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

Good morning. And welcome to the Rainbow Rare Earths Limited Investor Presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. I'd now like to hand you to George Bennett, CEO. Good morning.

Good morning. I hope you can hear me well. Well and clear. I'd like to welcome you to another investor update on rainbow. We've had quite a lot going on since I last presented to IMC and it's all been very exciting for Rainbow. So there's no further due I shall carry on. Usual disclaimer. Thank you. So this slide was in my last presentation. It presents the Phalaborwa base case in terms of our financial metrics. This was published as part of our PEA in October last year. And once again, it highlighted what a robust project we have in rainbow with the Phalaborwa project. And since then, of course, we've done a couple of other things. You see where it's a strategic asset. We did a capital raise at a 30% premium to the market price at the time. The cornerstone investor was TechMet or funded by the U.S. government by the DFC, the Development Finance Corporation and this, I think, speaks volumes in itself that we now have the U.S. government through TechMet a 12% shareholder in Rainbow, and we will be looking at further investments from the source in the U.S. Once again, we have very robust economics in our PEA. But the technology that is very innovative. We've been able to extend this further to signing MOU with Mosaic and Uberaba in Brazil, and I'll talk about that later. And then as the last sort of key point is the experienced team. I've covered this in previous presentations and some more information on our experienced team that's delivered many, many times in the past is now an appendix to this presentation and you can look at it at your leisure. Very importantly, on Monday this week, we announced the MOU signed with Mosaic, Mosaic is a U.S. listed multinational. They've got a $12 billion market cap. And what we've been able to do is sign a MOU to jointly develop the Uberaba project in Brazil. Now Uberaba is a very large phosphate producer. The mine phosphate hard rock phosphate from carbonatite similar to what Foskor mine in Phalaborwa the slurry it down to our phosphoric acid plant, and that reduced phosphogypsum very, very similar to the process that we have that was carried out for 60 years at Phalaborwa in South Africa and run by Sasol. As I said, the phosphate slurry feed at Uberaba mine and produce is a similar nature to what we experienced at Phalaborwa. And in our initial desktop work we did on this opportunity, we know that the grade is similar, if not higher, than Phalaborwa and the rare elements of the similar makeup to what we have at Phalaborwa and just to stress, Phalaborwa has a very, very high basket of neodymium and praseodymium above 29%, which is one of the highest in the world, and it's got very, very strong commercial credits in terms of terbium and dysprosium which are very important, these 2 heavier elements. We basically are going to collaborate with Mosaic to do the test work, which has already started at SGS Laboratories in Toronto, very well known worldwide. He recognized laboratory with lots of relative experience and basically refunding the work program, the drilling program would have to undertake on the stack at Uberaba as well as the PEA on a 50:50 basis. So you can understand where we are going with this project. I might add that the Uberaba stack is significantly larger than what we have at Phalaborwa. So it's a very, very exciting opportunity for Rainbow. We expect there will be a similar low capital intensity to Phalaborwa compared to the hard rock rare earth projects. It will be resilient to the pricing environment that we see, and I'll go into that more later. And very importantly, the phosphate mine that's feeding this phosphoric acid plant at Uberaba, a life in excess of 25 years. So it's a very, very long-life project. Rainbow now find itself jointly developing with Mosaic in Brazil. Also very importantly, we've consolidated our ownership at Phalaborwa by doing a deal which is very, very accretive in terms of NPV for Rainbow. We have paid $5 million to take interest from 70% to 85% in the Phalaborwa project in South Africa, and we've got a call option, which will exercise at our leisure to take the other 15% based on VWAP the price of Rainbow in October 2023. And then -- so we will fix a number of shares that we're going to issue for the balance of the 15%, but we've got up to 2 years to exercise this. And the reason why we're going to take 2 years. We just want to make sure that we've got all the permitting in place and so forth before we finalize our last 15% call option. So it's a very, very strategic stake. It's being done in a very strategic manner. And as I said, we raised $9.5 million on the market recently at a premium of, as I said, about 30%. And it demonstrates that we've got strong backing from the market and also a very strong backing by TechMet, which, as I said, is funded by the U.S. government. TechMet came in for $7.5 million of the $9.5 million, and we were able to raise $2 million from the balance of other shareholders who are very supportive of Rainbow. For the investors on this interview are not sort of familiar with the rare earth market and with the Phalaborwa story or the Rainbow story per se. As we know, key building blocks for the net zero sort of target that we see for 2050 is basically electric vehicles, solar and wind power. Now wind power generation, which has been rolled out aggressively over the next 20-odd years requires a huge amount of permanent magnet and their drives. And these permanent magnets’ are made up about of the 3-megawatt wind turbines got 2 tonnes of permanent magnets in it and about 600 kilograms of those permanent magnets’ are made up of neodymium and praseodymium. So a very, very important part for permanent magnets and wind turbines, electric vehicles like Tesla or a fully electric