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

Good morning, and welcome to the Rainbow Rare Earths Limited Investor Presentation. [Operator Instructions] The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses, where it is appropriate to do so. Before we begin, I would like to submit the following poll. And I would now like to hand over to CEO, George Bennett. Good morning to you.

Good morning, and welcome to Rainbow Rare Earths' presentation. Again, Happy New Year to everybody, and I think we are going to see a very, very positive 2025. Thanks very much, everyone. The usual disclaimer. Thank you. Well, rare earths, I mean, most of the audience have heard me present before, but for those new to the audience, we know that rare earths are critical building blocks in order to reach net zero by 2050. With Trump being inaugurated today, that might move slightly, but there's still massive, massive incentive for governments to move towards net zero and try and achieve the goal set out in the Paris Accord. Now, to achieve net zero, we need green energy, and we need reduced emissions. And we see that with the growth in the electric vehicle sales over the last several years, almost 10 years now, really kicking off in 2015. Wind turbines being rolled out and huge, huge volumes of wind turbines. And then rare earths' going to all your consumer electronics as well. Your [ boAT ] speakers, your iPhones, your Samsung phones, your computer hard drives and very, very importantly, defense. And the geopolitics, the way they are, defense is even more important. Even though they don't use a hard volume of rare earths, they are very, very critical. F-35 fighter jet requires 420 kilos of rare earths per fighter jet, these rare earths go into heat-seeking missiles, missile guidance systems, night vision goggles. The U.S. nuclear submarine is something like 35 tonnes of rare earths in it. So very, very key for defense. And as I said, we see this importance being dominated by geopolitics. And of course, we've got new frontiers of growth for permanent magnets and requiring rare earths, which I'll talk to you a bit later, which are robotics and what we call eVTOLs, electrical vehicle takeoff and landing vehicles. As I mentioned, the exciting new market predicted to require a lot of permanent magnets and foster even further growth that we've seen to date into the next decade will be humanoid robots for industrial use as well as helping to alleviate the labor shortages that we see in the world today. In other words, we see there's a negative growth rate in China. They need something like 5 million people per annum to -- because of the negative growth rates. We see Korea is going negative -- South Korea is going negative growth rate. We see this in Germany, Italy and other countries, industrialized countries around the world that have got a negative growth rate. And Elon Musk forecast that there will be 10 billion humanoid robots by 2040. That's one for every person on the planet. And these robots, as I said, will do things like pick your grapes, tie your shoelaces, pour drinks and of course, huge industrial use as well. There's just a short video on the slide that I'd like to play now. And where we can see robots. [Presentation]

