Ionic Rare Earths Advancing Downstream Strategy and Recycling Business Alongside Upstream Mine Development

• Ionic Rare Earths is developing a rare earth project in Uganda and a magnet recycling business in the UK. They are looking to be part of the rare earth supply chain.
• There is growing interest and momentum in the rare earths industry, with more companies and countries looking to get involved. However, financing projects remains challenging.
• Ionic's project in Uganda has a positive pre-feasibility study with a capital cost of $120 million USD and strong economics like a 32-33% IRR. It's a starting point that can be expanded.
• Ionic is focused on producing material that can go into a Western supply chain in the near-term, though also has long-term aspirations for US capacity.
• A demonstration plant in Uganda, starting H2 2023, will produce material samples and data to aid planning expansion and supply chain engagement.

About Ionic Rare Earths

Ionic Rare Earths is a mining company focused on the development of rare earth projects, including an ionic adsorption clay deposit in Uganda, a downstream strategy, and a recycling business in the UK. The company is led by Managing Director Tim Harrison and is listed on the ASX.

Ionic Rare Earths Limited is developing its flagship Makuutu Rare Earths Project in Uganda into a major global supplier of critical and heavy rare earths. Makuutu boasts near-surface rare earth mineralization amenable to simple and low-cost processing. The project's ionic clay geology resembles major Chinese deposits responsible for heavy rare earth supply. Excellent recoveries demonstrated in metallurgical testing provide flexibility in process design. With its advanced stage, exploration upside, and access to infrastructure like roads and power, Makuutu is poised to deliver sustainable production.

Rare earths are essential for clean energy technologies like wind turbines and electric vehicles. Makuutu can supply the magnet metals needed for the transition to renewables. Led by an accomplished team, Ionic Rare Earths is positioned to unlock Makuutu's value for stakeholders as a strategic source of rare earths.

Interview with Tim Harrison, Managing Director of Ionic Rare Earths Ltd

Upstream Mine Development in Uganda

Ionic Rare Earths' flagship project is the Makuutu Rare Earths project located in Uganda. Makuutu hosts a large ionic clay hosted rare earth deposit, with a mineral resource of 78 million tonnes at 840ppm total rare earth oxide for 650,000 tonnes contained TREO.

The company recently completed a definitive feasibility study on an initial development at Makuutu, which contemplates a starter operation producing over 3,000 tonnes per annum rare earth oxides. The DFS demonstrates robust economics including an NPV of over $400 million and IRR of 32-33%.

Importantly, Makuutu's starter operation requires low capital of only $120 million to develop and has short timelines to production targeted for early 2025. Permitting is progressing well, with submission of a mining licence application and expectations that regulations will soon be finalized in Uganda.

The starter operation will utilize just a fraction of Makuutu's large resource base, providing significant upside to grow production over time. Ionic is also conducting additional exploration at Makuutu to expand the resource and production potential further.

Downstream Rare Earth Processing Strategy

A key part of Ionic's strategy is to integrate downstream into rare earth processing to produce separated rare earth oxides and potentially metals, alloys and magnets. This will allow the company to capture additional margin, better control its product quality, and develop long-term customer partnerships.

Ionic has established a downstream rare earth demonstration facility in the UK, which is producing small quantities of separated rare earth oxides. This provides product samples for customer testing and qualification and will demonstrate the company's capabilities.

Discussions are already underway with potential customers in Europe, Japan, Korea and the USA who require ex-China supply of rare earth materials. Ionic aims to align its upstream mine development plans with the growth ambitions of strategic downstream partners.

UK Recycling Business

In addition to its upstream mine and downstream processing, Ionic has established a rare earth magnet recycling business in the UK. This provides exposure to the large and growing magnet recycling market, complementing Ionic's primary supply from its mining assets.

The recycling business is strategically located, providing logistical advantages and proximity to European customers. It also benefits from UK government support as part of initiatives to onshore critical raw material supply chains.

Industry Momentum Building

The rare earths market is seeing a resurgence, with over 250 delegates attending a recent industry conference. Various industry participants are looking to collaborate to rebuild Western supply chains and reduce reliance on China.

However, funding and financing these projects remains challenging with capital tightly constrained. Ionic is well positioned having already secured UK government grant funding and located in Northern Ireland, providing access to UK, EU and potential US funding sources.

While fragmentation remains across the rare earths industry, Ionic is focused on aligning itself with credible partners that have the technical capabilities required to re-establish complete supply chains. Consolidation is expected as Western capacity comes online.

Conclusion

With progress on its mine development, downstream integration, and recycling business, Ionic Rare Earths is executing on its strategy to build a vertically integrated rare earths company.

The near-term production potential at Makuutu provides a clear pathway to cashflow in a rising price environment. Meanwhile the company's downstream and recycling plans provide investors with additional leverage to growing magnet and electric vehicle demand.

After the recent share price weakness, IXIRare Earths provides exposure to the rare earths upside at an attractive entry point. With multiple value catalysts expected over the next 6-12 months, the company is positioned to re-rate as it transitions to producer status.