vehicle takes between 3 and 5 kilograms of permanent magnets. And once again, you've got a very high percentage of neodymium and praseodymium required in these permanent magnets not only for, as I said, for electric vehicles, wind turbines, but all consumer electronics today make up 50% of permanent magnet demand. And the defense industry also requires permanent magnets. Not only do you require a large amount of neodymium and praseodymium, you also require dysprosium and terbium in smaller quantities, and these protect the permanent magnets from leasing their power to heat and electric vehicles generate heat in turbines and certainly miss our guidance of systems when they're flying it at high speed through the atmosphere, they generate lots of heat and you need dysprosium and terbium to protect the properties of the permanent magnets. So also a very, very important part of the 4 permanent -- of the 4 areas that are required in the permanent magnet industry. And as I mentioned, consumer electronics, your handheld drills, your cell phones, your earpods, your drones, your electric scooters and electric motorbikes all these things require permanent magnet motors and they all require rare earth elements in them. So the demand outlook is very, very robust. As I mentioned earlier, dysprosium and terbium are small but vital components of permanent magnet, and we see the importance of Dy and Tb growing in the world right now. There was a conference in Barcelona just 3 or 4 weeks ago and was very apparent, our dysprosium and terbium be recognized as being very, very important going forward. Because of China has got -- has only got a 10-year life reserves left on these 2 rare earth elements. So with the Chinese only having 10 years of mine life left, you realize our critical and other sources of these 2 rares are becoming. And basically, there are no facilities separating dysprosium and terbium outside of China in the world right now. Lynas are currently building a plant nearest to separate the dysprosium the terbium and they mine in Australia. Because even currently, even though Lynas themselves separate neodymium and praseodymium the heavy rare earth mean dysprosium and terbium are actually currently being separated in China and then moving the separation to the U.S. But right now, there's nobody else. Rainbow will be one of the few companies in the world that separate all 4 of these rare earth oxides, separators oxides outside of China. As you can see, what our production forecast of these 2 key elements will be as plus/minus 100 tonnes of dysprosium plus/minus 40 to 50 tonnes of terbium. Even though these tonnages look small, very, very high value and very important in a global sense. Once again, this highlights these 2 key areas RE and dysprosium and terbium on this chart, you can supply by McKinsey severe imbalance is dark blue on this chart and moderate imbalance is slightly lighter blue. As you can see in the magnets, dysprosium and terbium they colored in dark blue showing a severe imbalance that they're predicting and neodymium and praseodymium is in the [indiscernible] but also a moderate imbalance, which you're all aware of is occurring as -- in terms of forecast supply and forecast demand. Going back to this chart now where we're looking at a supply deficit of 27,000 tonnes forecast by 2032. And this is supporting the increase in the price of the Phalaborwa basket. In other words, we see rare earth prices rising consistently on average over the next 10 years. We have seen price pullback in 2022 and 2023. This is after a spike in 2022, driven by massive rollout of wind turbine generation in China which slowed, but that wind power turbine generation is going to pick up its forecast towards the end of this year and going into next year and continue as well as forecast demand growth for EVs, and that's why you see a pickup in rare earth pricing as well as -- so that translates into a pickup of the value of the Rainbow basket made up of those 4 permanent magnet REs. For first time sort of -- first-time views of the Rainbow story on this webinar over here in this slide, we have the Rainbow project at Phalaborwa, as you can see, those 2 stacks there or the gypsum stacks that are plus 30 million tonnes of gypsum with associated acid water on top. Now on the top right-hand corner of this photograph, you've got a old phosphoric acid plant that has been mothballed in 2014, and that was originally largely run by Sasol and to the was sold to Bosveld Phosphates, so we did our deal with and they ended for 2 years and then it was closed down in 2014. And very importantly, next door, you have the hard rock carbonatite phosphate mine that produced a concentrated phosphate slurry, the REs, which are present in the hard rock carbonatite went an economic value to mine just for themselves. But because they were now concentrated up in the phosphate slurry and pump next door, they fit the phosphoric acid plant. Phosphoric acid is required for the fertilizer industry globally. And what Sasol did was the key ingredient to add here was sulfuric acid and heat in the production of phosphoric acid and then the various stages of phosphoric acid production, you finally created the gypsum residue, which was a pump onto these 2 stacks. And the REs supported with the gypsum on to the 2 gypsum stacks in the waste residue. The slight yellow discoloring and you can see it at the very top on the right-hand side of this photograph is of sulfur stockpile, this sulfur stockpile fed the sulfuric acid plant on site. Now the reason why I'm mentioning this is because these stacks in what's known as a cracked chemical form. Now all Hard Rock rare earth projects have to mine with crushing and well, first of all, drill and blast, then you have to haul to the process plant where you've got crushing, you've got milling to crush -- to take the crushed rock into almost sand or powder form. Then you have to rotation process, produce a rare concentrate. Once you've got a rare