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

This is on the back of our announcement yesterday that we've decided to use SX as the optimal route for separation for our Phalaborwa project in South Africa, and this is to separate rare earths out of phosphogypsum. Joining me is our Technical Director, Dave Dodd, and together, we'll go through the presentation that you'll be seeing up on your screens. This is the usual disclaimer. Thank you very much. And just to highlight Rainbow and some of you who might not be familiar with us, we've been pioneering the recovery of rare earths from phosphogypsum stacks. Specifically, our first project is based in South Africa at a place called Phalaborwa. And we've developed unique IP but using very well-known and proven technology. And we believe that we will be a very, very low cost and high-margin producer of separated rare earths, and we'll go into more detail than that. And our portfolio is diversified in the sense that we have a well-advanced project in South Africa and Phalaborwa, where we are busy with the definitive feasibility study. And in Brazil, our project called Uberaba, we are completing an economic assessment as the first stage of that project, and we'll talk about that a bit more later in the presentation. Basically, we've made a decision to go the solvent extraction route, which is to using the tried and proven method used in the industry to separate rare earths into 99.5% plus in plus purity. And our 2 products we are going to be producing is separated NdPr Oxide, as I've mentioned, at plus 99.5% purity and the SEG plus mixed earth carbonate at plus 99.5% purity. This is the same route that one of the biggest well-known earth producers in the world has gone, which is Lynas. Lynas for -- since the inception and since they've been in production, they've always produced a separated NdPr oxide at 99.5% plus purity and they produced the SEG+ product, which they've sold to China. It's only about 4 months ago that they commissioned the heavy rare earth separation project in Malaysia that they are separating the SEG+ themselves. But we are going the same route as Lynas has done for 12-odd years. As I said, we were looking at continuous ion chromatography as a route to separation. And whilst this is a method that looked compelling at the time, it was taking us too long to prove this technology and to -- and there was always the risk around it to whether it will be successful on the commercial large-scale basis and to derisk the project and to meet our targeted production time lines, we switched to solvent extraction. And the reason why we also switched to solvent extraction because we've had massive, massive success in producing a very, very small feed volume into the final separation circuit by impurity removal via continuous ion chromatography and via some precipitation stages. And I say Dave will talk to that a bit later. But essentially, we've taken our volumetric flow our premium each solution going into the continuous ion exchange from 340 cubes an hour down to between 5 to 6 or 7 cubes an hour feeding that final separation circuit. And because we've got such high-grade rare earth product going into the separation circuit and with very low impurities, we realized that we would have a very small SX circuit, and this would mean that we would keep our capital within the parameters that we've given to the market, and we reckon we will hold our position at the bottom of the cost curve in terms of separated rare earth products. Thank you. This confirms -- this is by Argus Media that we are also at the very high end of the margin curve. We've got EBITDA margin over 70% for our project, which is very rare in any mining project or any project for that matter. And we're very proud of that we're still going to be sitting at this end of the margin curve. For those on the call, just a bit of background. We know that Chinese have weaponized rare earths. They've used this very successfully in negotiating the tariff wars with America and they've imposed restrictions on rare earths, which led to the halting of many production facilities in the West and they imposed new restrictions in October '25, which they used to negotiate further sort of tariff just to lighten the tariffs that Trump was imposing on them and then they put a suspension on this restriction later in October last month. But we all know that at any stage, China could reintroduce the restrictions. And with that, we've seen certain rare earths trade in Europe at a much, much higher level than they're trading in China. So we've seen a bifurcation of pricing in the West, and we think that's here to stay for a very long time now. And all the offtake discussions we're having in Rainbow guys are saying that we see there's going to be a new pricing created outside of China for these rare earths, and we're seeing hard evidence of that in the market. As mentioned, food and factories in Europe had to shut down for a while when those initial hard rare earth bans came into effect in sort of March, April this year. And people seem to think that