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

Good morning, ladies and gentlemen. Welcome to the Rainbow Rare Earths Limited Investor Presentation [Indiscernible]. [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 questions submitted today and publish responses where it is appropriate to do so, and these will be available via your Investor Meet company dashboard. Before we begin, if I may, 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 over to CEO, George Bennett. Good morning, sir.

Good morning, and thank you for hosting this presentation. This is a quarterly presentation that Rainbow has been doing for the last couple of quarters now. And once again, it's an update on the last quarter as well as you would have seen that we announced our interims on Friday, but being a development company, interim results are really not that important for Rainbow right now, what's more important is, as I said, is what we've done in the last quarter and what we're looking to do in the next quarter. Thank you. Just the usual disclaimer. And I just want to highlight the investment opportunity in the base case for Rainbow at the moment. Our flagship project is obviously our Phalaborwa project in South Africa. And as you know, it's rarest or deemed critical minerals that are forecasting massive rising demand due to the need for the green economy and then also there's an urgent need for non-Chinese supplier. So last, in the last quarter of 2023, we -- 2022, I should say, sorry, we announced our PEA and once again, very, very strong numbers. I just want to reiterate the audience. We had an NPV of over $621 million using a conservative discount rate of 10%. We had a post-ax IRR of 40% when life of project EBITDA of almost $200 million per annum, and that's using spot pricing and our financial model, which is very important to note and life of project margin of over 75%. And with that, we've got a payback period of less than 2 years, which is significant, I think, for any rare earth project that we have at the moment. That's the development project. We have an innovative technology I'll talk about later and very importantly, a very experienced team. This is the opportunity for Rainbow. Our market cap is circa $62 million at the moment, and we have an EPV, as I said, base case into the NPV of over $620 million. Once again, I've spoken about our experienced team, which we added to in the last quarter of 2022. As I said, we've got the experience and the skills to not only develop the Phalaborwa project but also from a corporate point of view with Peter Gardner and Adonis Pouroulis, very experienced mining entrepreneurs, and Peter is very experienced mining finance guy, which is very important for the next stage in Rainbow's life, which is the project financing of this project, which we are already looking at to do well in line with completing our bankable or definitive feasibility study. Now the reason why rare earths are so important in the world right now is that they are very important in what they call building blocks and the whole world is trying to reach net zero in 2050. There's 17 elements in the rare earth basket. When you mine the rare earths deposit, you mine all 17 elements, but there are only really a few key elements that the whole world is chasing right now and these are known as magnet rare earths and they are Neodymium and Praseodymium, Terbium and Dysprosium. At Phalaborwa, we are fortunate enough to have all four of these in economic quantities. Not all rare earth projects have all of these in economic quantities. Neodymium and Praseodymium, they make up just over 29% of the rare earth basket, one of the highest percentages of any rare earth basket in the world. And as I mentioned, we also have economic quantities of Dysprosium and Terbium, which is also critical for permanent magnets. Permanent magnets, as we know, are critical in wind turbines today, which the whole world is rolling out far more wind turbine power at the moment, electric vehicles, the defense industry and also consumer electronics require all these permanent magnets and we'll talk about that later. They've got a very competitive advantage, which is why they're required in the electric vehicles. They give you better range. And we also -- their forecasts in growth -- forecast to grow very, very strongly for the next 10 to 20 years. And if we want to reach the COP27 commitments, we need a lot more wind power to be -- and EV vehicles to be on our roads. Now just to -- sorry, just to go back to the last point about electric vehicles and NdPr being very important for permanent magnets. We know Tesla came out with an announcement about 4 weeks ago where they were looking to move away from permanent magnets and the market had a bit of a noted reaction. When you analyze the Tesla announcement, you realize that Tesla -- what, 12% of rare earth magnet demand is for the electric vehicle market, Tesla is only 15% of that market. And if you then water that down, that means the Tesla announcement, we think puts only 1% to 2% at risk the permanent magnet demand using rare earths. So it is not as big an impact as the market initially thought. And when you then drill further into the Tesla announcement, you'll notice that they haven't actually announced which electric vehicles are going to use the substitute of permanent magnets for it. I mean, is it the new range of vehicles. Is it going to be the current range. There's no territory on that, and they've also announced that they are going to look at possibly replacing this with a ferrite magnet. And we know ferrite magnet has got penalties in terms of weight in the vehicle, and it will impact their range. So even if they do introduce these ferrite magnets, they've given us no time lines on development. We know permanent magnet development time lines are anywhere between 6 to 10 years. And as I said, ferrite magnets give you a range penalties. So we think if they do introduce it, it will be to their lower price range electric vehicles and the premium electric vehicles we wouldn't think that they would want to affect their range and substitute permanent magnets motors. But that still has to come out