S1 E42: Rainbow Rare Earth: Innovative Mining Approach With George Bennett

Dustin Olsen (00:40)
Hello everyone, welcome back to the Rare Earth Exchanges podcast. You're joined by me Destin, my cohost Daniel, and we have George Bennett, who is the CEO of Rainbow Rare Earths based out of Johannesburg, South Africa. George, welcome to the show.

George Bennett (00:54)
Thanks very much for having me.

Dustin Olsen (00:56)
Yes, you guys are doing some interesting things with mining and recycling, right? So to kind of get things started right away, we would love to hear a bit of your background and also just how you got started with Rainbow Rears.

George Bennett (01:11)
Thanks for that. Well, my background starts in stock breaking and investment banking where I worked for 16 years in South Africa, became a partner in a very large successful business here, which we sold to HSBC in 1998. So that was a success. And, you know, after a few years with HSBC and on the board of HSBC, I then decided to leave a big

global corporate and I got into mining. I ended up hitting up mining research sales and doing some mining investment finance. So I ended up for my son's becoming the CEO of a private gold exploration business based in Tanzania. Took it to a million ounces in a year and listed that in the London Stock Exchange and today it's got two operating gold mines. It's called Shanta Gold so it's been a success and then shortly after that I got approached to help

refinance of chapter 11 or bankrupt mining engineering business. They built mines all over Africa. In fact, LULO, the flagship gold mine of Raynald Resources, which is now part of Barrick, was built by MDM Engineering, the company I restarted. So I was fortunate enough to restart the business with the key technical guys. in an eight-year period, I listed that in the London Exchange. Two years later, I a dividend every six months. And we built 22 mines in sort of nine years.

did about 40 feasibility studies. Two of those were rare earth feasibility studies, so we had some experience in rare earths. And I sold that company to a global engineering business called Amic Foster Wheeler at the end of 2015, sorry 2014. And then after seeing that, the pipeline of projects through that I sold with the company resigned and saw an opportunity in Rainbow Rare Earths, which was listed in London, but…

needed refinancing. was trading at about 2.5 pa share and helped refinance it, took it over and we're looking for a new roof project for the company which was what we found in Pettibore in South Africa.

Daniel O'Connor (03:06)
you

George Bennett (03:07)
Yeah, so the company's done well I would guess since then. know, our share price the other day was 27p from 2.5p when I took it over. we've secured a project in South Africa, town called Palabora, which is where we're extracting rheres out of phosphogypsum. Just to give a bit of background, all phosphates…

rock is mined for the fertiliser industry. you crush it, you mill it, you concentrate it up into a slurry which is then fed into a phosphoric acid plant. The phosphoric acid produces a gypsum waste residue called phosphogypsum. There are rivers present in the hard rock, phosphate rock, but not economic quantities. But with creating a high grade phosphate concentrate to feed your phosphoric acid plant, the rivers are also upgraded in this process.

they ended up deporting with the waste stream called phosphorgypsum onto two stacks, waste stacks that we have at Palabore in South Africa of circa 35 million tonnes now. So basically it's effectively like a mine tailings project but it's a chemical processing project because when you produce phosphoric acid you add two key ingredients, you add sulfuric acid

and you add heat to make phosphoric acid and when you crack a rare earth concentrate into a mineral concentrate before you go to separation you add two key ingredients you add heat and you add sulfuric acid and these two steps were done for us at the Palabar project at zero cost to the project so we have a cracked chemical stockpile of 35 million tonnes which grades at 0.44 % total rare earth oxides which is a very very high grade for this type of project

And if you compare that to high-neutrality projects in Myanmar or China or South America, they grade 0.04 to 0.08 % TRIO. So that's by order of magnitude 60 to 10 times higher grade. So all projects in the mining space are great. There's a term called grade is king. So we effectively have a very high grade project.