permanent magnets, all the hype around them was in electric vehicles and plug-in hybrids, but a normal internal combustion engine vehicle still requires about a kilogram of permanent magnets in them. So even your standard car, all those lines were shut down as they couldn't operate without the supply of these permanent magnets for the various components in these normal ICE motor vehicles. And that just brought it to the West attention very hard that these rare earths are important not only for wind turbines and other modern technology, but also just for a normal standard ICE vehicle. And we've also seen now the impact of Yttrium on the aerospace industry, Yttrium was targeted by the Chinese in their October restriction. And we've seen the price of Yttrium skyrocketed in Europe and it's been trading very high for a large part of this year as Yttrium people have realized it is very key in aerospace as well as defense applications, and it's become very sought after rare earth in the SEG+ product that we're going to be producing. Also, we see and me in a couple of rare earth conferences this year, and you see the big forecast that's going to be driving demand for rare earths, these humanoid robots. Mr. Musk is predicting 10 billion by 2040 on the planet. But even if there's 1 billion humanoid robots on the planet by 2040, that's still double the number of EVs that will be on the planet by 2040. So there's a massive, massive new area of growth for permanent magnets in robotics. And also, we see very much a big demand in drones, not only commercial drones, but we all know that drone warfare is a very real thing as we see what's happening in Ukraine and Russia and all these drones require permanent magnet motors as well as well as air taxis that are now starting to fly commercially in America and in Dubai. These eVTOLs, which is electrical vertical take-off and landing aircraft are going to grow in use globally, and these also require significant amounts of permanent magnets in them. So we see a major new sort of area of demand for permanent magnets over the next 15-odd years, and that's very exciting for the macro of rare earths. Just once again to highlight what we've seen since the MP Materials and the Department of Defense or Department of War now announced a couple of months ago, a partnership with MP where they set a floor price for neodymium and praseodymium at $110 a kilogram. Since then, we saw the Chinese price move up quite strongly since that deal was announced. And it's back to sort of circa $80, so around about USD 80 kg at the moment. And then on the right-hand side, you can see dysprosium and terbium. As I've indicated, these heavy rare earths in Europe are trading at 2 to 3x the Chinese pricing. And as I said, there's a realization in the market that this price bifurcation is very real and it's going to be here for a while, and we're going to have a separate pricing index for rare earths, which is very good for all potential producers as well as existing producers in the market. The market needs literally a new rare earth producer to come on stream every year for the next 5 or 10 years to meet demand. And unfortunately, lots of projects will not go into production, but there are a few that will go and Rainbow is definitely one of those projects that will go into production. And as a team, as a technical team and management team, we see the pathway and we are very confident in that. It is interesting that the $110 a kg price for NdPr set by the DOD just happens to be the same price point that we use in our feasibility studies to date for NdPr as Rainbow. We didn't use forecast rare earth pricing. We use spot pricing in our initial PEA and our updated economic assessment we released last year in December, we used $110 a kg as well. So it's fortuitous for Rainbow that this happens to be the same price that has been struck now and which people are using as a benchmark as a floor price in negotiations going forward. As I've indicated earlier, yttrium has been specifically targeted by the Chinese because of its use in aerospace and defense. And one of the key sort of points that the Chinese exports were very clear about is that they will not export any rare earths that will end up in defense applications. And with that, you've seen the -- literally a drop-off of export of yttrium to almost 0 for the last few months, and we've seen this massive price increase of yttrium and that bodes very well for Rainbow because we never had yttrium in our financing models that we produce to date, and this has now become a significant portion of what it means for Rainbow's revenue going forward. Just as I said, we want to be part of the independent supply chain of rare earths outside of China. And we've succeeded very successfully and be able to prove that we can extract the rare earths out of phosphogypsum in an economic manner. I mean it has been done through lots of small research papers done by various academics over the years and -- but they haven't been economic. We have been able to do it with very positive economics. And as I said, we've also done