Announcement PDF 30 September 2024 Significant Resource Expansion at Koppamurra Expanded 236 Mt Mineral Resource includes 68 Mt grading over 1000 ppm TREO1 Highlights • Resource up, grade up: Mineral Resource estimate increases 27% to 236 million tonnes (Mt) at 748 ppm TREO as compared to 186 million tonnes at 712 ppm TREO previously 2 • Higher-Grade Tonnes Increased: Mineral Resource now includes 68 million tonnes grading over 1000 ppm TREO, representing a 70% increase on the previous Mineral Resource estimate, highlighting the potential for an initial higher-grade project development plan • Higher-Grade Subsets Identified: Infill drilling has defined thicker, NW-trending areas of continuous higher-grade mineralisation within the resource • Geographic extension: Successful program to define Mineral Resources across the broader tenure added 25 million tonnes to the northern area • Growth Potential: Compelling scope for ongoing Mineral Resource growth with mineralisation open to the north and south and the current 236 Mt Mineral Resource covers only ~2% of total Koppamurra tenure • Watch a short video and engage with this announcement at the AR3 investor hub Australian Rare Earths (ASX: AR3) has significantly expanded its Koppamurra Mineral Resource Estimate (MRE) with a 27% increase in the MRE and a 70% boost in the higher-grade subsets. AR3 Managing Director and CEO, Travis Beinke said: “We are pleased to announce another significant milestone in delineating the rare earths mineral province discovered by AR3 at Koppamurra. This substantial increase in the Mineral Resource estimate, coupled with the improved grade and higher-grade tonnage, reinforces our belief in the Project's potential to become a strategically important, long-life supplier of critical rare earths. The updated Minerals Resources estimate has underscored the significant potential for a shallow, higher-grade subset of the broader rare earth deposit. The additional drilling, along with ongoing improvements to the resource model provide us with growing confidence in the consistency of the mineralisation. 1 Total Rare Earth Oxide (TREO) Refer ASX release “84% increase in Resource confirms Koppamurra as a world-scale ionic clay-hosted rare earths Province” 19 September 2023 2 There’s very large upside for resource growth, with the current 236 Mt Mineral Resource estimate covering only 2% of our extensive 7,400km2 tenure.” IHC Mining Geological Services Manager Greg Jones said: “The latest Mineral Resource estimate continued to incorporate our improved understanding of the mineralised geological package, as well as incorporating element specific variography analysis. Targeted infill drilling by AR3 has identified thicker packages of mineralised clay while at the same time, tightening up the previously identified high grade areas. IHC Mining consider this Mineral Resource estimate to be a significant further improvement over the previous Mineral Resource estimate and an additional improvement to the overall JORC classification confidence.” Mineral Resource Estimate The updated Mineral Resource estimate incorporates results from the drilling program conducted between October and December 2023. The overall program added 8,742m (694 holes) to the existing 55,979 m (5,283 holes) drilled for the previous Mineral Resource estimate announced September 2023. With the additional drilling and through the application of industry-standard geological interpretation methods, the total Mineral Resource estimate across the Koppamurra Project area increased by 27% to 236 Mt, with an average TREO grade of 748 ppm. This includes 113 Mt categorised as Measured and Indicated resources, a 14% increase to these higher confidence resource classifications relative to the September 2023 Mineral Resource estimate. The updated Exploration Target now ranges from 500Mt at 780 ppm to 3.2Bt at 520ppm TREO. The potential quantity and grade of the Exploration Target is conceptual in nature, as there has been insufficient exploration undertaken to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource. The updated Mineral Resource model shows significant improvement over the previous model, particularly in terms of grade definition and strike continuity, which now highlights more extensive regions of consistently higher-grade mineralisation. These advancements reflect the effort and refinement applied with each iteration of the model, driven by exploration improvements such as strategically designed drill traverses aligned with results from variography, and continuous enhancements in geological interpretation, wireframing, and grade interpolation processes. Figure 1: Proposed drill hole location- Koppamurra northern Francis Area Drill spacings to satisfy the Indicated and Measured