Ionic Rare Earths' Makuutu Project Offers Unique Magnet and Heavy Rare Earths Supply Outside China

• Ionic Rare Earths has submitted its mining license application for the Makuutu Rare Earth Project and is working diligently with the Ugandan delegation to expedite the process.
• The Makuutu Rare Earth Project is unique for its production of both magnet and heavy rare earths, crucial for Western governments and alternative supply chains, offering an alternative to China.
• Ionic Rare Earths is actively engaging with Uganda as a mining destination, helping to develop a robust and transparent system and collaborating on the project's development.
• The company is focused on the supply chain, including the development of a demonstration plant in Uganda and recycling efforts in Northern Ireland, aiming to secure partnerships with manufacturers and EV partners in Europe, the US, Japan, Korea, and other regions.

About Ionic Rare Earths

Ionic Rare Earths Limited (ASX: IXR) is an Australian company focused on becoming a fully integrated miner, refiner, and recycler of rare earth elements needed for renewable energy technologies. Its flagship asset is the Makuutu Rare Earths Project in Uganda, which is nearing operational status with the recent completion of a positive Definitive Feasibility Study on the first stage of development. Makuutu is expected to have a 35-year initial mine life producing rare earth concentrates. Recent submissions of key permitting documents to the Ugandan government delegation at the Africa Down Under conference signal Ionic is on track to develop Makuutu into a globally significant rare earths mine.

IonicRE also owns Ionic Technologies in the UK, which has developed proprietary processes to extract and purify rare earths from mining concentrates and recycled magnets. This technology provides IonicRE capabilities across the full rare earths value chain from mining to recycling to refining. In June 2023, Ionic Technologies announced initial production from its Demonstration Plant, which validates its process for recovering high purity rare earth oxides from recycling.

IonicRE's strategy is to leverage its integrated operations in mining, recycling, and refining to become a leading supplier of sustainable and traceable rare earths critical to electric vehicle motors, wind turbines, electronics and defense applications. The company aims to support the transition to renewable energy while adhering to principles of responsible and ethical business.

The Makuutu Advantage: Critical Magnet and Heavy Rare Earths

In an interview at Africa Down Under 2023, Ionic managing director Tim Harrison outlined several advantages of the Makuutu deposit that make it a highly attractive supply source of critical rare earth elements (REEs) needed for clean energy technologies and advanced manufacturing.

As an ionic adsorption clay deposit, Makuutu contains both magnet rare earths like neodymium and praseodymium and heavy rare earths such as dysprosium and terbium. These REEs are essential for producing the powerful permanent magnets required in electric vehicles, wind turbines, robotics and other high-tech applications.

Additionally, Makuutu's advanced ionic clays produce REEs that are not committed to China. This makes the project stand out as a crucial potential source of rare earths supply outside China, which currently dominates global REE processing and magnet manufacturing. There is surging demand from Western governments and manufacturers for alternative supply chains.

Fast-Track Development Underway in Uganda

Ionic is collaborating closely with the Ugandan government to fast-track permitting and development of the Makuutu Rare Earths Project. At Africa Down Under, Harrison noted Ionic is helping Uganda implement robust and transparent mining systems. The company sees Uganda as an emerging regional mining hub and wants to be a key partner in the country's development.

A demonstration plant is now under construction at the Makuutu site to produce rare earth samples for supply chain partners and derisk the project. Ionic aims to quickly advance Makuutu to an investment decision based on confirmed offtake agreements rather than follow the traditional mine development model.

According to Harrison, Ionic is already in discussions with potential customers in Europe, the United States, Japan and South Korea keen to secure reliable rare earths supply from Makuutu. The project is being watched closely by governments seeking to localize rare earths supply chains.

Integrated Mine-to-Magnet Strategy

In addition to its core focus on the flagship Makuutu mine development, Ionic is also executing an integrated mine-to-magnet strategy.

The company's Northern Ireland recycling facility, Ionic Rare Earths Technologies, is producing high purity rare earth oxides from end-of-life magnets and other secondary sources. These recycled oxides can then be supplied to Ionic's emerging network of separation partners, metal alloy producers and magnet manufacturers.

This secondary supply source complements Ionic's near-term production from Makuutu. Having an integrated supply chain spanning mining, recycling, processing and metal alloying is positioning Ionic as a full-service provider of rare earths for magnet making.

Next Steps: Scaling Up for Demand Surge

With permitting progressing in Uganda and its Northern Ireland recycling facility ramping up, Ionic Rare Earths is poised to scale up its operations to meet accelerating demand for magnet metals.

Strong interest from automakers, wind turbine manufacturers and other end-users will drive further project development. Ionic's demonstration plant will generate samples to finalize offtake agreements in 2023. Subject to permitting and project financing, Ionic aims to commission the full-scale Makuutu mine in 2025 to feed 20,000 tonnes per year of rare earth oxides into its downstream customer base. The company may also look to expand production above this level to supply additional separation capacity through partners.

With its unique mine and recycle supply strategy, Ionic Rare Earths has positioned itself at the forefront of building diversified rare earths supply chains for the global energy transition. Both the Makuutu mine and Northern Ireland recycling facility will provide critical magnet rare earths to support electrification and high-tech manufacturing.

Investment Thesis

Compelling project economics: The Makuutu project has potential for strong profit margins given its high rare earth grades and low costs. As an ionic clay deposit, Makuutu has among the lowest capital and operating costs globally. This gives it an edge over hard rock projects.

Strategic assets: Makuutu provides exposure to critical magnet metals needed for clean energy and technology. Supply is constrained, so assets like Makuutu with near-term production potential are scarce. The Northern Ireland recycling facility also provides a strategic secondary source of rare earths.

Favorable demand outlook: Demand for rare earth magnets is projected to grow rapidly with surging uptake of electric vehicles, offshore wind power, robotics and other high-tech applications. Makuutu is well-timed to capitalize on this growth.

Reduced geo-political risks: Developing Makuutu in partnership with Uganda can help ensure reliable supply and avoid potential restrictions faced by projects in certain jurisdictions. Ionic's secondary supply from recycling also mitigates geo-political risks.

Strong industry support: Governments in Europe, the US, Japan and beyond are incentivized to back projects like Makuutu to localize rare earth supply chains. This can lower project risks.

Proven management: Ionic's experienced leadership team has a track record of successfully developing and operating rare earth projects around the world.

For investors seeking exposure to critical energy transition metals underpinned by solid demand growth, Ionic Rare Earth's high-quality assets, integrated strategy and strong industry/government support make it an attractive investment opportunity.