Arafura Rare Earths Limited · ASX:ARU

Arafura Rare Earths — Arafura Resources — Shareholder Meeting (November 2007)

26 slides from Arafura Rare Earths's shareholder meeting presentation, Nov 23, 2007

1. Slide 1: Annual General Meeting Presentation

   Arafura Resources Ltd For personal use only Annual General Meeting Presentation Alistair J Stephens Managing Director 23 November 2007

2. Slide 2: Important Notice

   Arafura Resources Ltd For personal use only Important Notice This presentation contains certain statements which may constitute "forward-looking statements". Such statements are only predictions and are subject to inherent risks and uncertainties which could cause actual values, results, performance

3. Slide 3: Presentation overview

   Presentation overview For personal use only 1. Introduction 2. Capital Structure & Finance 3. Achievements in 2007 4. Nolans Project 5. Plan ahead – Nolans & exploration 6. The Rare Earths Market 7. Summary

4. Slide 4: Capital structure

   Capital structure For personal use only Shares and Options (ASX: ARU/ARUO) As at 15 November 2007 ƒ Ordinary shares 143.4 million ƒ Listed options 10.9 million 13 cent expiring 30 June 2008 ƒ Unlisted options 6.65 million employee options ƒ Cash in bank $20.7m Iron royalties $2.5m due Dec 2007 AusIn

5. Slide 5: Capital Raised and Use of Funds since listing

   Arafura For personal use only Capital Raised Use of Funds since listing Listed Nov 2003 20c $3.0m Exploration $4.2m 1st Capital raise 19c $1.3m Nolans Project $7.4m 2nd Capital raise 24c $1.8m Demerger costs $1.1m SSPP 32c $5.6m Funds transferred to NuPower $8.8m Rights Issue 36c $12.1m Corporate co

6. Slide 6: Focused on Rare Earths

   Arafura For personal use only Focused on Rare Earths A growing business Employed additional geologists and engineers reflects our growth And will be expanding further in 2008 Building market relationships Now identified in Europe and Asia as a reputable potential RE producer A strong market reputati

7. Slide 7: Project locations

   Project locations For personal use only Kurinelli – Davenport West (Gold) Frances Creek – Mt Porter (Gold) Aileron-Reynolds Range (REE) Hammer Hill JV (Nickel) Jervois (Vanadium)

8. Slide 8: Achievements 2007

   Achievements 2007 For personal use only The Demerger of NuPower Resources Ltd ƒ Transferred uranium exploration assets ƒ Transferred $8.8m in cash ƒ All eligible ARU shareholders benefited Vanadium discovery at Jervois ƒ Good grade, good recovery, good potential ƒ But it is remote Frances Creek ƒ Sa

9. Slide 9: Achievements – Community

   Achievements – Community For personal use only Keeping the community informed Helping in education Supporting the local community Employing local workers

10. Slide 10: Achievements 2007 – Nolans

    Achievements 2007 – Nolans For personal use only 1. Project PFS Valuation NPV AUD $1.1 Billion (post tax) 2. Drilling has identified more mineralisation & more will come ƒ Allows the flexibility of increasing production rates in the future 3. Bench scale test work proves a viable process 4. World’s

11. Slide 11: Nolans Pre-feasibility

    Nolans Pre-feasibility For personal use only 1. Capital costs estimated at AUD$750m ƒ A base of AUD$450m for all plant ƒ For mine site, RE separation, Phosphoric Acid, Calcium Chloride & Uranium plants ƒ Includes AUD$120m for contingency – potential scope change ƒ Includes AUD$180 for first fill che

12. Slide 12: Nolans Pre-feasibility

    Nolans Pre-feasibility For personal use only 1. Revenue AUD$8.25b (2007 dollars) over 20 years 2. Conservative Pricing Rare earths 20,000 tpa @ US$ 11,600 / t Phosphoric acid 150,000 tpa @ US$ 400 / t Calcium Chloride 400,000 tpa @ US$ 100 / t Uranium Oxide 150 tpa @ US$ 100/lb 3. Conservative excha

13. Slide 13: Nolans Project Opportunities

    Nolans Project Opportunities For personal use only 1. Resources grade ƒ Assumes the average resource grade – conservative ƒ Optimum feed grade analysis & clay rejection in progress 2. Capital costs ƒ Savings expected with components manufactured overseas ƒ Capital requirements under review 3. Operat

