Technical Update - Phalaborwa Rare Earths Project

12 November 2020

Rainbow Rare Earths Limited

("Rainbow" or the "Company")

(LSE: RBW)

Technical Update for the Phalaborwa Rare Earths Project

Rainbow Rare Earths is pleased to announce further technical details for the Phalaborwa Rare Earths Project (the "Project") in South Africa, subject to the recently signed Co-Development Agreement (the "Agreement") with Bosveld Phosphates (Pty) Limited.

Key findings of the ongoing technical work to date include:

·    As previously announced, Sasol established a fully developed process flow sheet for the recovery of rare earth elements ("REE") from the gypsum stacks, the details of which are now being reviewed by Rainbow's technical staff.

·    The pilot plant developed by Sasol successfully produced three tonnes of mixed rare earth carbonate and an associated cerium oxide from the gypsum.

·   The pilot plant remains on site and is available to be recommissioned under the Agreement - this is expected to be a key asset in the development of the final optimised processing flow sheet for the Project.

·   Importantly, the REE minerals exist in chemical form in the two gypsum stacks, which generates two important benefits when compared to a traditional rare earth mining project:

o The expected costs of beneficiation are significantly lower than for a mined mineral rare earth project.

o The value of the resulting mixed rare earth carbonate will be significantly higher than a mineral concentrate, such as that produced at Rainbow's Gakara project in Burundi.

·   Initial reports suggest that the mixed rare earth carbonate is likely to generate up to 80% of the underlying rare earth metal prices for the Project, compared to approximately 30%, which is currently received by Rainbow from the sale of the Gakara mineral concentrate from Burundi.

·   Initial technical due diligence, based on historical assays, estimates that the proposed treatment of 2Mtpa of gypsum could deliver 10,000tpa of mixed rare earth carbonate containing c. 3,100t Neodymium ("Nd") and Praseodymium ("Pr") (together "NdPr"), making Rainbow a significant producer of NdPr from the successful development of Phalaborwa.

George Bennett, CEO, said: "We are delighted by the initial results of our ongoing technical review, which continues to reaffirm our confidence in the considerable potential of the Project and support our expectation that it will represent a significant source of NdPr for Rainbow.  Sasol's processing flow sheet demonstrates the viability of the Project, which is further validated by the proven ability to extract REEs from the gypsum, as displayed by the successful operation of its pilot plant.

Importantly, the material contained in the gypsum stacks has already been cracked, suggesting lower opex and capex for the processing required to deliver a high value product.  This value of the mixed rare earth carbonate will not only be higher than a traditional rare earth mineral concentrate due to the chemical form of the material in the stacks, but also on account of the underlying value of the rare earths basket, which at 30% NdPr, compares very favourably with other rare earth projects globally."

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

For further information, please contact:

Company                             Rainbow Rare Earths Ltd

George Bennett                  +27 82 652 8526

Pete Gardner

Broker                                  SP Angel Corporate Finance LLP

Ewan Leggat                       +44 (0) 20 3470 0470

Charlie Bouverat

Notes to Editors

Rainbow's strategy is to become a globally-significant producer of rare earth metals.  NdPr are vital components of the strongest permanent magnets used for the motors and turbines driving the green technology revolution. Analysts are predicting demand for magnet rare earth oxides will grow substantially over the coming years, driven by increasing adoption of green technology, pushing the overall market for NdPr into deficit.

The Company's Gakara Project in Burundi, which produces one of the highest-grade concentrates in the world (typically 54% total rare earth oxide ("TREO")) through ongoing trial mining operations, is currently the only African producer of rare earths.  The Gakara basket is weighted heavily towards NdPr, which account for over approximately 19.5% of the contained TREO and 80% of the value of the concentrate.

The Phalaborwa Rare Earths Project, located in South Africa, comprises approximately 35 million tonnes of gypsum resulting from historic phosphate hard rock mining, containing rare earth elements with an estimated average in situ grade of 0.6% TREO, based on previous sampling campaigns, of which 30% comprises high-value NdPr.  The rare earths are contained in chemical form in the gypsum stacks, which is expected to deliver a higher-value rare earth carbonate, with lower operating costs than a typical rare earth mineral project.