ONE OF THE WORLD’S RICHEST PRODUCING RARE EARTH...

NOVEMBER 2018

ONE OF THE WORLD’S RICHEST

PRODUCING RARE EARTH DEPOSITS

LOW COST PRODUCTION IN EAST AFRICA

Rainbow Rare Earths Ltd.

DISCLAIMER

These Presentation Materials are for information purposes only and must not be used or relied upon for the purpose of making any

investment decision or engaging in any investment activity and should not be construed as, an offer for sale or subscription of, or

solicitation of any offer to buy or subscribe for, any securities of Rainbow Rare Earths Limited (the “Company”). Whilst the information

contained herein has been prepared in good faith, neither the Company, its subsidiaries (together, the “Group”) nor any of the Group’s

directors, officers, employees, agents or advisers makes any representation or warranty in respect of the fairness, accuracy or

completeness of the information or opinions contained in this presentation and no responsibility or liability will be accepted in connection

with the same. The information contained herein is provided as at the date of this presentation and is subject to updating, completion,

revision, verification and further amendment without notice.

These Presentation Materials contain forward-looking statements in relation to the Group. By its very nature, such forward-looking

information requires the Company to make assumptions that may not materialise or that may not be accurate. Such forward-looking

statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Company that could

cause the actual performance or achievements of the Company to be materially different from any future results, performance or

achievements expressed or implied by such forward-looking statements. Nothing in this presentation should be construed as a profit

forecast. Past share performance cannot be relied on as a guide to future performance.

The graphs and data on page 22 (as labelled) is copyright ©2017 Argus Media Group. All rights reserved. All intellectual property

rights in the above extract are the exclusive property of Argus and/or its licensors and may only be used under licence from Argus. No

liability is accepted to any person in relation to the distribution or possession of this extract. Argus makes no warranties, express or

implied, as to the accuracy, adequacy, timeliness, reliability or completeness of the extract above or its fitness for any particular

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all liability related to or arising out of use, possession or distribution of the extract above to the fullest extent permissible by law.

1


ACHIEVEMENTS SO FAR

Develop first area for mining

(Gasagwe)

2

Most of the key challenges have been addressed in the first 18 months of operations

ACHIEVED

Recruit and train local workforce

Embed safe practices

Commence mining

Build processing

plant

Export concentrate

Complete sales to cash

cycle

Secure access to sales

proceeds

ACHIEVED ACHIEVED ACHIEVED ACHIEVED ACHIEVED ACHIEVED ACHIEVED

Increase production to break-even

REVISED

Now expected early 2019

Reach run rate of 400t concentrate per

month

REVISED

Now expected mid 2019

JORC Resource

On track for

Dec 2018

Open new mining areas

ONGOING

During 2019

Increase Resource

base

ONGOING


STRONG FUNDAMENTALS

3

The fundamentals of the Gakara project remain strong –notwithstanding short term operational challenges