This is a robot in Los Angeles. This has taken a few months ago when my son was in L.A., and he has a robot performing the task of Deliveroo or Uber Eats, where it's delivering a pizza in that box. And we see this type of robotic growth taking place more and more in the Western world. Growing deliveries are forecast to increase significantly. I think last year, there's something like 200,000 drone deliveries made by people like Amazon. They are forecast to grow to 2 million drone deliveries this year, and we see exponential growth continuing in this area. So we're very excited about these new frontiers of the rare earth demand usage. And as I said, we forecast that by the end of 2040, robotics and eVTOL permanent magnets demand will be 2/3 of demand and 1/3 will be wind turbines and EVs, whereas in 2030, we see EVs and wind turbines being 2/3 of demand and robotics and eVTOLs been 1/3. So that's going to switch around in the following 10 years towards 2040. We see eVTOLs originally born out of drones. We see drone deliveries already happening commercially and in a number of Western countries, and this is going to expect to explode in usage. And then eVTOLs are basically air taxis. Four licenses are starting to operate on a commercial basis in the U.S. this year. One will be here in airport. One will be JFK -- sorry, 2 will be JFK, 1 will be LAX. So those are the first 4 commercial licenses which will transport people from airports to a destination. And the beauty about this is that air taxi and eVTOL taxi from LAX to San Diego will take 8 minutes as opposed to 1 to 1.5 hours in a car or a taxi, and the price is forecast to be similar to that of an Uber Black. So for the price of an Uber Black, you'll make this trip in 8 minutes, and one can imagine how much this will save people, you, in terms of the expense of time, especially businessmen and even just normal holiday makers who prefer to spend 8 minutes on the e-taxi rather than 1.5 hours in a vehicle going to the airport. These eVTOLs require 15 to 20x more permanent magnets than EV does -- electric vehicle does. And as I mentioned, we see massive demand in this area in the next decade, and this is one of the new frontiers aligned in conjunction with robotics. These are some of the demand forecast, as I mentioned. And as you can see, advanced air mobility or eVTOLs and robotics forecast to expand going into the next decade and continuing to 2040, which is as far as we look at in compared to EVs, as you see on the left-hand side there. This is supplied by Adamas Research. So with this exciting outlook for rare earths, Rainbow, as I said, we intend to unlock global opportunities to be a low-cost and responsible supply of critical rare earths from phosphogypsum. As you can see, this is an independent verification that Rainbow is the lowest rare earth project in development today, and it will be the lowest rare earth project in production in the Western world, and we believe we are even below the cost of Chinese rare earth production. As you can see there on the right-hand side, this is Rainbow's margin, independently verified by Argus Media. We then have Mt Weld, which is Lynas in Australia, just breaking even, and we have Mountain Pass at current rare pricing losing money right now. And this is a rare earth prices in the last quarter. The reason why Rainbow's margin is so much better than other development projects and even projects and will be, compared to projects and production, is that we don't have a lot of the associated costs that you see with the typical rare earth mining project. We don't have the cost of hard rock mining or even in situ leaching. Cost to retain per tonne is less than $1 a tonne, circa [ USD 0.70, USD 0.75 ] a tonne to mine a had rock rare earth project just from an open pit, you're looking at a mining cost of anywhere between $15 to maybe $20, $25 a tonne. We have got no hauling and stockpiling, crushing, milling and grinding to produce a mix of concentrate, which is your first stage of rare earth production. And we don't have the flotation costs and then cracking. You have to crack a rare earth mineral into a chemical form before we can go further downstream to produce separate rare earth oxides like Lynas have been doing for many years, and where Mountain Pass are going downstream further. And for many, many years, all they've done is produced a mix of concentrate, and that stops after the flotation process. But then they've recently gone into cracking the rare earth concentrate it to chemical form and they're starting to get down to separated rare earth oxides. Traditional mining projects, unfortunately, have a multitude of challenges to overcome, and these include low grades, complex mineralogy, lower recovery rates and high levels of radioactivity. And obviously, if it's an ionic clay deposit, it's huge environmental obligations around in situ leaching. They use ammonia sulfate, which is very, very detrimental to the environment or some clay projects are looking at heap leaches. But the typical recovery rate in ionic clay project is 40% to 50%. Rainbow Rare Earths' overall recovery proven by extensive test we're piloting and bench scale test it in laboratories. But as I said, further proven by low scale piloting is in the area of 65% become the overall recovery. Going on to, as I said, to actually kind of Phalaborwa project itself. The reason why we have an asset that we've got is because for 60-odd years, we've the phosphate mining done by Foskor mining company in South Africa, which produces phosphate slurry from phosphate rock, which is fed to a phosphoric acid plant next door, which is owned by Sasol. The phosphoric acid plant is key to produce phosphoric acid for the fertilizer industry all over the world. And the hard rock carbonatite source of the phosphate drop means that this type phosphate drop is quite a high level of rare earths compared to sedimentary or marine deposits of phosphate rock. So that's the type of phosphate drug deposit that we are targeting, that produces phosphoric acid. And this is what we have in Phalaborwa as I've mentioned. The phosphate gypsum is a byproduct of phosphoric acid production, and the rare earths are initially upgraded in the phosphate concentration process and being further in the production of phosphoric acid in the phos acid, the sludge. And that process produces gypsum waste residues in the rare earths with gypsum onto some stacks that we have at Phalaborwa and you have elsewhere in the world. Rainbow is in -- when we realized that we had these gypsum stacks with high-grade rare earths in it, we initially looked at what Sasol had done was to produce a mixture of carbonate. And they've got our technical directors said to me, George, look, we shouldn't stop where Sasol stop, let's go all the way through to separated rare earth oxides because once we got the rare earths in solution, it's not going to be difficult to go and produce separate rare earth oxides, and that's the IP that we've developed at Rainbow. We're using proven processes in a slightly different configuration and a slightly different application by using continuous ion exchange and continuous ion chromatography to take a crack chemical stockpile of rare earths and go to separate rare earth oxides there. And we'll deliver the 4 key magnet rare earths, Neodymium, Praseodymium, Dysprosium and Terbium which are 2 of the heavy rare earths that are short supply in the world today, even more so than Neodymium and Praseodymium. And these are critical for the permanent magnet applications I've spoken about. They're not only do you need Neodymium, Praseodymium, but Dysprosium and Terbium are key to prevent these magnets from overheating and losing the magnetism in the motors that these rare earth magnets go into. Just mentioning footprinting the Phalaborwa project once again for the market to see. As you can see, Phalaborwa's grade is 5 to 10x higher than a typical ionic clay project and then mining grade skin. The reason why we compare this to ionic clay projects because we have a chemical stockpile of phosphogypsum and we start meeting it directly with sulfuric acid to recover the rare earths, and we see some of the thing in ionic clay projects where they use ammonia sulfate to directly in situ leach the rare earths out of the clay in the ground. As you can see, in terms of where Phalaborwa is very different is look at the parts per million for NdPr in our project in Phalaborwa compared to the ionic clay projects. And you can see how much high grade we are in terms of our NdPr production and in terms of the absolute TREO grade. We then look at the hard rock projects below, you see Mountain Pass and MP Materials, They are graded as 8% TREO as heat grade fed into the crushing plants on site. And you have a look at another standout is that Rainbow's uranium and thorium content at Phalaborwa are very, very low. Those levels you see there for the audience that aren't [indiscernible] with us is literally the type of radiation levels you'll get in your microwave oven, but we see the radiative levels of thorium in Lynas, which is significantly higher. And this is why Lynas initially, only did the cracking and separation in Malaysia because they haven't want to have these -- the radiative waste deposited on the Australian continent. A couple of years ago, the Malaysian government said to Lynas, we've had enough of this now, you're going to start something that's back in your own country. And that's why Lynas is now building a separation plant in Australia. They finally received permission to deposit this radiated waste on the Australian continent. And this is largely because of all the pressure around rare earths and creating independent supply chain outside of China. But even in those higher rock grades or hard rock grades. As you can see, current pricing MP is just breaking even -- I'm sorry, MP is currently losing money and Lynas is just breaking even their current pricing. So other hard rock projects have time to get into production. We need higher pricing to allow some of these other projects to get into production because there's Adamas Intelligence forecast, we need another 7 rare earth projects coming on stream over the next decade to meet the independent supply chain demand that's going to be built in the West. And we're very confident Rainbow is one of those development projects. And we need, as I said, there's -- [indiscernible] is being developed in Australia right now, being built. And there are -- and this is very significant. And in fact, that we need another sort of 6 or 7 over the next few years. Once again, highlighting why Rainbow is a high-margin project, low capital intensity and lower operating costs. It's a brownfield site. The other 2 phosphogypsum stacks, we will be neutralizing the acid water that you see on top of those stacks in green using this in the closed circuit in our process plant being built at the southern end of the stack, stack B which is a smaller stack and between stack A, which is the largest state. Obviously, we will be building a new stack to sort of east of stack B. This will be aligned site. Currently, those stacks are online, so you've acid water reaching into the ground, which is not good for the environment because those stacks were originally built 60 years ago with that environmental legislation that you have in the world today. This will be, as I said, IFC standards and the Equator Principles standards. And we initially said we will be treated and be positioned on stack C, stack B area will then be aligned as well and stack A will then be treated and the deposition will go into the balance of stack C and A and want to restack these at the moment. You can see and read the site is already fenced. The top left-hand corner is where the original Sasol phosphoric acid plant was situated. This has been mothballed for some 10 years now. It will never go into operation again. But we see a high-voltage switchyard in place. We see the overhead power line, which runs through our property. So none of those costs you typically have to build out in the greenfield projects will occur here at Phalaborwa. And very importantly, next door, just at the top of this photograph, you've got the Phalaborwa Mining Company, which is the old Rio Tinto copper mine. They've gone underground into the sulfides. They've commissioned a new sulfuric acid plant, and they will be producing sulfuric acid on site, which they'll need to get rid of because they have about 10,000 tonnes of excess sulfuric acid that they need to get rid of, and we will be taking a large portion of that excess acid for our process plant. So we've got a very, very cheap source of sulfuric acid. The biggest cost in sulfuric acid is your transport. And that's why in the Congo, where they need sulfuric acid for the copper mines there and they have to transport at huge distances. The cost of sulfuric acid in the Congo is roughly $400, $450 a tonne forecast for 2025, whereas our sulfuric acid price and our updated capital cost and OpEx numbers we published last month is still sitting around $95 a tonne. So a significant saving in sulfuric acid cost. We also another reagent we require is silica and silica will be supplied to us. It's a waste reagent from the Foskor operation just north of the PMC Copper Mine. So they have the silica waste that will be producing in their phosphate slurry production process, and that silica will be supplied to Rainbow at a very, very low cost being a waste product. We're also 5 minutes from the town. So we service by hard rock -- I'm sorry, a hard top road. There's an airport very nearby, and there's a very large town that's supporting the key mines that operate in this town already. So a very, very good jurisdiction to be operating in South Africa. I'll now come into the primary flowsheet, and Dave, you can come in now, please.