14. Slide 14: Nolans Project Opportunities

    Nolans Project Opportunities For personal use only 5. Exchange rate ƒ The long term forecast USD : AUD is 0.75 ƒ AUD$1=USD$0.75 has a +A$600m impact = a post tax NPV of $1.7b ƒ More value to be realised in cost reductions 6. Pricing PFS Current prices^ ƒ Rare earths* US$ 11,600/t US$ 13,900/t ƒ Phos

15. Slide 15: Nolans – 2008 Plan

    Nolans – 2008 Plan For personal use only Pilot plant ƒ Designed to test a continuous process at a larger scale ƒ Will refine the design flowsheet and chemical consumptions Definitive Feasibility Study (DFS) – post pilot plant ƒ PFS accuracy for capital and operating costs are ±30% ƒ DFS will be sign

16. Slide 16: Nolans – Development plan

    Nolans – Development plan For personal use only 2008 Pilot plant and Definitive Feasibility Study 2009 Approvals process 2010 Construction & commissioning 2011 Production at 50% utilisation = 10,000 t REO 2012 Production at 75% utilisation = 15,000 t REO 2013 Production at 100% utilisation = 20,000

17. Slide 17: Exploration 2008

    Exploration 2008 For personal use only Vanadium – Jervois 100% ARU • Metallurgical test work indicates it is technically recoverable • More drilling needed to assess the size potential Nickel – Hammer Hill (Mithril Resources earn-in and management) • Priority targets identified • Drill program plann

18. Slide 18: The RE Market – one of change

    The RE Market – one of change Market driver Industry Structure For personal use only 1900’s Emerging market in flint Emerging market 1950’s Polishing & glass 1960’s Oil Industry Catalyst Growth on Oil 1970’s CRT TV era 1980’s Battery development Industry reforms 1990’s Magnet development 2000’s Elec

19. Slide 19: A market in need of Nolans

    A market in need of Nolans For personal use only The Managing Director will refer to posters at the AGM for this part of the presentation

20. Slide 20: Rare earths markets

    Rare earths markets For personal use only China ƒ Produces >95% of a total demand of 108,000 tonnes ƒ Consumes 55% = 60,000 tonnes ƒ Current export quota <40,000 tonnes ƒ Plans to potentially reduce the quota Non-Chinese supply ƒ Limited resources with modest expansion capability ƒ Currently dominat

21. Slide 21: Nolans product mix

    Nolans product mix For personal use only The Nolans project is enriched in high value rare earths. 100 4.5% 90 % R E O C o n te n t 27% 80 70 60 2006 demand Baiyun Obo Mountain Pass Mt Weld Nolans Ce+La Nd+Pr+Dy Heavy RE

22. Slide 22: Rare earths supply and demand

    Rare earths supply and demand For personal use only Demand growth estimated at 11.5% pa* 200,000 200,000 +185 000 tonnes by 2012 175,000 175,000 +155 000 tonnes by 2010 150,000 150,000 Demand tpa - REO 125,000 125,000 100,000 100,000 75,000 75,000 50,000 50,000 What happens if the Chinese export quo

23. Slide 23: Our markets

    For personal use only Our markets

24. Slide 24: Arafura – Growing in strength

    Arafura – Growing in strength For personal use only Quality people, projects and products ƒ Experienced people with purpose and commitment ƒ Financed to forge ahead ƒ Community relationships – a strength ƒ Reputation for delivery ƒ Nolans – strategically important ƒ Strong industry interest in the p

25. Slide 25: Questions

    For personal use only Questions German shareholder meeting (to be finalized) Frankfurt 10 December 2007 Steigenberger Frankfurt Hof Am Kaiserplatz 60311 Frankfurt Proposed shareholder meetings 2008 (notices of location to be posted) Darwin 4 February 2008 Adelaide 5 February 2008 Melbourne 6 Februar

26. Slide 26: Arafura Resources Ltd

    Arafura Resources Ltd For personal use only Alistair J Stephens Managing Director 23 November 2007

Arafura Resources — Shareholder Meeting (November 2007) on 6ix