ONE OF THE WORLD’S RICHEST PRODUCING RARE EARTH …

ANNUAL RESULTS 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 23 (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

purpose. Argus shall not be liable for any loss or damage arising from any party’s reliance on the extract above and disclaims any and

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

1


ANNUAL RESULTS TO 30 JUNE 2018

2

HIGHLIGHTS DURING THE YEAR

Gakara mine brought into

production on schedule with first production and export of

rare earth concentrate in

December 2017

575 tonnes of rare earth

concentrate at an average

TREO of 58% exported and 475t sold at

gross price of US$2,263/t by 30 June 2018

Successful financing –US$3.75

million raised in December

2017, and further US$2.0 million raised

in August 2018

Co-operation agreement for downstream processing Definitive Feasibility

Study signed with TechMet

in August 2018

1 million LTI-free hours

surpassed in June 2018

Drilling underway at

Kiyenzi where JORC

Resource is targeted for

Q4 2018


YE 30 JUNE 2018 – SUMMARY P&L AND BALANCE SHEET

3

US$’000 30 June 2018 30 June 2017

Operating expenses (2,753) (1,431)

Net finance income 238 29

Total loss in period (2,515) (1,402)

US$’000 30 June 2018 30 June 2017

Non-current assets 11,249 5,973

Cash 354 3,198

Other current assets 950 22

Borrowings (760) (20)

Other payables (1,415) (429)

Net assets 10,378 8,744

INCOME STATEMENT

BALANCE SHEET

▶ Production costs were US$1.3m, however were offset by net revenues of US$1.0m. The balance of US$0.3m was capitalised as part of the Gakara project capex, as commercial production was not met until July 2018

▶ Operating expenses therefore consist primarily of US$2.0m administrative expenses and US$0.7m share based payments

▶ Net finance income included fx gains on Burundi Franc liabilities in the year

▶ Fixed assets represent the Gakara mine and processing plant, constructed and brought into production in the year

▶ Other current assets includes US$0.3m of stockpiled ore, US$0.5m of sales proceeds received post year end

▶ Borrowings represent a Burundian Franc overdraft with Finbank

▶ Other payables includes trade payables and accruals at year end


YE 30 JUNE 2018 – SUMMARY CASHFLOW

4

US$’000 30 June

2018

30 June

2017

Net cash used in operating activities (1,837) (844)

Exploration spend - (769)

Capex (5,231) (1,363)

Repayment of Pala loan - (1,700)

Other borrowings 669 250

Net proceeds of equity raising 3,536 7,410

FX on cash balances 19 144

Net cashflow after FX (2,844) 3,128

Opening cash 3,198 70

Closing cash 354 3,198

CASHFLOW STATEMENT

▶ Net cash used in operating activities includes the net impact of operating costs and working capital (including the stockpile)

▶ Capex of US$5.2m related to the construction of the Gasagwe mine and Kabezi plant completed in the year – plus brownfields exploration costs

▶ Other borrowings reflect the drawdown of the Finbank overdrafts

▶ US$3.5m equity placing proceeds were received in Dec 2017

▶ Closing cash balance of US$0.4m v US$3.2m in June 2017

▶ A further equity placing was completed post year end in August 2018, for gross proceeds of US$2.0m


WHAT IS RAINBOW RARE EARTHS?

5

AN INDEPENDENT SUPPLIER OF HIGH-GRADE CONCENTRATE TO THE GLOBAL RARE EARTH MARKET

USPs

the highest grade rare earths

mine globally

90% owner of Gakara:

in Africa(one of a handful

outside of China)

Gakara is the only producing rare earths mine

(47 - 67% TREO)

containing both Nd and Pr

High value basket

(magnet rare earths)

which are driving

demand

with multinational

thyssenkrupp

Materials Trading

10yr offtake agreement


2018 – PLANNED DEVELOPMENT

PRODUCTION RAMP UP AND NEWSFLOW FROM EXPLORATION

2018 target of 5,000tpa year end run rate and delivery of code compliant Resource

