaminated water, I'm unsure about that). Some 'unofficial' rare earth mines in China have led to an horrifically toxic local environment. Such mines make up a surprisingly large percentage of the global supply of some heavy metals and rare earths (or so it is assumed by bodies that track mining and refining figures and find an unexplained gap of up to 33% in some cases), and I'm hoping some of that rare earths supply will disappear from the markets as China continues to crack down on pollution.Same goes for recovery of same from batteries and the like, which is only economic when no consideration is given to the environment or safety of the workforce and local populace.
Rhodium45
20 Mar 2017
Re: Forgot to mention... Thanks for your posts Eadwig, very informative.I too am looking at getting a few more as soon as the new tax year comes and I can top up my accounts. Yes, its speculative, but if the trial mining goes well then it could all be very good in the future.
Rhodium45
20 Mar 2017
CPR Tried looking up CPR, and at first all I could find was "cardiopulmonary resuscitation" But more seriously, I think it stands for "Competent Person's Reports".
Eadwig
20 Mar 2017
Forgot to mention... I bought a few today in the hope that they get a boost from these up-coming presentations (hopefully with some amended figures). Very speculative.My response on ADVFN:"Fantastic work, shakeypremis. If you double the figure per tonne (and therefore revenue) and slot the figures into my working, which I haven't done yet, I think you'll find it makes a lot more sense - keeping in mind this is a TRIAL mining project with no guarantees - and obviously conservative figures used too.As I mentioned in my post, (and its in the document too), there are further on-site processes that can be done, E.g. with the tailings, which they haven't included and also with the concentrate at a later date which would up the purity and therefore the price commanded - although also the cost of processing, presumably.Let's hope whoever corrects the document does a quick check over the other figures too while they're at it. Where there is one typo that didn't get spotted there is often another. Its an odd one too. Not transposition of two figures (which some people are prone to a bit like dyslexia), and not a key next to the correct one on a keyboard either. So worth going over. Very surprised they never spotted it themselves.However, such a fast response is always a sign of a potentially good company.EadwigPS, there is (at least) one other discrepancy in the report, I believe
age 19 "Process plant will have 10tph capacity and capable of ramping up to 5000tpa."If that means tonnes per hour and tonnes per annum (and I may have got that wrong), if you run the plant for 7 hours a day at 9tph (under capacity to reduce wear and tear and allowing for a 1 hour lunch break in which the whole shift eats together) 7 hours @ 9 tonnes = 63 tonnes per day.Let's say as an enlightened employer, staff get 8 weeks holiday a year and don't work weekends and the plant is down for another 4 weeks for unscheduled maintenance, that's still 197 working days. 197 days x 63 tonnes = c. 12,425 tpa. So 5,000 tonnes per annum is more of a 'ramp down' rather than "ramping up".So something doesn't quite figure there. Either the plant has 10 tonnes per hour capacity or 5,000 tonnes p.a. I think the latter figure from the target has been accidentally substituted as the plant capacity - or what it might be expected to deal with. Not its actual capacity.Its quite important, because the processing plant is probably the most expensive single asset on site, and if you run it with shifts and standard holidays etc, not to mention weekends, 9tph would suggest something more like a capacity of 45,000 tonnes per year. And that's allowing for only two shifts (7 days), running at just 90% capacity and two months down time for maintenance.That could handle the processing from several sites, one would imagine, without any extra expense. And it could probably be pushed 30% or more harder than that if it were running round the clock. Mines aren't notorious for going easy on their plant - or their workers, come to that.Worth another e-mail? Feel free to pass my post on if you wish. It isn't such an immediate 'need to know' issue. It does make you wonder how many other things might not be exactly right in the presentation.PPS. I am available to proof read such documents, admittedly at a high cost per hour, in case anyone from RBW is reading.
Eadwig
20 Mar 2017
Re: Problem with figures? No response here so tried a post on ADVFN with the figures I laid out here. I got a few responses and shakeypremis said he would e-mail the company. They responded immediately, and he made two posts:"I've got a response from the company (a very quick response I might add).The figures quoted in the presentation on page 22 are incorrect. $240/t transportation, marketing and royalties should actually be $280/t. Still $200 transport costs.The presentation should be updated shortly apparently.Still $1066/t is still not exactly a compelling figure, although the person who emailed back did seem to indicate that this was not the exact figure per tonne of concentrate, but was simply closer to the price received per tonne. So presumably higher?"Some further questions so he posted this:"This is the email I received, it's from a very senior figure within the company:"Thank you for your email, which makes an excellent point. Due to the UK’s financial regulations the Company was restricted from including any detailed forecasts in its Prospectus or presentation that were not contained in the Competent Person’s report, hence the source of the Year 1 Opex numbers quoted on the page in the presentation. Note of course that these are Year 1 numbers and the costs per tonne will benefit from economies of scale as production ramps up.The percentage rates for Royalty and Marketing costs are correct, however you have correctly identified a typo in the $240 number which should in fact be c $280 and using your maths gets you closer to what might be the price per tonne for our concentrate (which we were also unable to include in the marketing documentation).We will ensure that the presentation is corrected.Thanks for your interest in Rainbow."They wanted me to make sure that I made it clear that as the company trial mining, concentrate sales are not guaranteed."I do not mind if my response appears on a bulletin board, however you should remind readers that our Prospectus clearly states that we are “trial mining” as defined by the CPR and concentrate sales are not guaranteed." "Anyone know who or what "the CPR" are?
