Rainbow Rare Earths Limited (RBW) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to the Rainbow Rare Earths Limited investor presentation. [Operator Instructions] 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 out 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. Here's our usual disclaimer and here are some of the highlights from the PEA. 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 Rainbow as a company, and it's a very exciting part that we are in know. Our base case NPV sits at -- for the projects sits at $627-odd million. And when I say the base case, this is based on 2023 rare earth forecast prices, which are lower than 2022'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 2 years, which is exceptionally good for a mining project. And I say mining project usually because essentially, this is a chemical processing plant that we'll be building. If we look at the year-to-date average prices, and we use these in our economic model, we've got an NPV of almost $1 billion at $930-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 1.7 years. So these are obviously very encouraging numbers. And I think it's the best rare earth project out there in the market in 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 -- produced or separated rare earth oxides. And I must stress Rainbow is one of the very few development companies out there that are going all the way through to separated rare earth oxides. The only other company in production that goes all the way through to separated rare earth oxides in the world right now is Lynas in Australia. And if you look at their cost per kilogram 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 rare earths from phosphogypsum opportunities around the world. And we've developed IP in conjunction with K-Tech, which enables us to do that. I must stress that the back end of our process flow sheet is already patented by K-Tech, and it's proven and they have used many -- this technology in many instances around the world and that's a key derisker for Rainbow. And in the up-front part of the process flow sheet that we've developed jointly with K-Tech, 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 but apart from what we have at Phalaborwa. One of the key reasons why we are able to have a lower 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. While all rare earth projects start with producing a mixed rare earth concentrate, then you have to crack this concentrate, then you have to -- from the cracking you got, you either produce a mixed rare earth carbonates or a mixed rare earth oxides, and that's where most projects stop around the world. We're going one step further. We're going all the way to separated rare earth oxides, which enables us to capture the published RE oxide price that's published by the Bulletin Board without suffering any discount, and this is a major advantage for the project as well. Just to take viewers, who are not familiar with the rare earth markets, just to give them a bit of background on why this is such a strategic and critical mineral is that all rare earth projects have roughly 17 rare earth elements in them. But only a few of those rare earth elements are key for the green economy, as everyone talks about, and basically neodymium and praseodymium, which are key for permanent magnets, and permanent magnets going to electric cars and wind turbines. Now each wind turbine, 3-megawatt wind turbine, takes about 2 tonnes -- that's per turbine, 2 tonnes of neodymium/praseodymium magnets. And each electric car takes between 2 and 3 kilograms. 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 green power, that means there's a significant demand that's been driven by legislation for rare earth. 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 the permanent magnets. And fortunately, at Phalaborwa, we've all 4 of these rare earths and the economic quantity that we'll be extracting. In fact, 95% of the value of our basket is made up of these 4 rare earths. And that's why we're only going to target the 4 rare earths with the K-Tech technology to separate them out, and we'll be then selling them into this growing market, which is going into very much a supply deficit going forward. Just once again to now look at our resource in Phalaborwa, it's -- very importantly, 29.1% of our basket, our rare earth basket, sits in the 2 key rare earths, neodymium and praseodymium. This is higher than most rare earth projects out there in the world, and it's higher than the 2 big rare earth companies in production being Mountain Pass in America and Lynas in Australia. NdPr is very, very high, very much at the top end. And as I said, we've also got dysprosium and terbium in significant economic quantities. If we look at how we stack up against some of the other rare earth projects out there, the reason why Phalaborwa excited us when we secured the project was because we compared this to an ionic clay project because ionic clays have got very low mining costs and we've got very low mining costs at Phalaborwa or basically we'll be re-mining 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 ionic clay deposits around the world now and in China. Now ionic clay deposits are typically 0.06% to 0.08% grade TREO. We sit at 0.43%, which is 10x higher grade than ionic