Mr. Rahim Suleman reports

NEO PERFORMANCE MATERIALS SIGNS MOU WITH RAINBOW RARE EARTHS FOR MAGNET RARE EARTH OFFTAKE FROM THE PHALABORWA PROJECT

Neo Performance Materials Inc. has signed a memorandum of understanding with Rainbow Rare Earths Ltd. covering technical support for and offtake from Rainbow's Phalaborwa rare earth project in South Africa. Rainbow plans to recover rare earth elements (REEs) from legacy phosphogypsum residue at the Phalaborwa project, a byproduct of fertilizer production that resides in above-ground stacks. Recovering rare earths from this stockpiled material will provide Neo access to magnetic rare earth products that require no new mining and adds a new supply source to the company's raw material supply chain.

Neo has conducted technical due diligence on the Phalaborwa project, including review of Rainbow's process for recovering rare earths from the phosphogypsum residue ahead of separation and purification, and considers the project a promising secondary source of magnetic rare earths.

The collaboration encompasses three aspects:

• Securing rare earth supply for Neo's European operations: Rainbow will provide Neo with offtake rights to 40 per cent of Phalaborwa's annual production of separated NdPr (neodymium-praseodymium) oxide (greater-than-99-per-cent purity) and 65 per cent of its annual mixed samarium-europium-gadolinium and heavy rare earth carbonate (SEG+). The SEG+ contains the magnet rare earths dysprosium and terbium, as well as samarium, europium, gadolinium, holmium, erbium, thulium, ytterbium, lutetium and yttrium.
• Providing solvent extraction technology and support: Neo will provide Rainbow with design input and technical support for the final solvent extraction (SX) separation circuit to achieve the Phalaborwa project's intended product mix and purity. Test work is under way in Estonia, followed by an integrated pilot-scale campaign in Johannesburg.
• Expanding feedstock for European separation: The mixed SEG+ heavy rare earth carbonate will be suitable for further separation at Neo's facilities. Neo and Rainbow have agreed to consider toll treating the remaining 35 per cent of the Phalaborwa project's SEG+ at Neo's facilities, with the separated dysprosium, terbium and yttrium returned to Rainbow to market.

This agreement establishes a secondary source of rare earth feedstock and further diversifies Neo's raw material supply chain. It also strengthens Neo's European platform, which includes a commercial light and heavy rare earth separation facility and a sintered magnet manufacturing facility in Estonia. Rare earths recovered from phosphogypsum residue are a secondary raw material, consistent with the objectives of the European Union Critical Raw Materials Act to expand the recovery of critical raw materials from waste.

"This partnership with Rainbow advances Neo's strategy to build a secure and resilient rare earth magnetics supply chain supported by diverse and sustainable sources of rare earth feedstock," said Rahim Suleman, president and chief executive officer of Neo. "Rainbow's Phalaborwa project represents a unique rare earth opportunity with the potential to reach the market quickly and competitively. Because the material is already at the surface and requires no new mining, the project has the potential for a lower-development-risk profile than many greenfield projects. Combining Rainbow's expertise in recovering rare earths from phosphogypsum with Neo's decades of experience in rare earth separation, processing and magnet manufacturing allows our teams to jointly define and optimize the process from recovery through final separation while providing customers with the secure, traceable supply chains that critical minerals markets increasingly demand."

"Finalizing our technology partner for the SX separation process was the remaining step required to complete our process to extract REEs from phosphogypsum waste," said George Bennett, chief executive officer of Rainbow. "We are delighted that Neo has agreed to partner with us. Their deep understanding and experience in rare earth separation and magnet materials is invaluable. That they have chosen to partner with Rainbow reflects our shared strategy to secure a verifiable source of permanent magnet elements needed to meet growing demand for a reliable, secure REE supply."

Rainbow and Neo have committed to advance binding long-form agreements under the MOU, and work to document these agreements has commenced. The terms described above remain subject to the negotiation and execution of those definitive agreements.

About Neo Performance Materials Inc.

Neo manufactures the building blocks of many modern technologies that enhance efficiency and sustainability. Neo's advanced industrial materials -- magnetic powders, rare earth magnets, magnetic assemblies, specialty chemicals, metals and alloys -- are critical to the performance of many everyday products and emerging technologies. Neo's products fast-forward technologies for the net-zero transition. The business of Neo is organized along three segments: Magnequench, Chemicals & Oxides, and Rare Metals. Neo is headquartered in Toronto, Ont., Canada, with corporate offices in Greenwood Village, Colo., United States; Singapore; and Beijing, China. Neo has a global platform that includes manufacturing facilities located in Canada, Estonia, China, Germany, Thailand and the United Kingdom as well as a dedicated research and development centre in Singapore.

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