Quarterly Report For The Period Ending 31 March 2023

Ionic Rare Earths Limited (“IonicRE” or “The Company”) (ASX: IXR) is pleased to provide its Quarterly Report for the period ending 31 March 2023. This report includes development activities at its now 60% owned Makuutu Rare Earths Project (“Makuutu” or “the Project”) in Uganda, announced after the quarter end and the Company’s 100% owned magnet recycling subsidiary in the UK, Ionic Technologies International Limited (“IonicTech”).

HIGHLIGHTS

MAKUUTU RARE EARTHS PROJECT

• IonicRE’s ownership moves to 60%;
  
• Makuutu Stage 1 Definitive Feasibility Study (DFS) finalised confirming technical and financial viability for an initial 35-Year mine life with first MREC production targeted for Q4 2024;
• Maiden Makuutu Ore Reserve Estimate announced over RL 1693 of 172.9 Mt at 848 ppm TREO, or 584 ppm TREO – CeO₂, and 30 ppm Sc₂O₃;
  
• Makuutu Stage 1 plant capacity is 5.0 million tonne per annum (tpa) Run of Mine (ROM) throughput, producing a value-added mixed rare earth carbonate (MREC) (including Scandium) product, via a modular heap desorption processing plant;

Makuutu Stage 1 DFS Financial Metrics

• Stage 1delivers an EBITDA of A$2.29 billion (US$1.60 billion¹)
  
• Stage 1 Post Tax Free Cash Flow total ~ A$1.46 billion (US$1.02 billion)
  
• Stage 1 Pre‐tax NPV8 of ~US$406 million (~A$580 million);
• Stage 1 Post‐tax NPV8 of ~US$278 million (~A$397 million);
  
• Stage 1 Capital Expenditure (“CAPEX”) of US$120.8 million;
• Stage 1 Post-tax IRR of ~32.7%;
  
• Stage 1 Post-tax capital payback of ~3 years from first MREC production;
• Renewal of Retention License, RL 00007, the next tenement that the Company will progress to MLA, was lodged and approved within two weeks by Uganda’s Directorate of Geological Survey and Mines (DGSM) – a clear indication of the Government’s strong support for Makuutu;
• Demonstration plant approvals received and construction commenced;

MAGNET RECYCLING TO PRODUCE RARE EARTH OXIDES (REOs)

• IonicTech magnet recycling demonstration plant progressing towards production of separated and refined magnet rare earth oxides (REOs) by the end of Q2 2023;
• Key appointments made in the UK to advance Ionic Technologies towards REO production via recycling and strengthen engagement with potential Europe and UK stakeholders; and

CORPORATE

• Engagement continues with governments, government bodies, and potential strategic partners interested in the unique appeal of the Makuutu basket of magnet and heavy rare earths to feed new emerging supply chains.

The next phase of work at Makuutu is to build the Demonstration Plant to further unlock value, firstly by proving the potential to achieve higher desorption heap stack heights to improve capital efficiency with a view to further increasing production capacity. Secondly, optimising desorption conditions to explore improved extractions and minimising the dissolution of impurities, to further optimise economics.”

The IonicTech team has made great progress through the first quarter of 2023, and with commissioning underway the Company is on track towards being a magnet REO producer by the middle of 2023. The magnet recycling demonstration plant, located at our facility in Belfast is on track, and adding more technical expertise and leadership to the overall program will greatly enhance the existing team as IonicRE look towards producing recycled magnet REOs by mid-2023.

Additionally, the capability added to the wider IonicRE team has provided immediate impact and we look forward to further leveraging progress on key relationships and opportunities identified in the USA, Europe and the UK through 2023.

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