clay deposit, and very importantly, if you look at our neodymium/praseodymium parts per million, you see how we stack up. The next best ionic clay project out there, we're still 600x 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. In fact, in terms of grade, we're higher than some hard rock deposits out there in the world and our neodymium/praseodymium percentage or price per million is exceptionally high. And then another key consideration for rare earth project is uranium and thorium because all rare earth projects have a certain amount of uranium and thorium. Our uranium and thorium content is exceptionally low at Phalaborwa 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 separate the uranium and thorium out of their resource and do something with it. Our uranium and thorium content that's in our PEA is below 1 becquerel unit. And if you want to export into China or export rare earth concentrates on the high seas, you need to be below 10 becquerel unit. So we are less than 10% of the benchmark that is set in the world. So basically, the radio activity in Phalaborwa is so low that you've got more radioactivity in your microwave oven at home. So a very significant project as well. Just to once again look at the project economics, we've got a life of mine of 14-odd years. We're going to be treating 2.2 million tonnes per annum. And over the life of the project, we'll be producing 26,000 tonnes of our targeted rare earths. Our capital costs are at the moment $295 million and we anticipate some optimization of this capital number in the next phase of feasibility study. And our OpEx per kilogram of rare earth separate oxides produced is USD 33.86 per kilogram, which, as I say, is the lowest that we can see anywhere in the world -- in the Western world that is. We -- it's very difficult to get numbers out of China. They don't publish their numbers, and even if they did publish their numbers, we'd have to question them. The other thing is looking at our project economics. As I said, our base case pricing, which is conservative, and year-to-date pricing projects got NPV of over $900 million, and on forecast pricing, the NPV is over $1 billion. If you went and took the latest forecast numbers, they 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, it goes up to about 88% life of project and the NPV goes to about $1.6 billion. So as I said, Rainbow has been very conservative with our forecast numbers, and we believe this is -- we'd rather be conservative and have numbers which are realistic in our PEA which can only improve going forward. So we're very excited of all the developments that will take place in the next stage of feasibility study. That's just the forecast and graphic of the cash flow for Phalaborwa and also the basket price of our rare earth basket. 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 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 most 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 rare earth projects out there in the world that are in development, their CapEx numbers start in the $500 million to $1 billion for the kind of revenue and EBITDA they'll be producing. So Rainbow is very, very robust from that point of view. And one of the reasons is that we don't have all the steps of the typical hard rock mining project. We don't have to drill and blast. We don't have haulage. We don't have 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 once you produce a rare earth concentrate, you have to leach some of those, the unfriendly rare earths out of it like uranium and thorium. You have to take it out of your product and then you have to crack it, and once you've cracked it, only then can you start leaching and going to securing the rare earths out of your cracked concentrate. And we're fortunate that Phalaborwa Rare is that the Phalaborwa residue stacks, phosphogypsum residue stacks came about as a result of hard rock mining next door with Foskor, the government mining company, mining a hard rock carbonatite next door that had rare elements in it, trace elements, but very low grade. But a flotation process at Foskor that produce a phosphate concentrate, slurry concentrate, and the rare earths were upgraded in this phosphate slurry concentrate which was then pumped next door to our phosphoric acid production plant, which was last owned by Sasol. And Sasol were forced to sell it a couple of years ago to Bosveld Phosphates who are now owners of the project and who we did this deal with. But in the production of phosphoric acid, you actually add heat and sulfuric acid to the phosphate slurry, two key ingredients when you're cracking a rare earth mineral concentrate. And basically, by adding phosphoric acid and heat, they were able to produce phosphoric acid with 1 or 2 other agents added, of course. But then you had this gypsum residue and the gypsum residue sits in these chemical stacks at Phalaborwa in crack chemical form. So we are basically 2/3 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 20 months of work to produce our PEA. And a while ago, people were saying, why was the PEA taking so long? PEA took a little bit longer because we needed to optimize our flow sheet to make sure that the PEA came out with numbers which we knew would be very good. And we wanted to reduce our up-front