a big derisking step by deciding to go through with -- with our final separation via solvent extraction, which is the gold standard. And that was the source of the announcement yesterday, and we've had the report from ANSTO confirming our separation purity and the 2 products that we hope to achieve. We've -- a lot of this has been -- we've been able to achieve this year because of our in-house laboratory that we built and commissioned in February this year. And this has saved us a massive amount of cost as well as the turnaround time of results is literally hours as opposed to weeks. And if we hadn't commissioned our own laboratory in Johannesburg earlier this year, we would have taken far longer to get to where we are now. As I said, the -- our processing technology is rewriting the economics of rare earth production. And basically, we believe that we are below the cost of Chinese production now as supported by reports and people like by Argus Media and so forth. And we believe we're at the bottom of the industry cost curve. It's a very, very exciting project for Rainbow. And as I said, we are applying the same technology to our project in Brazil, and Dave will talk more to that. Just once again to highlight another thing that keeps our CapEx lower than a typical greenfield project is this is a brownfield site. It's a chemical processing site. We are a chemical processing facility. We're going to be extracting the rare earths out of those 2 stacks you see there, gypsum stacks. In the triangle, as you can see on the bottom right-hand side, we'll be redepositing the gypsum after we've taken the rare earths out on a new line stack site. And we're really -- the sites are really fenced. It's got overhead power lines in place. It's got a high-voltage switchyard in place, the water reticulation in place. So all those costs that you typically have to incur yourself in the greenfield site, we don't have that Phalaborwa. Also very significantly, we're literally 3 or 4 kilometers from the center of a very well-established mining town called Phalaborwa in South Africa. We're not displacing any villages. We're not cutting down virgin forest or jungle to build our facility. This is a fence site that's been operating for 60-odd years, producing phosphoric acid and phosphoric acid production ceased about 10 years ago. But as I said, we are -- there's lots of infrastructure that we'll be using that is in place on site here. And we've got 35 million tonnes and our grade at 0.44% TREO is very high grade for this type of resource. Our project economics, this is based on the updated economic assessment released in December last year, and we'll be doing a further update ahead of the release of our DFS next year. But as I've mentioned, we've got a post-tax IRR of 38-plus percent. We -- our CapEx is circa $325 million. And using a conservative NPV discount rate of 10, we've got a post-tax NPV of $611 million. We expect to use a lower discount rate for our final set of financials because that's accepted by the market will improve our NPV, we believe. And we've got EBITDA of $181 million per annum, and that's based on $110 a kg for NdPr. But we've now also announced that with our SEG+ Group and with the credit for gadolinium and yttrium, our revenue for the SEG+ Group will add circa $160 million per annum to Rainbow's revenue compared to when we -- before we were just looking at separating Dy and Tb and getting -- the revenue for the Dy and Tb was circa $80 million. So by now producing an SEG+ Group and getting credit for the yttrium and for the gadolinium at a 70% payability, which is a conservative payability, it will add $160 million of revenue to our project, and that will obviously have a positive impact on our EBITDA. And you can see what we will be producing circa 1,850 tonnes of NdPr per annum separated oxide, and that's the key components of our SEG+ you can see there. I think this is also significant because typically rare earths have basically the pricing has been very inconsistent. You have peaks and troughs. And earlier this year, at the low end of the price point for praseodymium, which was circa $60 a kg for NdPr, the value of our basket, and this is just dysprosium and terbium was $78 a kg. And if we've been in production, we still would have made circa $63 million of EBITDA per annum. If we look at the arrow in the middle of that chart on the left-hand side, that's the price that the DOD struck the deal and it's also the price that we use in our interim model in our PEA that confirms that we would produce circa $181 million of EBITDA per annum. But if we now update this with the improvement of the SEG+, we can see an improvement in that EBITDA flowing through to Rainbow's bottom line as well. So this remains a bridge robust project, and we could withstand much lower rare earth pricing once we're in production and still be profitable. That $60 a kg for NdPr was the low point in the price cycle over the last sort of 5 -- well, actually about the last 10 years for rare earth pricing, if I can remember. Dave, I think this is where you come in here..