Thanks, George, and good morning. On this slide, you can see the block flow diagram that was developed for our PEA. This was based on bench scale test work that was conducted at the [indiscernible] facility in Australia. After we completed that, we made a decision that it would be preferable for us to conduct the large-scale pilot plant operations in Johannesburg. And we then did a further bench scale test work program. And during the initial setup runs on the pilot plant, we were able to identify a number of optimization opportunities for this flow sheet. And the elements of plant that are now highlighted in a pink color on this block flow diagram have all been eliminated from the flow sheet. So a significant chunk of the process has been removed, greatly simplifying the project to the benefit of both capital and operating costs. So we've been able to remove completely the impurity leach and the downstream processing steps that are associated with that. And we've also been able to remove the rare earth fluoride precipitation step and the following acid bake and water leach processes that have now been removed from the flow sheet and we're able to go directly to the CIX step. That has allowed us to produce an improved quality of product as an intermediate product in terms of a rare earth -- mixed rare earth carbonate, which goes to the downstream separation processes and purification processes. If I move on to the next slide. Here, you can see a number of photographs of the pilot plant operation. This was a very large-scale operation compared with the average typical pilot operation for one of these type of projects, which generally would run at somewhere around 2 to 5 kilograms per hour, whereas this process was run at 20 kilograms per hour. So significant scale, which we felt was appropriate given that this is a relatively new process that we're bringing together, although each of the individual steps in the process are, in fact, very well proven, very standard processes that are utilized throughout the extraction industry, for example, agitated leach tanks, filters, pumps, et cetera. There's nothing strange or unusual in terms of the equipment or the technology that's being used in this process. The pilot plant confirmed very nicely our process flow sheet, and we had at least 65% or higher on all of our runs of recovery of rare earths from the phosphogypsum. And we, again, were able to deliver a high-quality intermediate product for the subsequent separation and purification processes. We did also identify a number of further opportunities for optimizing this process. These are relatively small, but could all have some benefit in terms of capital and operating costs or simplifying the process. And we're giving those further evaluation as we stand now. In terms of the separation process, and I know this is an area of great interest for everybody. We've demonstrated in the work that was conducted in Florida, the ability to separate the rare earths either in groups or individually. So we're comfortable that the separation process is going to work. What we need to focus on at the moment is the removal of impurities, which we want to do during the continuous ion exchange, the CIX process step and ahead of the continuous ion chromatography, CIC, which is used to then do the separation of the rare earths or the groups of rare earths. And our focus right now is that impurity removal. By the way, the CIX step was actually done on a pilot scale at Mintek in Johannesburg in conjunction with our leach processes. So we're very comfortable about that process and the way that's going to work. We've also made a decision to establish our own laboratory now in Johannesburg. The idea here is that we've actually completed all the leach test work in Johannesburg, and our technical team there is now available to do work on the CIX and CIC steps. And also, we ran into a problem in Florida where in the laboratory there, the analytical equipment used to analyze the samples being produced in the CIX and the CIC ran into problems, and they had to go outside outsourcing at considerable expense and with about a 2-week turnaround, which is a big delay on every step of the processing. And we felt that we would have a greater benefit if we relocated this process into Johannesburg. We've been able to speed up the program and improve on the cost for the program as well. In this slide, you can see a number of photographs of the laboratory that we've established in Johannesburg. And we also -- on top of the work that we want to do for Phalaborwa, which remains our key priority, we do have a number of other project opportunities from different parts of the world, including the Uberaba project, which we'll deal with a bit later and also the Canadian project that's coming up. So a number of opportunities which motivate us to have a laboratory where we can apply our own technical team, our own IP and have control of the work that's going on. And I'm pleased to say that we've managed to conduct the first test in this laboratory within 3 months of making the decision to establish it. And as you can see from the photographs, it's a well-established world-class facility that we've got with a very focused approach to extracting rare earths from phosphogypsum and then also developing and upgrading the process for separation and purification of the rare earth oxide products that we're aiming to produce for the magnet rare earths. And so this is up and running, and we're very excited about having this on the go. I think the next slide is over to you, George.