flows, which would reduce our reagent consumption, which will reduce the flows into the K-Tech section of the back end and that would reduce the capital. And we wanted to make sure that we could come out with a flow sheet that was proven at that scale and that we knew would be successful and we've been able to achieve this. And it's not just 20 months of work. What Rainbow was able to do is we're able to draw on all the Mintek work that was done by Sasol. So Sasol and Mintek looking at extracting rare earths out of phosphogypsum and these 20 years of development that we're able to access, we're able to access Sasol's own development. In fact, Sasol built a pilot plant here in 2011, 2012, that successfully extracted 3 tonnes of mixed rare earth carbonate from the phosphoric acid solution -- large solution at Phalaborwa. So we always knew the rare earths 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 your project. So we spent a lot of time, but it's not just 20 months, it's 20-odd years of backup. And then we fortunately were able to partner with K-Tech as our technology and IP partner with the back end and also on the front end. And K-Tech brings 30 years of phosphogypsum experience in Florida, which is the heart of phosphogypsum mining in the United States, to Rainbow. So as I said, there's many, many years of background development that led to the 20 months that when we really got involved and produced what we have been able to produce for 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 continuous ion exchange, continuous ion chromatography units that have been commercially built by K-Tech and are in production around the world. So these units are in production in numerous facilities around the world; mining, chemical, food, biotech. And very importantly, the size of the unit you see there is in fact -- which is in commercial production right now, is actually larger than the size of the unit we're going to be requiring for Phalaborwa. So these units are all, as I said, have been used commercially and it derisks the project significantly for Phalaborwa as well. The reason we're using the continuous ion exchange is basically a commercially available reason. It's manufactured by 3 commercial companies in the United States. 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 K-Tech IP is able to select the rare earths that we require, just the 4 rare earths we require, and the other rare earths will then just be -- will be bagged and stored, it's very much more efficient than 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 going to have at Phalaborwa. So very exciting for Rainbow. So just to conclude in terms of our next steps, there will be a resource update. We'll be going into a full feasibility study. And we will be updating because the site is largely permitted, but we will be updating brownfields permits that are already in place, and we'll be applying for a new permit for the new stack site that we will have to have at Phalaborwa which -- and we're already going to be starting that 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 work is starting. And then finally, we will be going into an extensive -- continuous pilot plant operation to once again derisk the flow sheet even further. And we are 100% convinced that the continuous layered scale which will be -- say, will be developed into a bulk piloting, will be successful. But we're doing this just to give investors 100% satisfaction that this project is completely derisked. We believe this derisk is already at Rainbow, but I don't expect you to take my word for it, and 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 2 other agreements over the last 3 months. We signed an MOU for a major diversified chemical company in South Africa to look at extracting the rare earths from their phosphoric acid production. That's occurring in South Africa. The reason why we signed those MOUs because we recognize that this current phosphoric acid production process uses the same feedstock from Phalaborwa -- from Foskor that is -- the phosphoric acid production. And therefore, it's got the same root of elements that we have in our Phalaborwa project and so we signed an MOU. It's very exciting. So we've got further project diversification. And then we signed an MOU with OCP in Morocco which is to investigate once again extracting the rare earths of the phosphogypsum opportunities they have in Morocco. Morocco is the largest producer of phosphoric acid in the world and the largest producer of phosphogypsum 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 we are the only rare earth company I'm aware of in the world that has got multiple projects and in multiple countries that we are now operating in and developing. Thank you.

George, that's great. If I may just jump back in there. Thank you very much indeed for your presentation this morning. [Operator Instructions] 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&A can be accessed via your investor dashboard. George, we did receive a number of pre-submitted questions ahead of today's event as well as, as you can see in the Q&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&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.

Okay. All right. So just to have a look. Can you hear me?

Yes, sir. We can hear you.

