Quarterly Activities/Appendix 5B Cash Flow Report

Executive Summary

Australian Rare Earths Limited (ASX: AR3) is pleased to provide an update on progress made during the quarter ended 30 September 2024. AR3 has achieved significant milestones in its exploration and development projects, with a strong focus on building a robust portfolio of high-quality energy transition assets.

Koppamurra Rare Earths Project

The Koppamurra Project achieved significant growth in the September quarter, with a 27% increase in its Mineral Resource estimate and a 70% boost in higher-grade subsets. The current Mineral Resource estimate now sits at 236 million tonnes (Mt) at 748 ppm TREO, including 68 Mt grading at over 1000 ppm TREO (ASX 30 September 2024).

Infill drilling has identified thicker, higher-grade mineralised areas, and the Project's geographic extent has expanded to include 25 million tonnes of additional resources to the north of the main resource area. With mineralisation open to the north and south, Koppamurra demonstrates strong potential for both continued resource growth and a long-life production profile.

AR3 continues to advance a high-grade progressive heap leach and rapid rehabilitation development pathway at Koppamurra. This approach aligns with AR3's commitment to developing a sustainable alternative supply of rare earths essential for the clean energy transition.

Portfolio expansion with addition of Uranium prospects

AR3 made significant steps in expanding its clean energy transition metals portfolio with the addition of three Uranium projects in the September 2024 quarter. The Company successfully acquired Valrico Resources Pty Ltd, securing 100% ownership of the Overland Uranium Project and subsequently further expanded its landholding to ~3,000km². Government approvals were obtained for exploration activities, paving the way for the first drill campaign, which is on-track to commence in mid-October 2024.

The inaugural drill campaign at Overland is targeting sedimentary-hosted uranium deposits amenable to In-situ recovery (ISR) extraction. Overland’s geological conditions, including permeable pathways and reductants, are favourable for uranium mineralisation.

AR3 has applied for additional exploration licenses prospective for uranium at Triggs Bore and Hamilton Creek.

Financial Position

AR3 has maintained a strong cash position over the September quarter, supporting the Company’s capacity to drive the development of its key projects and thereby generate value for shareholders.