IN AFRICA March 2019 DISCLAIMER These Presentation Materials are - - PowerPoint PPT Presentation

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IN AFRICA March 2019 DISCLAIMER These Presentation Materials are - - PowerPoint PPT Presentation

THE ONLY RARE EARTHS MINE IN AFRICA March 2019 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


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March 2019

THE ONLY RARE EARTHS MINE IN AFRICA

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SLIDE 2

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.

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SLIDE 3

Rainbow Rare Earths Ltd.

STRONG FUNDAMENTALS

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THE FUNDAMENTALS OF THE GAKARA PROJECT REMAIN STRONG – FROM START UP IN LATE 2017 TO TARGETED BREAKEVEN IN LATE 2019

Grade

With veins averaging a TREO of 47-67%, Gakara is by far the highest-grade mine in the world

Potential world-class deposit

  • Maiden JORC Resource

announced Dec 2018

  • Over 12,000 tonnes high grade

Resources from just 3 of 28 prospects and over 1 million tonnes

  • f lower grade (2.2% TREO)

Resource at Kiyenzi

Environmentally sound

  • Demand growth for RE ‘green

technologies’ yet most sources of RE are environmentally damaging

  • Gakara uses no chemicals/reagents

and utilises local workforce

Asset in production

Only producing mine in Africa, one

  • f only two listed RE companies

that are producing commercially

  • utside China

RE demand set to increase

  • Demand for magnet REs (NdPr)

set to rise in response to increase in production of EVs

  • Limited production capacity in

market medium-term, particularly

  • utside China

Downstream separation planned with TechMet

Will significantly reduce discount to basket price and improve margins

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SLIDE 4

Rainbow Rare Earths Ltd.

WHY RARE EARTHS?

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

  • f 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

NdFeB demand NdPr market balance

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Source: Citic Securities via SMM Source: Citic Securities via SMM

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SLIDE 5

Rainbow Rare Earths Ltd.

GAKARA PROJECT OVERVIEW

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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 650t in six month period to 31 Dec 2018 Offtake Partner 10-year offtake agreement signed with thyssenKruup Materials Trading for 5ktpa of concentrate, and right of first refusal for additional 5ktpa JORC Resource JORC Resource outlined 12k high grade veins (TREO 55%), as well as 1.2m tonnes lower grade (TREO 2.2%) deposit at Kiyenzi Exploration upside High Grade – 25 additional targets identified Low Grade – more exploration work targeted for Kiyenzi and other areas 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 550 tonnes exported in H1 FY19

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SLIDE 6

Rainbow Rare Earths Ltd.

ACHIEVEMENTS SO FAR

5 KEY CHALLENGES HAVE BEEN SUCCESSFULLY ADDRESSED IN THE FIRST 18 MONTHS OF OPERATIONS

Develop 1st and 2nd mining areas

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

Expected H2 2019

JORC Resource

Announced Dec 2018

Open 2 new mining areas

ONGOING During 2019

Further increases to Resource base

ONGOING

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Rainbow Rare Earths Ltd.

THE GAKARA RARE EARTHS PROJECT

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Rainbow Rare Earths Ltd.

GASAGWE & MURAMBI MINING AREAS

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GASAGWE MURAMBI

Gakara Mining Licence perimeter, mining areas and RE discoveries

▶ Initial

mining area (commenced 2017) has contributed the bulk of ore tonnes to date and served to provide strong foundation for proof of concept

▶ Very high grade vein stockwork structure allows

tight control of tonnes to be processed

▶ Likely to cease later in 2019 as initially planned,

although new vein discoveries continually being made

▶ Vein structure very similar to Gasagwe ▶ Trenching suggests vein extension may be up to

200m, approximately twice the length at Gasagwe

▶ First tonnes delivered Q2 18-19, now increasing to

full production following construction of haul road and waste dump

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Rainbow Rare Earths Ltd.

GASAGWE & MURAMBI MINING AREAS

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SMALL MECHANICAL FLEET SUPPORTS MANUAL EXTRACTION OF HIGH GRADE VEINS

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Rainbow Rare Earths Ltd.

