Phalaborwa PEA

Rainbow Rare Earths Limited

("Rainbow" or the "Company")

(LSE: RBW)

29 July 2021

Commencement of Phalaborwa Preliminary Economic Assessment

Rainbow Rare Earths Ltd is pleased to announce that work on the Preliminary Economic Assessment (the "PEA") for the Phalaborwa rare earths project ("Phalaborwa") in South Africa has commenced.

Independent test work carried out to date has confirmed that the phosphogypsum at Phalaborwa is amenable to direct leaching with sulphuric acid for extraction of the contained rare earths. The resultant pregnant leach solution, after acid recovery, will be a suitable feedstock for purification and separation of the valuable rare earths. The PEA will compare a conventional route to produce a Cerium-depleted mixed rare earths carbonate versus an alternative flow sheet that bypasses the carbonate stage and delivers three higher value products, comprising NdPr oxide, Tb oxide and Dy oxide[1]. The results will then guide the direction for development of a pre-feasibility study.

The scope of the PEA has been enlarged from the original plan to now include a downstream processing step, as an alternative to the original flowsheet which will produce a mixed rare earth carbonate. This is possible at Phalaborwa owing to the fact that the rare earths contained in the phosphogypsum are in a "cracked" chemical form. Further downstream processing to separate and purify individual oxides is anticipated to deliver the following benefits compared to a traditional flowsheet:

·    The enhanced flowsheet is expected to be capable of delivering a higher value product, delivering the full value of the separated rare earth metal oxides.  By comparison, Rainbow's Gakara project produces a high-grade mineral concentrate, which has been sold to China for further downstream beneficiation/processing, realising approximately 30% of the contained rare earths metal oxide value.  The traditional flowsheet at Phalaborwa would produce a mixed rare earth carbonate, realising approximately 60% - 65% of the contained metal oxide value, compared to 100% of the metal oxide value we would achieve by going further downstream to produce separated individual oxides as a per the enlarged PEA scope of work.

·    Capital and operating expenditure cost savings are expected compared to the initial traditional flow sheet to produce a mixed rare earth carbonate for further processing in a dedicated separation facility.

·    Only the high value rare earths will be separated and recovered (Nd, Pr, Tb and Dy which represent 95% of the Phalaborwa rare earths basket value), thereby enabling the Company to capture the full benefit of additional value from downstream processing, without superfluous capital and operating expenditure which would be needed to separate all the individual rare earth elements present in the stacks.

The outcome of a successful trade-off study will enable Phalaborwa to deliver the increased value of the separated rare earth oxides through a single, low capital-intensity processing plant at the project site.

George Bennett, CEO, said: "We are pleased to have started this important phase of the Phalaborwa Project. We have long believed that the real value in Rainbow's business model would come from developing an integrated mine-to-metal producer, which is capable of realising the full value of the underlying rare earth oxides for stakeholders and developing a responsible, independent Western supply chain.

Owing to the unique nature of Phalaborwa, with the rare earths contained in a 'cracked' chemical form, we are already able to progress to the downstream beneficiation process by producing a mixed rare earth carbonate, rather than a mineral concentrate. Thanks to our strong technical team, who worked alongside me at MDM Engineering on a number of feasibility studies for rare earths projects, we have the internal knowledge and experience at Rainbow to identify this opportunity for a single processing flowsheet to produce individual rare earth oxides with a lower capital intensity than a traditional approach.

I look forward to releasing the results of the PEA to the market in due course."

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 an Inferred Mineral Resource Estimate of 38.3Mt at 0.43% TREO contained within gypsum tailings stacked in unconsolidated dumps derived from historic phosphate hard rock mining.  High value NdPr oxide represent 29.1% of the total contained rare earth oxides, with economic Dysprosium and Terbium oxide credits enhancing the overall value of the rare earth basket contained in the stacks.  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.