concentrate, you have to crack it into a chemical form and to crack rare concentrates into chemical form, you need two key ingredients, sulfuric acid and heat. And this has taken place already at Phalaborwa. And therefore, we have a track chemical stockpile, and we were able to go straight into an asset solution with using sulfuric acid to niche the rare [indiscernible], the gypsum and then go into the next stage, which is to go into separated [earth] oxides further downstream than most at projects go. Lots of rare projects in the world stop at either just producing a mix of concentrate or they stop at producing a mix of carbonate after the cracking stage or mixed RE sulphate or mixture of salt. Because Rainbow started with the crack Chemical stockpile, we were able to -- we said why must we stop at a mixture of carbonate, we're going to go further downstream to capture 100% of the value and produce a mix -- sorry, separated [rare earth] oxides. If we only stock to the carbonate or sulphate, we capture 60% of the payability if we stopped at that point. But because we're going all the way to separate red oxide, we are now capturing 100% of the payability. So once again, you can see that this is a low capital intensity project below $200 million, and that's basically the price -- the CapEx footprint of September last year. We will be giving an update of the PEA CapEx for this ahead of the release of our [indiscernible] feasibility study, which has already started and is well underway, and our target for our DFS is March 2024. Finally, just to have a look at our OpEx. As you can see, our OpEx is very, very low,]indiscernible at USD 33.86 per kilogram. This is the lowest in the Western world. We are aware of this and we believe it's even lower than Chinese costs of separating to [indiscernible] oxides, which puts us in a very, very strong price. And against that, the basket price in our PEA, you can see this is driving our EBITDA margin of over 75%, which is fantastic EBITDA margin for any mining project or any project for that matter. We look at the rare supply chain, as I've been talking about it, just to give some more color to it. As you can see, we started mining then you have to produce a rare earth concentrate, then you have to crack it and only once it's crack, you can then take it into a mix of carbonate or mixed RE sulphate or mix off oxides for that matter. And then you go into the separation stage Rainbow starts with the cracked chemical stockpile. So we are going to produce a mixed RE sulphate and then we're going to go to do the final stage of separation and produce the four separated [RE] oxides that are very important for permanent magnets. After that, we have to supply facility that takes it into metal and alloy because once you turn it from metal to an alloy you can see the permanent magnet manufacturing operation. And this is where there's a big bottleneck in the world right now, which is metals to alloy, and then magnet manufacturing. Now the West is very, very focused on that and rolling out these steps in the strategic supply chain to create the supply chain outside of China, and we see the German manufacturer, for example, put back. We've entered into an agreement with General Motors in the U.S. to build a magnet factory in the U.S., and they are looking at also expanding their magnet manufacturing facility in Germany. But they have announced the rollout of the new magnet manufactory in the U.S. to feed General Motors in the U.S. Now there will be a mountain pass or we've spoken about has been able to see metal and metal to this plant, metals alloy to this plant, but we know [indiscernible] are running quite late and Rainbow, we believe, will be able to produce separated rare oxides to feed one of these facilities in the very near future. And the fact that we are considering doing the back end of our separation in the U.S. similar to what [indiscernible] were doing will create a very, very real presence for Rainbow in the U.S. We've got that flexibility. It's come about because we split our pilot plant between being the front end to produce a mixed RE sulphate [indiscernible] in South Africa and then shipping a mixed RE sulphate to the U.S. where our pilot plant is currently undergoing construction K-tech in Florida, and then there they'll do to separate a [indiscernible] oxide similar to what [lines] will do but on the commercial scale. Currently, we're doing it at pilot fine scale, and then we will make a decision where we want to do the commercial front end in South Africa and the commercial back end in the U.S., and we'll be making announcements on this short term. Once again, Rainbow is using a new technology to separate the [indiscernible] out of the mixed RE sulphate is called continuous ion exchange and continuous ion chromatography. It is very tried technology. It's continuous ion exchange is used in uranium plants all around the world and myself and the rainbow team in our previous life is MDM engineering, where we we're part of the MDM engineering, we designed and built two uranium plants. So we're very, very favored using continuous ion exchange and [employment] process plant design and then continuous ion chromatography came about the guys at K-Tech invented CIC and sorry, continuous ion exchange and they also invented continuous ion chromatography. Now this is used worldwide in other industries, the biotech phosphate mining as well as the chemical industry. So it's a tried and tested process but we are -- for the first time, we'll be using it commercials, we'll be using that commercial scale to separate the [indiscernible] that we are looking for of the Phalaborwa [indiscernible] served. So very, very exciting. It's a much lower capital intensity, much more environmentally friendly process compared to continuous ion -- sorry, continuous solvent extraction, which is their day factor away for separating [indiscernible] used by the Chinese, used by liners and will be used by Mountain Pass. But