JORC Resource Categories are set at 120 m and 60 m, respectively. Drilling that informed the Exploration Target was conducted at line spacings of at least 1 km, and in some areas, up to 2 km apart, with drill hole spacings along the lines typically ranging from 100 m to 400 m. Recent infill drilling at 120 m spacings within the northern Francis Area has defined 28 million tonnes of Inferred Resource, a significant increase from the previously reported 3.3 million tonnes in this area (Figure 4). This outcome highlights the effectiveness of infill drilling within the northern Francis Area, providing greater geological and grade distribution confidence and thereby supporting higher confidence resource classifications. The updated September 2024 Koppamurra Mineral Resource estimate is set out in Table 1 and resource categories shown in Figure 3 and 4. This Resource has been reported using a cut-off grade of 325 ppm TREO-CeO2. Table 1 – Koppamurra Mineral Resource estimate September 2024. Rounding may cause differences in the last significant figure Koppamurra Mineral Resource Estimate – September 2024* Magnet Rare Earths JORC Tonnes TREO Pr6O11 Nd2O3 Category Mt ppm ppm % TREO ppm % TREO ppm % TREO ppm % TREO Measured 0.7 813 37 4.6 140 17.3 3.8 0.5 21 2.6 Indicated 112 750 34 4.6 132 17.6 3.6 0.5 20 2.7 Inferred 123 747 35 4.6 132 17.6 3.4 0.5 19 2.6 Total 236 748 35 4.6 132 0.5 20 2.6 17.6 Tb4O7 3.5 Dy2O3 A summary of the Koppamurra Mineral Resource estimates over time, demonstrating the progressive increase in resource is provided in Figure 2 below. The steady increase reflects the success of the ongoing exploration efforts and the strategic drilling programs leading to more accurate modeling and Mineral Resource estimates. Figure 2- Koppamurra Mineral Resource progression Figure 3 - JORC Mineral Resource Categories for the southern Koppamurra (Dovetail) Resource Area. Infill drilling area shown in white outline. Figure 4 – Entire Koppamurra Resource areas and Categories including southern (Dovetail) and northern (Francis) Resource Areas. Note the Inferred resource categories defined in the northern Francis Resource Areas are exclusively where infill drilling has been conducted. Figure 5 – Heat map showing high value TREO (TREO-CeO2) for the southern Resource Area. Note the welldefined NW trending continuous higher-grade zones where infill drilling has been conducted. Exploration Target Estimate The Exploration Target across the entire Koppamurra project has increased the lower range of the Exploration Target, which now spans from 500 Mt to 3.2 Bt with average grades ranging from 520 ppm to 780 ppm TREO, marking an improvement from the previous range of 330 Mt to 3.1 Bt. The potential quantity and grade of the Exploration Target is conceptual in nature, as there has been insufficient exploration undertaken to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource. The updated September 2024 Exploration Target estimate is set out in Table 2 below and shown in Figure 4. Exploration Target has been reported using a cut-off grade range of 225 ppm and 425 ppm TREO-CeO2. Table 2– Koppamurra Exploration Target September 2024 Koppamurra Exploration Target – September 2024 Magnet Rare Earths Exploration Target Total Tonnes Mt 500-3,200 TREO ppm 520 - 780 Pr6O11 ppm % TREO 20 - 40 3.8-5.1 Nd2O3 ppm % TREO 90 - 140 17-18 ppm 3-4 Tb4O7 % TREO 0.5-0.6 ppm 10 - 20 Dy2O3 % TREO 1.9-2.6 Infill Drilling The infill drilling area was specifically targeted for detailed comparison with the previous Mineral Resource estimation due to its location within the current proposed mining lease application area. This area provides a clear example of how the recent model improvements, driven by additional drilling, have improved the Mineral Resource model. By focusing on this zone of recent infill drilling, we can demonstrate the positive impact of the updated model and its potential for future mining operations. The Mineral Resource estimation subset within the infill drilling area has increased by 2.8 Mt in tonnes with additional infill drilling. The key magnet rare earth elements Neodymium, Praseodymium, Dysprosium, and Terbium either increased slightly or remained unchanged in their contribution to the increased resource in this area. This is a positive outcome as the drilling density increased to closer spacings, providing greater confidence in the continuity of the resource and of a higher-grade component within it. The closer spaced infill drilling improved the definition of geological domain contacts, including an overall thickening of the REE bearing clay (Zone 3) which resulted in an increase in tonnes. This result enhances confidence in the resource, as the grade remained stable while the improved domain control contributed to