LONDON (ShareCast) - (ShareCast News) - Guernsey-based mining company Rainbow Rare Earths released its audited results for the twelve months ended 30 June on Wednesday, raising production guidance and run-of-mine (ROM) ore production between 3,000 and 4,000 tonnes in the announcement.
Rainbow said it expected to produce ore capable of generating somewhere in the region of 2,250 to 3,000 tonnes of mineral concentrate, up from its previous estimate of 2,503 tonnes of concentrate.

The revised guidance covered a time period of 14 months since first activities at Gasagwe started.

The company said it was assessing several different approaches to extraction of ROM ore that would affect levels of dilution, the reason why there was an extremely large range in the anticipated ROM ore tonnage figure.

All of Rainbow's ROM ore was processed into rare earth mineral concentrate in the Kabezi region, just 20 km away from the mining areas and about 13km south of Burundi's capital city, Bujumbura.

After Rainbow completed its placing and admission to the London Stock Exchange Main Market and its $7.4m in gross proceeds raised, the company focused on rapidly developing its Gasagwe mining site, preparing the site and stripping away waste.

At the same time that net cash increased to £3.19m from $70,000 at the end of June 2016, Rainbow dropped its liability position nearly £2m to end the year at £449,000.

While the firm reported no revenue through the year, over the same time period it watched expenditure increase due to administrative expenses rising from $600,000 to $1.3m.

"The current financial year is likely to be even more momentous for Rainbow than the last and should see the first sales of our rare earth concentrate through ThyssenKrupp Raw Materials in Q4 2017, with production and sales then ramping up on a steady basis through 2018," said Martin Eales, chief executive officer of Rainbow.

"We have seen increases in prices of the various rare earth elements in the oxide and metal forms over the course of 2017, with our 'basket price' for Gasagwe concentrate increasing by around 70% in 2017 so far, which bodes very well for the future returns from the Gakara Project as we seek to develop one of the very few non-Chinese sources of rare earths," he added.

The completion of construction and commissioning of the plant is expected in the coming weeks, which should allow Rainbow to meet its target of shipping the first concentrate before the end of the year.

Rainbow reported a pre-tax of $1.40mln, versus a loss of US$1.2mln the year before.

Activity per share was flat, posting a loss of 0.01p per share for s second straight year.

As of 1200 BST, shares had bumped up 0.45% to 11.05p.

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