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Updated Mineral Resource Estimate for Phalaborwa

RNS Number : 6490D

Rainbow Rare Earths Limited

11 September 2024

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11 September 2024

Rainbow Rare Earths Limited

("Rainbow" or "the Company")

LSE: RBW

Updated JORC-compliant Mineral Resource Estimate ("MRE") for Phalaborwa

· Updated MRE confirms a 15% increase in the overall size of the Phalaborwa Resource, adding an additional two years to the project life.

· Total Measured, Indicated and Inferred Resource of 35.0 Mt at 0.44% TREO, with a near doubling in the material now classified as Measured.

· The light rare earth elements ("REEs") neodymium ("Nd") and praseodymium ("Pd") represent 29% and the heavy REEs dysprosium ("Dy") and terbium ("Tb") represent 1% and 0.3% respectively - all four of these REEs are considered critical minerals essential to the green energy transition.

· The MRE now reports the full range of recoverable REEs that may have economic value for Rainbow in the future, being the SEG group (samarium, europium and gadolinium), lanthanum ("La") and cerium ("Ce").

· At spot pricing, including Nd/Pr at ca. US$62.5/kg[1], the MRE has an in-situ metal oxide value of ca. US$3.7 billion REEs, with considerable upside based on the forecast strong demand outlook for permanent magnet REEs.

NEWS RELEASE

Further to the Resource Update released on 26 February 2024, today's announcement reflects the publication of a new MRE for Phalaborwa prepared in accordance with the guidelines of the JORC Code (2012 Edition) ("JORC"). The full MRE can be accessed at https://www.rainbowrareearths.com/project/phalaborwa/.

As indicated in the February announcement, the application of updated bulk density estimates and additional drilling for the Phalaborwa phosphogypsum stacks has led to an increase in the Resource by 15% from 30.4 Mt to 35.0 Mt, reported at a 0.2% TREO cut-off grade. At projected production rates, this has extended the project life from 14 years to 16 years.

George Bennett, CEO of Rainbow, commented: "The publication of an updated JORC-compliant Resource for Phalaborwa reaffirms the huge value intrinsic to this project, which contains economic quantities of all four of the critical magnet REEs. It also points to the potential for value from other recoverable REEs, which are currently not included in our project economics, and the MRE has an in-situ metal oxide value of ca. US$3.7 billion even at today's lower spot prices. It's worth noting that this is a very different type of Resource to that of a hard rock mining project, sitting at surface with a relatively homogenous distribution in the phosphogypsum stacks. Therefore, we intend to process the entirety of the stacks, allowing us to generate value from the full 35 Mt Resource."

The four most economically important REEs, being Nd, Pr, Dy and Tb, together represent over 30% of the basket by volume at Phalaborwa and 96% by value. These REEs have been designated globally as critical minerals for the green energy transition due to their use in the permanent magnets essential for electric vehicles and wind turbines. Furthermore, they are considered to be among those critical minerals most at risk in terms of supply chain vulnerabilities.

For the first time, the MRE now includes the full range of recoverable REEs that may have economic value for Rainbow in the future, being the SEG group, La and Ce. At spot prices, the MRE including these ancillary REEs has an in-situ metal oxide value of ca. US$3.7 billion. We have also confirmed that the process residue gypsum is a saleable product, allowing Rainbow to realise further value from the Resource.

The updated MRE confirms very low levels of radioactive elements, further attesting to the 'green' credentials of this project, which will recover REEs from a waste product and rehabilitate an industrial site over time. Uranium is estimated at 1.8 ppm and thorium is estimated at 48ppm, at which levels they can be considered trace elements.

Measured, Indicated and Inferred Mineral Resource Estimate

The MRE is located in two adjacent historically processed phosphogypsum stacks (termed Stack A and Stack B) on the Phalaborwa project site. The MRE update was completed in July 2024 and is based on additional drilling and sampling completed during 2023. Samples were initially sent to Ardaman and Associates, Inc., a Tetra Tech Company ("Ardaman"), in the USA for bulk density calculations before being shipped back to SGS in South Africa for grade assays.