Yes. Just to finish off on the lab, we've got a site visit there next week ahead of the mining in [indiscernible] in Cape Town. We've got a number of clients, investors and analysts visiting that laboratory just to see what we believe is a world-class facility. Just to move on to the interim report that we published last month, which is one of the key reasons for this update for the [ IFC ] is that as previously reported, our resource from the PEA had moved from -- up from 14-year life to 35 million tonnes to a 16-year life. But very importantly is that our CapEx number is within the overall inflation over the period from October '22 until December last year. In other words, if one applied purely inflation to our original CapEx numbers, you would have looked at a number above $330-odd million, and we've come in at $326 million. This CapEx number has got a far higher level of accuracy compared to the [ PA ] number, which large parts of the capital that make up this capital number are DFS standard in terms of sizing, pricing and so forth. So we're very confident that we are keeping our capital well within the inflation currently that has occurred in the market over the last couple of years. And this is compared to a lot of other projects. I don't like to mention names, obviously, but if one looks at various projects that are being developed in the world right now, they've all had massive CapEx flow of some between 50% to almost 100%, hundreds and hundreds and in some cases, almost $1 billion more for some earth projects that are being developed and projects and other minerals. Our operating cost per kilogram came in at $12.91, which is exceptionally low, and we believe this is on par with Chinese cost of production, if not -- operating costs, I should say, if not even lower. As I said, this is an update on the PEA number that we released in October '22 and using the same pricing metrics as we use in the PEA, the post-tax NPV is still very, very robust for this project. And as Dave mentioned, we've been able to reconfirm our recovery numbers of slightly better than 65% overall recovery. And our Neodymium, Praseodymium and very importantly, Dysprosium and Terbium production numbers are very, very robust in terms of absolute tonnage. And we've got a very, very strong post-tax IRR and our EBITDA margin is still significantly above what you see in the typical mining project by a long way. On the right-hand side is a photograph of the hydraulic mining that we piloted apart from the piloting of the process in South Africa, we also piloted the reclaim using hydraulic hoses, and that's a full-scale reclaim -- pilot reclaim taking place there. And we're pleased to say that the gypsum behaves in a similar manner as to what we anticipated in the PEA. And the cost of mining this phosphogypsum or reclaiming it, I should say, is even lower than what we published in the PEA. It's coming in at circa USD 0.70, USD 0.75 per tonne compared to, I think, USD 1.20 per tonne in the PEA. In terms of our EBITDA sensitivity to pricing, this is very, very important because we believe that to go into a development in a project such as this, you need to be resilient against even in low pricing environment. And if you look at the far left-hand side of the slide in front of you, you look at the basket there at $78.46, that's in December 2024, which is last month, that was the price of our basket. And this is because using a Neodymium, Praseodymium price of circa $58 to $60 a kg, which is where we're sitting now and with the credit of the Dysprosium and Terbium, which is a significant credit to our basket at that basket price, the [indiscernible] production today, we'd still be making $63 million of EBITDA, which is better than any rare earth project in development or operating in the world today. So we're very, very pleased about the metrics of these numbers. And if you look at -- if we're in production today, if we look at the spot pricing that was achieved in 2022, we would have made $181 million EBITDA. So that's over the life of the project using spot rare earth pricing as at 2022. But all the forecasters are forecasting rare earth prices to rise over the next 18 months, which is -- which will bode well for Rainbow because that's when we will be in construction and then looking -- I'll talk about the time line of that later, but looking to go into production in 2027. Once again, we believe we are a very green rare earth project, one of the greenest in the world, purely because we are treating a waste residue. We're going to be depositing this waste residue on to a new line stack site, which is currently unlined, as I've mentioned. We'll be using the phos acid water that's associated with these stacks. We'll be neutralizing it in our process plant. We'll be creating a clean benign gypsum, which will then be sold into the East African gypsum market. Not all of it, unfortunately, because the gypsum market is not big enough for our production rate, which is going to be 2.2 million tonnes per annum of phosphogypsum we'll be treating. And total South African gypsum market is only 1.2 million tonnes per annum. But the South African gypsum market is running short of gypsum. We have got a letter of intent with the biggest gypsum trader in South Africa, and we'll be looking to capture sort of 400,000 to 500,000 tonnes per annum of that gypsum market. And as I say, it's not our primary business. So we can afford to be a low-cost producer or seller of gypsum into the African market to capture as much market share as we can. But we save on deposition. And over many, many years, those gypsum stacks will be completely leveled in South Africa, and there will be a complete rehabilitation of that site, which most mining projects can't claim. There was a phosphogypsum stack, which Omnia, a big fertilizer producer in South Africa used to have and that gypsum stack has been completely sold into African gypsum market over a number of years, and that stack is now completely level. And we anticipate seeing a similar thing in Phalaborwa. Plus we're also using a source of reagents, which are waste byproducts in terms of the sulfuric acid production next door as well as the silica that we'll be using, which is sourced from Foskor next door. So once again, we're using waste products in our process, which bodes very well for ESG sort of point and the circular economy. And of course, the social value is huge. Lots of people that lost their jobs in the mothballed Sasol phosphoric acid plant still haven't been reemployed in the area. We'll be hoping to reemploy as many of those that are still able to work and have got the skills of working in a very acidic environment like they worked in the phosphoric acid plant in Phalaborwa. Just in terms of timeline, as I mentioned, last year, we did a resource update. We published the interim study numbers. This year, we focused on final separation, test work happening in South Africa using our own laboratory and the pilot plant. We've shipped a pilot plant from -- that was operating in Florida that's actually arrived in South Africa on our shores yesterday. It will be moved up to Phalaborwa in the next few days. And then over the coming weeks, we will be reconfiguring that pilot plant and running a pilot operation based on the final test work optimization that we've seen that's been run in our laboratory in South Africa. And that we'll be doing -- we'll go into project financing, and we still expect it to be in production in 2027 as per the original time. We did see a delay, as I mentioned to the market in my update just over a month ago, and that was to the DFS, but we still now anticipate completing the DFS in 2025, as I've mentioned, and we still aim to -- we still expect to be in production in 2027. This is creating -- as I said, the IP we've created within Rainbow by developing the Phalaborwa project has led to a huge global opportunity for Rainbow, which not many junior miners have and especially in the rare earth space. We signed an MoU with Brazil, Uberaba, that's our most advanced strategic partnership or partnership project. We are going to be going into an economic assessment to prove to the world how good a project this is. We're financing that 50-50 with Mosaic in Brazil. It's -- once again, it's a hard rock source of carbonatite, which has fed a phosphoric acid plant in Brazil. We have an opportunity in Brazil -- sorry, in Brazil and Canada, where we've been approached by a Canadian junior there who will be developing a phosphoric acid plant fed from a carbonatite source of hard rock phosphate slurry, and that will be producing high-grade phosphogypsum in terms of rare earth content, and they will have looked -- they will approach Rainbow to partner with them on that portion of the project, which we'd be very happy to do. We've been approached by the Saudi government to be a partner and looking at assessing their phosphogypsum stockpiles in Saudi Arabia. The same has happened in Morocco. And we also have been approached by guys who want to form a strategic partnership with Rainbow to look at the phosphogypsum stacks that are present in India right now. So a huge global opportunity. Rainbow is not just a single project, a 16-year life project. We have lots of other opportunities around the world. More importantly, the Uberaba project is a long-life project. It's a massive opportunity, and Dave will talk more about that on the next slide. Dave?