Just by way of background, I mean there's a lot of talk in the industry about creating supply chains that go mine to magnet. People tend to talk about the businesses that need to link to develop those. But I thought it worth starting by saying there's a lot of different technical skill sets that are required in terms of that supply chain. It would start in a classic situation with a geologist who establishes an economic resource. It then feeds into a mining engineering skill that has to develop a mining method to economically extract the ore from the ore body. Mineralogy takes over at that point to determine exactly what form the rare earths have in the ore body, which then feeds into the mineral processing engineering discipline who look at how they can extract that mineral from the ore and produce a relatively high-grade mineral concentrate. And that's where a lot of the mining projects have stopped historically, and they've sort of sold that product in as a concentrate. Some go a step further, which is moving into the arena of chemical engineering where you have to first break down the mineral and put the rare earths and impurities into solution and then several further steps involved with chemical engineering of removing those impurities from the solution and delivering a relatively clean rare earth solution into a separation process. And all of that falls into the skill set of chemical engineering, after which the products that come out of that will be in the form of oxides, which need to go into a pyrometallurgical process and ultimately, the alloys that are produced from that, which are going to produce magnets go into an industrial engineering environment to produce the magnets and ultimately produce the products that the whole process has been aimed at. So it's a long list of different skill sets, all have to combine to produce that. And each one of those interfaces potentially creates a risk for transfer of understanding and knowledge of what to do in the next phase where we sit is firmly in the chemical engineering phase of that. And we're not stepping outside of that. So we have one skill set to deal with. And I can say that everybody in our technical team is, in fact, a chemical engineer. We pick up at the point where we already have a material that has had the rare earth mineral broken down and it's sitting in those stacks, and we then have to redissolve it and remove impurities and go into a separation process. So we're keeping ourselves in a nice simple space and a ready market for the products that we're going to make. So the next step really is to say, well, why we ended up with solvent extraction. And the answer is there's 2 major reasons for that. One is that the development and commercialization of a new technology and CIC would be a new technology at the commercialization step does take some time, and it requires a lot of demonstration to prove that it's actually working. So that's one reason why we felt that moving to solvent extraction would be interesting. But very importantly, what we've done in terms of our development of the impurity removal process has been to be able to deliver a very clean solution that can feed into a solvent extraction process that, in fact, meets and indeed exceeds the specifications for successful separations in solvent extraction. And then the part that really feeds into that because I think when most people think solvent extraction and rare earths, they imagine football fields of mixer settlers possibly even in the thousands. I think it's worth understanding that, that applies only to a commercial refinery, which is looking to separate all 17 of the rare earth elements and needs multiple steps to do that in. It also needs to separate some of those elements, which are very, very low concentration, which means that one has to upgrade the solutions a great deal, recycle a great deal and you end up with this very large number of mixer settlers. What we've managed to do is just to bring down the flow into our separation circuit to a few cubic meters per hour from a pregnant leach solution of 340 cubic meters an hour. And that also combined with the fact that we will only produce 2 products out of our solvent extraction circuit. It will be neodymium, praseodymium oxide and that will be able to go directly into the alloy industry. And then the other one will be an SEG+ carbonate, which can feed downstream into the current commercial heavy rare earth separation facilities. So just 2 circuits with a low flow feed and a very pure start. What that means is that we're not talking hundreds and hundreds or even thousands of mixer settlers, we're talking 75 and they're small mixer settlers. So that suddenly becomes very, very attractive and very, very competitive with the emerging alternative processes, which we've looked at extensively. We started to consider solvent extraction when we started to see where we could go with this. And the first thing that we did was to move the CIX, which was going to be combined with CIC as our final steps in this process. We moved it right upstream to treat the pregnant leach solution. What that does is a sharp drop in the flow, and it also removes quite a lot of impurities right at that first step. After that, we're dealing with much smaller flows and we have got a selective precipitation process where we drop out all of the impurities in some cases, completely, in other cases, to below the spec limitations for successful solvent extraction. So that has all been done with a great deal of work in our laboratory since the start of the year. And we're clear that solvent extraction now is very definitely the way to go. It's a certainty in the outcome. There is no need for us to go to demonstration plants or anything like that. We've already done a modeling exercise at ANSTO, where they have been able to put in the chemical analysis of our product and with a high degree of accuracy, predict the outcome of that solvent extraction plant. They sized the equipment for us, and we're busy costing that. But we know from previous experience that, that cost is going to come out in the same order of magnitude as what we would have had previously. So we're very comfortable it's not going to move the needle on the economics of the project. We're very comfortable that it's going to give us a certainty of the outcome and a certainty of the product qualities. And it also means that we can move forward more quickly into our DFS and get completion done on that. So our process is basically locked in now from the start to the finish.

