The PEA uses the updated mineral resource estimate for the Ashram Deposit (SGS Geostat, 2012), released March 6, 2012. This resource incorporates all drilling completed at the Ashra Deposit through 2011 (15,691.74 m in 45 holes). The mineral resource estimate is as follows:

• The base case TREO cut-off grade (CoG) for the reporting of the 2012 mineral resource estimate was retained from the 2011 base case CoG of 1.25% TREO.
• LREO (Light Rare Earth Oxides) = La₂O₃ + Ce₂O₃ + Pr₂O₃ + Nd₂O₃
• MREO (Middle Rare Earth Oxides) = Sm₂O₃ + Eu₂O₃ + Gd₂O₃
• HREO (Heavy Rare Earth Oxides) = Tb₂O₃ + Dy₂O₃ + Ho₂O₃ + Er₂O₃ + Tm₂O₃ + Yb₂O₃ + Lu₂O₃ + Y₂O₃
• MHREO (Middle and Heavy Rare Earth Oxides) = MREO + HREO
• MHREO / TREO, ratio expressed as a percent

Results of the PEA represent forward-looking information. This economic assessment is by definition preliminary in nature and it includes inferred mineral resources that are considered too speculative to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the preliminary economic assessment will be realized. Mineral resources are not mineral reserves as they do not have demonstrated economic viability.

The Ashram Deposit hosts a well-balanced rare earth distribution anchored in the magnet feed rare earths (Nd, Pr, Tb, and Dy) with the strongest market fundamentals over the near, mid, and long-term. In addition, within the overall resource, there exists a zone of more intense Middle and Heavy Rare Earth Oxide (MHREO) enrichment, termed the ‘MHREO Zone’. This mineralized zone contains an REE distribution of 24% combined NdPr (19% Nd, 5% Pr) with significant Dy (0.9%) and Tb (0.2%). This type of magnet feed and MHREO enrichment is unique to Ashram and extends from surface with significant tonnage and grade. The current resource for the Ashram MHREO zone is 1.1 Million tonnes (Mt) at 1.69% TREO of measured, 5.4 Mt at 1.62% TREO of indicated, and 2.79 Mt at 1.57% TREO of inferred.

• 4,000 t/d, open-pit operation with 0.19:1 (waste:ore) strip ratio over 25 year mine life
• Pre-tax Net Present Value (NPV) of $2.32 billion dollars at a 10% discount rate*
• Pre-tax Internal Rate of Return (IRR) of 44% and pre-tax payback period of 2.25 years*
• Estimated capital cost of $763 million (including 25% contingency)
• Estimated operating cost of $95.20/tonne treated, or approximately $7.91/ kg of rare earth oxide (REO) produced
• Annual production averaging ~16,850 tonnes of rare earth oxide over life of mine, including 2,870 tonnes Nd oxide, 96 tonnes Eu oxide, 26 tonnes Tb oxide, 106 tonnes Dy oxide, and 440 tonnes Y oxide
• Rare earth element host mineralogy (monazite, bastnaesite, and xenotime) comprises phases amenable to recovery with processing using conventional and proven techniques

* The current Ashram Technical Report (effective date July 5^, 2012, revised January 7, 2015) explains why no after-tax case is included.

Results of the PEA represent forward-looking information. This economic assessment is by definition preliminary in nature and it includes inferred mineral resources that are considered too speculative to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the preliminary economic assessment will be realized. Mineral resources are not mineral reserves as they do not have demonstrated economic viability.

Darren L. Smith, M.Sc., P.Geol., Dahrouge Geological Consulting Ltd., a Qualified Person as defined by National Instrument 43-101, has prepared, read and approved all scientific and technical information that relates to the Ashram Rare Earth Element Project on this website.