in the wash. And whichever way you look at it, it's a very small impact on demand. Another important thing to notice or to take note of is that consumer electronics still make up 50% of permanent magnet demand, and that's we're talking about. Electric or handheld tools, drones, electric motor scooters, electric motor bikes and I-phones or all smartphones use permanent magnets, for instance. Consumer electronics are very, very big driver. And of course, wind turbines are very big consumer of permanent magnet. So even though electric vehicles are very important, there's a lot of other things to consider. And so I just wanted to put the Tesla announcement on the set for all the listeners to this broadcast. If you look at, as I mentioned, wind turbine demand, this is forecasted to go very strongly if we hope to reach the COP27 net 0 targets of 2050 and that means far far more wind turbines being rolled out. Now each 3 megawatt direct drive wind turbine requires 2 tonnes of permanent magnets and all of those 2 tonnes of permanent magnets, over 600 kilograms are rare earths per turbine. And we all know what -- that the whole world is forecasting a stronger green energy from wind turbines, and we don't see that slacking anyway soon. The spike of rare earth prices in 2021 as a direct result of massive wind turbine capacity being rolled out in China in the first half of 2021. And as I said, we see further capacity being rolled out over the next 10-odd years, strong new rolled out for, and that will mean very strong demand for permanent magnets in these wind turbines. EV sales still very important, irrespective of the route Tesla finally go and as I mentioned with the Tesla announcement, there's no real detail. So we saw BMW try and move away from permanent magnets. They came back to permanent magnets. So we saw a long way to go for that to have any significant impact. So electric vehicle demand, which is legislated to in terms of the thematic and the macro, we see this demand continuing to grow right through [ 2025 ], 2040, even and that's going require massive investment in new projects to meet the rare earth magnets -- the magnets that are required, and that's Neodymium and Praseodymium largely been the 2 key rare earth elements that [ have to feed ] as the production of permanent magnets and a small amount of Dysprosium and Terbium. And as I've mentioned, we cautioned enough in Phalaborwa to have all four of these permanent magnet rare earths. Quite a few projects that have been developed around the world do not have the capacity to produce Dysprosium and Terbium in any meaningful way and we can. As I said, the supply deficit for Phalaborwa, it's looking very good. You see our forecast basket price is slowly but surely trending up. And this is very important for our project economics and for the -- basically all the financial metrics are growing -- continue to look very good and for the next 10 years and longer. And our project in Phalaborwa has got a 14-year life, and we'll talk about the resource update. But a minimum of 14-year life. So this supply deficit forecast at 2030 and longer is very, very positive basket in Phalaborwa. We know that the Chinese dominate this market and the whole western world is looking for alternative supply outside of China. We believe Rainbow is going to be one of the key strategic sources of rare earths -- permanent magnet rare earths outside of China. In 20 -- sorry, 30 years ago, Deng Xiaoping in China announced that the Middle East has oil and the Chinese -- China has rare earths. So they saw the strategic advantage of rare earths 30 years ago and built out the strategic advantage over a 30-year period. We all now know that the West does not want to rely on China. So there's a massive forecast, sorry, focus on rare earth projects outside of China, and we believe Rainbow is one of those key projects that will go into production and will be one of the solutions to looking forward as sources outside of China. Also very clinical in the defense industry, even though not a massive volume, but from a strategic point of view, very, very critical. And every fighter jet, whether F35 or F19 or so forth, they require 120 kilograms of rare earths per jet. So as you can see, this is also a key area that the West is focusing on from the EU to the U.S. is that you have strategic supply for these clinical rare earth oxides outside of China. Now I'm going to the Phalaborwa project per se. And a lot of you will have seen this slide before. Once again, it just highlights we've got these gypsum stacks, which is the result of phosphoric acid production process plants, as you see in the right-hand -- top right-hand corner there, this was a plant run by Sasol using phosphate hard rock slurry fed from a mine called Foskor next door and using sulfuric acid and heat, 2 key ingredients in the production of phosphoric acid, you then dry the gypsum residue. The rare earths were not in economic quantity in the hard rock phosphate, but when you produce a phosphate slurry, you produce it through a concentration process. The rare earth elements are actually upgraded in the phosphate slurry. And then this was used to feed the phosphoric acid plant and the -- in the production of phosphoric acid, you produced a gypsum residue and the gypsum residue was then deposited on these two stacks you see in the photograph on the slide currently. And the rare earth is deported into the phosphogypsum and are now in economic quantities in the phosphate -- sorry, in the phosphogypsum that we see stacks, that you see in the photograph there. Very importantly, because we are only dealing with a crack chemical product on these stacks because when you produce phosphoric acid, as I mentioned, we've got 2 key ingredients, sulfuric acid and heat. These are 2 key ingredients and all rare earth projects have to add to chemical con -- sorry, rare earth concentrates to crack it before they can do downstream beneficiation. At Phalaborwa we sit with cracked chemical stacks and that's our OpEx as well as you can see on the slide there. So USD 33.86 per KG, we believe it's the lowest OpEx for separated rare earth oxides in the world, certainly in