we are going in a slightly different route, which we proven at [indiscernible] And our pilot client will be the final step proving that our final stage of separation has totally gear us when we produce separated rare earth outside out of the pilot plants in Florida by the end of this quarter. So a very, very exciting time for Rainbow. I might add that -- there's a new company in Norway, called [Vertech], which is also using a mix with carbonate to produce separated rig oxides and they're also using CIC. So remember, I will be, I think, the first deal on the large scale commercially. But it's interesting to know [VerTech] in Norway also gaining the suite. As you can see, these are photographs of our pilot plant at Mintek in Johannesburg, the front end of the pilot plant's already been commissioned. We'll be producing the first stage, which is a mixed RE sulphate out of the pilot plant once again in this quarter. And that, as I say, is the derisk stage for Rainbow, because the mixed RE sulphate is using processes that are tried and tested that their conventional processes and the rare industry we're using neutralizing the [indiscernible] using to watch the phosphogypsum, we're producing a gypsum stack. This then going into an acid solution, which will lead the [indiscernible] out of the acid solution, then we're going to continuous ion exchange which is well proven to remove the fluoride, then we do what's known as the silica precipitation then it goes into another hazard leach. And basically, we then go to a [salt] which is a strong agitated acid [indiscernible] to produce a mixed RE sulphate. This whole process is used in many rare earth projects around the world. So once again, all the front end of this is tried-and-tested proven technology, and we will produce a mixed RE sulphate, which is 60% payable. So that derisk Rainbow as it sits. And the final separation will take place in Florida in a pilot plant there to improve 100% that our process will actually separated oxides are completely derisked. Now it's a pilot point in Florida are currently under construction, and this is on target and on budget to be complete at the end of July, and it will be ready to remove the -- to receive the mixed RE sulphate from the front end that have been created at Mintek shortly thereafter. I think this is a new slide, which we haven't shown to this forum before. It's a very, very powerful slide. As we know, rare earth prices have been under pressure starting to last quarter of 2022 and into the first half of 2023. And I said at the time when published the PEA for Phalaborwa, that we will be resilient to pricing shots in the rig market. And my prediction was actually almost coming true, where I said we could withstand a 50% drop in rare earth prices and we still be very, very profitable. While the rare earth price have come down by about 40%, and that's started declining slowly. But if you look at the left-hand chart there and also on the left-hand side of that chart, you'll see that value of 78.46 US$/kg, that's the Phalaborwa basket, which is below spot at the moment that's quite higher. But at the value of that basket rainbow would still generate about $80 million of EBITDA per annum. And that's very, very significant because I don't think there are many rare earth projects in the world, if any, that will produce that kind of EBITDA margin or even EBITDA at current pricing. And then we see, as the basket price rises, Rainbow's average EBITDA increases strongly. Our OpEx stays very, very low because it's more is fixed, and we see very, very strong returns for Rainbow. So we look at that price of 20 or 216.54 for the Rainbow basket. This will generate about [$300] million of EBITDA, and that would be circa 2029 pricing forecast pricing, that Rainbow would be able to produce [$300] million of EBITDA. But then if we -- but that's looking at conservative pricing. If we look at where we see pricing when Rainbow is expected to be in production, which is 2026. The first stage of production, we're looking at $100 million -- $120 million of EBITDA. And as we ramp up in 2027, we're looking at $300 million of EBITDA in 2027. If you look at forecast pricing at 2032 and then steady state, we're looking at EBITDA numbers around about $450 million to $500 million of EBITDA in 2032, which is not that far away in terms of the life of a project. So these numbers, footprint Rainbows opportunity and very, very, very significant upside for Rainbow even from very depressed pricing we see in rare earths right now but all the forecast is these are not rainbows forecasts. But one thing about rare earth forecast pricing is [indiscernible] forecasting pricing to go up. And like a gold forecaster, gold price forecaster, then you'll have some guys, you'll call the gold price up to $3,000 next month and some guys will be calling gold down to $1,500 next month. That's the nature of forecasting the gold price. But one thing is very, very apparent with the pricing forecast is that because of the thematic and the structural underpin of demand for permanent magnets and rare earths [indiscernible] permanent magnets everybody confirms that prices are going up, it's just which forecast you want to join and take into your financial model. But then the whole forecast pricing scenarios, rainbow is a very good profitable business based on Phalaborwa and we have an opportunity now to replicate this with what we have in Brazil. Just to cover the ESG credentials once again, we know it's a brownfield site. We're using water in a closed loop, the water we are receiving is from those gypsum stacks. So we're going to utilize all that acid water, which right now is [indiscernible] to be an environmental risk. So we're cleaning up there environmental risk. We will be redepositing the clean benign gypsum on a line stack side. [indiscernible] integrate principle standards. And we'll also be entering into an agreement shortly to sell part of this phosphogypsum into the South [indiscernible] gypsum market. We will be, as I said, recycling of water and any discharge will be totally benign. We are also using sulfuric acid from a nearby sulfuric acid plant. In fact, when I say nearby I'm talking about one or 2 kilometers away from the Phalaborwa mining company, it's a big copper mine. They have excess of sulfuric acid to get rid of every month. It's circa 10,000 tonnes a month and at Phalaborwa we're going to be requiring between 4,500 and 5,000 tonnes of sulfuric acid per month. So we've got ample sulfuric acid as a waste stream from next door, and that's fed into the OpEx of our PEA because at the time of PEA our price that we were indicated we would receive from Phalaborwa was $95 a tonne. Just to footprint, this DEKO your mining corporate in the Congo need sulfuric acid -- now we're paying $450 a tonne for sulfuric acid. So that just shows you how competitive our sulfuric acid, which leads into our financial metrics of Rainbow and also, we're going to be using a renewable energy -- is a gigawatt of renewable energy being commission in the Northern Cape and South Africa between wind and solar that's been fed into the grid. There's two licenses of initiated in South Africa to will this green power of the group. And we are already in negotiations with one of those license holders, and we've got an agreement that we'll be able to build the power require also grid at Phalaborwa. And we're only going to need about 10 to 12 megawatts of power, very, very low. In normal mining project, your power cost would be about 50% of your OpEx at Phalaborwa will be below 20% of our OpEx for our power. So once again, it just shows you the green financials of this project. When I have a look at where we are, we've had strong progress since the fourth quarter of 2022 and by quarter 3 of 2023, all the work streams by definitive feasibility study are underway, which I think is key. We have -- we've also been able to increase our project pipeline. As I mentioned, the MOU signed at Mosaic on the Uberaba projects is very key. The reason why I say this is very key is because the Uberaba project is almost a copy and paste of the Phalaborwa project. It's hard rock monetized mining. It's producing a phosphate slurry fee phosphoric acid plant, the phosphoric acid plant requires sulfuric acid heat to generate the phosphoric acid for the Brazilian fertilizer market and then they produce the gypsum waste residue which sits on a massive stack at Uberaba. Very importantly, they produce their own sulfuric acid at Uberaba similar to what Sasol did in South Africa. That means for our plant at Uberaba will have a very, very cheap source of sulfuric acid to feed into the OpEx number of this project. So this -- I think the fact that we were able to sign this with a $12 billion company gives Rainbow's IP and technology, a huge amount of credibility. And as I said, we're already testing their samples in Canada and also because we -- all the lessons we've learned at Phalaborwa and the [indiscernible] we've been able to develop and all the tests we've done, we know a large part of this will apply to the Uberaba project. Not all of it because -- no two ore bodies are the same anywhere in the world. So they can monetize even though it's a commoditized hard rock. It will have different characteristics to the one in Phalaborwa. But a large part of the [formation] will be applicable. So we see that we'll be able to produce this project along very, very quickly. We are also working with OCP in Morocco. But OCP, as I've always said, is and told the market, it's a sedimentary phosphate source of phosphogypsum that they're generating at Phalaborwa, it's very low grade. So we are looking at ways of being able to upgrade that phosphogypsum fee in terms of the area of content. And only then we'll be able to do something with it. But that's a far slower project. It is progressing, as I've said, but it will be at a slower pace than Uberaba. So our focus right now is delivering Phalaborwa, which is a near term, very, very high-value project. And in parallel, we'll be able to move the Uberaba project along relatively quickly because of what all our knowledge that we have got to Phalaborwa. And also once the environmental process started by WSP Golder global engineering sorry, consultancy, [indiscernible] consultancy is progressing very well. I think key takeaways just on Phalaborwa alone, if we look at when we forecast to come into production in 2026, [indiscernible], the very conservative discount rate post tax discount rate jumps to over $1 billion. We've got an IRR of over 40% will be generating, as I said, circa $210 million of EBITDA per annum and EBITDA margin jumps to over 80%. So also, we've got a strategic advantage now we've got the flexibility to be able to do the back-end separation in the U.S., which will give us U.S. presence. Will start making us, I think, important to U.S. investors. You can start looking at Rainbow from that point of view. We know U.S. investors like anything to do with American and the fact that we will be onshoring this if we decide to do this, we would be onshoring the separation on U.S. or we think we'll carry favorable U.S. investors. And we've got a large amount of geographic diversification, which no other ore project in the world has a mine add. All rare earth projects in the world right now are single project companies and Rainbow will be unique in the sense that we will have this geographic and project diversification of two low capital-intensity projects, very low OpEx that we'll be able to stay the [ vagaries ] of rare earth pricing, which we know most of those projects in the world will [better be] able to operate under trying with pricing that we have at the moment. But even at these worth prices, as I mentioned earlier, and you can see back in our presentation, Rainbow will still be a very profitable company. So I would like to thank you for your attendance, and I will now go to questions. Thank you very much.