With that, we started looking at the extraction process of the rear end from the phosphogypsum and we realized that the sulfuric acid, we just do a direct leach. We extract the rear end out of the phosphogypsum with sulfuric acid at a certain temperature with a couple of stages of leaching and then we go into what's known as a continuous ion exchange circuit and we produce a very high grade mixed rear end product or mixed rear end carbonate.

which the markets want to wear with. Where lots of projects stop at that stage. In other words, Cera Verde in South America is stopping at a mixture of carbonate. They're selling that to China. Northern minerals in northern territories in Australia is just producing a concentrate. They're not even cracking into a carbonate. And they're that concentrate to Ioluka.

in Australia and other projects are going to mix with carbonate as well but there very few projects that are going to separate with oxides like Linus in Australia are doing and MP materials in America are now going further downstream. So until recently MP materials in America just produce a mixed earth concentrate which they were forced to sell to China and that's the only place they could crack it and then separate it further. They've obviously spent a lot of money and they're now going further downstream where they're

going into separated rare earth oxides and then they're going to produce they go to the midstream which is metal and alloy and finally they want to get into magnet production so they're going the whole value chain. If I look at Linus in Australia the biggest rare earth producer outside of China since they were in production I think in circa 2012 all they've produced is separated near-denium presodinium oxide which is

the Holy Grail in terms of going to separate a product in the rear-earth space and then they produced what's known as the SEG Plus Group which is samarium, europium and ganglion with the heavies in it which is dysprosium and terbium which are very critical not only for permanent magnets but also in defense applications. So, landers have always sold the SEG Plus to China for separation and it's only about three months ago in Malaysia that they commissioned the heavy rear-earth separation plant to separate the SEG Plus themselves.

So just to give the audience a bit of a pause there, hopefully what I've saying at a high level has made sense to your audience.

Dustin Olsen (07:16)
I think it has, there's a lot of great insights there with what you just shared throughout the industry and what different companies are doing and how they're doing it. Truly fascinating. Something about rare earths, like they're not truly rare, but they are notoriously difficult to produce. with kind of what you're saying here, from your perspective, what's the real challenge? it geology, technology, cost or policy when it comes to getting rare earths?

George Bennett (07:40)
I think it's twofold. It's great. There are very few high grade group projects that I think are economic. And I've looked at a lot of projects when I was in my mining engineering business. I have a good insight into this. And we see a lot of projects. mean, one of the projects in Australia I was talking about, their grade is 0.96 % teoria. It's a hot rock project. They still got to mine. Still got to drill and blast, crush, mill, reduce the concentrate, it, then, you know, and so forth. So they got a lot of…

unit operations and you need high grade to be able to do that economically. look at Linus in Australia, the grade of their projects is about 8.5 % Te Orio.

So just to give you a comparison, that's 8.5 times higher grade. If you look at MP materials in America, they also circa 8.5 to 8.75 % TRIO. Also a very high grade project. So you have a lot of projects out there bandied around in the world that they say, oh, they're going to be commercially, they're going to be economic, but they're grading at 1 % or 1.5%, 2%. And…

When you see those companies like Linus and MP Materials, you're on production. We backing to make money recently before the benchmark pricing was set by the DoD in the US. You are battle to see how a lot of these projects are going to come on stream. So that's the problem with Reus is that there's lots of Reus around. Unfortunately, there aren't enough projects I believe will be economic to go into production. And that's an old adage of exploration. 95 % of all exploration companies…

never going to production and the same with the earth projects. 95 % of all the projects will never see the light of day in terms of production and where that of all is different is because we've got so few unit costs to get to our stage as I say we've got a crack chemical stockpile is that we definitely are going into production that's why our EBITDA margin sits at about 75 % for our project we've got a project IR and our post-tax IR of circa 45 %

And we've got a low capital intensity. We are circa $326 million and we did some optimization studies at the moment which I'll be announcing quite shortly which we believe will have a positive impact on that CAPEX number. So we're very confident in our CAPEX number and we've seen a lot of road projects currently being built where they've blown the CAPEX number out by between 50 and 100 percent. You know, which is, which for me is surprising because

having run an engineering company, I don't know how you can be that far out on your CAPEX number, but be that as it may. We are seeing that in the market and I'm very confident that because I might add that the Rainbow team…

80 % of the Rainbow team all worked for me in my mining engineering company. So my technical director from MDM, my lead process engineer from MDM, my lead study manager from MDM, they're all working for Rainbow Roos at the moment. So we've got a lot of experience within a small company like Rainbow in terms of being able to deliver because we've done it on behalf of clients for many, many years.

Now we're just delivering on behalf of Rainbow for ourselves. And I'm very confident that, you know, we, I know we're going to deliver and we effectively, a very fast track project as well. As you guys will know, mining projects take from cradle to grave, in other words, from discovery to production. The average is about 20 years.