Hi, George. Sorry, I was playing with the microphone on mute. Yes. Uberaba is a particularly exciting project for us. I think the key to note is it's a large-scale project that currently producing over 4 million tonnes per annum of phosphogypsum, which will peak at about 5,000 -- 5 million tonnes per annum in the coming years. And the grade of the phosphogypsum there is, in fact, higher than Phalaborwa, ranging from about 4,500 parts per million up to 7,900 parts per million of total rare earth oxides. So this is a very significant opportunity. I think we initially started that we would look at the recovering phosphogypsum and extracting the rare earths from the existing stacks, which are currently around about 70 million tonnes, double that of Phalaborwa. But looking closer at the project, it makes more sense for us to focus in on the current arisings coming out of their existing phosphogypsum production that's coming out of their phosphoric acid plant, which offers some very interesting opportunities, which I'll deal with in a few moments. But we started out running a number of tests at SGS in Canada and demonstrated that we could recover up to 60% of the rare earths using the Phalaborwa operating conditions. Subsequent to that, we have been directing a test work program at Mosaic laboratory in Brazil. And we've been able to get over 70% recovery of the rare earths from phosphogypsum by tweaking the conditions compared with Phalaborwa. And that's what's prompted us to say we really need to move quickly now into an economic assessment. And we're just finalizing the last steps in the process test work to have a flow sheet that we can base that economic assessment on. And in the next few months, we'd expect to complete that and be in a position to publish that economic assessment. But certainly, from everything we're looking at, it looks like a really exciting project. It's got bigger scale than Phalaborwa, and it has a very long life potential. Bear in mind that this is an existing operation. The mining program runs on for decades, and we really do think this is going to be a substantial project for Rainbow. Going to look at why does it look interesting for us to process the material as it comes out of the phosphoric acid plant. It eliminates the reclaim process. So that's a cost that just disappears for us. We can go directly into leaching of that as it exits the phosphoric acid plant. In addition, the plan for Mosaic is to sell 100% of the phosphogypsum after we've extracted the rare earths into the agricultural industry that surrounds them. It's a very large-scale agricultural area. They're currently selling a large amount in the order of 3 million to 4 million tonnes per annum, and we'd like to upgrade that to 4 million to 5 million tonnes per annum. So we will not need to stack the phosphogypsum after it's being processed in the rare earth plant. It will be able to go directly into the agricultural industry. And on top of that, because we're right next door to this existing operation, they readily have available to us power that is cogenerated as a result of their sulfuric acid production. We readily have an availability steam for heating the leach, which is, again, a byproduct of their acid production. And there's a number of key reagents, which are already being used there, which means that they're readily available on site as well. And on top of that, we have a very professional, very strong technical team from Mosaic to support the project and a very willing and eager partner in getting this project up and running. So all in all, this is a very exciting project for us and is likely to move quite quickly. Our focus remains on Phalaborwa, but this will be a very quick follow-on, I believe, if all goes well. Thanks,George.