[Operator Instructions] But George, perhaps to start with, we did receive a number of pre-submitted questions from investors. So I'll read the first one here, which reads as follows. Please could you give an update on the Gakara project in Burundi and what is the likelihood of it proceeding in the near future?

So broadly, you're still on your care maintenance. It's a very, very low cost to keep it can and maintenance for Rainbow. And right now, we are just waiting to engage with the Burundi government. They just, I think, 6 weeks ago passed a new mining at [indiscernible]. And based on that new mining at the government has said they would like to start negotiations with Rainbow. So we are waiting for that finalization of a meeting date. But I can -- I would just like to stress that it will be a fairly slow process, I think, in negotiating with the government as is the nature of negotiating with these -- with governments. And -- but we have no -- there's no [indiscernible] of Rainbow losing its license in Burundi. But it's also very, very small in the size of what we have in terms of Rainbow's overall sort of value as a company. To footprint Burundi right now in terms of EBITDA, even at full-scale commercial production at current rig pricing in Burundi, that would generate more than $5 million or $6 million in EBITDA, whereas Rainbow would generate plus $80 million of EBITDA. And then we will be also looking at the opportunity in Brazil. So I think that speaks for itself.

Perfect. The next one here read as follows. When the pilot plant is dismantled up from Mintek, will it be reassembled -- and if so, where?

