Burundi – Rainbow Rare Earths has secured USD$12 million in funding from Pala Investments for the development of its high grade Gakara Burundi rare earths project.
This financing agreement, subject to the completion of certain milestones, will fund the project through to full production.
Rainbow Rare Earths is focused exclusively on fast-tracking Gakara to production. At an average in-situ grade of 54.3% Total Rare Earth Oxide (TREO), the company believes its project is the richest rare earth deposit in the world.
The first stage of funding is a two-tranche convertible loan for a total of $6 million. The first tranche is allocated for studies to detail the mining method and sequence; investigate the optimal processing methods; and prepare for trial mining. This work is estimated to be completed within six months of closing.
The second tranche will provide the capital to commence trial mining, which will be used to optimise the mining method and to increase efficiencies. The deposits that have been defined within Rainbow’s mining licence to date all have veins outcropping at surface, and the mining methods required for this deposit are simple. Rainbow expects to use small scale machinery and to adopt a benching approach.
On success of the trial mining phase, Pala can opt to convert the loan and invest a further $6 million on an equity basis. These funds will be used to expand mine infrastructure on site and allow larger scale mining to commence, with a targeted production run rate of 5 000 t of >50% TREO (total rare earth oxide) concentrate per annum.
Rainbow has identified extensive deposits within the mining licence that have been incorporated into the mine plan for the first five years. Additional detailed exploration is planned to take place across the 39 km² licence area focused around known mineralisation outcrops to extend the mine life further.
Martin Eales, MD, comments: “We are very pleased to have secured this investment from Pala, who will provide both financial and technical advice and will be a valued partner going forward. Their detailed due diligence and subsequent participation provides significant third party endorsement of the potential and quality of our project.”
“With the recent approval of the mining licence and mining convention from the Burundian government, we can now make rapid progress, and I look forward to reporting on further developments in due course.”