a higher overall tonnage. The maps shown in Figure 6, comparing the Mineral Resource model within the infill drilling area before and after the recent drilling and modelling, clearly highlight the semi-continuous NW trends in mineralisation while the sections shown in Figure 7 display noticeably thicker REE bearing clay zone (Zone 3), further emphasising the improvement in the revised Mineral Resource. Figure 6 – Comparison of the infill drilling area resource cut-out, showing the September 2023 Mineral Resource model (left) and revised 2024 Mineral Resource model (right). The additional drilling within the infill drilling area informing the updated model has defined continuous, higher-grade NW-trending zones, leading to an increase in overall tonnage within this area. See Figure 7 for sections. B I B Figure 7 – Section A-AI and B-BI showing the September 2023 Resource Model interpreted zones (top) and revised Resource Model interpreted zones (bottom). The additional drilling within the infill drilling area and the updated Mineral Resource model has defined a more continuous and overall thicker zone of REE mineralisation (Zone 3 shown in orange). With infill drilling and improved modelling the revised Mineral Resource has increased in grade and tonnes within the infill drilling area. Information provided pursuant to ASX Listing Rule 5.8.1 Geology and Geological Interpretation The ionic clay hosted REE mineralisation at Koppamurra is hosted by clayey sediments interpreted to have been deposited onto a limestone base (Gambier Limestone) and accumulated in an interdunal, lagoonal or estuarine environment which has been extensively mapped east of the Kanawinka fault in south-east South Australia. A dedicated post-doctoral research program investigating the source of the REE at Koppamurra is ongoing, with no definitive source of the REE confirmed to date although preliminary results of this study have ruled out the alkali volcanics in south-eastern Australia which was originally considered as a potential source. Mineralogical test work conducted on clay samples from the project area established that the dominant clay minerals are smectite and kaolin, and that the few REE-rich minerals detected during the scanning electron microscope (SEM) investigation were not considered inconsistent with the suggestion that a significant proportion of REE are distributed in the material as adsorbed elements on clay and iron oxide surfaces. Sampling and sub-sampling techniques One metre aircore sample intervals were homogenised within the cyclone and the rotary splitter was set to an approximate 20% split producing around 1.5kg sample for each metre interval. The 1.5kg sample was collected in a pre-numbered calico bag and the 80% portion was collected in plastic UV stabilised bags labelled with hole identity and interval. The 1.5kg sample collected in the calico bag was logged by the geologist onsite. The logged samples were placed in polyweave bags and sent to Naracoorte base at the end of each day. The polyweave bags were then placed on pallets and dispatched to the assay laboratory in Bulka Bags. Drilling techniques RC aircore drilling methods were used to obtain samples from the drilling programmes. The RC aircore method uses hollow rods containing an inner tube which sits inside the hollow outer rod barrel. The drill cuttings are removed by injection of compressed air into the hole via the annular area between the inner tube and the drill rod. The cuttings are then blown back to surface up the inner tube where they pass through the sample separating system (cyclone, with a rotary splitter) and are collected. • • • Aircore drill rods used were 3 m long. NQ diameter (76 mm) drill bits and rods were used. All Aircore drill holes were vertical with depths varying between 2 m and 36 m Sample analysis method The 1.5kg aircore samples were assayed by Bureau Veritas laboratory in Wingfield, Adelaide, South Australia, which is considered their primary laboratory. The samples were initially oven dried at 105 degrees Celsius for 24 hours. Samples were secondary crushed to 3 mm fraction, and the weight recorded. The sample was then pulverised to 90% passing 75μm. Excess residue was maintained for storage while the rest of the sample placed in 8x4 packets and sent to the central weighing laboratory. All weighed samples were then analysed using the Multiple Elements Fusion/Mixed Acid Digest analytical method; ICP Scan (Mixed Acid Digest – Lithium Borate Fusion) Samples are digested using a mixed acid digest and also fused with Lithium Borate to ensure all elements are brought into solution. The digests are then analysed for the following elements (detection Limits shown): Al (100) As (1) Ba (1) Be (0.5) Ca(100) Ce (0.1) Co (1) Cr (10) Dy (0.05) Er (0.05) Eu(0.05) Fe(100) Gd (0.2) Ho (0.02) K (100) La (0.5) Lu (0.02) Mg (100) Mn (2) Na (100) Nd (0.05) Ni (2) Pr (0.2) S (50) Sc (1) Si (100) Sm(0.05) Sr (0.5) Th (0.1) Ti (50) Tm (0.2) U (0.1) V (5) Y (0.1) Yb (0.05) Zr (1) Estimation methodology The JORC Mineral Resource Classification for the Koppamurra project deposit was supported by drill hole spacing, geological continuity and variography of TREO, TREO-CeO2 of the target mineralised domain Zone 3. The classification of Measured, Indicated and Inferred Mineral Resources was supported by all the criteria noted above. A significant Exploration Target has also been defined which can be used to determine areas of significant prospectivity for future drill programmes. As a Competent Person, IHC Mining Geological Services Manager, Greg Jones. considers that the results of the Mineral Resource estimate appropriately reflects a reasonable view of the deposit categorisation and reasonable prospects of eventual economic extraction (RPEEE). Cut-off grades, including basis for the selected Cut-off Grade The selection of the TREO-CeO2 cut-off grade used for reporting was based on the experience of the Competent Person and given the early stage of the Koppamurra project, this cut-off grade was selected based on a peer review of publicly available information from more advanced projects with comparable mineralisation styles (i.e., clay-hosted rare earth mineralisation) and comparable conceptual processing methods. Material above this cut-off generates a head feed grade of over 700 ppm, and in the opinion of the Competent Person meets the conditions for reporting of a Mineral Resource with reasonable prospects of eventual economic extraction. Mining and metallurgical methods / material modifying factors No specific mining or metallurgical methods or parameters were incorporated into the modelling process. Representative material from the current drilling programme will be utilised in ongoing metallurgical testwork. The announcement has been authorised for release by the Board of Australian Rare Earths Limited. For further information please contact: Australian Rare Earths Limited Travis Beinke Managing Director and CEO T: 1 300 646 100 Media Enquiries Jessica Fertig Tau Media E: info@taumedia.com.au Engage and Contribute at the AR3 investor hub: https://investorhub.ar3.com.au/ Competent Person’s Statement The information in this report which relates to Mineral Resources for the Koppamurra rare earth deposit is based upon and fairly represents information compiled by Mr. Greg Jones who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr. Jones is a full-time employee of IHC Mining and has sufficient experience relevant to the style of mineralisation, the type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Mr. Jones consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. Forward Looking Statement This announcement contains forward-looking statements which involve a number of risks and uncertainties. These forward-looking statements are expressed in good faith and believed to have a reasonable basis. These statements reflect current expectations, intentions or strategies regarding the future and assumptions based on currently available information. Should one or more of the risks or uncertainties materialise, or should underlying assumptions prove incorrect, actual results may vary from the expectations, intentions and strategies described in this announcement. No obligation is assumed to update forward looking statements if these beliefs, opinions, and estimates should change or to reflect other future developments. About Australian Rare Earths Limited Australian Rare Earths is committed to the timely exploration and development of its 100% owned, flagship Koppamurra Project, located in the new Koppamurra rare earths Province in southeastern South Australia and western Victoria. Koppamurra is a prospective ionic clay hosted rare earth deposit, rich in all the elements required in the manufacture of rare earth permanent magnets which are essential components in electric vehicles, wind turbines and domestic appliances. In addition, AR3 is actively reviewing other potential prospective areas which may also host uranium and ionic clay hosted rare earth deposits throughout Australia. The Company is focused on executing a growth strategy that will ensure AR3 is positioned to become an independent and sustainable source of energy transition metals, playing a pivotal role in the global transition to a green economy. JORC Table 1 Criteria Sampling techniques Section 1 Sampling Techniques and Data Explanation Comment Nature and quality of RC Aircore drilling methods were used obtain sampling (e.g., cut samples from the October‐December 2021, channels, random chips, or February‐April 2022, September‐December 2022 specific specialised February‐ June 2023, and October‐December industry standard 2023 drilling programs. measurement tools The following information covers the sampling appropriate to the process: minerals under  All air core samples were collected from the investigation, such as rotary splitter mounted at the bottom of the down hole gamma sondes, cyclone using a pre‐numbered calico bag and or handheld XRF plastic UV sample bag. The samples were instruments, etc). These geologically logged at 1 m intervals using the examples should not be marked calico sample which averaged ~1.5 kg taken as limiting the broad in mass. meaning of sampling.  