So in the pilot plant of Mintek, I might [specify] that it's Mintek's pilot plant. Now part of the equipment has been purchased by Rainbow, but the majority of the equipment is based at Mintek [indiscernible] Big R&D [indiscernible] in South Africa with a world-class reputation and most of the equipment is there. So, we won't be dismantling and taking it away. We'll only take this and pieces that belong to Rainbow. But once again, we will be looking at doing another pilot program with the Brazilian opportunity, which dare I say shortly, it would be fairly quick compared to when you find a new discovery and the time it takes, the new discovery to get your piloting, we'll be piloting Brazil relatively quickly, and we'll be using part of that equipment for the Brazilian pilot. The equipment at K-Tech that's all rainbows and we'll take a decision on what to do with the final back-end separation pilot plant. At K-Tech's offices or laboratories in Florida. But we haven't come to a final decision yet.

That's great. Is Morocco still being considered/assessed as you briefly alluded to in your recent interview?

I've just covered Morocco, as I said, we are busy with test work there. As I said, it's a much slower opportunity. We are assessing it was -- as mentioned, it's a much lower grade, and sedimentary phosphate deposit. So we've got some work to do there, and we are working with the M6, which is the university in Morocco as well as OCP themselves. And this is progressing as I mentioned.

Perfect. That's great. And moving on to the final pre-submitted question. Your previous capital raises have been a premium to the share price on the day, which is unusual for pre-revenue junior miner. Have you achieved this and what's been the benefits?

Look, I think we've achieved this because we've been able to convince investors that Rainbow has got a lot more value than what the share price is reflecting, and that's proven by the premiums being raised [indiscernible] of Rainbow. I think the people that we've come into new fund raises at a premium of people who are -- who believe in the long-term story of rainbow, they're not stags who're looking for 20% discount to the spot price and sell it immediately once they receive their shares through raising. So we've been able to be able to raise a added premium from people who believe in the Rainbow story, believe in the teams -- been able to deliver that value that will eventually come out of Rainbow. So I think it's been very, very positive.

George, that does conclude the pre-submitted questions. But as you can see, we received a number of questions throughout today's live presentation. If I could just hand over to you just to read out those questions and give response to whether appropriate to do so. I'll pick up near the end.

