Phalaborwa Positive Assay Results

Rainbow Rare Earths Limited

("Rainbow" or the "Company")

(LSE: RBW)

28 April 2021

Final Phalaborwa Assay Results Demonstrate Value of Rare Earths Basket

Rainbow Rare Earths Ltd is pleased to announce the final assay results from the auger drilling programme completed at the Phalaborwa Rare Earths Project ("Phalaborwa" or the "Project") located in South Africa, further to the publication of the initial set of assay results on 12 February 2021, which confirm:

·    Average grade of 0.45% total rare earths oxide ("TREO").

·    Average combined grade of 0.13% Neodymium and Praseodymium ("NdPr") oxide, representing 28.9% of the TREO grade reported in the rare earths basket.

·    Economic levels of Dysprosium and Terbium recorded, enhancing the overall rare earths basket value contained in the stacks by approximately 15%.

·    Low levels of radioactive elements present in the stacks.

The assay results, which are included in a table below, are broadly supportive of previous indications from the Sasol sample and test work programme.  The assay results and average grades reported (which incorporate previously announced holes) do not represent a mineral resource estimate.  Following the receipt of these results and prior to the publication of a JORC (2012) Mineral Resource Estimate, Rainbow will carry out an additional drilling programme within the estimated +/-35 million tonne gypsum stacks to confirm bulk density as well performing an updated topography survey.

George Bennett, CEO, said: "These results further reinforce our confidence in the considerable potential of Phalaborwa in South Africa.  The grades reported, augmented by the Dysprosium and Terbium credits, highlight the substantial overall value of the rare earths basket contained within these gypsum stacks, surpassing our original expectations based on current rare earth prices.

In essence, although the average assay grade reported has dropped from 0.50% TREO to 0.45% TREO, the overall value per tonne of gypsum is 15% higher than we initially anticipated thanks to the high value of the Dysprosium and Terbium ("DyTb").  The overall rare earth basket price was expected to be dominated by the NdPr content, which at current prices is valued at US$111/t gypsum based on the assay values reported.  The additional DyTb credit adds a further US$36/t gypsum, significantly enhancing the recoverable value of the rare earths from the gypsum stacks.  Together, these high value elements represent over 92% of the total value of the Phalaborwa rare earths basket.

The Phalaborwa asset represents a fast-track development project, with metallurgical test-work underway at ANSTO in Sydney, to design an optimised processing circuit for recovery of a mixed rare earth carbonate."

For further information, please contact:

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 Phalaborwa Rare Earths Project, located in South Africa, comprises approximately 35 million tonnes of gypsum tailings stacked in unconsolidated dumps derived from historic phosphate hard rock mining, containing rare earth elements with an initial estimated average in situ grade of 0.45% TREO, based on previous sampling campaigns, of which +/- 30% comprises high-value NdPr. The rare earths are contained in chemical form in the gypsum dumps, which is expected to deliver a higher-value rare earth carbonate, with lower operating costs than a typical rare earth mineral project.

The Company's Gakara Project in Burundi, which produces one of the highest-grade concentrates in the world (typically 54% total rare earths oxides ("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 85% of the value of the concentrate.