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Notes:

1. TREO = Total Rare Earth Oxide; ppm = parts per million

2. Resource figures are reported gross; Rainbow owns an 85% interest in the Phalaborwa project, with an option to increase ownership to 100%

3. The Mineral Resource is reported at a nominal 0.2% TREO cut-off grade

4. No constraining shell is required as stacks are above ground level and no selective reclamation is required

5. Mineral resources are not mineral reserves and do not have demonstrated economic viability

6. The 'Total' rows do not always tally due to rounding

7. The full Resource tables are set out in the Appendix

The MRE is classified as Measured, Indicated and Inferred Mineral Resources of 46%, 43% and 11% deposit tonnage respectively (July 2023 Resource: Measured, Indicated and Inferred Mineral Resources of 24%, 53% and 23% deposit tonnage respectively), representing increased confidence as a result of recent infill drilling.

The MRE is noted as being relatively homogenous in nature, with no selective reclamation of the stacks required as 99.7% of the phosphogypsum tonnage is above the 0.2% TREO cut-off. Due to the nature of the Resource sitting at surface and the associated water limiting drill accessibility, Rainbow is not planning to do further infill drilling and the Inferred portion will be included in the project's forthcoming Definitive Feasibility Study. It is anticipated that the full Resource will be processed as part of the project life.

Competent Persons Statement

The information in this report that relates to the Mineral Resources for the Phalaborwa project is based on, and fairly represents, information compiled or reviewed by Mr Malcolm Titley, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists. Mr Titley is employed by Maja Mining Limited, an independent consulting company.

Mr Titley has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Titley consents to the inclusion of information from this report in Rainbow public releases using his information in the form and context in which it appears.

For further information, please contact:

Rainbow Rare Earths Ltd	Company	George Bennett Pete Gardner	+27 82 652 8526
	IR	Cathy Malins	+44 7876 796 629 [email protected]
Berenberg	Broker	Matthew Armitt Jennifer Lee	+44 (0) 20 3207 7800
Stifel	Broker	Ashton Clanfield Varun Talwar	+44 20 7710 7600
Tavistock Communications	PR/IR	Charles Vivian Tara Vivian-Neal	+44 (0) 20 7920 3150 [email protected]

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 that occurs as the by-product of phosphoric acid production, with the original source rock for both deposits being a hardrock carbonatite.

The Phalaborwa Preliminary Economic Assessment has confirmed strong base line economics for the project, which has a base case NPV10 of US$627 million, an average EBITDA operating margin of 75% and a payback period of < two years.

More information is available at www.rainbowrareearths.com.

Appendix

MRE - REE Proportions

JORC 2012	Stack	Mt	TREO %	Nd	Pr	NdPr	Dy	Tb	Eu	Sm	Gd	La	Ce	LREO	HREO	SEGO	Ga	F	Th	U	Dry BD	Moisture
Measured	Stack A	10.8	0.4	23.6	5.7	29.3	1.0	0.3	0.8	4.0	3.0	17.4	41.6	92.2	5.5	7.8	10	0.8	48.6	1.7	1.37	25
	Stack B	5.2	0.5	23.3	5.9	29.1	0.9	0.3	0.8	3.9	2.9	17.4	42.2	92.5	5.4	7.6	9	0.7	45.0	2.1	1.33	27
	Total	16.0	0.5	23.5	5.7	29.2	1.0	0.3	0.8	4.0	3.0	17.4	41.8	92.3	5.4	7.7	10	0.7	47.4	1.8	1.36	26
Indicated	Stack A	11.0	0.4	23.3	5.5	28.8	1.0	0.3	0.8	3.9	2.9	17.2	42.2	92.2	5.4	7.6	11	0.6	47.7	1.8	1.46	22
	Stack B	3.9	0.5	23.2	5.7	28.8	1.0	0.3	0.8	3.9	2.8	17.6	42.4	92.7	5.2	7.5	10	0.7	42.9	2.0	1.31	27
	Rubble/ Mixed	0.4	0.3	25.3	5.4	30.7	1.0	0.3	0.8	4.5	2.8	16.4	40.5	92.2	5.3	8.1	6	1.3	28.5	1.9	1.42	27
	Total	15.2	0.4	23.3	5.6	28.9	1.0	0.3	0.8	3.9	2.9	17.3	42.2	92.3	5.4	7.6	11	0.7	46.0	1.9	1.42	24
Inferred	Stack A	1.7	0.4	23.4	5.5	28.9	1.0	0.3	0.8	3.9	2.8	17.0	42.5	92.3	5.3	7.5	9	0.6	46.0	2.1	1.48	21
	Stack B	1.6	0.4	23.2	5.5	28.7	1.0	0.3	0.8	4.0	2.8	17.7	42.1	92.5	5.3	7.7	11	0.7	40.2	2.0	1.33	27
	Rubble/ Mixed	0.6	0.3	24.3	5.8	30.1	0.9	0.3	0.8	4.6	2.7	17.3	40.5	92.5	5.2	8.2	5	1.1	31.1	1.5	1.42	25
	Total	3.8	0.4	23.4	5.6	29.0	1.0	0.3	0.8	4.0	2.8	17.3	42.1	92.4	5.3	7.7	9	0.7	41.4	2.0	1.40	24
Grand Total		35.0	0.4	23.4	5.6	29.0	1.0	0.3	0.8	4.0	2.9	17.3	42.0	92.3	5.4	7.7	10	0.7	46.1	1.8	1.39	25