Dave, should I move forward the slide?

I just wanted to finish by saying that we -- our next step really is going to be to produce enough material to produce products for marketing purposes primarily, and that will just take us a little bit of time because we have to process the best part of 30 tonnes of phosphogypsum. Thanks, George, if you can move on. So you can see here, we talked to the fact that we've completed pre-feasibility level work on the SX process with ANSTO at the 75 mixer settlers that they confirmed that we need instead of many hundreds or even thousands of people envisage. It keeps us in the low capital intensity and low operating cost arena that we were always in. And we are currently starting up a large-scale pilot plant in Johannesburg, purely to produce enough high-grade feedstock for a solvent extraction plant to run. And the key objective of that is to produce marketing samples for our products. I'd like to just mention here that we have already run a large-scale pilot plant for all of our leach processing and the CIX processing historically. So we're well advanced in terms of that. But the pilot plant that we're about to start now will cover everything from phosphogypsum through to SX feed with all of the leaching, the CIX and the impurity removal. This is just a quick view of what's happening at our facility at Mintek. The top left shows the drums of phosphogypsum that we've taken from our resource in Phalaborwa. That's sitting in a storage facility that is dedicated to us, and that's going to feed into our pilot plant. The total that we'll bring up initially is 28 tonnes, and we possibly will bring a few more tonnes later on when we need it. The bottom left is the leach plant. You can see in the background with 2 tanks that are wrapped in white heating blankets. Those are the 2 stages of leaching. The bigger tank in the foreground is the repumping tank that feeds into those leach plants. And the tray that you can see on the left-hand bottom corner is the filter for the residue from the leach process. Top right-hand corner then is the CIX unit, which is basically in the center of that photograph. And around it, you've got a series of pumps that pump the various solutions into that and the columns with the resin rotate and perform alternating duties until they come back to start the cycle again. I'd like to stress clearly that CIX is a very, very well understood process. It's very robust. It's very flexible. We've done very extensive hundreds of batch scale tests in the laboratory with extremely good results and very consistent results. And we expect the fact that this is now a continuous operation will give us an upgrade in terms of the solution coming out of this that goes forward into our impurity rejection process. And in the bottom right photograph, this is the various vessels that are going to be used for the impurity rejection process, which is all about selective precipitation steps and filtration. That's in the process of being set up at the moment. But the leach plant is currently being commissioned and is running its leach -- first leach runs all being well today. CIX plant is fully tested and ready to go as soon as we have leach solution available to feed that, which I would suggest will be during the course of next week. That's all on that. And if you could move forward, George. This is the flow sheet that we now have locked in. We will have a mechanical reclamation process. The phosphogypsum reclaimed from the stacks will be screened to prevent oversized material entering our process. The oversized material will be recirculated broken down and brought back in. We then have a 2-stage leach process with filtration after each filter step. It's a counter current leach so that the solution from the second stage cycles back to the first stage and then counter flow as a result of that. And our final leach solution coming out of the first stage will head to our CIX unit where we will produce and convert from a sulfate medium, which is we are leaching with sulfuric acid in the elution process, we elute with a chloride medium. So we will shift from sulfate to chloride, which is very beneficial for all the downstream processes because chloride is the classic medium in which the rare earth processes of purification, separation operate. We've tested running with sulfate and it becomes a bit more complicated. So we're very happy to be able to do that. And I'm pleased to say that our element is a very low-cost sodium chloride. That's what you sprinkle on your fishing chips. So it's going to abandon. That's nice and cheap. We then have a series of precipitation steps and then into our 2-stage solvent extraction process and then the products coming out of that will be dry. The first stage is going to deliver the SEG+ product. And the second stage will be the NdPr oxide and exiting the solvent extraction will be a small amount of remaining impurities and the cerium and lanthanum. That's our flow sheet. It's become quite neat and quite tiny and quite a straightforward process using basically tried and tested equipment and processes all the way through just a different combination, if you like, to get the phosphogypsum to deliver the results that we want. And hence, we're very happy with this process. We have -- because of the delay that we've had in developing the chromatography process and the time it's taken us to deal with the impurities to make it suitable for solvent extraction. We've used that to do a number of trade-off studies backed by test work in our laboratory to look at optimizing both capital and operating costs. One of them, which you can see on the right-hand side, the top photograph there shows a hydraulic reclamation process, which is where we thought we would start. It's classically used in tailings recovery processes. But we're moving to a mechanical process. What we've established in digging into our stacks to take samples is that the phosphogypsum becomes quite hard at depth, and we feel that the mechanical process offers us quite a few advantages and certainty in delivering a good process. So that's one trade-off we finished, and it allows us to eliminate quite a few expensive process steps right upfront before we even get into the leach. The other trade-off studies have been looking at the amount of acid we use, the circuit configuration for the leaching and processes like that. All of those are very well advanced as trade-off studies. We run numbers in a preliminary way, and we're just finalizing those right now, and we'll be able to announce the outcome of those. But we know at this stage that they're going to be very beneficial and deliver to us some meaningful capital benefits and operating cost benefits. It's been a very productive time, I would say, we've been able to do work that perhaps would not have been done otherwise. We would have gone with a process that worked adequately, but now it's going to be a somewhat more economically beneficial process. I think that's probably -- I think that's back to you, George.