JUNE 2018

Completion of Phase 1 drilling

and Kiyenzilaboratory results

JULY 2018

Q2 production results and

commencement of Phase 2 drilling

APRIL 2018

Q1 production results and Phase 1 drilling update

Q4 2018

Targeted delivery of code compliant

Resource

OCTOBER 2018

Q3 production results

Q4 2018

Opening of new mining area –

Murambi

6


FUNDAMENTAL GROWTH AND VALUE STRATEGY

7

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▶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

8


GASAGWE & MURAMBI MINING AREAS

9

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

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

▶ Final permitting, approvals and land compensation in process

▶ First production expected in Q4 2018

MURAMBI

Gakara Mining Licence perimeter, mining areas and RE discoveries


ARIEL VIEW OF MURAMBI MINING AREA

10


KABEZI PROCESSING PLANT

11

A SIMPLE EFFICIENT GRAVITY SEPARATION PROCESSING FACILITY

Fully operational

– commissioning

completed Q1

2018

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%

12

RAINBOW’S PLANT FULLY COMMISSIONED AND HANDED OVER Q1 2018

Concentrate in production Final Concentrate Concentrate loaded and ready for export


RAINBOW – SALES AND MARKETING

13

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

Sep

20

18

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. First tonnes

successfully delivered to end customers.

► Bulk of Rainbow sales revenue received from

TK upon transfer of title at Mombasa port.

► Current basket price US$11.76/kg (as at

13/09/18)

Rainbow Basket Price 2018

10.00

11.00

12.00

13.00

14.00

15.00

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

US$/kg


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

▶ Alongside the Cooperation Agreement TechMet invested

US$500,000 into Rainbow

▶ 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

14

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. 15

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

16

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 began Aug 2018 and nears completion - will form key part of

code-compliant resource expected to be delivered in Q4 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

17

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 (US$ millions) Market Cap vs. Project Capex

Current Market Cap as % of equity invested

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 12/09/18• 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

18

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

Production target

of 6,000tpa by

the end of 2019


KEY STRENGTHS

19

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


KEY DATA

20

TICKER MARKET MARKET CAP SHARE PRICESHARES

IN ISSUEBROKERS

RBW.L LSE £21.39m 12.25p 187.1m ARDEN PARTNERS

SHARE PRICE GRAPH

As at 17.09.18

SIGNIFICANT SHAREHOLDERS

SHAREHOLDER HOLDING

Adonis Pouroulis 25.46%

Other Board &

Management12.91%

Miton Asset

Management5.16%

Rainbow’s IPO Price

5

7.5

10

12.5

15

17.5

20

22.5

25


CONTACT

Martin Eales

Rainbow Rare Earths

29 Lincoln’s Inn Fields

London, WC2A 3EG

[email protected]

T +44 (0) 20 3910 4550

21Rainbow Rare Earths Ltd.


GAKARA PROJECT OVERVIEW

22

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 is focus for Phase 2 drilling

and 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

Targeting run rate of c. 5,000tpa by the

end of 2018 and c. 6,000tpa in 2019


RARE EARTHS

23

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

Rare

eart

h p

rod

ucti

on

–2016

► Global rare earth production in 2016 was

estimated at 160,000-170,000 metric tonnes,

with 93% of it produced in China (source: Argus)

► With 6,000t p/a run rate target during 2019

Rainbow has the potential to make Burundi the

third largest producer of rare earths, after China

and Australia

► 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: Argus Media Group – 2017

Glo

bal R

are

Eart

h P

rod

ucti

on

2008-1

6

Source: Argus Media

China-basedproduction

Non-Chineseproduction


THE “TECHNOLOGY METALS”

24

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

25

• 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 Non-Executive Director of Gaming Realms Plc and 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

26

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)

27

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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