EDITOR: | July 16th, 2013

Burundi rare earth project back on track, production planned within 18 months

| July 16, 2013 | No Comments
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Mystery solved. Just over a year ago I posed the question on the forerunner of InvestorIntel as to what had happened to the Gakara rare earth project in Burundi, as I could find nothing on the internet as to who then owned it. Now we know: an unlisted company is raising $5 million to help it get Gakara in production within 18 months —which, if successful, would mean the project leapfrogging several others now in various stages of progress.

The company, Rainbow Rare Earths, is run by Mark Sumich, the Australian who got Globe Metals & Mining (ASX:GBE) off and running with its rare earth project in Mozambique and its more advanced niobium discovery in Malawi.

My question last year was provoked by the decision from Southern Crown Resources (ASX:SWR) to exit the rare earths space; it then had project plans in Mozambique and Zambia. But in 2010 Southern Crown had also applied for the Gakara project in Burundi. But the trail had gone cold since then.

Now it’s hot again. Rainbow is part of Pella Resources, an African-focused mineral and energy group. It received the Gakara deposit in May 2011 by presidential decree.

According to Sumich, the highlights of the project are what it calls an “exceedingly high run-of-mine grade of 54.3% total rare earth oxide”. It is hosted by bastnaesite and monazite with low uranium and thorium levels. There is an initial metal inventory of 256,500 tonnes of ore with a contained 141,853 tonnes of rare earth oxides. An initial mine life of 18 years has been calculated at the production rate of 5,000 tonnes a year of REE concentrate.

It appears that deals have already been done with downstream operators. Moreover, Rainbow suggests, they have scratched only the surface: their wording is that the “majority of the licence area remains unexplored”.

What is most interesting about the fact that buyers seem to have been found is that the Gakara output will be 98.9% light rare earths. Of the company’s basket, cerium will comprise 47.3%, lanthanum 30.3%, neodymium 15.4%, praseodymium 4.6%, samarium 1.3%, gadolinium 0.5%, dysprosium just 0.1%, europium 0.3% and yttrium 0.2%. The heavy rare earths are present in very small amounts but do not register as a percentage. So it would seem that, despite talk of surpluses, there are still buyers out there for lanthanum and cerium, in particular.

Rainbow describes Gakara as having good road and rail links to the port of Dar es Salaam in Tanzania. So far as electricity is concerned, a hydroelectric plant is operating within the licence area.

The deposit was discovered in 1936 by SOMUKU (Mining Company of Muhinga and Kigali) based in Antwerp, Belgium — the country had been absorbed as part of German East Africa in 1899 and after World War I Belgium was put in charge of it and neighbouring Rwanda as a League of Nations mandate called Ruanda-Urundi. Independence was gained in 1962.

Between 1948 and 1978, SOMUKU and another Belgian company mined Gakara and produced about 5,000 tonnes of rare earths with ore grading close to 50%. The concentrate was sold to French and German companies.

Between 1981-1985 the German Geological Survey carried out further exploration work.


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