A handheld Olympus Vanta XFR Analyser Include reference to was used to assess the geochemistry of the measures taken to air core samples in the field. The XRF ensure sample analysis provided a full suite of mineral representivity and the elements for characterising the lithological appropriate calibration units. of any measurement  XRF readings were downloaded from the tools or systems used. XRF Analyser at the end of each day and Aspects of the uploaded to the Australian Rare Earths determination of Azure Data Studio database. mineralisation that are Material to the Public  Field duplicates were taken at a rate of Report. In cases where 1:33 and inserted blindly into the sample ‘industry standard’ work batches. has been done this would  At the laboratory, the samples were oven be relatively simple (e.g., dried at 105 degrees for a minimum of 24 ‘reverse circulation drilling hours and secondary crushed to 3 mm was used to obtain 1 m fraction and then pulverised to 90% passing samples from which 3 kg 75 µm. Excess residue was maintained for was pulverised to produce storage while the rest of the sample placed a 30 g charge for fire in 8x4 packets and sent to the central assay’). In other cases, weighing laboratory. The samples were more explanation may be submitted for analysis using XRF‐ICP‐MS required, such as where method. there is coarse gold that has inherent sampling  A laboratory repeat was taken at ~ 1 in 21 problems. Unusual samples; commodities or  Commercially obtained standards were mineralisation types (e.g., submarine nodules) may warrant disclosure of detailed information. Drilling techniques Drill type (e.g., core, reverse circulation, open‐ hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (e.g., core diameter, triple or standard tube, depth of diamond tails, face‐ sampling bit, or other type, whether core is oriented and if so, by what method, etc). inserted by the laboratory at a rate of ~ 1 in 9 into the sample sequence.      Drill sample recovery Method of recording and assessing core and chip sample recoveries and results assessed. Measures taken to maximise sample recovery and ensure representative nature of the samples. Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.       Drilling was completed using a Mcleod or Wallis air ore drill rig (Landcruiser 6x6 or similar) for the drilling. Aircore drilling is a form of reverse circulation drilling where the sample is collected at the face and returned inside the inner tube. The drill cuttings are removed by injection of compressed air into the hole via the annular area between the inner tube and the drill rod. Aircore drill rods used were 3 m long. NQ diameter (76 mm) drill bits and rods were used. All aircore drill holes were vertical with depths varying between 2 m and 36 m. Drill sample recovery for aircore is monitored by recording sample condition descriptions where ‘Poor’ to ‘Very Poor’ were used to identify any samples recovered which were potentially not representative of the interval drilled. A comment was included where water injection was required to recover the sample from a particular interval. The use of water injection can potentially bias a sample and very little water injection was required during this drilling program. No significant loses of samples were observed due to the shallow drilling depths (<36 m). The rotary splitter was set to an approximate 20% split, which produced approximately 1.5 kg sample for each meter interval. The 1.5 kg sample was collected in a pre‐ numbered calico bags and the remaining 80% (5 kg to 8 kg) was collected in plastic UV bags labelled with the hole number and sample interval. At the end of each drill rod, the drill string is cleaned by blowing down with air to remove any clay and silt potentially built up in the sample pipes and cyclone. Logging Sub‐sampling techniques and sample preparation Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies. Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography. The total length and percentage of the relevant intersections logged. If core, whether cut or sawn and whether quarter, half or all cores taken. If non‐core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry. For all sample types, the nature, quality, and appropriateness of the sample preparation technique. Quality control procedures adopted for all sub‐sampling stages to maximise representivity of samples. Measures taken to ensure that the sampling is representative of the in‐ situ material collected, including for instance results for field duplicate/second‐half  No relationship exists between sample recovery and grade.  All aircore samples collected in calico bags were logged for lithology, colour, cement type, hardness, percentage rock estimate, sorting, and any relevant comments such as moisture, sample condition, or vegetation.  Geological logging data for all drill holes was qualitatively logged onto Microsoft Excel spreadsheet using a Panasonic Toughbook with validation rules built into the spreadsheet including specific drop‐ down menus for each variable. The data was uploaded to the Australian Rare Earths Azure Data Studio database.  Every drill hole was logged in full and logging was undertaken with reference to a drilling template with codes prescribed and guidance to ensure consistent and systematic data collection  1 m aircore sample interval were homogenised within the cyclone and the rotary splitter was set to an approximate 20% split producing around 1.5 kg sample for each metre interval.  The 1.5 kg sample was collected in a pre‐ numbered calico bag and the 80% (5 kg to 8 kg) portion was collected in plastic UV bags labelled with hole identity and interval.  Duplicates were generally taken within the clay lithologies above the basement as this is the likely zone of REE enrichment. These duplicate samples were normally collected by using a second calico bag and placing it under the rotary splitter collecting a 20% split but due to the difficulties of placing a second calico bag under the rotary splitter during sample collection, some duplicates were collected by hand from the plastic UV bags which captured the other 80% of the material recovered from any particular interval.  The material in the plastic UV bags was mixed up and every attempt to take as representative sample of the material as sampling. Whether sample sizes are appropriate to the grain size of the material being sampled. Quality of assay data and laboratory tests The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc. possible by hand was made and then placed in a pre‐numbered calico bag.  The 1.5 kg sample collected in the calico bag was logged by the geologist onsite. The logged samples were placed in polyweave bags and sent to Naracoorte base at the end of each day. The polyweave bags were then placed on pallets and dispatched to Bureau Veritas laboratory in Adelaide in Bulka Bags.  The remaining 80% split from the aircore interval was stored for future reference.  Field duplicates of all the samples were completed at a frequency of 1 in 33 samples. Field standards were inserted into the sample sequence at a frequency of 1:42. Standard reference Material (SRM) samples were inserted into the sample batches at a frequency rate of 1 per 10 samples by the laboratory and a repeat sample was taken at a rate of 1 per 21 samples.  A rig geologist oversaw the sampling and logging process while a second geologist selected samples for analysis based on the logging descriptions and Pxrf analysis. Clay rich sample and those adjacent to the limestone basement contact were selected for assay. REEs are known to be contained within the clay component of the sediment package based on analysis of XRF data and previous exploration work.  The detailed geological logging of samples provides lithology (clay component) and proximity to the limestone basement which is sufficient for the purpose of determining the mineralised zone.  The 1.5 kg aircore samples were assayed by Bureau Veritas laboratory in Wingfield, Adelaide, South Australia, which is considered the Primary laboratory.  The samples were initially oven dried at 105 degrees Celsius for 24 hours. Samples were secondary crushed to 3 mm fraction and the weight recorded. The sample was then pulverised to 90% passing 75 µm. Excess residue was maintained for storage while the rest of the sample placed in 8x4 packets Nature of quality control procedures adopted (e.g., standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e., lack of bias) and precision have been established.        Verification of sampling and assaying and sent to the central weighing laboratory. All weighed samples were then analysed using the Multiple Elements Fusion/Mixed Acid Digest analytical method; ICP Scan (Mixed Acid Digest – Lithium Borate Fusion) Samples are digested using a mixed acid dige