Yes. As we announced, and I think I've spoken to this a bit already is that we announced a resource upgrade. And as I said, with yttrium becoming significantly important globally or certainly in the West, we've seen the impact of this on our economics where, as I said, it's one of the highest risk critical minerals announced by the U.S. government in 2025. And as I said, now that we are going to be getting value for our SEG+ Group across not only the terbium and dysprosium, but these other elements that, as I mentioned, we see circa $160 million per annum at mid-market pricing for these rare earth elements compared to some $80 million of revenue that we had originally in our economic report for separated Dy and Tb at 100% payability. So even at the conservative payability level by adding these -- value for these SEG+ products, we see a very, very significant increase in revenue for Rainbow. And you can work out for yourself with our EBITDA margin, there will be a significant improvement in our EBITDA as well. And we also -- in Brazil, the Uberaba project, we will also be producing separated NdPr as well as an SEG+ group, and we're very excited about the work we're doing with Mosaic in Brazil, and Dave will talk to that a little bit later. Just in terms of the next steps, now that we have a defined route to separation, originally forecast finishing our DFS by the end of December '25, but that was always with the caveat that we had to achieve our final separation route first. And we never knew how long it would take with any certainty because it was a different route that we were going with ion chromatography. We had no idea how long it would take us to prove that to a level that we are certain that this was going to be the route to go. And with us not achieving that certainty and switching to SX, as I've said, that's led to the delay in the DFS to sort of mid-2026. And that's our target now. And basically, we have the defined route, as I said, with SX, and we have now more certainty in when we will be able to complete our DFS. We are expecting to have FID in the third quarter -- fourth quarter, sorry, of 2026 to allow us to go into construction at the beginning of '27 and still meet our production target of 2028. And that has not changed even with the site holdup we've seen with publishing our DFS, as I said, with our target now in the middle of 2026. And as I indicated earlier, we've seen a massive increase in offtake inquiries coming through not only once we announced that we're going to be producing in SEG+ Group product to the market, but also that the fact that we now have a significant amount of yttrium that will be in our SEG+ Group. This has also led to certain inquiries only last week talking specifically for yttrium. And so this has been a very positive change in Rainbow's economics, and we've seen the benefit of that with various inquiries coming through. Dave, back to you on -- because you've just been to Brazil a couple of weeks ago, and I'll let you talk to this slide.

Thanks, George. First, I want to stress that it's a pleasure working with the technical team in Brazil. They are very skilled and very enthusiastic and doing a great job working very well with us. They've been able to use a very good laboratory facilities to do test work under our direction. And the project itself is an exciting one. It's a current operating phosphoric acid plant. It's a long-life facility. The ore resources are extensive that are being mined and processed to produce the phos rock that comes to this phosphoric acid facility and fertilizer facility. So they're continually adding to their stockpile in the order of 4.5 million tonnes per annum of phosphogypsum, which is not insignificant. There are several good things about this. One is that the grade of total rare earths is somewhat higher than Phalaborwa and although the NdPr is a little lower as a percentage of that basket with the higher grade and the higher tonnage, the output is going to be higher for NdPr and for that matter, an SEG+ Group product as well. So we have the same suite of material that we're going to be producing in terms of rare earths. So that's a very nice fit with the work that we're doing at Phalaborwa. And of course, the Uberaba process development benefits a great deal from the work that we've done for Phalaborwa. And it is a very, very similar flow sheet that we are going to have there that we currently developed for Phalaborwa. So I believe that this will come on stream in a very short space of time simply because it's got those huge advantages. We have focused instead of on the stack material here, we focused on leaching the sort of current arising coming directly out of the phosphoric acid plant. This eliminates the reclamation side of things. It also eliminates a double stacking system requirement. So there's quite a few advantages in that respect. And then there's further advantages in terms of synergy with this industrial chemical facility where they're currently either buying in or producing many of the reagents that we need for our process. So a great deal of synergy in there, which is going to help a great deal. And -- what I can say is that overall, this is a very, very exciting project, which I believe is going to move very quickly. And I believe it's going to be at a modest capital input because of the benefits of synergy with the operation there. And we certainly have a very enthusiastic team in Brazil working on this who are very eager to see it go into production as soon as possible. So great support from our partner here. And although our economic assessment looks at a 15-year life, we know what the resources look like for the operations that Mosaic has in Brazil, and it will certainly extend a great deal longer than that. All in all, a very, very nice looking project with lots of advantages. George I think that's...