the Western world, and we believe even more than China. And you see our rare earth phosphate vary per kg, and this is driving the project economics that we've got a very, very high EBITDA margin. And with low capital intensity of only $295 million of CapEx, you can see why our payback on this project is so quick compared to a lot of other rare earth projects being developed out there in the world. Also very importantly, very, very low in radioactive elements, thorium and uranium. And as a result, we don't have any radioactivity issues with our product and we currently fall under the current radioactive license that sits over the site. This is [indiscernible]for the project whatsoever. Going back to where we sit on the rare earth sort of value chain. Your upstream, you've got mining, you've got to produce a rare earth concentrate, then you have to track it and as with mining project, you've got to drilling lots of hard rock, you've got to transport your ore into a process plant where you've got crushing, you've got milling, you've got flotation reagents before you produce a rare earth concentrate. Then you have to crack your rare earth concentrates before you can go into further downstream, which is a separation menu. The next stage is producing a oxide to go into a metal plant, which will turn it into metal and alloy. And that's predominantly done in China right now, and then you go to magnet manufacturer. Phalaborwa is unique because we sit with the cracked chemical stacks. So we go straight from this cracked chemical stack into the separation technique to produce 4 magnet rare earths that we're targeting and this has massive advantages of capital and operating costs versus traditional rare earth mining development projects. If you look at our resource update that we announced just last week as well. Once again, it's confirmed the grade is more generally higher at 0.44, not 0.43 as a preliminary resource update. So it's slightly higher grade. Once again, confirming the tonnage of 34.4 million tonnes, giving us just over a 14-year life for this project. And once again, very importantly, our rare earth elements are confirmed in the range that we've initially put at. And that basically, we've moved a large portion of the resource from Inferred into M and I, and we'll be doing one last round of drilling to take -- the bill of inferred is not in the M and I -- into the M and I category. Very importantly, we've appointed [Indiscernible] in the U.S. who is one of the global experts in phosphogypsum stacks to design dry stacking for the definitive feasibility study. And early indications are that our bulk density at [ depth ] should be a lot lower when we do our final range of drilling, and this could give us an opportunity to increase the total resource tonnage. So that will be in our final resource update. So there's a potential of the slight increase in our resource here, which would also obviously be further positive for the project. At Phalaborwa, the reason why our project economics -- or one of the key reasons by our project economics were so good apart from the fact that we don't have all the mining costs upfront is that we're using this -- RP that with K-Tech in Florida, our technology partner in Florida. They used continuous ion exchange and continuous ion chromatography. These guys are the inventors of continuous ion exchange, which is well used in the uranium process plants around the world and that's widely, as I said, widely deployed in many, many uranium mining process plants around the world. And importantly, they also -- they invented the continuous ion chromatography, which is separating rare earth oxides in the very far simpler method than you use -- the traditional method of solvent extraction continues and solvent extraction, which requires literally hundreds of mixer settlers. It's the de facto way the Chinese use it, but we are very confident because the K-Tech process has been applied to many industries, the CIC process and clearly slurry mining chemical industries globally, and it's also been used for the extraction of uranium and thorium on a large scale, which is -- as you know, you experienced in rare earth projects, and this has been successfully applied to extracting uranium and thorium out of phosphogypsum on a large scale. So we're very confident in this technology. It's also interesting to note that there's a technology in Norway that has been applied to separate rare earth oxides and it's also using continuous ion chromatography. So we are very confident that this process is the right process to use that Phalaborwa from the project economics, it is far greener, and as I said, it's from the operating point of view, very, very good and efficient way of extracting these rare earths and it's safe and simple to run. And importantly, it's been applied in a larger scale than what we have tried at Phalaborwa. I get asked questions often [indiscernible] K-Tech and this will be applied commercially. Well, in fact, the IPs are really applied commercially in larger size than what we require. So once again, this answers a few questions, I hope for some investors. Just once again, footprinting why Rainbow is a good project when you compare to ionic clay deposits. When we first came across Phalaborwa, we very quickly realized at 0.4% TREO, this was 60 -- 10x higher grade than ionic clay deposits. If you look at those ionic clay deposits, our footprint there, you can see what I mean. And because our Neodymium and Praseodymium is so high, 29% of our rare earth basket and the greatest are high in terms of 0.44, you can see our parts per million of NdPr are still 6x better than your next best ionic clay project on that list, and that's probably one of the best ionic clay rare earth in projects the world right now, it's the Makuutu project. And why we footprint this against ionic clay deposits, because they have very low mining costs. You don't have to drill blast of hard rock crushing that you would have for a typical hard rock mining project, ionic clay deposits at very, very low mining cost. And this is why we footprint ourselves against those projects. And you can see how well Phalaborwa comes out on