Thank you, Dave. Yes. So as I've mentioned, this is an extremely exciting project for Rainbow, much, much longer life in Rainbow, and we think we're dealing with global fertilizer business called Mosaic. And as Dave has mentioned, the team is first class, and we're working extremely well with this team with the Rainbow team. Thank you. We've got a very strong technical team, led by Dave with quite a bit of experience in the rare earth space. You see underneath Dave and Chris Le Roux here and Roux Wildenboer and there's -- those blocks in green are rare earth feasibility studies, bankable feasibility studies done in previous companies that -- where we worked together. Our Chairman initially developed Gakara, another rare earth project in Africa. And then we've got a lot of uranium experience and so forth, which is important because when you design a building uranium processing plants, you use continuous ion exchange, which is a process we're very familiar with as a Rainbow team. And as a team, we bought a couple of uranium plants in South Africa and a number of uranium studies. And of course, very importantly, with uranium plants, you are looking at materials of construction very carefully because you're dealing in a very acidic environment. So you need to make sure you've got the correct stainless steel pieces of equipment that make sure that your plant doesn't break down, be it from the leach tanks, [indiscernible], valves, your pumps and so forth. So all that experience we've learnt in the uranium space, we bring to bear on the Rainbow projects. And once again, why Rainbow? We believe we've got very strong backers, that all will be one of the highest rare earth projects in development today, it's been, as I say, independently verified that we are. We've got a unique flow sheet that brings a low capital intensity to this project that you don't see in other projects as well as a very, very low OpEx. And we've got years government support to the DFC, which have committed $50 million in project and non-project equity at the construction phase of our project. We have TechMet, which is a critical minerals fund, which has already got 12% stake in Rainbow. And Ecora Resources, the market you have seen last year, took a royalty out in Rainbow and they're very, very supportive for Rainbow and look forward to doing more business with Rainbow going forward. But very strong shareholders, very good support. And both the DFC, TechMet and the Ecora have done independent due diligence on the processes that we are using in Rainbow and which I think is -- bodes very well from this is that we've already had week-to-week-to-weeks of different stages of, let's say, technical DD, and we've been given the nimble of health on basically the flow sheet that Rainbow has been pricing for going forward. So we're very, very confident. And I'd like to thank the audience for taking part. Thank you.

