Source:Investing News
Shares of the company were down 9.09 percent on Tuesday (March 12), following the release of the company’s half-year results for the last six months of 2018, which indicated a total loss of US$3.2 million.
“From a production perspective, the six months ended 31 December 2018 were challenging, particularly from the operation’s first pit, Gasagwe, which has provided almost all the ore mined from the Gakara project to date,” company CEO Martin Eales said in the press release.
Despite production not reaching the estimated targets, it was still up from the previous period. Recent concentrate exports totaled 550 tonnes, up 25 tonnes from 525 tonnes exported January to June 2018.
Although Rainbow experienced hiccups in relation to the planned production ramp up, the company remains confident it will improve its overall performance over the next few months.
“However, looking ahead, we have begun to address the teething issues and are now focused on increasing production from new mining areas, targeting near-term positive EBITDA and becoming a key strategic supplier to the market,” he said.
Rainbow believes the quality of its resource and its hospitable location make it a highly lucrative company for investors as well as rare earth end users.
“As one of only two listed REE companies that is producing commercially outside China, and as the only REE producer in Africa, the fundamentals of our potential world-class, high-grade asset remain strong,” Eales said.
He continued, “[g]iven that demand for REEs (particularly those used in the manufacture of rare earth magnets) is expected to rise in response to the increase in production of electric vehicles, we are excited about the future.”
Even though the company’s scheduled ramp up was difficult, Rainbow did achieve a number of milestones.
Rainbow was able to advance a second mining area, known as Murambi, which began production in late December. Two additional areas, Kiyenzi and Gomvyi, are currently undergoing preparatory exploration and development work with the goal of commencing operations in the second half of 2019.
Shares of Rainbow were trading at GBX 2.02 on Tuesday.