that metric. Going back to the opportunities for Rainbow, this technology we've developed at the front end, which is a co-patent between K-Tech and Rainbow as well as the back end, which is patented by K-Tech, and we've got the rights to use this patent. You can see that there are other opportunities out there in the world to apply this technology. We signed the master agreement with OCP in Morocco, the largest producer of phosphate products in the world, and we've already embarked on a [ test work ] program with that as well as the MOU with a major chemical company in South Africa to extract rare earths from the phos acid stream, but they're using a different process to Phalaborwa to produce phosphoric acid, they're using nitric acid. And with that, it's a slightly different opportunity. and we've been testing samples from this project in South Africa as well. And we're also investigating global opportunities. I've signed 2 NDAs with 2 other hardware phosphate sources of phosphoric acid production in other continents around the world, and we are investigating these opportunities as we speak. Very importantly completely from an ESG point of view, Phalaborwa project is probably one of the greenest projects in the world. It's a brownfield site. So that gives us a big tick. It's on an existing chemical site. And basically a majority of the environmental permits are in place and only require updating. We are going to be rehabilitating the phosphogypsum stacks that you saw on the photograph earlier. First of all, we are cleaning up the acid water associated with the stacks and using the neutralized acid water in a close circuit in our process plant. And basically, we are redepositing the clean benign gypsum on the new stack sites just to the south of the photograph that you can see. And basically, this will be a line stack site, the current stocks are in line because 60 years ago, you needed to line stacks anywhere in the world for it, rather than mine just in South Africa. So the new stacks out will be line, and we will then also be probably selling some of this clean gypsum into the South African gypsum market. There's an opportunity there, which is a fairly big credit for us. We -- as I said, we are using recycled water for the process plant from current acid water, which is the risk to the current environment. And basically, one of the key reagents we're using, which is sulfuric acid in our process, is coming from a waste stream next door, the Phalaborwa Mining Company is a new phosphoric -- sorry, a new sulfuric acid plants and it produces excess sulfuric acid and we'll be able to take a large part of this sulfuric acid from next door and use it in our process plant. So once again, we're using a waste stream, which is another big credit. We will be reusing some of the infrastructure there, which is another bonus for the project. We don't have to rebuild all the infrastructure from scratch and that is another big plus. And very importantly, we're also looking at renewable power, wind and solar power that we will be using to supply lot of the power at Phalaborwa. We will be using baseload from Eskom but a large part of that power will be renewable and will have Eskom as backup. So very, very important for the green credentials of this project. Also usually beneficial to the local community, and we'll be obviously employing people from the local community that works in the original phosphoric acid plant when there were trained some 6 or 7 years ago, and we'll be hoping to reemploy a lot of those skills that are still available in the area. Just to reiterate, in the fourth quarter of 2022, we published a very, very strong PEA. We added to the technical team, which is very key because this is all about process technology and chemical process and technology, which we have within the rainbow team. We announced that we would be coming out with a resource update in the first quarter of 2023, which we've done. And I can also be very pleased to announce that work on our pilot plant has commenced at Mintek in South Africa, and that fabrication has started to be up and running in this quarter with our pilot plant. And we've also taken a decision for the back end of the plant to be run in Florida in the U.S. That's the CIC and the CIX and CIC separation is a natural split in our process where we produce some mix rare earth sulfate, which is a solid, very similar for a rare earth project that produces a mixed rare earth carbonate or a mixed rare earth salt or mixed rare earth oxide for that matter, and then they ship that somewhere else for further separation. We've got a natural breakthrough, we produce a mixed rare earth sulfate with this technology at Phalaborwa, and then we're going to use that to be separated in the K-Tech facility in Lakeland. The CIC and the CIX units have already been purchased and are on site. And basically, they're currently putting that back end process and pilot process plant together in America. We've also commissioned a [indiscernible] engineering who did a very good job in the PEA to slightly definitive feasibility study. And very importantly, we've also commissioned [indiscernible], as I mentioned earlier, the global gypsum stack experts to be -- they will be designing the new stacks that will be deposited -- have to build at Phalaborwa. And of course, we're looking at ongoing opportunities around the world in different jurisdictions, different continents to leverage our technology and to give Rainbow a far longer life than just a 14-year of Phalaborwa, but a far longer project diversification and project life. So just to finish off, I believe that if you look at forecast pricing for rare earths, which are very, very strong, with almost all forecasts out there forecasting rising pricing for rare earths, Phalaborwa is forecasted to come into production, we're looking at over $1 billion NPV or IRR of over 44%. We're producing in that stage, plus/minus $310 million of EBITDA per annum and we have an EBITDA margin of 82% or 83%, sorry. So once again, very, very strong project economics, which I believe make this a compelling story. Thanks very much for your time and listening to this presentation.