Perfect. George, Dave, thank you very much indeed for your presentation. [Operator Instructions] While the company take a few moments to review those questions submitted today, I would like to remind you that a recording of this presentation, along with the copy of the slides and the published Q&A can be accessed via our investors dashboard. George, Dave, as you can see, we have received a number of questions for today's presentation. And George, if I may now hand back to you and kindly ask you to read out the questions where appropriate to do so, and I'll pick up on both at the end.

Sure. Thanks very much for that. I have to read the questions. So the first question is, please go to explain the rest of the purification work needed to get us to the market -- market-ready assay of 99% purity in terms of cost, capital and time. Pre-final investment decision. Well, I can tell you that in terms of cost and capital, we've already, as you can see, have purchased all the equipment for that lab. The lab is up and running. We did it in record time. The cost of running that lab, the cost of completing the DFS based on the results coming out of that lab and running the pilot plant, switching the pilot plant operation for the back end from Florida to South Africa are still well within our original budget. I might add that if we hadn't made the decision of moving or financing and we're not financing, buying our own laboratory or establishing our own laboratory, moving the pilot plant operation to South Africa, if we carried on doing it in Florida, not only would have cost us about a year extra in time, it would have cost us a lot more in capital that -- and we would have grown our DFS budget. But by bringing it in-house and moving the plant to South Africa, we're well within our original DFS budget. And as I mentioned, we still aim to complete the DFS in 2025 and be in production in 2027. In terms of the actual sort of explain the work, the purification work, I'll let Dave just briefly complete the last part of that question.

Thanks, George. Yes, in Florida, we were able to demonstrate that the separation of rare earths and the rare earth groups in some cases, is achievable. So we're very comfortable that, that process is going to work. What we've also done in Mintek during the pilot operation is run a pilot scale continuous ion exchange for recovery of the rare earths from the leach solutions. So again, we're very confident with that step. What hasn't been put together, and this is because the laboratory in Florida ran into problems with their analytical equipment is to link these 2 and run it through the process of the continuous ion exchange, which is essentially about reducing the impurities that come with the rare earths during the leaching process and then presenting to the separation process a very clean rare earth solution for the separation steps. That wasn't done and wasn't achieved in Florida. And as George said, the time to get there was going to blow out on us as well as the cost, hence, the decision to move to the process, this pilot plant across to our own laboratory now. So our starting point here is to run with the continuous ion exchange process that we've established, improve upon the impurity rejection steps in there to the point where we're satisfied that we're delivering to the separation steps, a solution that will allow us to produce a high-purity separated rare earth product. The focus is primarily about the impurity rejection steps and followed then by separating to a high-purity product. As I say, separation has been demonstrated and CIX has been demonstrated to run well. So we remain confident that we will achieve our targets. That's basically where we are now. Once we've done the bench scale work in the laboratory there, we're satisfied with that purity rejection, we will fire up the pilot plant, which is currently clearing customers in South Africa and will be established in the next couple of months and reconfigured. So within the next few months, we hope to be able to announce some good results out of that separation process.