Yes. So I've got a question here. What's the back-up [dam] for the [indiscernible] oxides extraction in the event of the Rainbow technology not working. We don't have a back-up dam because we know it works to be honest, I'll be very blunt. We know the process works. So but if you -- for some [hallelujah] reason, the final separation didn't work the funding process, which we know does work would still generate at PEA pricing about $120 million, $130 million of EBITDA. So in the front end part of Rainbow's process makes Rainbow very, very profitable company. But as I said, the final banking we know work, so we don't have a backup plan. Next one is, does Rainbow [indiscernible] license for Morocco? No, we don't, but this is not apparent because Morocco bought the [K-Tech] technology a few years ago to separate uranium and thorium out of the phosphogypsum. So once again, as I alluded to, we know the K-Tech technology works. This is why OCP be the biggest generator of phosphogypsum in the world bought their technology. But that didn't preclude OCP from signing a master agreement with Rainbow because of what we've done at the front end, which we've also been able to go into a patent application with. The next one is what's the ballpark value to Rainbow, should Brazilian project proceed into operation? I can't answer that question other than you look at the kind of all the metrics and you look at the size of the opportunity in Brazil and you can draw your own conclusions. But no, I wouldn't -- we haven't done the work yet and anything -- any statement made on this, I would have to get signed off from Mosaic. So at the moment, you can draw your own conclusions. But needless to say, this is a major, major opportunity in Brazil, and we would expect very, very good financials to come out of this or financial metrics, I should say, to come out of it as well as low capital intensity. Any other questions? Sorry, I see [ Wood Ramberg ] considered disposing off the Gakara project. I'm not limited to say that other than we'll consider all our options once we are given the go-ahead to start re-mining in Burundi. Given the take from my presentation that we are focusing on [indiscernible] of [indiscernible] now, that's what I can say. Next answer is how would you manage your ongoing power outages in South Africa? I think I want to just part you with the fact that we are going to be really in green power off the grid. So we're not concerned about the power. Also I might add every -- it's well documented that the power shortages in South Africa, but what doesn't get documented is that the mines actually don't suffer many power disruptions because the mines are -- you can't have a mine using power when you've got miner workers 2 or 3 kilometers underground, and you need to bring them to surface. So the miners suffer very, very little power outages. And at Phalaborwa we would expect to see a similar result for -- without power. But as I said, we're not a big power draw and it's reading off the grid didn't work because the grid started faltering, we again introduced solar power ourselves. And Phalaborwa is one of the hottest places in South Africa. So we have very, very good results if we put our solar power plant, which will be circa 10 megawatts, which is not big by anybody's standards. Would you look to list on the U.S. market? As I mentioned, we've got the flexibility now to onshore part of our separation on U.S. soil, and that would then -- we would then have to consider that, yes. Any other questions? When will the DFS be complete? This will be -- our target date is March 2024. And then after the completion of the DFS, we will go into financing discussions. And the intention is to hopefully be able to start construction in the last quarter of 2024 for our process point at Phalaborwa I might add that the DFC, which is the U.S. government, have indicated to Rainbow that they would be happy to look at being a project funding partner. In other words, a debt funding partner for Rainbow and as I said, they are already invested in Rainbow through TopCo with 12% of Rainbow. But [indiscernible]? No, I wouldn't, at this stage.

George, I think you've addressed those questions you can from investors. And of course, the company will review all questions given today and we'll publish our responses on the Investor Meet Company platform. But just before redirect investors to provide you with their feedback, which knows particularly important to the company. George, could I just ask you for a few closing comments.

I think I've covered most things for all the investors, hopefully. As I said, we are making very good progress since our last presentation. The pilot plant is going along very, very well, both at Mintek and the Board at in Florida. We expect to get these produce a mixed RE sulphate as I said, within the next couple of weeks, the next few weeks, I should say, will be this quarter, and we'll also be able to have the separated [indiscernible] by the end of this quarter out of the plant in Florida. So we've got two massive derisking steps for Rainbow. But as I said, the first step is, in my mind, already give us because there's no doubt that we'll produce a mixed RE sulphate which makes Rainbow a very, very profitable company in its own right, just based on the 60% payability of the sulphate. But as you know, we're going all the way through to separate oxides so I think the future for Rainbow looks very good as well as the exciting MOU with Mosaic and in Brazil. Well, it's Mosaic in New York, actually, but it's a project in Brazil, which gives Rainbow lots of credibility for the marketplace as well. Thank you very much.

Perfect. George. Thank you once again for updating investors today. Could I please ask investors do not close the session as you now be automatically redirected to provide your feedback in order for the management team can better understand your views and expectations. It's going to take a few moments to complete and I'm sure will be greatly valued by the company. On behalf of the management team of Rainbow Rare Earths Limited, I would like to thank you attending today's presentation, and good morning to you all.

Thank you.