AERIAL VIEW OF MURAMBI MINING AREA

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Rainbow Rare Earths Ltd.

ADDITIONAL MINING AREAS FOR 2019

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NEW PITS PLANNED AT KIYENZI AND GOMVYI TO PROVIDE SCALE AND CONSISTENCY

Gakara Mining Licence perimeter, mining areas and RE discoveries KIYENZI GOMVYI

▶ Experience so far justifies expansion to multiple pit

strategy

▶ Greater scale of operations caters for inevitable

variability

  • f
  • re

tonnes from each site and therefore adds more consistency to production

▶ Exploration work already underway on Kiyenzi and

Gomvyi suggests that both areas can be mined

▶ Both new pits expected to be in operation in H2 of

calendar 2019, following necessary permitting and compensation process recently successfully undertaken for Murambi

▶ With multiple pits in operation the business is

expected to reach breakeven and profitability in the second half of 2019

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Rainbow Rare Earths Ltd.

FUNDAMENTAL GROWTH AND VALUE STRATEGY

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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 multiple mine areas in parallel ▶Optimise efficiency of operations ▶Increase production and sales to 250-300tpm

during 2019 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

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Rainbow Rare Earths Ltd.

OPERATIONS UPDATE: Q2 2018-2019

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BROADLY CONSISTENT PRODUCTION JUSTIFIES EXPANSION INTO NEW AREAS

Tonnes exported Tonnes sold

50 100 150 200 250 300 350 400

Q2 2017- 2018 Q3 2017- 2018 Q4 2017- 2018 Q1 2018- 2019 Q2 2018- 2019

50 100 150 200 250 300

Q2 2017- 2018 Q3 2017- 2018 Q4 2017- 2018 Q1 2018- 2019 Q2 2018- 2019

▶ 275t Concentrate exported and 300t sold –

broadly consistent with prior periods

▶ Marginal fall in grade and commodity prices

  • ver the quarter gave lower sales price per

tonne

▶ Strong

demand from customers justifies increase in producing areas

▶ Cash flow breakeven/profitability expected in

H2 calendar 2019

▶ Flexible equity funding agreement with Lind

Partners announced for up to US$7.75 million, allows investment for growth when required

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Rainbow Rare Earths Ltd.

KABEZI PROCESSING PLANT

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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 Sufficient throughput capacity for substantial production increases

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Rainbow Rare Earths Ltd.

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 56%

in H1 2018-19

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RAINBOW’S PLANT FULLY COMMISSIONED WITH CAPACITY FOR INCREASED THROUGHPUT

Concentrate in production Final Concentrate Concentrate loaded and ready for export

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Rainbow Rare Earths Ltd.

RAINBOW – SALES AND MARKETING

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ORE VALUE STRONGLY WEIGHTED TOWARDS MAGNET RARE EARTHS Value in Nd and Pr Basket composition

31% 48% 4% 15% 2% Lanthanum Cerium Praseodymium Neodymium Other

Based on average grades of REOs within Gasagwe in situ vein samples and market prices of separated REOs on China FOB basis as at Nov 2018 By REO Content

Rainbow Basket Price 2018 - 19

11 11.5 12 12.5 13 13.5 14 14.5 Jan 2018 Feb 2018 Mar 2018 Apr 2018 May 2018 Jun 2018 Jul 2018 Aug 2018 Sep 2018 Oct 2018 Nov 2018 Dec 2018 Jan 2019

▶ Based on Rainbow’s typical concentrate sales,

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

▶ Customer demand extremely strong ▶ Bulk of Rainbow sales revenue received from

TK upon transfer of title at Mombasa port

▶ Current basket price US$11.51/kg (as at

25/01/19)

US$/Kg

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Rainbow Rare Earths Ltd.

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

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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

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Rainbow Rare Earths Ltd.

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EXPLORATION SUCCESS

Maiden JORC Resource declared in December 2018 confirms potential world class deposit, with near term Resources from additional high grade veins that could be augmented by a substantial lower grade zone at Kiyenzi

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

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Rainbow Rare Earths Ltd.