Notes

1. TREO = Total Rare Earth Oxide, HREO = Heavy Rare Earth Oxide, LREO = Light Rare Earth Oxide, SEGO = SEG Oxide

2. The Mineral Resource is reported at a 0.2% TREO cut-off grade

3. The individual REEs set out in the table refer to the following oxides, set out as % proportions of TREO; Nd2O3, Pr6O11, Dy2O3, Tb4O7, Eu2O3, Sm2O3, Gd2O3, La2O3, Ce2O3, Ce2O3

4. NdPr, LREO, HREO and SEGO are set out as % proportions of TREO

5. Ga, Th, U are shown as parts per million (ppm), F is shown as %

6. Moisture content is set out as %

7. No constraining shell is required as stacks are above ground level

8. Adequate initial metallurgical testwork and financial analysis has been completed to satisfy reasonable prospects for economic evaluation

9. The favoured mineral processing route uses a continuous ion exchange (to remove impurities) followed by REE leach and REE refining to produce three saleable products: neodymium/praseodymium oxide, dysprosium oxide, and terbium oxide; all processing is expected to be on-site at the Phalaborwa Mining Complex adjacent to the phosphogypsum stacks

10. Tonnages are rounded to the nearest 100,000 tonnes to reflect this as an estimate

MRE - REE Grades

JORC 2012	Stack	Mt	TREO %	LREO %	HREO %	SEGO %	F %	Th ppm	U ppm	Nd2O3 %	Pr6O11 %	Dy2O3 %	Tb4O7 %	Sm2O3 %	Eu2O3 %	Gd2O3 %	La2O3 %	Ce2O3 %	Dry BD	Moisture
Measured	Stack A	10.8	0.44	0.41	0.02	0.03	0.8	49	1.7	0.104	0.025	0.004	0.001	0.018	0.004	0.013	0.077	0.184	1.37	25
	Stack B	5.2	0.47	0.43	0.02	0.04	0.7	45	2.1	0.109	0.028	0.004	0.002	0.018	0.004	0.014	0.081	0.198	1.33	27
	Total	16.0	0.45	0.42	0.02	0.03	0.7	47	1.8	0.106	0.026	0.004	0.001	0.018	0.004	0.013	0.078	0.188	1.36	26
Indicated	Stack A	11.0	0.42	0.39	0.02	0.03	0.6	48	1.8	0.098	0.023	0.004	0.001	0.016	0.003	0.012	0.072	0.177	1.46	22
	Stack B	3.9	0.46	0.42	0.02	0.03	0.7	43	2.0	0.106	0.026	0.004	0.001	0.018	0.004	0.013	0.080	0.193	1.31	27
	Rubble/ Mixed	0.4	0.30	0.28	0.02	0.02	1.3	29	1.9	0.075	0.016	0.003	0.001	0.013	0.002	0.008	0.050	0.123	1.42	27
	Total	15.2	0.43	0.39	0.02	0.03	0.7	46	1.9	0.099	0.024	0.004	0.001	0.017	0.003	0.012	0.074	0.180	1.42	24
Inferred	Stack A	1.7	0.41	0.38	0.02	0.03	0.6	46	2.1	0.097	0.023	0.004	0.001	0.016	0.003	0.012	0.071	0.176	1.48	21
	Stack B	1.6	0.44	0.41	0.02	0.03	0.7	40	2.0	0.103	0.025	0.004	0.001	0.018	0.004	0.013	0.079	0.188	1.33	27
	Rubble/ Mixed	0.6	0.31	0.28	0.02	0.02	1.1	31	1.5	0.074	0.018	0.003	0.001	0.014	0.003	0.008	0.053	0.125	1.42	25
	Total	3.8	0.41	0.38	0.02	0.03	0.7	41	2.0	0.096	0.023	0.004	0.001	0.016	0.003	0.012	0.071	0.173	1.40	24
Grand Total		35.0	0.44	0.40	0.02	0.03	0.7	46.0	1.8	0.102	0.025	0.004	0.001	0.017	0.003	0.013	0.075	0.183	1.39	25

