Rainbow Rare Earths Regulatory News (RBW)

5 February 2024

Rainbow Rare Earths Limited

("Rainbow" or "the Company")

LSE: RBW

Update on Rare Earth Oxide Separation Progress

· Group separation of the rare earth elements has been achieved in the initial ion exchange test-work ongoing in USA

· The successful achievement of the group separation paves the way for the delivery of individual separated rare earth oxides. A high purity neodymium and praseodymium (together "NdPr") separated rare earth oxide is the initial focus of the back-end piloting campaign, with the dysprosium ("Dy") and terbium ("Tb") oxides to follow thereafter

· Group separation for the samarium ("Sm"), europium ("Eu") and gadolinium ("Gd") elements holds promise and could provide a complementary revenue stream as a combined oxide

· Rainbow is attending the 121 Mining Investment Conference in Cape Town, South Africa this week. A copy of the 121 conference presentation is available on the Company's website at: https://www.rainbowrareearths.com/investors/results-reports-presentations/

News Release

Rainbow Rare Earths is pleased to announce an update on progress with regards to the ongoing rare earth oxide separation work underway at the back-end pilot plant, which is located at the facilities of Rainbow's technical partner K-Technologies, Inc. ("K-Tech") in Florida. 

The back-end plant process utilises continuous ion exchange ("CIX") and continuous ion chromatography ("CIC") to produce separated rare earth oxides. The innovative application of this established technology has been pioneered by K-Tech in the rare earth space and replaces traditional solvent extraction which uses toxic and flammable solvents and diluents and requires more than 100 separate stages.

As previously announced, the optimal feed for the back-end process has been determined by Rainbow and K-Tech as a cerium-depleted mixed rare earth carbonate, which provides a higher-grade feedstock to the back-end separation circuit.

The initial separation at the back-end pilot plant has been achieved using the mixed rare earth carbonate successfully produced from phosphogypsum from the Phalaborwa project. This material, which includes cerium, was previously shipped to K-Tech from the front-end pilot plant located at the Johannesburg facilities of the Council for Mineral Technology ("Mintek"), a global leader in mineral processing, extractive metallurgy, and related fields. Cerium depletion test work is ongoing at both K-Tech and Mintek and the cerium-depleted carbonate, once available, is expected to produce better results in the CIX / CIC separation circuits.

The back-end plant process comprises three main stages, as depicted in the simplified CIX / CIC block flow diagram to follow, being:

1. Stage 1: Impurity Removal via CIX;

2. Stage 2: Group separation via CIC (in two steps); and

3. Stage 3: Individual separation via CIC (in three steps).

Stage 1 removes remaining impurities from the mixed rare earths feed. Stage 2 then uses CIC to separate the targeted rare earth elements (NdPr, Dy, Tb) into groups from the uneconomic rare earth elements. Stage 3 purifies the separated target groups into the individual desired separated rare earth oxides.

A summary of the progress made with the back-end flowsheet is as follows:

· successful impurity removal in the initial ion-exchange step providing suitable feed solution for group separation;

· successful separation of the uneconomic lanthanum and cerium group;

· successful group separation in the first step of the chromatography stage, delivering a NdPr group, grading ca. 68%, as feed for purification in the subsequent individual chromatography separation steps;

· considerable upgrading of the concentration of the Dy and Tb from a combined feed grade of 0.9% to 14.6%, which requires separation from the SEG group; and

· good separation of the samarium, europium and gadolinium ("SEG") group at a grade of ca. 63%, which as a group provides the strong potential for an additional valuable product line as a combined Sm-Eu-Gd oxide concentrate.

The current focus of the pilot plant test work at K-Tech is to optimise the second stage of the chromatography process to produce a 99.5% NdPr product. This will be followed by CIC testing to separate and purify the separate Dy and Tb oxides.

In addition, the production of a separated and purified SEG oxide product will be evaluated and followed up. Initial indications are that Phalaborwa could produce ca. 500 tonnes per annum of a saleable SEG product which, in addition to the previously announced off-take for the residual gypsum, provides the potential for an additional revenue stream for the project with minimal capital and operating costs.

George Bennett, CEO of Rainbow, commented: "I am very pleased with the continued progress to date validating our front-end process flow sheet and the K-Tech CIX / CIC process flow sheet for the back-end. The back-end process is on track to deliver separated high purity rare earth oxides of NdPr, Dy and Tb, the four most economically important rare earth elements due to their crucial role in the green energy transition. It is also notable that we have achieved positive separation in the chromatography circuit of the SEG group of rare earth oxides, which could add another very saleable product and revenue stream to Rainbow at minimal cost.''

The four rare earths that will be produced at Phalaborwa - NdPr, Dy and Tb - are all designated as critical minerals further to their important role in the transition to the green economy. As vital components of permanent magnets, these rare earth elements are used within electric vehicles and wind turbines, as well as many other advanced technologies including those required for strategic defence purposes, such as guided missiles, drones, electronic displays, sonar and jet fighter engines. The SEG rare earths are samarium (used in magnets), europium (used in optical displays) and gadolinium (used in medical and nuclear applications).

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Notes to Editors:

About Rainbow:

Rainbow Rare Earths aims to be a forerunner in the establishment of an independent and ethical supply chain of the rare earth elements that are driving the green energy transition. It is doing this successfully via the identification and development of secondary rare earth deposits that can be brought into production quicker and at a lower cost than traditional hard rock mining projects, with a focus on the permanent magnet rare earth elements neodymium and praseodymium, dysprosium and terbium.

The Company is focused on the development of the Phalaborwa Rare Earths Project in South Africa and the earlier stage Uberaba Project in Brazil. Both projects entail the recovery of rare earths from phosphogypsum stacks that occur as the by-product of phosphoric acid production, with the original source rock for both deposits being a hardrock carbonatite. Rainbow intends to use a proprietary separation technique developed by and in conjunction with its partner K-Technologies, Inc., which simplifies the process of producing separated rare earth oxides (versus traditional solvent extraction), leading to cost and environmental benefits.

The Phalaborwa Preliminary Economic Assessment has confirmed strong base line economics for the project, which has a base case NPV10 of US$627 million[1], an average EBITDA operating margin of 75% and a payback period of < two years. Pilot plant operations commenced in 2023, with the project expected to reach commercial production in 2026, just five years after work began on the project by Rainbow.

More information is available at www.rainbowrareearths.com.