Thank you, Dave. Next question is any news on Burundi, just short and sweet. Burundi has been written off to 0 in our books. We are totally focused on sourcing rare earths out of phosphogypsum opportunities globally, which is significant in size compared to what Burundi could ever have been. And -- but to add to that, we are in negotiations with the government for restart operation. And we -- so those -- we were in country in December, and we're just waiting to hear from the Burundi government once again. But I'll now move on to in October '24 investor meeting, the time line to production slide stated interim report to allow the commencement of project financing. Now that the interim report was issued in December '24, have financing discussions commenced? Or do you need to wait for anything else? Well, as you know, we published that in the second week of December, and that's when the whole world went on vacation, especially in South Africa for the summer period in South Africa and the short Christmas period in Europe. We now are going to the Mining Indaba next week in Cape Town, which starts international Mining Indaba, and that's where we will now be engaging with the financing discussions in terms of the debt and so forth. So yes, the interim report has been very successful in terms of highlighting the low capital and the OpEx numbers. So we are happy to start those discussions in the next couple of weeks, starting with the Mining Indaba in Cape Town. I'm just looking at the next question. One says, can you describe the activities you are undertaking in ongoing rare earth oxide separation work? I believe we've answered that. Another question is what are Rainbow's plans for transporting 1,900 tonnes of oxide per annum to its end customers? To be honest with you, logistics is the smallest concern for this project. 1,900 tonnes per annum, that's a small amount of containers leaving the site by road every month. I think yes, it's a few hundred tonnes of product leaving per month. So it's a very, very small quantity that we have to transport, and it's a negligible cost, I should say. And really, it's not a concern for Rainbow. If we're a bulk producer of iron ore, coal, manganese and so forth, this becomes a key issue for a project, but we are transporting just a few container loads a month of rare earth product. So very, very easy to ship to our customers. The next question is, how long would you estimate, please, before the final investment decision is made? And are you at all concerned about the markets and ability to raise capital? Well, as I said, we tend to complete the DFS within the 2025 time line, and that will be able to conclude final financing of the project in terms of debt as well as the equity that we'll need for the project. Remember, this project will be able to cover 2/3 debt quite comfortably because of the high EBITDA margin. So we're very comfortable on that process. In terms of the markets, I think the geopolitics in the world at the moment are very fragile, but they bode well for the rare earth market. The West and especially the U.S. under Donald Trump is even more focused on creating an independent supply chain outside of China for critical minerals and rare earth being the most critical of these because China controls not only circa 60% to 80% of the primary production of mine rare earths, but they control circa 95% of the downstream processing. So all the other strategic minerals -- they are very dominant in China, but not quite as dominant as rare earths. So I think it bodes well for rare earths. And so we're very excited over the next few years for the market. And in terms of pricing, we think we've seen the low in the rare earth pricing over the last couple of months. It's been bumping between $53 and $60 per kilogram for NdPr. We think this is the bottoming out and all the forecasters are forecasting 2025 to be a far better pricing environment for the rare earth prices. And we see this from a couple of presentations that we've attended recently by forecasters in the rare earth space that are also looking for a stronger 2025. So we're quite comfortable with the outlook. Last year wasn't a good year for pricing, as we all know, but we anticipate much higher pricing this year well, I would say, higher pricing this year. And our ability to raise capital, we've proven time and time again, we are very confident that the team has the ability to raise the capital when required to build this product -- project and get us into production. I think those are all the questions I've seen, and I thank the audience.

Perfect, George, Dave, thank you for addressing those questions from investors today. But before we direct investors to provide you with their feedback, which is particularly important to the company, George, may I please ask you for a few closing comments?

Yes. I just think that Rainbow is in a very good space. We're very excited about achieving the final purity by optimizing it in our own laboratory and having the pilot plant under our control in South Africa. The pilot plant, I'm pleased to say, arrived on our shores. I think I mentioned yesterday, the ship docked. So that pilot plant will be up in Johannesburg within a few days after clearing customs. And as I said, apart from the excitement within Rainbow at the project level, I think at the macro level, we're going to see much better rare earth pricing this year, and we've got these massive new areas of frontiers that are going to create demand for permanent magnets and a very key part of those permanent magnets will be the rare earths that we'll be producing in Rainbow. So I think we're very excited. Thank you very much.

Fantastic. George, Dave, thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the Board can better understand your views and expectations. This will only 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, we would like to thank you for attending today's presentation, and good morning to you all.

Thank you.