Rainbow Rare Earths Announces The Acquisition Of 100% Of The Phalaborwa Project
Rainbow Rare Earths Announces The Acquisition Of 100% Of The Phalaborwa Project. Rainbow Rare Earths is pleased to announce that it has signed an agreement with Bosveld Phosphates (Pty) Limited (“Bosveld”) to allow 100% ownership of the Phalaborwa Project in South Africa.
Under the terms of the agreement, Rainbow will receive an immediate 85% interest in the unincorporated joint venture that holds the rights to Phalaborwa, with Bosveld holding the remaining 15%. This updates the original Project Co-Development Agreement, which envisaged Rainbow earning a 70% interest in Phalaborwa further to the completion of a pre-feasibility study on the project. Under the terms of the agreement, Rainbow will pay Bosveld US$5 million in cash in July 2023.
Under the agreement Rainbow is also being granted a call option to acquire the remaining 15% of the joint venture owned by Bosveld, in return for US$7 million of equity in the Company, at any time from 31 October 2023 until 31 December 2025. Rainbow shares issued pursuant to the call option will be subject to a 24-month lock-up. On completion of a definitive feasibility study (“DFS”) the unincorporated joint venture will be transferred into an incorporated joint venture company and, at Rainbow’s election, Bosveld will transfer all assets required for the project into that company.
George Bennett, CEO, commented: “We have always wanted to consolidate our interest in the Phalaborwa project, given the exceptional economics highlighted by our preliminary economic assessment that confirmed an NPV10 of US$627m based on spot rare earth prices at the time of publication. We are therefore delighted to reach this agreement with Bosveld which offers a clear path to Rainbow owning 100% of the project.”
“This is an exciting time for Rainbow and Phalaborwa, with the front end of the pilot plant operational in South Africa and the back end being constructed in USA. I look forward to announcing the results from the front end pilot testing, confirming we are able to extract the rare earths and produce a saleable mixed rare earth sulphate. The fact that we will have achieved this within three years of signing the initial Phalaborwa earn-in agreement is testament to the combined strength, delivery capabilities and rare earth experience of our technical team.” Bennett concluded.
