Rainbow Rare Earths Regulatory News (RBW)

NOT FOR RELEASE, DISTRIBUTION OR PUBLICATION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA (THE "UNITED STATES") (INCLUDING ITS TERRITORIES AND POSSESSIONS, ANY STATE OF THE UNITED STATES AND THE DISTRICT OF COLUMBIA), AUSTRALIA, CANADA, JAPAN OR SOUTH AFRICA OR ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO DISTRIBUTE THIS ANNOUNCEMENT.

This announcement is an advertisement for the purposes of the Prospectus Rules and not a prospectus. Neither this announcement nor anything contained herein shall form the basis of, or be relied upon in connection with, any offer or commitment whatsoever in any jurisdiction. Investors should not purchase or subscribe for any transferable securities referred to in this announcement except on the basis of information contained in the prospectus (the "Prospectus") published by the Company (as defined below) in connection with the admission of the Company's ordinary shares of no par value (the "Ordinary Shares") to the Official List of the Financial Conduct Authority (the "FCA") (Standard Listing Segment) and to trading on the Main Market for listed securities of the London Stock Exchange plc (the "London Stock Exchange"). This announcement is not an offer to sell, or a solicitation of an offer to acquire, securities in the United States, Australia, Canada, Japan, the Republic of South Africa or in any other jurisdiction.

FOR IMMEDIATE RELEASE

30 January 2017

Rainbow Rare Earths Ltd ('Rainbow' or 'the Company')

Admission to Trading on the London Stock Exchange

Rainbow, the rare earth element development company operating in East Africa, is pleased to announce the admission of its entire issued share capital of 152,025,807 ordinary shares of no par value (the 'Ordinary Shares') to the standard listing segment of the Official List of the Financial Conduct Authority and to trading on the Main Market of the London Stock Exchange for listed securities ('Admission'). This follows the placing of 65,036,958 Ordinary Shares at a price of 10 pence per share, giving the Company a market capitalisation of approximately £15.2 million on Admission. The funds raised will capitalise its Gakara Project in Burundi through trial mining and into production in 2017 targeting first sales by year-end. Dealing will commence at 8.00 a.m. under the TIDM code "RBW" (ISIN: GG00BD59ZW98).

Highlights:

· Rainbow's focus is the Gakara Project ('Gakara') in Burundi, one of the highest-grade (47%-67% Total Rare Earth Oxide) rare earths projects globally

· Raised US$8 million to fast-track fully permitted Gakara to production ahead of targeted first sales of concentrate by year-end

· Low capex of US$2.23 million and fast route to production within nine months

· Low-risk, low-cost mining and processing routes identified

· Ten-year distribution and offtake agreement with multinational thyssenkrupp Raw Materials ('tk Raw Materials') secured for the sale of 5,000 tpa of concentrate produced

· Gakara basket is weighted heavily towards the magnet rare earths, including neodymium and praseodymium, which are driving demand accounting for 70% of annual global REE sales due to their use in vital components in motors, generators, wind turbines and electric vehicles

· Board and management team are technically, operationally and financially proven in mine development particularly in Africa

Rainbow CEO, Martin Eales, said: "Our Gakara Project continues to differentiate itself from its peers; modest capital expenditure of just US$2.23 million and low cost, simple processing route to produce rare earth element (REE) concentrate directly into the market this year presents investors with a very compelling proposition. The measurement which really sets Gakara apart however is its grade. Our project boasts an in-situ grade in the range of 47-67% TREO, making it one of the highest grade REE projects globally.

"With recent shifts in the rare earths market, driven by the increasing demand for powerful magnets used for electric vehicles, motors and wind turbines, we believe that now is an optimal time for Rainbow to produce REE concentrate. Beyond the extremely high-grade ore and low-capital expenditure associated with the initial development of the project, the Company also benefits from strong support for the development of Gakara, both from the Burundi government and the local community, together with our offtake partner, tk Raw Materials.

"With the leadership team's impressive collective experience, the strong governmental and local support and the innate potential of the Gakara Project, we are confident that we have a strong foundation from which to establish and scale a rare earth production company in East Africa. We have a defined development strategy in place and following the support we have received from our new investors, I am confident that the Company is well-positioned to create near and long-term value. The Company's listing on the London Stock Exchange marks the first significant step in its genesis and we look forward to providing the market with updates on our progress in due course."

In accordance with the Disclosure Guidance and Transparency Rules (DTR 5.6), the Company makes the following disclosure with respect to the share capital and voting rights of the Company. As at 30 January 2017, the share capital of the Company consists of 152,025,807 Ordinary Shares of no par value, each carrying voting rights. The Company does not hold any shares in treasury. Therefore, the total number of shares and voting rights in the Company is 152,025,807.

The above figure may be used by shareholders as the denominator for the calculations by which they determine if they are required to notify their interest in, or a change to their interest in, the Company under the Financial Conduct Authority's Disclosure Guidance and Transparency Rules.

A copy of the Company's prospectus, in connection with Admission, is available from the Company's registered office at Trafalgar Court, Second Floor, East Wing, Admiral Park, St Peter Port, Guernsey GY1 3EL and online at: http://www.rainbowrareearths.com/ subject to compliance with applicable securities laws. 

**ENDS**

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Important Notices

Neither this announcement nor any copy of it may be taken or transmitted, directly or indirectly, into the United States (including its territories and possessions), Australia, Canada, Japan, the Republic of South Africa or to any persons in any of those jurisdictions or any other jurisdictions where to do so would constitute a violation of the relevant securities laws of such jurisdiction. The distribution of this announcement and other information in connection with Admission in certain jurisdictions may be restricted by law and persons into whose possession this announcement, any document or other information referred to herein comes should inform themselves about and observe any such restriction. Any failure to comply with these restrictions may constitute a violation of the securities laws of any such jurisdiction.

