Rainbow Rare Earths (RBW:AIM) 16.4p

Gain to date: 103%

We flagged Rainbow Rare Earths (RBW:AIM) at the beginning of June at 8.1p – citing a big catalyst on the horizon if it could prove it could deliver rare earths at the required specifications from its Phalaborwa project in South Africa. This encompasses two stacks of gypsum, created as a by-product of historic phosphate mining, which contain rare earth elements.

WHAT HAS HAPPENED SINCE WE SAID TO BUY?

The shares have been driven sharply higher by a string of positive releases, including an agreement with phosphate miner Mosaic (MOS:NYSE) to apply the Phalaborwa blueprint in Brazil, and this culminated in news (5 September) of the successful production of the first batch of mixed rare earth sulphate from its pilot plant in South Africa which proves the concept.

WHAT SHOULD INVESTORS DO NOW?

A small drop in the share price as this key milestone was reported suggests it may have been better to travel than arrive, at least in the short term, but we remain believers in the long-term potential so stick with the stock.

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