If you look at most of the RUIS projects out there that are on so-called definitive feasibility study stage or pre-feasibility study stage, if you go back to when they were first discovered…

on average they're between 15 and 20 years already and they're not in production yet. So whereas Palabora we realised we had roots in the fossil Egyptian stacks, we got hold of the project in January 21, we started to work on it and we forecast to be in production in 2028 which is circa eight years.

That's a very fast-tracked project in this space. So when Mr. Trump talks about, we're going to have a lot of rivers coming out of our ears and flowing because of all these deals he's doing, he doesn't understand that these projects take 15, 20, 25 years to come into production, you know?

Daniel O'Connor (11:34)
Ha ha.

George, just to interject, we write about that because those kind of comments don't help the industry and don't help the companies, right? Because the companies need to raise financing and if all of a sudden the messaging is, hey, everything's taken care of because we did a few deals, that's a disservice.

George Bennett (11:52)
Correct.

It's a complete disservice as you quite rightly point out. I know from my own experience, which is fairly sort of broad I should say, and yeah it's factual. You can go into any facts on projects from discovery to production 20 years on average, and even longer. So when we talk about Reus in Greenland or Reus in the Ukraine, even if they were Reus found tomorrow of economic quantities, it's still 20 years away from production.

So the problem with the rivers are that they suffer from grade, as I mentioned, and they suffer from difficult extraction because lots of earth projects are beset with problems with uranium and thorium. So these are two key ingredients you need to extract out of these projects to be a green and to be able to ship your concentrate or your mixed-earth carbonate around the world for further downstream work. Fortunately, all phosphogypsum that we've encountered, and we've encountered in numerous other projects, got only trace levels

of uranium and thorium and we don't suffer any of those problems at Palo Borgo. pleased to say and we have the same we have the same with our project in Brazil. So two years ago I signed an MOU with Mosaic in Brazil. Mosaic are the global fertilizer business listed in the NYSE. I think they're about a 15 or so billion dollar business so it's a reasonable business and they

We're happy to sign a deal with me that we're going to extract the rows from their phosphoric acid production facilities in Uberaba in Brazil and take the rows out of their phosphogypsum. And we're busy with the economic assessment on that project now, the initial study on that project, which we will have to publish by the end of this year. We'll complete the study by the end of November, we hope, and we'll do a review and we should be able to announce the results of that study fairly soon.

80 or 90 % of the work we've done in Palabóa we've been able to apply to the project in Brazil. So the project in Brazil we believe the financial metrics are going to be even better than Palabóa and those are already impressive as I mentioned to you and this will also be a very fast-track project. we're talking about eight years from cradle to grave for the Palabóa project.

there's an indication that we'll be able to even do it quicker with the project with Uberaba in Brazil. It's also very high grade by comparison to our nuclear projects. The grade of the project is 0.52 % TRIO. Once again, it's all above the ground. It's all in a waste product. There's no mining costs involved. There's no other costs involved. And you've got some hard rock growth projects that are trying to sell themselves at 0.55 % TRIO.

You can understand why when you've got a project with 60 % of your flow sheet is already done for free for you, the metrics of a project like Uberaba in Brazil are going to be very, very good and be very impressive.

Daniel O'Connor (14:40)
I have a question and I think it's brilliant what you guys are doing, George. I think it fits into the circular economy premise. It's value added. It just makes total sense. Whose idea was this? I know before we started filming, we talked about there was academia that were looking into this. But when it comes to actual commercial, rubber hits the road, how did this idea come up?

When did that start?

George Bennett (15:06)
It started in late 2020 when I was approached by the guys who own these phosphor gypsum stacks in South Africa. was an old phosphoric acid plant run by Sassol, a global chemical conglomerate based in South Africa, you might be known to some of your American viewers. But Sassol had mothballed this phosphoric acid plant and these guys had bought it. And they were using the plant initially for their own purposes, but then they closed it down. And they said, George, we see we've got some rarities in these stacks.