Grade

At TREO of 47-67%, Gakara is by

far the highest-grade mine in the

world

Potential world-class deposit

• Over 1,000 occurrences of Rare

Earths (REs) discovered within

39-km2 licence area due to be

explored further

• JORC Resource in Dec 2018 will

incorporate only a small

proportion of the total licence area

Low-capex asset

Brought into production for

just US$11m

Asset in production

Only producing mine in Africa, one

of only two listed RE producers

outside China

RE prices expected to

respond to demand drivers

• Demand for NdPr in particular set

to rise in line with growth in

production of EVs

• Limited production capacity in

market medium-term, particularly

outside China

Downstream separation

planned with TechMet

Will significantly reduce discount to

basket price and improve margins


OPERATIONS UPDATE: Q1 2018-2019

▶ Concentrate tonnes exported up 27% QoQ to 350t

▶ Sales for the quarter were maintained at 350t

▶ Average grade increased to 59%TREO from 55%

TREO in previous quarter

▶ Murambi on track to commence production by YE

2018

▶ JORC Resource on track for delivery by YE 2018

▶ 400tpm run rate now targeted for later in 2019 with

250-300tpm in the near-term signifying EBITDA

positive status

4

INCREASE IN EXPORTED TONNES AND TOTAL ORE MINED FROM GASAGWE

Tonnes e

xport

ed

Tonnes s

old

0

50

100

150

200

250

300

350

400

Q2 2017-2018

Q3 2017-2018

Q4 2017-2018

Q1 2018-2019

0

50

100

150

200

250

300

350

400

Q2 2017-2018

Q3 2017-2018

Q4 2017-2018

Q1 2018-2019


FUNDAMENTAL GROWTH AND VALUE STRATEGY

5

THREE ELEMENTS: NEAR-TERM PRODUCTION; RESOURCE GROWTH; AND

DOWNSTREAM EXPANSION

Near-term production and cashflow maximisation

Expand resource base

Develop downstream

separation

2018 2019 2020 2021 2022 2023 2024

Current strategy▶ Operate 2+ mine areas in parallel▶ Optimise efficiency of operations▶ Increase production and sales to 250-300tpm in

the near-term to become EBITDA positive▶ Expand operations into new permit areas

Resource expansion▶ Identify large deposit or deposits to enable step

change in production to 10,000tpa or more

Develop separation capability▶ Investigate separation capability for Gakara

concentrate with feasibility study to be completed with additional funding from TechMet

▶ Capex will depend on scale and technique but may be <US$50m

▶ Would reduce discount to metal content price considerably from c.70% levels at present

3

2

1


THE GAKARA RARE EARTHS PROJECT

6


GASAGWE & MURAMBI MINING AREAS

7

First operational mining area

▶ Small mechanical fleet strips overburden

▶ Manual extraction of high grade vein material

▶ Consistent high grade ore has supplied all of Rainbow’s production to date although veins can be unpredictable

GASAGWE

Rainbow’s next mining area

▶ Vein structure very similar to Gasagwe

▶ Lab tested vein samples contain high grade TREOs at 48-60%

▶ Trenching suggests vein extension may be up to 200m, approximately twice the length at Gasagwe

▶ First production expected before end 2018

MURAMBI

Gakara Mining Licence perimeter, mining areas and RE discoveries


ARIEL VIEW OF MURAMBI MINING AREA

8


KABEZI PROCESSING PLANT

9

A SIMPLE EFFICIENT GRAVITY SEPARATION PROCESSING FACILITY

Fully operational

and

commissioned

Capacity

available to

increase

production

throughput

without further

capex

Located next to

asphalt road

providing ease of

access for

container trucks

First tonnes

successfully

exported in

December 2017


CONCENTRATE PRODUCTION

► Rainbow processing plant located c. 13km south of Bujumbura at Kabezi and approximately

20km from mining areas

► Loading, sealing and sampling process working efficiently with Govt of Burundi officials prior to

export by container truck to port

► Bulk of revenue from thyssenkrupp Materials Trading received by Rainbow upon delivery at port

for each export

► Reliable and consistent TREO grade maintained in concentrate produced at an average of 58%

10

RAINBOW’S PLANT FULLY COMMISSIONED AND HANDED OVER MARCH 2018

Concentrate in production Final Concentrate Concentrate loaded and ready for export


RAINBOW – SALES AND MARKETING

11

ORE VALUE STRONGLY WEIGHTED TOWARDS MAGNET RARE EARTHS

Value in Nd and PrBasket composition

31%

48%

4%

15%

2%

Lanthanum Cerium Praseodymium Neodymium Other

Ba

sed

on

ave

rag

e g

rad

es o

f R

EOs

wit

hin

Ga

sag

we

in s

itu

vei

n s

am

ple

s a

nd

ma

rket

pri

ces

of

sep

ara

ted

REO

s o

n C

hin

a F

OB

ba

sis

as

at

No

v 2

01

8

By R

EO

Co

nte

nt

► Gasagwe: Based on average samples, magnet

REEs account for approximately 19% of the

contained REOs within the ore, representing an

average of over 80% of the contained value of

REOs at current market prices

► thyssenkrupp Materials Trading handles all

sales negotiations and logistics

► Bulk of Rainbow sales revenue received from

TK upon transfer of title at Mombasa port

► Current basket price US$11.21/kg (as at

01/11/18)