Notes

1. TREO = Total Rare Earth Oxide, HREO = Heavy Rare Earth Oxide, LREO = Light Rare Earth Oxide, SEGO = SEG Oxide

2. The Mineral Resource is reported at a 0.2% TREO cut-off grade

3. Moisture content is set out as %

4. No constraining shell is required as stacks are above ground level

5. Adequate initial metallurgical testwork and financial analysis has been completed to satisfy reasonable prospects for economic evaluation

6. The favoured mineral processing route uses a continuous ion exchange (to remove impurities) followed by REE leach and REE refining to produce three saleable products: neodymium/praseodymium oxide, dysprosium oxide, and terbium oxide; all processing is expected to be on-site at the Phalaborwa Mining Complex adjacent to the phosphogypsum stacks

7. Tonnages are rounded to the nearest 100,000 tonnes to reflect this as an estimate

MRE - Contained Metal

			Contained Metal (tonnes)
JORC 2012	Stack	Mt	Nd2O3	Pr6O11	Dy2O3	Tb4O7	Sm2O3	Eu2O3	Gd2O3	La2O3	Ce2O3	Dry BD	Moisture
Measured	Stack A	10.8	11,214	2,704	466	152	1,896	379	14	8,272	19,831	1.37	25
	Stack B	5.2	5,721	1,439	228	79	953	198	7	4,261	10,345	1.33	27
	Total	16.0	16,935	4,143	695	230	2,849	577	21	12,533	30,176	1.36	26
Indicated	Stack A	11.0	10,724	2,545	455	145	1,797	371	13	7,929	19,436	1.46	22
	Stack B	3.9	4,109	1,009	168	54	693	142	5	3,115	7,515	1.31	27
	Rubble/Mixed	0.4	275	60	11	4	50	9	0	183	453	1.42	27
	Total	15.2	15,109	3,615	634	202	2,540	521	19	11,227	27,404	1.42	24
Inferred	Stack A	1.7	1,602	379	66	20	264	55	2	1,169	2,920	1.48	21
	Stack B	1.6	1,624	388	68	22	280	58	2	1,241	2,953	1.33	27
	Rubble/Mixed	0.6	420	100	16	6	80	15	0	299	708	1.42	25
	Total	3.8	3,646	867	151	48	624	127	4	2,710	6,580	1.40	24
Grand Total		35.0	35,689	8,624	1,479	480	6,012	1,225	44	26,469	64,161	1.39	25

Notes

1. The Mineral Resource is reported at a 0.2% TREO cut-off grade

2. Metal Content is quoted to the nearest ton

3. Moisture content is set out as %

4. No constraining shell is required as stacks are above ground level

5. Adequate initial metallurgical testwork and financial analysis has been completed to satisfy reasonable prospects for economic evaluation

7. Tonnages are rounded to the nearest 100,000 tonnes to reflect this as an estimate

[1] As at 6 September 2024

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TIDM	RBW
Share Price	24.14p0.00%

Date	11 Sept 2024
Time	07:00:05
Category	Corporate updates
ID	6490D

TIDM	RBW
Share Price	24.14p0.00%

Date	11 Sept 2024
Time	07:00:05
Category	Corporate updates
ID	6490D

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Updated Mineral Resource Estimate for Phalaborwa