Rainbow Rare Earths (RBW.L) Resource Estimate for Phalaborwa Project

MAIDEN JORC MINERAL RESOURCE ESTIMATE FOR PHALABORWA PROJECT

Rainbow Rare Earths Ltd is pleased to announce a maiden JORC (2012) compliant Mineral Resource Estimate in respect of the Phalaborwa Project in South Africa (“Phalaborwa” or the “Project”).

· Inferred Mineral Resource Estimate of 38.3Mt at 0.43% TREO is larger than the original 35Mt expected from the gypsum stacks.

· High value Neodymium (“Nd”) and Praseodymium (“Pr”) oxide, the essential metals for permanent magnets powering the green revolution, represent 29.1% of the total contained rare earth oxides, with an in-situ value of US$95/t gypsum1.

· Economic Dysprosium (“Dy”) and Terbium (“Tb”) oxide credits, with an in-situ value of US$28/t gypsum1, enhance the overall value of the rare earth basket contained in the stacks, with the in-situ value of these four high value rare earth elements totalling US$123/t gypsum1.

· Very low levels of radioactive elements confirmed in the Inferred Mineral Resource Estimate confirm the ‘green’ credentials of this project.

1. Based on metal oxide prices published by Argus Media on 11th June 2021

George Bennett, CEO, said: “The Maiden Mineral Resource Estimate for Phalaborwa marks an important milestone for Rainbow, underpinning the opportunity for the rapid development of a low capital and operating cost, high value processing facility in South Africa to provide the essential metals to power the green revolution from an extremely environmentally beneficial project.

The fact that the rare earths are present in a chemical rather than mineral form in the gypsum stacks removes the need, as with the majority of global rare earth projects, to firstly produce a mineral concentrate before undertaking a complex and energy intensive ‘cracking’ process. The initial Phalaborwa process will deliver a high value cracked rare earth carbonate and studies are ongoing to investigate whether the valuable rare earth metals can be delivered as separated rare earth oxides for direct sale to industrial users. This gives us confidence that Phalaborwa will become the cornerstone of Rainbow’s business in the near term.

Alongside the recently announced metallurgical test work results, which have confirmed that the gypsum stacks are amenable to simple, direct leaching with low-cost sulphuric acid at ambient temperature and pressure, the road map to commercialising the Phalaborwa deposit is now clear. We look forward to announcing further metallurgical test work results ahead of completing an initial scoping study/preliminary economic assessment in Q3 2021.”

The Phalaborwa gypsum is contained in two separate gypsum stacks, labelled simply as Stack A and Stack B, for which Mineral Resources have been individually estimated as set out below:

Inferred Mineral Resource Estimate

· All Estimated Mineral Resources are classified as Inferred

· The Inferred Mineral Resource Estimate is reported above a cut-off grade of 0.2% TREO.

· No constraining pit shell is required for the Inferred Mineral Resource Estimate due to the gypsum stacks being entirely above ground level.

· Mineral resources are not mineral reserves and do not have demonstrated economic viability.

Further metallurgical test work is ongoing with ANSTO Minerals in Australia to define a preliminary processing flow sheet to support a scoping study/preliminary economic assessment for the Phalaborwa project, which is expected to be completed in Q3 2021.

The maiden JORC Mineral Resource has been estimated based on the assay results received from 1,056.3m of auger drilling completed in December 2020. The auger drilling was independently assayed by SGS South Africa on the basis of 1.5m interval samples with appropriate duplicate, standards and blanks used for QAQC purposes. A further programme of sonic drilling was undertaken in April 2021 primarily to recover samples for bulk density estimation – the assay results from this drill programme were not available at the time of the initial resource estimation and will be used for a further resource update ahead of a formal feasibility study for Phalaborwa. Further drilling/assay samples will also be required to upgrade the mineral resources to the Measured and Indicated categories required for a formal feasibility study.

The surface topography of the gypsum stacks was calculated by use of a LIDAR survey. The Mineral Resource Estimate uses a 1.5t/m3 estimate for the bulk density of the gypsum stacks, being the average of the bulk density calculated for competent samples collected from the sonic drilling programme (1.66t/m3) and the bulk density calculated from more porous/weathered material near the surface of the stacks (1.33t/m3). Further work is planned to validate the overall bulk density of the stacks to upgrade the mineral resources to the Measured and Indicated categories required for a formal feasibility study.

Mineral resources were estimated using a block model with a panel size of 50 x 50 x 3m with block volume resolution down to 5 x 5 x 0.5m. Grades, including rare earth oxides, thorium and uranium, were estimated by ordinary kriging.

Competent Persons Statement

The Mineral Resource Statement presented herein has been compiled and classified by Malcolm Titley, a Competent Person who is a Member of The Australasian Institute of Mining and Metallurgy and the Australian Institute of Geoscientists. Mr Titley is employed by Maja Mining Limited, an independent consulting company. Mr Titley has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Titley is responsible for the preparation of the Mineral Resource Estimate and takes overall responsibility for the resource estimation work and resulting Mineral Resource Statement and consents to the inclusion in this announcement of the matters based on their information in the form and context in which it appears.

Appendix

“Indicated Mineral Resource” is that part of a Mineral Resource for which quantity, grade or quality, densities, shape and physical characteristics are estimated with sufficient confidence to allow the application of mining, processing, metallurgical, infrastructure, economic, marketing, legal, environmental, social and governmental factors to support mine planning and evaluation of the economic viability of the deposit. Geological evidence is derived from adequately detailed and reliable exploration, sampling and testing and is sufficient to assume geological and grade or quality continuity between points of observation. An Indicated Mineral Resource has a lower level of confidence than that applying to a Measured Mineral Resource and may only be converted to a probable mineral reserve.

“Inferred Mineral Resource” is that part of a Mineral Resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. Geological evidence is sufficient to imply but not verify geological and grade or quality continuity. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a mineral reserve. It is reasonably expected that the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration. An Inferred Mineral Resource is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings and drill holes.

“JORC Code” means the 2012 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves prepared by the Joint Ore Reserves Committee of the Australasian Institute of Mining and Metallurgy, Australian Institute of Geoscientists and Minerals Council of Australia. The JORC Code is an acceptable foreign code for purposes of NI 43-101.

“Mt” means million tonnes

“Dy” means Dysprosium

“TREO” means Total Rare Earth Oxides

“TB” means Terbium

“Nd” means Neodymium

“Pr” means Praseodymium

Market Abuse Regulation (“MAR”) Disclosure

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596/2014 as it forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 (“MAR”), and is disclosed in accordance with the Company’s obligations under Article 17 of MAR.


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