Rainbow Basket Price 2018

10.00

11.00

12.00

13.00

14.00

15.00

Jan-18 Feb-18Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18

US$/kg

Rainbow - Basketprice


COOPERATION AGREEMENT WITH TECHMET

▶ JV agreement whereby TechMet will fund up to US$3m for a full

Definitive Feasibility Study (“DFS”) for a downstream rare earth

separation business, with the aim of processing Rainbow’s high

grade concentrate into separated rare earths

▶ Separated rare earth oxides sell for a significantly higher price

than Rainbow’s concentrate product, which typically includes a

processing discount of approximately 70% on metal content

▶ The agreement enables Rainbow to benefit from TechMet’s

extensive network of contacts and access to financing as well

as rapidly accelerating plans to commence downstream

processing of Rainbow’s concentrate

12

DEAL ENABLES RAPID ACCELERATION OF DOWNSTREAM BUSINESS INVESTIGATION

TechMet Ltd

▶ A private company investing in projects producing,

processing and recycling strategic “technology metals”

▶ Led by prominent mining industry CEO Brian Menell

▶ Interests in producing or development assets covering

lithium, tin, nickel, cobalt and tungsten with projects

across a number of African countries and in North and

South America

Rainbow Rare Earths Ltd. 13

EXPLORATION SUCCESS

Company photo of Kiyenzi (left) and Gasagwe (right)

Over 1,000 instances of rare earth mineralisation have been

discovered over an area of 39 km2, which points to a potentially

world-class rare earth deposit, particularly in view of the

exceptional grades.


KIYENZI DISCOVERY – 2018

14

PRIORITY TARGET FROM PHASE 1 DRILLING CAMPAIGN REVEALS NEW REE MINERALISATION

Photos: August 2018 drilling at Kiyenzi; and drill core showing the REE containing brecchia

► Significant REE mineralisation encountered in five out of ten diamond drill holes at the

Kiyenzi target as announced 27 June 2018 (see table below)

► Intersections range from a few centimetres to a few metres thick of breccia

mineralisation

► Depth of intersections discovered so far only 2 metres to 33 metres

► Thickness of the breccias may prove more amenable to mechanised extraction at

greater volumes than Gasagwe

► Multiple samples have been laboratory tested and returned attractive TREO grades

► Kiyenzi Phase 2 drilling is now complete and will form key part of code-compliant

resource expected to be delivered in December 2018

Hole ID From (m) To (m) Width (m) Grade (TREO%)

GAK_DD_10 7.00 7.72 0.72 7.72% including 17cm at 10.98%

GAK_DD_10 19.00 19.12 0.12 15.23%


GAK_DD_12 1.97 2.20 0.23 18.25%

GAK_DD_12 10.40 10.80 0.40 2.84%

GAK_DD_12 12.05 12.09 0.04 5.36%

GAK_DD_13 2.61 3.59 0.98 2.79%



PEER COMPARISON

15

RBW Rainbow Rare Earths

MKA Mkango Resources

PEK Peak Resources

HAS Hastings Technology Metals

NTU Northern Minerals

GGG Greenland Minerals

AVL Avalon Advanced Materials

ALK* Alkane Resources

ARU Arafura Resources

LYC Lynas Corporation

Total raised since 2005 (US$ millions)

REE companies in

production

RAINBOW HAS ACHIEVED PRODUCTION FOR A FRACTION OF THE COST OF OTHER PROJECTS

ALK also has a

producing gold mine *

Note and Sources:• Market capitalisations as at 31/10/18• Total equity raised 2005-2018 based

on financial statements converted into US$ at applicable year end rates and research undertaken by Cox and Kynicky (2018)

• Project Capex source: UBS research


24 MONTH OBJECTIVES

16

NEAR-TERM OPTIONS INTENDED TO DRIVE VALUE FOR

SHAREHOLDERS FOLLOWING INITIAL SUCCESS

Target maiden

code

compliant

Resource by

YE 2018

Completion of

DFS for

downstream

processing via

Techmet

funded JV

Expanded

exploration

strategy and

drilling

campaign

Progressive

increases in

production

from new

mining areas

Targeting

near-term

positive

EBITDA


KEY STRENGTHS

17

Highest grade globally: 47-67% TREO

The only African REE producer

Attractive rare earth mix

Low capex operation

Simple processing route

Fully permitted

Distribution partner established

Supportive government

Team to deliver

EV transformational demand drive

Significant exploration upside to

ramp up production

Delivered on production & sales in

11 months


CONTACT

Martin Eales

Rainbow Rare Earths

29 Lincoln’s Inn Fields

London, WC2A 3EG

[email protected]

T +44 (0) 20 3910 4550

18Rainbow Rare Earths Ltd.