Would you mind having a look at it? I looked at the initial grab samples that Cecil had assayed and Cecil had built a pilot plant to look at extracting roots from this fossil gypsum around about 2012 because that's when the last root crisis happened if you remember with the South China Seas dispute between China and Japan. Root prices sparked suddenly there was the flavor of the month so work had been done on this but when I

interacted with these guys and I realized that listen, know, the grade of the rest in this gypsum stack looks very good to me when I compared to our NECLAIR projects. That's when I went and tied up a deal with these guys. And then I brought my technical director from MDM on board straight away and he said to me, George, look.

We know we can extract the rarest, but why stop at the mixture of carbonate? Let's go all the way through to separate the rarest oxides. So that's what Raymell are doing. We are doing what Linus has done since they've been in production, which is we're going to produce separated NDPR.

and we're going to produce an SCG plus group to sell for further downstream separation. We've run extensive pilot work here in South Africa. We've got our own laboratory. We're building a second pilot plant because we've optimized this front end lead circuit to bring our CAPEX down. As I mentioned, we'll be making some announcements on that shortly. And basically we are one of the few projects going to separate an NDPR and we're also going to produce the SCG plus group.

The beauty about producing the SCG Plus Group is will give us the flexibility to look at doing the final separation of that product with the Disprosium and Turbium, which is very sought after, I might add. We've got so many inquiries now from potential off-takers just looking to secure the SCG Plus Group that we could consider doing that final separation circuit on US soil, we could do it on European soil. So gives us nice flexibility to be able to look at doing that. as I said, we're going to produce 60 tonnes of Turbium,

tons of dysprosium, 20 tons of terbium and it doesn't sound like a lot but very very high value and very very critical for these permanent magnets across all applications in the new tech space.

Daniel O'Connor (17:43)
100%. So what, George, would it be safe to say in terms of the strengths of Rainbow, it's a low cost, high margin model. It's got compelling economics. It's got that circular component. You've got a net present value of I think what, six or 700 million.

George Bennett (17:56)
Yep.

Yeah.

Daniel O'Connor (18:07)
almost a 40

% return projection.

George Bennett (18:10)
Yeah, that's just some, that's board project. That's just a better board. Yeah.

Daniel O'Connor (18:13)
Yes,

yeah, yeah. So what about the Brazilian project? What does that math look like?

George Bennett (18:18)
Well, as I said, we haven't published it yet, so I can't say anything other than, as I've indicated, that we feel that the metrics are going to be as good, if not better, than Palabora when we finally announce it. That's all I can say.

Daniel O'Connor (18:22)
Okay.

Okay. Okay. Now let's talk about some challenges. mean, because this market is challenging. Let's talk about funding. do you have, I know that you have a few different investors. You have some U.S. government funding, I believe. ⁓ Would that be one of the more challenging times right now raising the capital or is the capital flowing as you need it?

George Bennett (18:46)
Yep.

The capital is flowing as we need it at the moment, I'm pleased to say. First of all, on the US funding, that's from the DFC, the Development Finance Corporation. So we've got an agreement for their investing in the Palabora project, $50 million for equity for construction. So we are going to need circuit $300 million to build this plant. We know the project metrics financials are so strong that we…

and we've already started discussions with various banks. It'll support two-thirds debt. So we're looking for $100 million of equity. $50 million is already coming from the DFC. So means Rainbow's only looking for $50 million equity funding when we come to construct this project. And our target timeline for construction is still circa 2027 to be in production in 28, as I mentioned to you guys. So we also have a top-cone,

12 % owned by TechMet, the critical minerals fund that's partly by the US government, partly by the Qatar investment fund and so forth. So that critical minerals fund with a lot of US funding and they've got 12 % in Rambo and Topco and the DFC 50 million dollars is coming via TechMet into Rambo. It's been allocated to the region.

Daniel O'Connor (20:05)
Right, yeah,

that's impressive. You do have impressive investors, you're well positioned overall. What is some of the biggest risks you see? mean, pricing, are you gonna be able to benefit on these floor prices that are kind of being established? Can you talk a little bit about that, how that's unfolding from your vantage?

George Bennett (20:24)
Yes, sir.

