RareX Partnership with Iluka Resources: Boosting Australian Rare Earths

Strategic Partnership Creates Powerful Rare Earth Consortium

RareX and Iluka Resources have formed a consortium to apply for the Mrima Hill rare earth-niobium-phosphate-manganese project in Kenya, submitting a formal application to Kenya's National Mining Corporation (NAMICO).

If successful, the consortium will establish a Special Purpose Vehicle (SPV) with Iluka holding a 25% stake, while RareX will maintain at least a 20% economic interest throughout the Prospecting Licence phase until a Mining Licence is granted. RareX will fund all consortium costs until the Mining Licence stage.

The partnership leverages each company's strengths:

• RareX: Will lead project development, focusing on community engagement, environmental protection, and technical derisking
• Iluka: Provides offtake agreement for rare earths with potential processing at its Eneabba refinery in Western Australia

"We are delighted to welcome Iluka as a strategic partner for the application and potential development of the Mrima Project," said James Durrant, RareX's Managing Director. "Their commitment, through a 25% ownership in the Special Purpose Vehicle, reflects the significant potential of this world-class deposit."

Mrima Hill: A World-Class Rare Earth Asset in Strategic Location

Mrima Hill represents a globally significant rare earth opportunity with multiple advantages:

• Location: Less than 100km from Mombasa in Kwale County, Kenya
• Logistics: Just 15km from the Indian Ocean coast
• Infrastructure: Adjacent to sealed highway infrastructure
• Power: Close proximity to geothermal power grids
• Revenue: Multiple potential revenue streams (rare earths, phosphate, niobium, manganese)

The project's strategic location creates a natural logistics corridor to Iluka's Eneabba rare earth refinery in Western Australia, which is currently under construction with the support of an AU$1.65 billion Australian federal government non-recourse loan.

Understanding Carbonatite Deposits: RareX's Expertise

What are carbonatite deposits and why are they important?

Carbonatite deposits are igneous rocks containing more than 50% carbonate minerals and are among the world's most important sources of rare earth elements (REEs). RareX's expertise with carbonatite deposits comes from its flagship Cummins Range project in Australia, which shares geological similarities with Mrima Hill.

Carbonatites typically have:

• Higher concentrations of rare earths compared to other deposit types
• Better distribution of valuable heavy rare earths
• Relatively simple metallurgy compared to clay-hosted deposits
• More consistent mineralization making them easier to mine

RareX's experience with Cummins Range positions the company to efficiently evaluate and develop Mrima Hill, applying direct learnings from one carbonatite project to another.

Multi-Phase Development Strategy with International Support

If the consortium's application is successful, RareX will implement a structured development approach:

1. Initial Focus: Community engagement and environmental assessments to secure social license
2. Technical Development: Resource definition and engineering studies
3. Local Capacity Building: Partnership with Curtin University to transfer skills to Kenyan workers
4. Value Chain Development:
   • Rare earths processed at Iluka's Eneabba facility
   • Build local value chains for manganese, phosphate, and niobium to support Kenya's domestic industries

The proposal has garnered support from technical and financial partners, indicating strong industry confidence in the project's potential.

Investment Opportunity: Creating an Allied Nations Critical Minerals Supply Chain

The RareX partnership with Iluka Resources represents more than just a mining project—it potentially creates a secure, allied-nation supply chain for critical minerals spanning Australia and Kenya.

Key investment considerations include:

"If successful, the Project could become part of a unique and independent mine to rare earth metal solution, backed by allied governments, and could contribute to deeper diplomatic relations between two Commonwealth countries," notes Durrant.

The Kenya Connection: Strategic Benefits

Kenya presents several strategic advantages for the Mrima Hill project:

• Renewable Energy: 85% of Kenya's power grid is supplied by renewable sources, primarily geothermal energy
• International Relations: Kenya is a Commonwealth nation and has been designated as a major non-NATO U.S. ally
• Industrial Synergy: The country has an active steel sector that could benefit from manganese production
• Agricultural Needs: Kenya currently imports 100% of its phosphate fertilisers, creating a domestic market opportunity

The RareX partnership with Iluka Resources could potentially strengthen trade and diplomatic connections between Kenya and Australia, both members of the Commonwealth of Nations and the Indian Ocean Rim Association.

Key Terms of the Consortium Agreement

The consortium arrangement includes several important provisions:

• Formation of a 75-25% RareX-Iluka SPV if the project proposal is accepted
• RareX will bear all costs until a Mining License is granted
• Iluka has the option to maintain its 25% stake with a USD$10 million payment once a Mining Licence is granted
• Binding offtake term sheet for conversion to a long-form agreement
• Offtake on a right of first refusal basis for rare earth and mineral sands products
• 10% price discount performance bonus for Iluka in return for technical support
• Allows separate development and sale of niobium, phosphate and manganese products

Why Investors Should Follow RareX

RareX presents a compelling investment case for those seeking exposure to the critical minerals sector:

• Strategic Portfolio: Beyond Mrima Hill, RareX controls Australia's largest undeveloped rare earths project (Cummins Range, +$330M NPV8 post-tax)
• Diversified Asset Base: Portfolio includes the Khaleesi Project (district-scale niobium potential), Mt Mansbridge (heavy rare earths), and other carbonatite-related prospects
• Strong Partnerships: The RareX partnership with Iluka Resources demonstrates ability to form strategic relationships with major industry players
• Integrated Business Model: Focuses on both exploration (new discoveries) and development (advancing existing assets)
• Global Relevance: Projects directly address critical mineral supply chains essential for the energy transition

The consortium for Mrima Hill represents a potential step-change in the company's development trajectory, creating an opportunity to establish a significant position in the global rare earths market through a project with exceptional logistics and strategic advantages.

Cautionary Note

At present, there are no guarantees that the consortium's application for the Mrima Hill Project will be accepted and that the consortium will be invited to negotiate with NAMICO and the State Department for Mining the terms on which the proposed Prospecting Licence will be granted. The grant of the Prospecting Licence remains subject to discretion of NAMICO and the Cabinet Secretary.

Key Takeaway

RareX has positioned itself as a potential key player in the global rare earths sector through its partnership with Iluka Resources to develop the Mrima Hill project in Kenya. With a strategic location, multiple commodity streams, and integration with Iluka's government-backed processing facility, the project could become a cornerstone of an allied-nations critical minerals supply chain. Investors should apply timeless investing rules when evaluating this opportunity and monitor the consortium's application progress as a potential catalyst for significant company growth. Furthermore, those interested in the sector would benefit from understanding mining investments and how JORC code compliance will factor into future resource announcements.

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