This announcement is only addressed to and directed at persons in member states of the European Economic Area ("EEA"), other than the United Kingdom, who are qualified investors within the meaning of Article 2(1)(e) of the Prospectus Directive (Directive 2003/71/EC), as amended ("Qualified Investors"). In addition, in the United Kingdom, this announcement is addressed and directed only at Qualified Investors who (i) are persons who have professional experience in matters relating to investments falling within Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 (the "Order"), (ii) are persons who are high net worth entities falling within Article 49(2)(a) to (d) of the Order and (iii) to persons to whom it may otherwise be lawful to communicate it to (all such persons being referred to as "relevant persons"). Any investment or investment activity to which this announcement relates is available only to relevant persons in the United Kingdom and Qualified Investors in any member state of the EEA other than the United Kingdom and will be engaged in only with such persons. Other persons should not rely or act upon this announcement or any of its contents.

Hannam & Partners (Advisory) LLP and Daniel Stewart & Company Plc, who are both authorised and regulated in the United Kingdom by the Financial Conduct Authority, are acting exclusively for Rainbow and no-one else in connection with the subject matter of this announcement, and will not be responsible to anyone other than Rainbow for providing the protections afforded to clients of Hannam & Partners (Advisory) LLP and Daniel Stewart & Company Plc (together the "Banks"), nor for giving advice in relation to the subject matter of this announcement.

In connection with Admission, each of the Banks and any of their respective affiliates, acting as investors for their own accounts, may subscribe for or purchase Ordinary Shares and in that capacity may retain, purchase, sell, offer to sell or otherwise deal for their own accounts in such Ordinary Shares and other securities of the Company or related investments in connection with Admission or otherwise.

In addition, certain of the Banks or their affiliates may enter into financing arrangements and swaps in connection with which they or their affiliates may from time to time acquire, hold or dispose of Ordinary Shares. The Banks or any of their respective affiliates do not intend to disclose the extent of any such investments or transactions otherwise than in accordance with any legal or regulatory obligations to do so.

Apart from the responsibilities and liabilities, if any, which may be imposed on any of the Banks by the Financial Services and Markets Act 2000 as amended, or the regulatory regime established thereunder, or under the regulatory regime of any jurisdiction where exclusion of liability under the relevant regulatory regime would be illegal, void or unenforceable, none of the Banks nor any of their respective subsidiary undertakings, affiliates or any of its or their respective directors, officers, employees, advisers agents or any other person accepts any responsibility or liability whatsoever for or makes any representation or warranty, express or implied, as to the truth, accuracy, completeness or fairness of the information or opinions in this announcement (or whether any information has been omitted from this announcement) or any other information relating to the Company, its subsidiaries or associated companies, whether written, oral or in a visual or electronic form, and howsoever transmitted or made available or for any loss howsoever arising from any use of this announcement or its contents or otherwise arising in connection therewith.

This announcement is for information purposes only and is not intended to, and does not, constitute or form part of any offer, invitation or solicitation of any offer to purchase, otherwise acquire, subscribe for, sell or otherwise dispose of any securities or the solicitation of any vote or approval in any jurisdiction, nor shall there be any sale, issuance, or transfer of securities in any jurisdiction in contravention of applicable law.

This announcement does not constitute a prospectus or prospectus equivalent document.

This announcement has been prepared for the purpose of complying with English law and the information disclosed may not be the same as that which would have been disclosed if this announcement had been prepared in accordance with the laws of jurisdictions outside the United Kingdom.

Overseas Shareholders

The release, publication or distribution of this announcement in certain jurisdictions may be restricted by law. Persons who are not resident in the United Kingdom or who are subject to other jurisdictions should inform themselves of, and observe, any applicable requirements. Any failure to comply with these requirements may constitute a violation of the securities laws of any such jurisdiction. To the fullest extent permitted by applicable law, the companies and persons involved in the Prospectus disclaim any responsibility or liability for the violation of such requirements by any person.

The Company's ordinary shares have not been, and will not be, registered under the US Securities Act or under the securities laws of any state or other jurisdiction of the United States. Accordingly, the Company's ordinary shares may not be offered, sold, resold, delivered, distributed or otherwise transferred, directly or indirectly, in or into the United States absent registration under the US Securities Act or an exemption therefrom.

None of the securities referred to in this announcement have been approved or disapproved by the SEC, any state securities commission in the United States or any other US regulatory authority, nor have such authorities passed upon or determined the adequacy or accuracy of the information contained in this announcement. Any representation to the contrary is a criminal offence in the United States. Unless otherwise determined by Rainbow and permitted by applicable law and regulation, no offer will be made available, directly or indirectly, in, into or from the United States, Australia, Canada, Japan, the Republic of South Africa or in any other jurisdiction where to do so would violate the laws in that jurisdiction and no person may vote by any such use, means, instrumentality or form within the United States, Australia, Canada, Japan, the Republic of South Africa or any other jurisdiction if to do so would constitute a violation of the laws of that jurisdiction. Accordingly, copies of this announcement and all documents relating to the Prospectus are not being, and must not be, directly or indirectly, mailed or otherwise forwarded, distributed or sent in, into or from the United States, Australia, Canada, Japan, the Republic of South Africa or in any other jurisdiction where to do so would violate the laws in that jurisdiction, and persons receiving this announcement and all documents relating to the Prospectus (including custodians, nominees and trustees) must not mail or otherwise distribute or send them in, into or from such jurisdictions where to do so would violate the laws in that jurisdiction.