KEY DATA

19

TICKER MARKET MARKET CAP SHARE PRICESHARES

IN ISSUEBROKERS

RBW.L LSE £8.8m 4.675p 187.1m ARDEN PARTNERS

As at 31.10.18

SIGNIFICANT SHAREHOLDERS

SHAREHOLDER HOLDING

Miton Asset Management* 4.58%

Legal & General Group** 4.65%

SHAREHOLDER HOLDING

Adonis Pouroulis 25.46%

Shawn McCormick 4.55%

Alexander Lowrie 2.27%

Robert Sinclair 2.64%

Martin Eales 1.25%

Atul Bali 0.84%

Cesare Morelli 0.67%

Gilbert Midende 0.60%

Jim Wynn 0.09%

Total 38.37%

OTHER SIGNIFICANT SHAREHOLDERS

* As at 1 November 2018

** As at 30 September 2018


GAKARA PROJECT OVERVIEW

20

PRODUCTION OF HIGH-GRADE RARE EARTH CONCENTRATE FROM THE ONLY PRODUCING RARE EARTHS MINE IN AFRICA

Key Facts

Processing

Simple efficient gravity separation

processing facility

Sales

475t in six month period to 30 June 2018

Offtake Partner

10-year offtake agreement signed with

thyssenKruup Materials Trading for 5ktpa

of concentrate, and right of first refusal

for additional 5ktpa

Exploration upside

Kiyenzi area Phase 2 drilling complete

with potential code compliant resource by

end 2018

Location

Mining Areas: 35km by road from

Bujumbura, Burundi’s capital city

Processing Plant: 13km South of

Bujumbura by road

Interest

90% with a non-dilutable 10% owned

by the Republic of Burundi

Mining Licence

Granted March 2015; valid for 25 years

and renewable thereafter

Infrastructure

Good road links to Dar es Salaam,

Tanzania and Mombasa, Kenya

Product

High Grade Rare Earth Minerals

Concentrate (47-67% TREO)

Production Rate

350 tonnes exported in Q1 FY19


RARE EARTHS

21

GAKARA IS ONE OF THE ONLY FEW RARE EARTH PRODUCERS OUTSIDE OF CHINA

Rare

Eart

h p

rod

ucti

on

–2017

► China remains the global leader in the production

of both mined rare earth products and refined

rare earth compounds, with Chinese production

accounting for 86% of global refined production in

2017 (source: Roskill)

► China has made strides to crackdown in illegal

mining, which is estimated to make up 1/3 of the

global supply

► Lynas Corp is the only significant non-

Chinese supplier of rare earths

► China dominates supply and large part of

demand, but global demand is also growing and

seeking non-Chinese sources of supply

Source: Roskill 2018

Glo

bal R

are

Eart

h P

rod

ucti

on

2008-1

6

Source: Argus Media

China-basedproduction

Non-Chineseproduction

86%


THE “TECHNOLOGY METALS”

22

ND & PR REPRESENT THE MOST SIGNIFICANT ELEMENTS IN THE LANTHANIDE GROUP BY VALUE

Electric vehicles: Forecast demand growth for NdPr is

primarily driven by the anticipated

uptake of EVs as well as growth in all

electric motor usage

Smart phones :Neodymium gives your phone the

power to vibrate. 2.87 billion

smartphone users worldwide

predicted by 2020

Wind turbines:

NdFeB magnets have allowed wind

turbines to reduce costs and

increase efficiencies

Magnet Rare Earths are critical in these key booming markets amongst others

An

nu

al

Glo

bal L

igh

t D

uty

Veh

icle

Sale

s

Source: Bloomberg New Energy Finance

Millio

n c

ars

pe

r ye

ar ► Global sales of Electric Vehicles (EV) increased

63% yoy in 2017, and are expected to continue to climb

► By 2040 it is estimated that 34% of the cars on the road will be EVs – 530 million in total and 54% of all new cars sold will be electric (Source:

BNEF)


BOARD

23

• Mining engineer: an entrepreneur whose expertise lies in the discovery, exploration and

development of natural resources across Africa including diamonds, precious/base metals, coal and

oil and gas.