George, that's great. And thank you very much indeed for your presentation this morning. If I may just jump back in then what I'll do is I'll just bring up your camera there as well. [Operator Instructions], 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. And as you can see there in the Q&A tab, we've also received a number of out today's presentation this morning as well. So firstly, thank you to all of those on the call for taking the time to submit their questions. And Tara, if I may hand over to you now, just to chair the Q&A session with George, and then I'll pick up from you at the end. Thank you.

Thank you, Jake. George, as Dave mentioned, there's a number of presubmitted questions, which I'll run through now. The first one is it's understood that the pipeline test work will be split across 2 sites for efficiency purposes, the front end in Phalaborwa and the back end at K-Tech in Florida. Do you think this is likely to be a long-term outcome for commercial production?

Well, firstly, what drove us fitting the site was timing. We wanted to make sure our pilot plants sat on schedule, and we realize that there might be a slight delay if we had to -- same with the pilot launch in Florida, tested, run it. This is to assemble a chip in South Africa, resemble it and install it in Mintek. So in order to save time and to get our continuous pilot plant process complete within the time lines that we wanted decision was made split it and we think it's been a very, very good decision. It also gives us flexibility because we can -- with this natural split in the process, we realize that it gives us flexibility, whether we want to do in one continuous plant in South Africa, we want to produce, as I've mentioned, mix rare earth sulfate in South Africa and then produce, separate rare earth oxides in the U.S., which would give us significant U.S. presence. So at this stage, it gives Rainbow flexibility. We haven't decided which way we want to go yet. But as I said, it gives us Rainbow a very interesting flexibility. And for that matter, we could also look at Rainbow's back end in the EU or the U.K. for that matter. So we think it's a very exciting development in Rainbow that we've now realized that we've got this very important flexibility and it's very positive in my view.

