4 October 2023

Rainbow Rare Earths Limited

("Rainbow" or "the Company")

LSE: RBW

Private Placement Update

Further to the announcement of the private placement to raise £4.5 million released on 27 September 2023, the Company is hereby correcting the following information:

The Placing proceeds include:

·    £0.63 million received from existing shareholder Pella Ventures Limited ("Pella") (the announcement dated 27 September 2023 stated £0.54 million);

·    £0.54 million received from existing shareholder TechMet Limited (the announcement dated 27 September 2023 stated £0.63 million); and

·    £3.33 million received from other investors, including £0.24 million from other members of Rainbow's Board of Directors and Senior Management.

Impact on total voting rights and admission

Of the 30 million Ordinary Shares to be issued under the Placing, 4,213,459 Ordinary Shares to be issued to Pella are subject to the approval of shareholders at the AGM to be held in November 2023 (the "Conditional Shares").

An application has been made for the initial 25,786,541 Ordinary Shares to be issued pursuant to the Placing (the "Unconditional Shares") to be admitted to the Official List (by way of a Standard Listing) and to trading on the London Stock Exchange Plc's Main Market for listed securities ("First Admission").  It is expected that First Admission will become effective and that dealing in the Unconditional Shares will commence on 5 October 2023.  The Unconditional Shares will rank pari passu with the existing Ordinary Shares.  Following Admission of the Unconditional Shares, the Company will have 624,645,196 Ordinary Shares in issue, which may be used by shareholders as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in, the Company under the FCA's Disclosure, Guidance and Transparency Rules.

It is expected that admission of the Conditional Shares will become effective and that dealing in the Conditional Shares will commence on or around 4 December 2023 ("Second Admission") following the AGM, and an application will be made for the Conditional Shares to be admitted to the Official List (by way of a Standard Listing) and to trading on the London Stock Exchange Plc's Main Market for listed securities once shareholder approval has been granted.  The Conditional Shares will rank pari passu with the existing Ordinary Shares.

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Notes to Editors:

About Rainbow:

Rainbow Rare Earths aims to be a forerunner in the establishment of an independent and ethical supply chain of the rare earth elements that are driving the green energy transition. It is doing this successfully via the identification and development of secondary rare earth deposits that can be brought into production quicker and at a lower cost than traditional hard rock mining projects, with a focus on the permanent magnet rare earth elements neodymium and praseodymium, dysprosium and terbium.

The Company is focused on the development of the Phalaborwa Rare Earths Project in South Africa and the earlier stage Uberaba Project in Brazil. Both projects entail the recovery of rare earths from phosphogypsum stacks that occur as the by-product of phosphoric acid production, with the original source rock for both deposits being a hardrock carbonatite. Rainbow will use a proprietary separation technique developed by and in conjunction with its partner K-Technologies, Inc., which simplifies the process of producing separated rare earth oxides (versus traditional solvent extraction), leading to cost and environmental benefits.

The Phalaborwa Preliminary Economic Assessment has confirmed strong base line economics for the project, which has a base case NPV₁₀ of US$627 million^[1], an average EBITDA operating margin of 75% and a payback period of less than two years. Pilot plant operations will commence in 2023, with the project expected to reach commercial production in 2026, just five years after work began on the project by Rainbow.