Initial Metallurgical results for Phalaborwa

Rainbow Rare Earths Limited

("Rainbow" or the "Company")

(LSE: RBW)

24 May 2021

INITIAL METALLURGICAL RESULTS FOR PHALABORWA PROJECT

Rainbow Rare Earths Ltd is pleased to provide an update on the initial results of the ongoing metallurgical test work programme for the Phalaborwa Project ("Phalaborwa" or the "Project") being undertaken by ANSTO Minerals in Australia ("ANSTO").

·   Testwork has confirmed the phosphogypsum is amenable to simple, direct, leaching with low cost sulphuric or hydrochloric acid without pre-treatment:

o Initial recoveries of rare earths of greater than 70% have been achieved within 24 hours, which will be improved through further optimisations.

o It is expected that production of high value products (mixed rare earth carbonate or separated rare earth oxides) will be possible from the leach solution.

·   The phosphogypsum contains exceptionally low levels of radioactive elements uranium and thorium when compared to other rare earth projects:

o No radioactivity controls are expected to be required for the shipment of the rare earth products.

o No expensive redeposition measures should be required for the leached phosphogypsum residue.

·  The test work results to date support the expectations that a simplified processing flow sheet can be developed and optimised from the original Sasol flow sheet to recover the rare earths without the high cost, energy and reagent intensive mining, crushing, milling, primary beneficiation, cracking and uranium/thorium removal costs associated with a typical rare earth project.

·   The next phase of testing, currently in progress at ANSTO, is focussed upon optimisation of leach recovery, acid consumption and initial selective recovery of the rare earths from the leach solution.

George Bennett, CEO, said: "We are excited by the initial highly positive test work results received from ANSTO, which support our view that Phalaborwa can be developed as a low capital intensity project with operating costs near the bottom of the global rare earth cost curve.  The high initial recovery of rare earths reported from the gypsum via a simple 24-hour acid leach process at ambient temperature and pressure is a major benefit as we are essentially dealing with a 'cracked chemical feed' that has occurred before the gypsum residue was deposited.  As we review further optimisation to increase recovery of rare earth elements and reduce re-agent consumption, we will carry out a thorough cost/benefit analysis to ensure that each step increases the overall value of the project.

These initial test work results confirm my belief that Phalaborwa, by its nature, will probably be the fastest global rare earth development project to get to the mixed rare earth carbonate producing stage.  We are targeting delivering production from Phalaborwa in an accelerated time-frame which can only be achieved because of the unique nature of the project with simple processing requirements."

The first phase of work at ANSTO focused on testing various leach lixiviants and conditions on a composite sample of material sourced from auger drilling across the gypsum stacks.  The composite sample was constructed with 10 individual samples spatially distributed to replicate the expected resource average grade with respect to major and target elements.  

Test work was performed utilising nitric acid, sulphuric acid and hydrochloric acid as the key lixiviant based on historical work completed on similar material.  The sulphuric acid and hydrochloric acid tests initially indicated good ambient temperature leach recoveries and kinetics leaching virtually concluded within a 24 hour period recovering ~70% of the rare earth elements present in the sample.  It is likely that sulphuric acid will be the lixiviant of choice due to local availability, costs and materials of construction as compared to hydrochloric acid.

Gamma analysis was also completed on the composite sample to understand the presence of radioactive elements within the gypsum stacks and the impact that may have on the processing and final product.  The analysis conducted to date shows that the overall level of radioactive materials is low, with the phosphogypsum having less than 1Bq/g of radionuclides present, which is in line with the IAEA International guidelines for exemption from regulations pertaining to radioactivity.

The test work to date has confirmed that the Phalaborwa tailings are expected to be benign, negating the need to manage multiple tailings facilities which adds increased costs for many global rare earth projects.  The concurrent rehabilitation of two historical gypsum stacks reduces the environmental footprint in an ecologically sensitive area.

Further work is planned to confirm the leach characteristic variability of the stacks to support a preliminary economic assessment for the Phalaborwa project.  Further optimisation and processing development work will then be undertaken prior to the completion of a full feasibility study.

**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 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.