And that leads us to the next question. When will you commence production?

As on our presentation, the forecast time line at the moment is that we've entered the definitive feasibility study stage on track. We're hoping to have that complete at the end of 2023 or the first quarter of 2024, which -- and at the same time, we have stated parallel debt financing talks with debt financiers. We not -- we know this project will be bankable. So we don't have to wait for the outcome of the bankable feasibility study to see if we've got a good project before we start negotiations with debt financiers. We do need this in parallel. And we would hope to have the project finance around about the third quarter of 2024 to start production and the break run in the last quarter to complete the plant at the end of '25, first quarter of '26 and to be in production in 2026. And that's as per the charts earlier in the presentation.

Thank you. Next question is, how is the patent for the production process progressing? Is the intellectual property at this process now legally secure?

So the -- or the back end, as you know, is already legally secured; the front end, which we are patenting with K-Tech, the draft patent is complete. It's just been reviewed and it's ready for submission shortly. And I must stress that once the patent is submitted, you have permanent [ whole year ] protection, worldwide protection. Because the patent process can take anywhere from 12 months to 2 years. So as I said, but the important thing is once you launch your patent, you have your protection immediately. And that process is almost complete, and it will be submitted very, very shortly.

Thank you. How much potential do the dry phosphogypsum site in Morocco have for rare earth extractions?

I can't answer that question at this stage. We know it has got huge potential. But what I can tell you is that we have initial results out from some [ software ] that we are busy testing. And indications are that it has got very good values of Dysprosium and Terbium to add to the NdPr in the basket in Morocco. And the starting grade is similar to Phalaborwa, which is exciting for us. And we're now just awaiting for the leach results. We did leach testing on the sample from Morocco. And once these leach results are out, we will be publishing something for the marketing.

Next question, which you did cover in the presentation, but what is the time scale to delivery of the pilot plant this year? And when do you anticipate completion of the DFS?

Well, as I mentioned, the pilot plant will be up and running in this quarter, and we're going to be running the pilot for between 3 and 4 months. And that will produce the separated rare earth oxides that we will use for marketing purposes and for design purposes for the final plant design. And the definitive feasibility study has commenced already. And as I mentioned, it's forecast completion at the end of this year, first quarter of 2024.

Another presubmitted question. What will happen to the waste once the phosphogypsum has been processed?

The waste will be redeposited on clean benign stacks, and we will then be selling this gypsum in to the South African gypsum market. For the life of the project, and it will be an ongoing resource or revenue stream to the project because to sell all the gypsum at Phalaborwa, it will take about 40 years in South Africa. So because the South African market is only about 1.2 million tonnes per annum, and we would only capture between 300,000 and 500,000 tonnes per annum of that market.