Yes. Just to conclude on Brazil that we are busy with the economic assessment. It will be complete by the end of 2025, and then we need Mosaic to review it before we can publish it. So -- and as soon as Mosaic finished their review, we'll be able to publish the results of this economic assessment. But we know enough about it already to know that we expect it to be very positive. And as David has mentioned, the feedstock for the phosphate rock that feeds the phosphoric acid plant has got a life of well over 25 years. So we see this as a very, very long life project. What makes Rainbow different just to finish off. So we have built this IP to unlock extracting rare earths out of phosphogypsum. We have 2 opportunities already with Phalaborwa and Uberaba, and we have seen -- been approached for other phosphogypsum opportunities around the world. So that does enable Rainbow to have a runway of other opportunities that we will pursue in due course. So it gives Rainbow lots of growth opportunity. So we have very good support for the Phalaborwa project already with support of a commitment of $50 million from the U.S. government by the DFC and TechMet, and strong support from Ecora. And as I said, the learnings from Phalaborwa have been applied to Uberaba, making our development of the Uberaba project even quicker than the Phalaborwa development runway. And we've got a very experienced team that can deliver, and we are doing a very, very good job for Rainbow. So I'd like to thank everybody on this call for their time, and we will now open this up to questions. Please submit questions by clicking the Ask a Question button. Thank you.

The first question is, will there still be a need for K-Tech licenses now that SX route has been chosen for the final separation stage? The answer to that is no. Very simple. What SX testing has been done on [ MREP ] samples at the front end. Dave, I think you can answer that. Dave, can you hear me?

We have focused on developing an impurity removal process that delivers a high-quality product that is suitable to feed into solvent extraction. The specs are well known, and we've discussed this with a number of people in the industry, and we know that we definitely exceed those specifications. And by that, I mean we are better than the specifications that are accepted into commercial solvent extraction plants around the world. We then have gone to ANSTO, who have developed the majority of circuits for solvent extraction, run numerous pilot plant operations for solvent extraction for rare earths and have developed a modeling method by which they can input into that the analysis of the feedstock and predict the outcome of the solvent extraction process for whichever products are being sought. They have run that model. They produce the results for us, and they delivered to us all of the key reagent requirements, all of the key input and output flows for that solvent extraction plant so that we are able to develop the operating cost and they also delivered to us the full mechanical equipment list, which allows us to develop the capital cost for that. We've done the operating cost estimate already. We're currently busy with the capital cost, but we have preliminary figures based on that mechanical equipment list without going to market from database information. And we have a pretty good idea of where that capital is going to fall, and we're very comfortable that, that sits very well. So we're clear that -- very clear in telling us that this model is very accurately predictive of the performance. It predicts the recoveries, which are in the range of 99.9% and 99.7% recovery in the solvent extraction process, and it predicts the purity of the product that comes out of the solvent extraction process which is between 99.5% and 99.9% at the moment. So we have a very good understanding of what this process will do, what it's going to cost and certainty of the outcome for that. I hope that answers the question.

Thank you, Dave. Just quickly, because I know the market is -- some people are slightly confused the difference between a mixed rare earth product and a mixed rare earth carbonate. Essentially, you can just answer that very quickly, Dave.

Yes. I mean what a mixed rare earth carbonate is generally, it's an intermediate product, which is produced as material that would be sold into a refinery, which would then do all of the solvent extraction separation work. So at that point, you've -- you remove the impurities in as far as you reasonably can or at least to meet the spec required by the refinery. And then that goes into the refinery and they do all the separation work from there. We're doing those 2 stages of separation, after which the cerium and lanthanum becomes a waste product for us, after which we have an NdPr oxide, which can go directly to the metal alloy manufacturers for the magnet alloys. And we have an SEG+, which will be a carbonate, which will go forward to a refinery for separation of those heavy rare earths, in particular, the ones that we'll be receiving value for will be Dy and Tb, Gd and Y. So that we don't intend to make that mixed rare earth carbonate and we don't need to. We are running in a chloride medium through our impurity process -- removal process. And that means we're in the right medium to go directly into a solvent extraction process. So we would not be actually making an intermediate product per se. We would have a very high purity mixed rare earth solution that would go directly into our 2 stages of solvent extraction.

I think, Dave, just to clear that, if we didn't intend going to SX separation, we would stop at a mixed rare earth carbonate. We would turn our solution into a carbonate to ship that to somebody else. But we're not doing that. We're going into a solvent extraction circuit at Phalaborwa. So that's why we are producing what we call the mixed rare earth product or, as you said, that high-grade solution that feeds into the SX circuit. But if we decided to stop there for whatever reason, which is not what we're doing, I just want to stress, then we would turn it into a carbonate.

