Rainbow Rare Earths - MOU signed with The Mosaic Company in Brazil

17 July 2023

Rainbow Rare Earths Limited

("Rainbow" or "the Company")

LSE: RBW

MOU signed with The Mosaic Company in Brazil

Rainbow Rare Earths is pleased to announce that it has entered into a memorandum of understanding ("MOU") with The Mosaic Company ("Mosaic"), the  world's leading integrated producer of concentrated phosphate and potash, to jointly develop a process flowsheet and conduct a preliminary economic assessment related to the extraction of rare earth elements from Mosaic's phosphogypsum stack in the Uberaba area of Minas Gerais in Brazil.

Highlights

·    Uberaba phosphate slurry feed is sourced from a hard rock carbonatite similar to the Foskor carbonatite that originally fed Sasol's phosphoric acid plant at Phalaborwa

·    Rainbow expects the Uberaba stack to have a similar grade and rare earth element make-up as those at Phalaborwa due to the similarities of the feedstock

·    Rainbow plans to develop a process flowsheet in conjunction with Mosaic which will incorporate the proprietary technology developed at Phalaborwa in order to extract the rare earth elements

·    Rainbow and Mosaic will collaborate on the production of a preliminary economic assessment of this opportunity

The Uberaba phosphogypsum stack contains valuable rare earth elements that occur as by-products of phosphoric acid production. The Uberaba phosphogypsum material is similar to Rainbow's Phalaborwa project in South Africa in that it is based on a hardrock carbonatite phosphate deposit, which is mined to initially produce a phosphate slurry feed that is then processed into phosphoric acid. While the hardrock carbonatite does not contain rare earths in sufficient quantities to be mined for these elements alone, the plant processes it undergoes serve to concentrate the quantity of rare earths contained therein, resulting in higher concentrations of rare earths than are in the original hardrock.

This process also subjects the material to sulphuric acid and heat, which effectively lead to 'cracked' chemical phosphogypsum material at Phalaborwa and which is expected to have achieved the same at the Uberaba stack. The benefit of this is that it can render the rare earths associated with the phosphogypsum amenable to direct acid leaching, which allows for a simpler hydrometallurgical process to produce separated and purified rare earth oxides.

Early indications are that the Uberaba phosphogypsum stack has a grade similar to that of the stacks at Phalaborwa and contains a similar makeup of rare earth elements. Samples from the stacks have been taken and are currently undergoing testing by SGS Laboratories in Toronto.

Under the terms of the MOU, Rainbow and Mosaic will look to jointly develop a process flowsheet to extract the rare earth elements from the Uberaba stack. Due to the similarity of the Phalaborwa and Uberaba projects, Rainbow anticipates that the majority of the Phalaborwa front end process flowsheet (jointly developed by Rainbow and K-Technologies, Inc. ("K-Tech") to deliver a mixed rare earth sulphate) will be applicable, as well as the Phalaborwa back-end process flowsheet (the patented K-Tech intellectual property ("IP") which uses continuous ion exchange and continuous ion chromatography to deliver separated rare earth oxides). Rainbow has the exclusive rights to use the K-Tech back-end IP for Brazil.

Following the production of the process flowsheet, Rainbow and Mosaic will collaborate on the production of a preliminary economic assessment of this opportunity to extract rare earths.

George Bennett, CEO of Rainbow, commented: "This agreement with Mosaic represents a major opportunity for Rainbow to apply the proprietary extraction technology developed in conjunction with K-Tech to become a multi-asset producer of rare earth elements from secondary sources. The geographic diversification of our portfolio further de-risks Rainbow as one of the only rare earth development companies with multiple near-term production opportunities and aligns with our aim 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."

Corrine Ricard, Senior Vice President of Mosaic, commented: "Innovation and sustainability are critically important to Mosaic and that's why we are enthusiastic about the opportunity to work with Rainbow to explore the extraction of rare earth oxides from our gypsum stack. We've made considerable strides over the years in advancing gypsum reuse - and this work is a natural extension of that. As we execute our mission to help the world grow the food it needs, the opportunity to further harness shared value out of the coproducts we produce benefits Mosaic and its stakeholders."

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Notes to Editors:

About Mosaic:

The Mosaic Company is one of the world's leading producers and marketers of concentrated phosphate and potash crop nutrients. Mosaic is a single-source provider of phosphate and potash fertilizers and feed ingredients for the global agriculture industry. More information on the company is available at www.mosaicco.com.

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 magnet rare earth elements neodymium and praseodymium ("NdPr"), dysprosium and terbium.

The Phalaborwa Rare Earths Project, located in South Africa, comprises a total Mineral Resource Estimate of 30.4 Mt at 0.44% TREO contained within unconsolidated gypsum stacks derived from historic phosphate hard rock mining. High value NdPr oxide represents 29.0% of the total contained rare earth oxides, with economic Dysprosium and Terbium oxide credits enhancing the overall value of the rare earth basket in the stacks. Rainbow will use a proprietary separation technique developed by its partner K-Technologies, Inc. for the plant at Phalaborwa, which simplifies the process of producing separated rare earth oxides (versus traditional solvent extraction), leading to cost benefits, as well as being more environmentally friendly.

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 will commence 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 on the company is available at www.rainbowrareearths.com.