I've been saying publicly and I said this in the public forum in Toronto and Adam's conference, RUF conference I spoke at last year. I said, guys, we need floor pricing in the RUF market because we're not going to see, you know, projects can't get going at these Chinese prices and we need floor pricing and we know the Chinese are manipulating the pricing. I'm pleased to say I said the same thing when I was in Montreal at another RUF conference earlier this year when I was talking to potential off-takers and we were seeing a lot of interest from potential off-takers

This was a June conference in Montreal when guys, when I was saying to those potential off-takers, these were South Koreans, Japanese, European, as well as US potential off-takers, that…

Guys, we're going to need to negotiate some kind of a floor price. And literally a month later, I was vindicated when the DOD announced the MP deal. and then we've seen Australian governments say that they are going to entertain floor pricing for critical minerals. And we've seen some other European government noises saying that we think we will entertain floor pricing. So I believe the MP deal was critical for the market. It has set a bench scale floor price. And we are…

in various offtake discussions and we obviously are.

trying to use that benchmark floor price as a starting point. And there seems to be an acceptance now in the industry that there's going to be some kind of floor pricing. Whether everybody can secure 110 or not is a different matter, but I do think we will see much higher floor pricing sets. And we've seen in the Neodymium and Presidium, as I said, with the DoD deal, but in Europe for the last six months, they were first, the Terra 4 started with China and we saw it display a gemmiterbium.

trading ex-China in Europe three times higher than the Chinese pricing and that's been consistent for the last six months. So we've seen the bifurcation pricing and I believe that's here for the longer term.

Daniel O'Connor (22:15)
Well, I do have a question though, George. So, you know, we've and we've tried to be very careful. So that deal with MP and the DOD that did establish a floor price between DOD and MP. There has been chat, there's been chatter, you know, government officials have said, yeah, yeah, we're going to have a floor price. But I have not seen, and you correct me if I'm wrong, I have not seen hard industrial policy declaring that across the board.

George Bennett (22:28)
Correct.

No, you're quite right. And that's why I said, I don't know if that DO deal is going to be replicated with other Earth companies in the US, but certainly with potential off-takers, be they Korean or Japanese and so forth.

they do recognize that the Chinese pricing is not the right pricing. If you want security of supply, you need to see higher pricing and you need to have some kind of floor price. I'm not saying it's 110 for everybody around the world, but I think it will be higher than what we see. And I take this from the uranium experience. as a group at Rambo, we built two uranium mines and we did a number of uranium feasibility studies. And when I sold the engineering company in

2014 we were building the Berkeley Energia uranium plant in Spain and when I did the bankable feasibility study for that project spot price for uranium was $20 a pound but the contract price for the bankable feasibility study was $45 a pound so

So the nuclear power plants weren't worried about spot pricing because that's not where the market volume traded. The volume traded on the contract price and they recognized that they want security of supply for their uranium plants they actually pay $45 a pound. Of course right now uranium is at 80 so that's a good price but that was in 2014 and I've said that the same principle or logic needs to apply in the real world market.

If you want security of supply, there's a certain price that you've got to accept for companies to be invested in and material to come onto the market.

Daniel O'Connor (24:13)
I agree, fundamentally agree. we're, you know, George, just so you know, we're pushing our audience and our reader base is growing. A lot of people from Washington come in. We're pushing these narratives because we understand, you know, the Chinese are going to manipulate this situation. You know, right now we track them very carefully. Those companies over there, those state-backed companies are expanding capacity. They're putting deals together to

George Bennett (24:31)
Yeah.

Daniel O'Connor (24:41)
to more efficient and to have more product, right? Because ultimately they're gonna flood the market.

George Bennett (24:44)
Yeah.

Well, I think ultimately they want to flood the market with their manufactured goods. That means they need the real…

Daniel O'Connor (24:50)
Yes.

George Bennett (24:51)
They need the reverse for their own internal consumption for robotics, for drones, EVs, plug-in hybrids, wind turbines, you name it. And I'm very positive on the next frontier of demand for permanent magnets and reverse is going to be driven by robotics and by drones and air taxis or EV tolls, electronic electrical vehicle, vertical takeoff and landing vehicles, which require a lot of permanent magnets in them, far more than what we see required in EVs and

Daniel O'Connor (24:59)
Absolutely.

George Bennett (25:21)
So the demand for readers on the macro front is very, very positive. And I think to get that security of supply, if you want to build robots in the West and these other types of technical products in the West, you're going to have to accept that you need a floor price to enable companies to go into production.

Daniel O'Connor (25:40)
We absolutely agree. Now on the topic of downstream and markets, like how much is Rainbow going to get involved with downstream? Are you going to use off-takers and third parties and magnets? Or are you going to also work directly with OEMs and drone and humanoid manufacturers?