Correct, George. And not only that, we would have options as to what that product that would go through a refinery would be. Although everybody talks about mixed rare earth carbonate, in our situation with the impurity process that we've got running, we would likely produce a mixed rare earth oxide, which is a higher percentage of total rare earth oxide than carbonate. And we know from the tests that we've done that this resolves very readily. And it's -- our initial conversations with people is that they'd be quite happy to take the oxide as opposed to carbonate, which saves us the further of producing the carbonate.

Thank you, Dave. Another question is, will CIC final stage separation continue to be developed in the background for possible application on future projects? Because we've got our own laboratory and it's such a low cost for us to investigate CIC further, once we've got pilot plant complete for producing material for the ANSTO SX pilot plant, we will continue to do low-cost R&D on CIC. And if we do get -- eventually get the right results, then we could look at it for other projects. So yes, to answer the question, we won't stop, but this is just an alternative that we will pursue slowly. Another question is, does it change appreciably the time to production from now or the cost base? I think I've answered that already and Dave answered it as well that our cost base will stay very much in line. And in fact, anything, we see it slightly improved with all the optimization work we've done. Next question was, are there any process or chemical shortages that you see as a risk? To be honest with you, no, I mean, all the equipment is standard equipment used in chemical or minerals processing plants in the industry. It's all available in South Africa or can be built in South Africa. So there's no issue there. And in terms of reagents, South Africa has got very sophisticated and established chemical industry in South Africa. So we don't see any impact on any reagents. They're all available either in South Africa or will import these from Western suppliers, which we've already established can supply all these reagents that we need either, as I said, in South Africa or through importers of these chemicals in South Africa, they are readily available. Can you give an...

Add to that, at this stage, we are not experiencing much in the way of a premium of costs on the Western suppliers over the Chinese, which was interesting.

Yes. And just can you give an indication on the order of magnitude changes to CapEx or OpEx due to the change in the flow sheet? Once again, I think we've already given an indication that we don't see any order of magnitude difference in either CapEx or OpEx with the change in the flow sheet. In fact, we're very confident about that. So those are all the questions that have been submitted. Just another -- what is the time scale for the ANSTO SX pilot plant? SX pilot plant is -- ANSTO SX pilot plant is due to run around about April, May next year. It will just run for 7 days on the SEG+ separation circuit...

Maybe I can -- I had conversations with ANSTO yesterday and got an update on that. But basically, the whole program is likely to run for between 4 to 6 weeks from start to finish, everything done.

That's updated knowledge for me. But I must stress that we don't need to finish the ANSTO piloting to do the work on the DFS for this. We'll be doing the engineering around the circuit for the DFS in parallel to running the pilot plant. So it's not that we have to finish the pilot and then do the DFS work. We'll be doing that in parallel. Dave, if you can just maybe confirm that for the audience...

Yes. Again, in the discussion with ANSTO yesterday, they confirmed that come January when we finalize the arrangements for the pilot plant operation, they would be in a position early in the new year, probably end of January, early February to deliver to us the basic package that would allow us to do the engineering and costing for the flow sheet for this SX plant. In other words, the flow sheet is known. It's not something new, and it's not something that has to be developed only after the piloting or as a result of the piloting.

We can confirm that. And just another question is that we are obviously not using ion chromatography anymore. We've gone with the tried and tested solvent extraction route that all projects -- all projects being developed in the West generally are using solvent extraction. So we've taken that risk out. And does this have any impact on materials and chemicals required? Not at all. The materials are still the same that we require in terms of materials or construction. There's no change there. And as I said, with chemicals required, no, all these chemicals, we were using them anyway and whichever route we're going to go and all these chemicals, as I've indicated, are available.

George, the only new chemical that we would use would be the solvent and diluent in the solvent extraction itself. All the other chemicals are already in the process.

Yes. And then there's a question, is the current plan to co-locate the SX with the front-end processing? And yes, we are doing that. We're going to do it on one site. We're going to have the SX plant at Phalaborwa, which will be separating the NdPr as well as producing the SEG+ product all on one site. It's obviously far more benefits to that from an economic point of view as well as a capital point of view. And that's the end of the session. Thank you. I will be very happy for Dave and I to take questions via e-mail if there are further questions. And I would to thank you all for your time. And hopefully, you are happy with the progress, the derisking of Rainbow and the fact that our project remains very robust both from a capital point of view as well as operating cost point of view. Thank you very much.