Yes. So just to have a look at the pre-submitted questions. Do we still intend to start with a trial processing plant or it's a pilot plant? Yes, we do intend to do this, as I mentioned earlier. And we'll be looking to be doing the design of that plant by the end of this year, hopefully. And early in the new year, we'll be basically going into the manufacturing and the construction of the pilot plant. We have some very unique ideas around this. And yes, it will be very positive for the pilot plant. The next thing is that are the interested parties here 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 just part of the bankable feasibility study. It's not going to slow us going into full production. We need to do a bankable feasibility study and the pilot plant will run in parallel with that bankable feasibility study. And by the time we finish our bankable, we will 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 time line still has to be confirmed, but we're looking at -- towards -- at the end of 2023, at the worst first quarter of 2024, and then we will be looking to start construction in the latter half of 2024 and completion of the plant by the end of 2025 with commissioning and starting before the end of 2025 so we can go into full production 2026. It's a very quick time line for a mining project. When you consider we only really secured this project in -- I think it was December 2020. We started working on it effectively January 2021. And most -- as this was a hard rock mining project, you're talking 10 to 20 years cradle to grave. So this is a very exceptionally quick time line. Are the basics in this PEA applicable to other sites and which make future PEAs on other sites easier? Well, yes, I've also sort of addressed that in the sense that, as I indicated, we signed MOUs to look at other phosphogypsum opportunities through phosphoric acid production process, one is OCP and the one with the chemical company in South Africa. So yes, we've already started doing that. And a large part of our flow sheet development that we've done for Phalaborwa 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 than it took us at Phalaborwa. And the last question is, how many other sites are we now considering? Well, as I said, so far, we've got 2 other sites. So yes, that answers that question. Next question is, congratulations on the great PEA results. Is the pre-feasibility now funded and underway? Well, the next stage of feasibility study is funded for the start of that, and then we'll assess that next year. But right now, we're not looking to raise any capital to kick off that feasibility study and certainly we're not raising any capital this year. Is the approximate rare earth content in the phosphoric acid processing stream from OCP plant in Morocco an ion? We do have a sense of what we're looking at in Morocco. But until we formalize the test work program and do some more assay results, we don't want to say anything about the rare earth content in the Morocco project just now. But I can say that from our initial test work or assay 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 over the patent and rights likely to have? Well, the patent is in process. It's being developed and it will be lodged shortly. And in terms of impact on rights likely to have, 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 said, the back end is already subject to a patent by K-Tech, and we're now jointly patenting the front end. So it doesn't have any impact other than being very positive for us. From Greg, is there any 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 could have used an 8% NPV rate, which will -- sorry, an 8% discount rate, 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 Phalaborwa project to China? Or are we able to find other customers? 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 rare 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 even after we've produced a separated rare earth oxide, which is significantly further than most rare earth 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 magnet manufacturing plant. Right now in the West, there's only one manufacturing plant that I'm aware of in Europe, [indiscernible] magnets. There's no magnet manufacturing that I'm aware of in the U.S. right now, they're talking about it. There's certainly no magnet manufacturing in the U.K. And the only other manufacturing outside of China is Japanese, and the Japanese get all their feedstock from Lynas, and Lynas were the funders of -- I mean, sorry, the Japanese were the funders of the Lynas project many years ago. So there's a bit of stuff that happens in Vietnam, and -- but there's very little capability outside 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 that downstream -- further downstream processing. But until that gets fully developed and it can take all of Phalaborwa's 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 thyssenkrupp for our product in Burundi, our mineral concentrate we produce there. And -- but as I said, in the short term, we might have to sell to China until the rare earth market or the downstream processing of rare earths 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 onstream 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 is being one of the first to market with separated rare earth oxides, and we believe we're a long way down the road. What's Rainbow's current cash position and how do you plan to fund the development of the Phalaborwa project? Well, first of all, our cash position is, we're comfortable at the moment, as I say, we don't need to raise any cash this year. And I've always said, when we build the pilot plant, I'll need to raise cash for the pilot plant. But we funded for the feasibility study phase at this stage. It's just a pilot plant that we, and we might look at some debt funding for the pilot plant there. So we don't need to come to the market for much equity for the pilot plant. And in terms of developing the Phalaborwa project, we are only going to 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 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. Might you send product to Pensana in the U.K.? The answer is no. Pensana need a mineral concentrate. We are going, on one site, all the way to a separated rare earth oxide. So that's what's unique about Rainbow as well. Most other rare earth projects in the world out there, in fact, all of them right now are producing a mixed rare earth concentrate or mixed rare earth carbonate or mixed rare earth oxide, and then they're sending it away to another jurisdiction to be further beneficiated and to separated rare earth oxides. What's unique about Phalaborwa is that we already have a chemical -- cracked chemical feedstock. So we can go straight away to