Phalaborwa Update

• Piloting campaign has confirmed Rainbow's innovative process, paving the way for the first commercial recovery of rare earths from phosphogypsum.
• Primary front-end leach plant flowsheet to produce a high grade rare earth feed stream has been subject to extensive testwork and piloting, delivering an optimised and simplified process flowsheet with a smaller footprint, with expected Capex and Opex efficiencies.
• Successful delivery of neodymium and praseodymium (together "Nd/Pr") of ca. 96% purity so far in the back-end separation pilot plant; this is confirmed by market participants as a saleable product at a normal market impurity discount. Rainbow team continues to optimise the process to achieve the expected oxide purity of +99%.
• The ongoing separation work places the timing to deliver the Definitive Feasibility Study ("DFS") in H1 2025 at risk, recognising that the most important objective is to deliver the optimal flowsheet for the project's long-term success; guidance for DFS completion is updated to full year 2025.
• Offtake discussions have commenced with organisations looking to secure a strategic and ethical source of the rare earths critical to the green energy transition.
• Longer-term, the honing of this technology will allow Rainbow to access a much larger addressable market in order to develop a long-term, scalable and sustainable business.
• Further technical information on the flowsheet testwork and optimisations is available at https://www.rainbowrareearths.com/project/phalaborwa/ as well as in an updated presentation which is available at https://www.rainbowrareearths.com/investors/results-reports-presentations/.

NEWS RELEASE

Rainbow Rare Earths is pleased to announce an update on the Phalaborwa project in South Africa. Further to the piloting campaigns carried out to date, Phalaborwa has now produced its first magnet rare earth elements ("REE") in a saleable form, paving the way for the first commercial recovery of REE from phosphogypsum.

George Bennett, CEO of Rainbow, commented: "I am very proud of our team's extensive and hard work to establish and optimise the primary front-end leach flowsheet at Phalaborwa, which has delivered a simplified process to recover REE from phosphogypsum versus that published in our Preliminary Economic Assessment ("PEA"). While we have now achieved two saleable products, being a mixed rare earth carbonate and separated Nd/Pr oxide of +96% purity, we will continue to optimise our process to achieve our target of +99% purity.

The supply chain for REE is subject to excessive vulnerabilities due to the dominance of China, who are increasingly demonstrating their ability to restrict access to speciality metals. The geopolitical risks have never been greater and we foresee that Phalaborwa can play an important part in the development of an independent and ethical supply chain of all four critical magnet REE.

Longer term, we expect that our innovative processing technology can be applied to a much larger addressable market and we are currently evaluating approaches for strategic partnership opportunities in Saudi Arabia, Canada and India, along with our MoU signed with the Mosaic Company ("Mosaic") for the Uberaba project in Brazil and the partnership with OCP S.A. ("OCP") and Mohammed VI Polytechnic University ("UM6P") in Morocco."

Primary Flowsheet

The primary leach flowsheet represents +/−75% of the Phalaborwa flowsheet and processes phosphogypsum to produce a high grade rare earth feed stream for the separation process.

The leach flowsheet as published in the project PEA in October 2022 incorporated a number of important processes including phosphogypsum washing, multiple stages of acid leaching, fluoride removal via continuous ion exchange ("CIX"), rare earth precipitation, a sulphuric acid agitated bake and water leach to produce a high-grade REE stream for separation.

The leach flowsheet has been subject to an extensive programme of bench scale and pilot plant leach test work conducted at the Johannesburg facilities of the Council for Mineral Technology ("Mintek"), aimed at supporting the DFS for the project. This work has confirmed the efficacy of a much simpler flowsheet, which maintains the overall recovery rate of rare earths at ca. 66%, paving the way for the first commercial recovery of magnet REE from phosphogypsum. The diagram below shows the original flowsheet adopted for the PEA, with the coloured blocks representing the processes and circuits that have now been eliminated.

The extended test work has allowed for the identification and action of multiple optimisation opportunities. The end result of these efficiency measures is the delivery of a simplified leach flowsheet with a smaller footprint, with expected capital and operating cost benefits versus the PEA flowsheet, which already showed strong economic returns across the rare earth price cycle. This bodes well for the updated economics of the revised flowsheet to be published in the Interim Report before the end of 2024.

Rare Earth Oxide Separation Flowsheet

The final separation flowsheet represents +/−25% of the Phalaborwa flowsheet and refines the mixed rare earth feed stream into separated rare earth oxides. This flowsheet has been tested via a combination of bench scale ion exchange/ion chromatography ("IX/IC") and pilot plant CIX /continuous ion chromatography ("CIC") at the facilities of K-Technologies, Inc. in Florida, USA.

As previously announced, the separation pilot plant has to date achieved proof of concept with the CIC delivering a separated NdPr oxide with ca. 96% purity. Market enquiries show that this is a saleable product, with a normal impurity discount as seen in other metals. Rainbow's team is continuing work to optimise the process to achieve oxide purity of +99%, with the Dy and Tb oxides to follow.

A review of the waste/recirculating streams from the CIX/CIC test work has shown that the leach and separation processes need to be integrated on the same site to allow for the recycle of critical streams from the separation process to the appropriate destinations in the leach plant and relevant disposal of waste material. This has resulted in the decision to advance the relocation timing of the CIX/CIC pilot plant to South Africa, with the added benefit that the separation work can be the full focus of Rainbow's technical team, which has already delivered excellent results on the optimisation and finalisation of the primary flowsheet.

Complementary bench scale IX/IC tests have commenced in South Africa aimed at achieving +99% purity while the pilot plant is shipped.

Next Steps

The various workstreams required as part of Phalaborwa's DFS are well advanced, but completion of the final DFS is dependent on the finalisation of the separation testwork for the project. This does place the timetable to complete the DFS in H1 2025 at risk and the Company is therefore updating its guidance to complete the DFS during full year 2025, recognising that the most important objective is to deliver the optimal flowsheet to ensure the long-term success and sustainability of the project.

The Interim Report to be announced in Q4 2024 will update the economics of the Phalaborwa project reflecting the optimisations delivered from the pilot test work campaigns to date, footprinted against the PEA. The Interim Report will evaluate the various product options currently available as revenue generators for the project.

The Interim Report is expected to demonstrate the resilience of the project economics in a variety of rare earth pricing scenarios and allow for the commencement of the financing process for the project in parallel with the completion of the separation work. Despite the potential delay in finalisation of the DFS, the Phalaborwa project development has been completed in a short timeframe, and it is expected that the project will be ready for development within five to six years of Rainbow securing the project rights in December 2020. This is a much shorter timeframe than would be expected for a traditional mining project, which has an average development time of ca. 17 years according to the IEA.

As part of the financing process, offtake discussions have commenced with industry participants, including original equipment manufacturers and global trading companies, who share Rainbow's values and are looking to secure responsible sources of all four critical magnet REE.

Longer term, Rainbow expects that the honing of its technology to recover critical REE from phosphogypsum will allow the Company to access a much larger addressable market in order to develop a long-term, scalable and sustainable business. To this end, it is currently evaluating approaches for strategic partnership opportunities in Saudi Arabia, Canada and India, along with the MoU signed with Mosaic for the Uberaba project in Brazil and the partnership with OCP S.A. ("OCP") and Mohammed VI Polytechnic University ("UM6P").