George Bennett (26:00)
It's a good question. we personally are not going to go into permanent magnets. It's a very, very difficult market. Very high tech.

Daniel O'Connor (26:07)
Yeah, understood.

George Bennett (26:09)
and we're not going to the mainstream but we are happy to be part of a supply chain. In other words, I've got little intent to supply separated neodymium presidium oxide to LCM which is less common metals in the UK. You've just been acquired by USA Reels.

Daniel O'Connor (26:24)
Yep. That's right.

George Bennett (26:27)
And that agreement is still very much in place because they are going to expand on the back of their takeout by USA Rears. They're expanding in Europe. I know who they're expanding with in Europe. They're going to be expanding in the UK and they are going to be expanding on US soil. So they're going to need more product, you know. So we would be very happy to be…

We're not going to do it ourselves, I believe, but to be part of that strategic supply chain to say that the permanent manufacturing manufacturers need the LCMs of the world to supply them with their not separated the alloys for magnet manufacturing. And then they in turn need upstream supply to feed those businesses. And we're talking to a couple of guys in Europe as well about that. And at the same time, we've had OEMs talking to us who have

Arrangements with their with their permanent magnet manufacturers and so forth and they saying to rainbow look we want to investigate if we can Enter some kind of offtake agreement where we can guarantee supplier for our midstream Sort of a partners and our permanent magnet partners so they can expand be it in Europe or be it in Japan So, you know, we we will be part of the supply chain. I don't want to do it myself to be honest with you

I think we can be pretty good at producing the separated NDPR and the SCG Plus Group and then we'll let other guys that we're happy to partner with to do the midstream and then the final downstream.

Daniel O'Connor (27:54)
Makes sense. That does make sense. What do you see as your biggest challenge? What keeps you up at night at this juncture looking at the market? You've executed very well, but you're not a person to rest, I can tell that. What's keeping you up at night right now?

Dustin Olsen (28:10)
you

George Bennett (28:12)
Well, two things. We were looking at using…

Continuous Iron Chromatography for the final separation process at Rainbow and recently we started looking at solvent extraction which is a gold standard because we've had so much success of incorporating CIX, continuous iron exchange into our flow sheet and as I said as a team at Rainbow we've designed and built uranium plants that use both continuous iron exchange and solvent extraction in them so we're very familiar with these processes so the market knows we've very successfully adopted the CIX into our flow sheet and that's produced

you

a volumetric reduction in pregnant heat solution going into the CIX to feed the final separation from 340 cubes an hour to circa five cubes an hour. So that's a 300 times reduction in volumetric flow. because of that, we recognize that that would mean that we would potentially have a very, small solvent extraction circuit. So we are evaluating, as we mentioned in our year in financials, which we published on Monday,

or yesterday that we're looking at both options. So we will be making an announcement on that very shortly which I believe will be the final de-risking step for Rainbow. As I said we know the two options and the gold standard SX will make a final decision very soon and then so it doesn't really worry me but it has been a concern and lastly it's just a timeline you know

We've been optimizing our front end flow sheet, which we believe will bring significant CAPEX savings, which will announce hopefully those positive results soon. And we…

We used a delayed idea, that we told the market about last year to do these optimization studies. So for me, it's just a slight timeline that keeps me awake, where I can make the timeline. And I'll deliver, it's just the timeline. And I'm being honest with your audience. But once again, I've seen it. If I use the Sierra Verde project in Brazil, they rushed the flow sheet.

They built a plant which is giving them huge trouble in Brazil. They've actually stopped that plant, re-engineered it. It's costing them hundreds of millions of dollars.

to redo that, re-engineer that part in Brazil. And because of the strong technical background of the Rainbow team, we've always said, guys, we might take a little bit longer, but we'll do it right. Because it's far more important to get it right than to rush something and get it out six months ahead of schedule and you haven't got everything 100 % right. And because at the end of the day, and we've used this delay in the DFS to optimize

CAPEX. So yes, there's a delay, but we've got a positive outcome from the delay, which I believe we'll be able to announce, is positive improvement in the CAPEX and OPEX, and obviously that will help improve the ebonyl margin, which is already fantastic and help improve the IRI and so forth. So those are the two key things. But in terms of being able to deliver, I know we're going to deliver, we're going to build this plot.