MAIDEN JORC RESOURCE – DECEMBER 2018

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UP TO 2 YEARS’ HIGH GRADE FEEDSTOCK AND HUGE POTENTIAL AT KIYENZI

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

Deposit name Measure d (t) Indicated (t) Inferred (t) Total Ore (t) TREO Grade % Contained TREO (t) Gasagwe 153 273 570 996 58.7 585 Murambi South 972 2,917 4,480 8,369 54.8 4,586 Gomvyi Centre

  • 861

2,265 3,126 54.0 1,688 Total high grade deposits 1,125 4,051 7,315 12,491 54.9 6,859 Kiyenzi 58,671 297,274 837,033 1,192,978 2.2 26,570 Total 59,796 301,325 844,348 1,205,469 2.8 33,429

▶ Total Maiden JORC compliant Resource of over 1.2 million tonnes of ore covering a

small fraction of the Gakara Project

▶ Three areas (Gasagwe, Murambi South and Gomvyi Centre) are very high grade vein

stockwork deposits – totalling 12,491 tonnes of Total Mineral Resource at an average TREO grade of 55%

▶ Kiyenzi is a very large, lower grade mineralised deposit with nearly 1.2 million tonnes

Mineral Resource at an average grade of 2.2% TREO employing a cut-off of 1% TREO

▶ The Mineral Resource is based on only four out of the 28 mineralised prospects across

Rainbow’s existing Mining Licence – indicating significant further upside for future exploration

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Rainbow Rare Earths Ltd.

24 MONTH OBJECTIVES

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NEAR-TERM OPTIONS INTENDED TO DRIVE VALUE FOR SHAREHOLDERS FOLLOWING INITIAL SUCCESS

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

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Rainbow Rare Earths Ltd.

CONTACT

Martin Eales Rainbow Rare Earths

29 Lincoln’s Inn Fields London, WC2A 3EG info@rainbowrareearths.com T +44 (0) 20 3910 4550

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Rainbow Rare Earths Ltd.

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Rainbow Rare Earths Ltd.

KEY DATA

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TICKER MARKET MARKET CAP SHARE PRICE SHARES IN ISSUE BROKERS

RBW.L LSE £5.39m 2.9p 195.4m ARDEN PARTNERS As at 25.02.19

SHAREHOLDER HOLDING

Adonis Pouroulis 24.49% Shawn McCormick 4.38% Alexander Lowrie 2.54% Robert Sinclair 2.18% Martin Eales 1.20% Atul Bali 0.80% Cesare Morelli 0.64% Gilbert Midende 0.58% Jim Wynn 0.09% Total 38.37%

BOARD & MANAGEMENT SHARE PRICE

5 10 15 20 25 30

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Rainbow Rare Earths Ltd.

BOARD

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  • 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

  • il 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 Pouroulis

Non-Executive Chairman

Martin Eales

CEO

Shawn McCormick

Non-Executive Director

Robert Sinclair

Non-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 Lowrie

Non-Executive Director

Atul Bali

Non-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

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Rainbow Rare Earths Ltd.

RARE EARTH ELEMENTS AND THEIR USES

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APPLICATION RARE EARTHS DEMAND DRIVERS Magnets Nd, 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 Batteries La, Ce, Pr, Nd

Hybrid vehicle batteries. Hydrogen absorption alloys for re-chargeable batteries

Phosphors Eu, Y, Tb, La, Dy, Ce, Pr, Gd

LCDs, PDPs, LEDs. Energy efficient fluorescent lights/lamps

Fluid Cracking Catalysts La, Ce, Pr, Nd

Petroleum production – greater consumption by ‘heavy’

  • ils and tar sands

Polishing Powders Ce, La, Nd

Mechano-chemical polishing powders for TVs, monitors, tablets, mirrors and (in nano-particulate form) silicon chips

Auto Catalysts Ce, La, Nd

Tighter NOx and SO2 standards – platinum is re-cycled, but for rare earths it is not economic

Glass Additive Ce, 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)