mixed rare earth carbonate and/or separated oxides. We're going all the way to separated oxides. Even Lynas from Australia, they're producing a mineral concentrate in one area and they're sending it off to Malaysia to be further processed into separated rare earth oxides. Rainbow has an unbelievable position in terms of that -- from that point of view. So no, we won't be doing that. How do you see the market for rare earths recycling, developing? This is from Michelle. To be honest with you, we looked at doing a deal some 18 -- longer -- in fact, almost 2 years ago now, with some Swiss guys who had technology, which I think for downstream separation as well as magnet recycling. And on doing a lot of research into the magnet market and the potential for recycling, came to the conclusion that this market is maybe 20 years away because for a start, we're going to get your feedstock for your magnet recycling plants. At the moment, all the magnet recyclers, and they're all in China, by the way, apart from some in Japan and one in Europe, they recycle all their own magnet offcuts and they own what they call swarf, which is like the fines from cutting magnets, something like the sawdust from a sawmill. So they recycle that themselves. So you're not going to get feedstock from there. And now you look at electric vehicles. Well, 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 10, 15, even 20 years or longer. So electric cars are going to last for a very, very long time. Now you're going to take that electric car and somebody has to somehow break that car apart to get the small magnets out of the electric motors or the windscreen or your seat or your window magnet [ motors ]. Those are exceptionally small magnets that you're going to have to try and get out. And then you go to the actual drive motor of the vehicle. Now you're going to try and get 1 or 2 kilograms 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 magnets from scrap heap of electric cars. And then next, we take wind turbines. Wind turbine, direct dry wind turbines, which use permanent magnets, have only recently come into being -- wind turbine fields have only recently started using direct drive wind turbines. Direct drive wind turbines have about 2 tonnes of magnets as I said in them. But these magnets are out -- these turbines are out in the sea. They are miles and miles offshore. They've got a 25- to 30-year life before they become redundant. So they've only been going for the last 5 or so years. So we're still 20 or 30 years away from redundancy. And then somebody has to go and dismantle that wind turbine in the North Sea or in the Southeast Asia Sea of Korea where they're building a massive sea wind turbine farm. And that's going to take -- a whole new market is going to develop before you can access those sources of redundant permanent magnets. So in my research of the market, I came to the conclusion that, yes, it will be developed, but it's, as I said, 20, 30 years away. So this is not going to be a source of neodymium/praseodymium from recycled magnets for a very, very long time. From David. Thank you, George. Very exciting. Given the troubles with Eskom, is high energy intensive in this project expected to be and is it possible to produce your own energy? It's a good question, David. So first of all, this is not energy intensive. If you read our PEA in detail, we actually make note of it. Only about 20% of our OpEx is energy, whereas a normal mining project, energy is up 50% plus of our OpEx, and so we're very low. From an energy point of view, we have a full grid high-voltage switchyard in place at Phalaborwa. We have an allocation from Eskom. We know that's not reliable, but Phalaborwa 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 -- and with battery storage to supplement the switchover from solar to generator power. And at the current pricing of power from Eskom, we could probably use solar and supported by generators where needed at a lower cost than Eskom with a 99.9% uptime guarantee from the solar providers. So I'm not worried about the energy situation in South Africa in terms of powering our plant. Ben says TechMet is a significant investor in Rainbow. What -- how do they -- what value do they add to Rainbow? Well, right now, Rainbow -- TechMet only owns 3% of Rainbow. So there's institutional fund holders, who are bigger holders. We would like to see TechMet 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, TechMet 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. Are you able to give any update on progress in discussions regarding Gakara? I can say that due to major political developments in Burundi 3 to 4 weeks ago where Prime Minister and the chief to cabinet were replaced in Burundi, this has led to meetings with the President and the President has indicated that he would like the impasse with Rainbow to be resolved as soon as possible. I might add that it wasn't just Rainbow that was targeted. All mining and 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 advisor, who's been tasked with getting the situation with Rainbow resolved. So we look forward to this being resolved. I can't give a time line, but there's progress. That's all I can say on that. Given the lack of rare earth production in U.S., when does the process move to Florida? I'm not quite sure what Michael is 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. So you can't touch them. So even there'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 Florida is not a market for us. We've really, as I said, signed a deal with OCP in Morocco, and we're looking at other areas, but not in the U.S. And yes, the numbers are for 100% of the Phalaborwa project, and we own 70% of it. I think that's all the questions I can see for now. So I think if there are no other questions, we'd like to conclude.

Yes, George, absolutely. Thank you very much indeed for being so generous with 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 is 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 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 would be great.

Well, I think I've covered most of it other than 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. OpEx is the lowest as we can see of any rare earth projects in the world or Western projects in the world right now. We've got relatively low CapEx for the volume of rare earths 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 steer this company for investors, I believe. And those other opportunities will certainly add value to Rainbow. And on the -- 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 billion 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. 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 going to 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.