Daniel O'Connor (31:18)
And I'm just, that's really helpful. And the DFS, I believe it's delayed to 2026 and it'll probably be wrapped up when? End of 2026? Early 2027?

George Bennett (31:30)
No, before

then, because we are on target. We're on target to start construction during 2027 and production in 2028. So yes, there's been a delay, but we're running a lot of processes in parallel to reduce the impact of that delay.

Daniel O'Connor (31:37)
Okay.

Right, right. Makes sense. Dustin, any questions? This is really, really informative stuff, George. We're really grateful.

George Bennett (31:52)
Thank you.

Dustin Olsen (31:52)
Yeah,

very informative and we are coming to the end of our time here. So if we were to fast forward five years into the future and we meet again, what does success look like for Rainbow? What do you hope to be seeing in five years?

George Bennett (32:09)
So we will be producing between our 50 % of Ubaraba and Palabowa, circa 3… Well, if I include Ubaraba, but we'll only have 50 % of the economics. But we will be producing circa 4,000 tons of separated NDPR.

outside per annum and 3,000 of those tons will get the economic value for and we'll be producing circa 120 tons of dysprosium and about 40 tons of terbium which makes us a significant heavy-rear-earth producer and we will be separating at SEG plus on US soil and if we achieve that

will be a five, six billion dollar business.

Daniel O'Connor (33:01)
Five to six.

George Bennett (33:01)
because they have

Dustin Olsen (33:01)
incredible.

George Bennett (33:03)
billion, billion dollar business.

Daniel O'Connor (33:04)
Yeah, that's great. Very exciting.

George Bennett (33:06)
Because I look at Linus, where Linus are in terms of their production, I look at MP materials in terms of their production. And remember our margin being that over 75 % EBITDA margin, we don't have to produce as much as them to be far more profitable than them. We are independently verified by August Media as well as Benchmark Minerals. We are in the highest margin quartile, second highest margin.

development company in world today in terms of EBITDA margin and we're at the lowest cost quartile. So we are even below Chinese cost of rare separation, which I don't think there many projects that can claim that because as I've mentioned, 60 % of our flow sheet is at zero cost to both our project in Brazil as well as our project in South Africa. So we're very hard margin business.

Daniel O'Connor (33:55)
And guys, Dustin's slipping a quick question. Just on that note, it's because of this methodology that you have refined with the recycling of these underlying products, correct? Are ⁓ there other groups doing that? Are you the only group in the world doing this at scale, at the current scale?

George Bennett (34:08)
Yeah.

We're only group doing it at scale at the moment. We have been approached by a group in Canada, a group in Europe, as well as the Moroccans and the Saudis to look at extracting roos from their phosphogypsum waste residue as well.

The beauty about what we have in Brazil and in South Africa is that the source of that phosphate rock, mine originally, is what's known as a hard rock carbonatite. So the grade of the rest in the hard rock is circa 10 times higher grade than we see in sedimentary deposits or phosphate. So phosphate produces in Florida, in Morocco, India, Saudi Arabia.

tend to marine or sedimentary sources of phosphate rock and they are by nature tenth the grade of those projects that we are currently involved in. So there are other opportunities but we are focusing on the hard rock phosphate sources of phosphogypsum because we the grade is very high and economic for the type of extraction process we've got.

Daniel O'Connor (35:14)
Makes sense. Dustin.

Dustin Olsen (35:16)
George, thank you so much for being on the show. We appreciate your wealth of knowledge and the insights that you've shared with us. Truly fascinating. And we would love to have you on the show again, just to get an update from you and see how things are progressing with your venture.

George Bennett (35:32)
Well I would love to be on your show again, it's been a pleasure talking to both of you guys. I appreciate the time you've taken to interview me. And hopefully as you say I've given you guys some insight, not only into Rainbow but the market. I started with zero knowledge in 2019 so over the years I've learnt a little bit. I ask a lot of questions, that's how I've always learnt. The same as when I was running an engineering business. I'm not an engineer but that seemed to go okay.

Dustin Olsen (35:56)
though, it definitely shows you seem very knowledgeable. So with that, we'll sign off here and thanks again for being here.

George Bennett (36:03)
No pleasure. Once again, thanks guys.