• Founder and Chairman of Petra Diamonds (LSE:PDL); Founder and Director of Chariot Oil & Gas

(AIM:CHAR) and Founder of Pella Resources Limited

• 15 years’ broking and investment banking expertise specialising in the resources sector

• Previously Managing Director at RBC Capital Markets in London. Was long-term adviser to

numerous London-listed resource companies

• Qualified Chartered Accountant

• International affairs specialist

• Over 25 years of political and extractive industries sector experience having served in The White

House as Director for African Affairs on the National Security Council (Washington)

• Previously Political Affairs Director of BP (London) and VP of TNK-BP (Moscow)

• Chartered Accountant with over 38 years’ experience in finance & accountancy

• Managing Director of Artemis Trustees Limited

• Fellow of the Institute of Chartered Accountants in England and Wales

Adonis PouroulisNon-Executive

Chairman

Martin EalesCEO

Shawn

McCormickNon-Executive Director

Robert SinclairNon-Executive Director

A BLEND OF CORPORATE, AFRICAN, RARE EARTH & PROJECT DEVELOPMENT EXPERIENCE

• Investment banker with 13 years’ experience and previous director roles at Deutsche Bank and RBS

• Co-founder of Telemark Capital LLP

• Significant market experience: IPOs and primary and secondary equity offerings

Alexander LowrieNon-Executive Director

Atul BaliNon-Executive Director • Corporate CEO with extensive experience in tech, government contracting and regulated industries

• Currently Chairman of Meridian Gaming

• Previously held divisional CEO or President positions with IGT (NYSE), Aristocrat (ASX), and Real

Networks (NASDAQ), as well as a venture capital firm


RARE EARTH ELEMENTS AND THEIR USES

24

APPLICATION RARE EARTHS DEMAND DRIVERS

MagnetsNd, Pr, Sm, Tb,

Dy

Automotive, Wind turbines, Drives for computers, mobile

phones, mp3 players, cameras, Voice coil motors.

Hybrid and Electric vehicles, Cordless power tools,

Sensors, Medical imaging (MRIs)

LaNiH

BatteriesLa, Ce, Pr, Nd

Hybrid vehicle batteries. Hydrogen absorption alloys for

re-chargeable batteries

PhosphorsEu, Y, Tb, La, Dy, Ce,

Pr, Gd

LCDs, PDPs, LEDs. Energy efficient

fluorescent lights/lamps

Fluid

Cracking

Catalysts

La, Ce, Pr, NdPetroleum production – greater consumption by ‘heavy’

oils and tar sands

Polishing

PowdersCe, La, Nd

Mechano-chemical polishing powders for TVs, monitors,

tablets, mirrors and (in nano-particulate form) silicon

chips

Auto

CatalystsCe, La, Nd

Tighter NOx and SO2 standards – platinum is re-cycled,

but for rare

earths it is not economic

Glass

AdditiveCe, La, Nd, Er

Cerium cuts down transmission of UV light. La increases

glass refractive

index for digital camera lens

Fibre Optics Er, Y, Tb, Eu Signal amplification

Scandium (Sc) Europium (Eu)

Yttrium (Y) Gadolinium (Gd)

Lanthanum (La) Terbium (Tb)

Cerium (Ce) Dysprosium (Dy)

Praseodymium (Pr) Holmium (Ho)

Neodymium (Nd) Erbium (Er)

Promethium (Pm) Thulium (Tm)

Samarium (Sm) Ytterbium (Yb)

Lutetium (Lu)


ELECTRIC VEHICLE REVOLUTION

► Market currently driven by increasing demand for powerfulmagnets used in electric motors and generators – rare earthmagnets are the strongest and lightest

► Governments of UK, India, Germany, France, Norway andChina have announced plans to ban petrol and diesel cars inthe future

► All new models from Volvo will be electric or hybrid from 2019

► General Motors committed to all electric, zero emissions fleet with plans to release 20 electric cars by 2023

► Volkswagen unveiled plans to invest a colossal €34 billion into EVs, over the next five years, and make electric versions of all 300 models, in the group’s 12-brand line up

► With the global shift to EVs lithium-ion battery demand will grow to 1,300 GWh in 2030 from 21GWh in 2016 (Source: BNEF)

25

2017 MARKED LANDMARK COMMITMENTS FROM AUTOMAKERS AND ACCELERATED ADOPTION OF EVs

Annual Global Light Duty Vehicle Sales

Source: Bloomberg New Energy Finance

Millio

n c

ars

on

th

e r

oa

d

Tesla introducing NdPr permanent magnet motor

(Model 3)

ONE OF THE WORLD’S RICHEST PRODUCING RARE EARTH...

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