Understood. And then this leads us to some of the last pre-submitted questions. Will the power and electricity issues affecting South Africa impact commissioning of the pilot plant and operations.

No. It won't impact the pilot plant. The pilot price got two generators at standby to make sure the pilot plant does not get interrupted. But very importantly, for the project itself, as I said, we will have wind and solar power supplying a large part of the power with Eskom as your base load. And we only forecast the production in 2026. We know South African government has approved a large number of independent power producing projects over the last 6 months have been approved and we would expect large number of these projects will be in production by the time 2026 comes about. So a huge amount of fresh [indiscernible] green power to win the -- and so we don't think it will be an issue for the project. And also this is not a very big power consuming project. The project only requires about total megawatts of power running at peak loads only 16 megawatts, baseloads about 12 megawatts. So not a huge power consumer compared to a typical hard rock mining projects.

Thank you very much. There's a few questions that have come in over the course of the presentation, which I'll just have a look to now, one of which is, when do you expect to have separated rare earth samples available?

As I said, we're only running the pilot plant for 3 to 4 months. So towards the end -- so basically, it will be in the third quarter of this year, we will have separated rare earth oxides. The pilot plant will be up and running, as I said, during this quarter, but it takes a while for the whole process from start to finish. And certainly, in the third quarter, we will have separated rare earth oxides for marketing. And as I said, and marketing purposes. And for the whole world to -- well for analyst visits and fund managers to come and visit the site as well.

Thank you. Are you anticipating material changes to the flow sheet once the pilot plant is in operation?

No. The flow sheet is very robust, so we don't see any significant changes to the flow sheet.

Do you expect the pipe plant to be profitable?

That's not that kind of pilot plant. I mean -- it's -- we're not doing a bulk pilot plant, which we're trying to run to generate revenue from. The pilot plant is of significant size in terms of for a continuous pilot plant to improve the technology, and that's what it's there for. It's not going to be revenue generated for regular.

Understood. There's a couple of questions on Burundi and the update at [indiscernible] which you did cover in the presentation, but that's been flagged in the Q's here.

Yes. As I mentioned, Burundi before in my previous presentation, it is on care and maintenance. We were approached by the government in end of November. They gave us a proposal. We gave them the counter proposal at the end of January this year, and we've been requested to attend the further negotiation with the Burundi government at the end of April. So we are in ongoing negotiations with the government to settle them positive.

Thank you, George. I think the other question...

Just to add, I might add that Phalaborwa in terms of scale is about 10x the size in terms of revenue and profitability that Burundi will ever be. So that's why our focus is on Phalaborwa.

Thank you very much. I think that answers most of the questions that have come through.

George, sorry, if I may just jump back in there. Thank you very much indeed for being so generous of your time in 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, just for you to review to then add any additional responses, of course, where it's appropriate to do so, and we'll publish all those responses on the Investor Meet company platform. But George, just really 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.

Yes, just I think, as I've mentioned in our last presentation, we are continuing to meet our time lines that I've given to the market over the last sort of 12 months. And that's very important for investors. Once again, very, very strong PEA, and we expect the definitive feasibility study to produce even stronger numbers. And so I think it's a very compelling case in terms of the rare earth projects out there that are on development. Rainbow is a project that is going to go into production, and I think that makes it very strategic for other people looking at this market out there. There are -- we are in talks with alliance partners to be a strategic source of separated oxides. And I think, as I said, because Mark, the people we're talking to are confident in Rainbow will be in production, which is why we are having these talks. So I think it makes a compelling investment case for investors. Thank you very much.

George, that's great. And thank you once again for updating investors this morning. Could I please ask investors not to close this session as you will now be automatically redirected for the opportunity to provide your feedback in order that the management team can better understand your views and expectations. This may take a few moments to complete, but I'm sure it will be greatly valued by the company. On behalf of the management team of Rainbow Rare Earths Limited, we would like to thank you for attending today's presentation. That now concludes today's session. So good morning to you all.

Thank you very much, and have a good day.