Phalaborwa drilling update

Rainbow Rare Earths Limited

("Rainbow" or the "Company")

(LSE: RBW)

7 January 2021

Drilling at the Phalaborwa Rare Earths Project

'Completed ahead of schedule and under budget'

Rainbow Rare Earths Ltd is delighted to announce that it has completed an auger drilling programme at the Phalaborwa Rare Earths Project ("Phalaborwa" or the "Project"), which was planned to deliver an inferred JORC (2012) resource classification, within the 35 million tonne gypsum stacks.  Assay samples have been dispatched to SGS laboratories in South Africa, with results expected during Q1 2021.  The drilling programme was completed ahead of schedule and under budget.

A metallurgical test programme will also be conducted from the drill samples to facilitate process optimisation of the original processing flow sheet, developed by Sasol, which enabled the successful operation of a pilot plant to produce over three tonnes of mixed rare earth carbonate.

George Bennett, CEO, said: "Based on previous sampling campaigns, the gypsum stacks contain rare earth elements with an estimated average in situ grade of 0.6% TREO, of which an estimated 30% is Neodymium and Praseodymium (NdPr), vital metals for the green revolution.  Defining an inferred resource for Phalaborwa will represent an important step in validating the Project's considerable potential as a significant producer of NdPr, enabling us to define and progress the optimal route to commercial production.

Owing to the nature of the Project, with the resources contained in gypsum stacks, the drilling programme was extremely low-cost compared to drilling a hard rock deposit to define a similar size resource.  I am extremely pleased with the excellent progress to date at Phalaborwa, which puts Rainbow in a strong position to further understand the significant potential of this Project."

**ENDS**

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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.