Rare Earth Extraction Co. Limited
(Registration number 1989/003212/06)
JSE code : RCO - ISIN code : ZAE000005807
("Rareco" or the "company")
In the announcement of Rareco's audited financial results for the year ended
30 June 2001, reference was made to the progress being made to develop the
Steenkampskraal monazite mine and build rare earth processing facilities in
South Africa. The directors wish to inform shareholders about the progress
that has been made and the negotiations that have been entered into:
- A leading international processor of rare earths has entered into an
agreement with Rareco to buy a minimumof two-thirds of Rareco's annual
production of rare earth chloride at international market prices and with a
guaranteed minimum price that assures Rareco an adequate return on capital.
This processor will also provide financial and technical assistance to
Rareco;
- Based on this agreement, Rareco applied to local and overseas financial
institutions for finance to bring the mine and processing plant into
production. Negotiations are at an advanced stage and may be completed
before the end of the year;
- The price of rare earth chloride has increased this year and is now at a
very satisfactory level from Rareco's point of view; and
- The directors have identified additional mineral resources that could
expand and extend Rareco's production.
In previous communications, shareholders were reminded of the threat to the
company in the form of an application for the winding-up of Rareco that was
brought by one minority shareholder nearly three years ago. This application
was dismissed, but an appeal was allowed on very restricted grounds. This
appeal should be heard soon.
Shareholders are accordingly requested to exercise caution in dealing in
their shares on the JSE Securities Exchange South Africa.
Somerset West
12 October 2001
Corporate Advisor and Sponsor
The Janus Corporation (Pty) Ltd
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