Lynas : October 5, Resource and Reserve Update

Category

Tonnes (Mt)

REO Grade (%)

REO (kT)

Measured

6.3

11.5

740

Indicated

5.4

8.6

470

Inferred

3.4

4.1

140

Total

15.0

8.8

1,350

Category

Tonnes (Mt)

REO Grade (%)

REO (kT)

Measured

3.8

5.2

200

Indicated

3.3

4.6

150

Inferred

1.1

3.6

40

Total

8.2

4.7

390

Category

Mt

Ta2O5

Nb2O5

TLnO

ZrO

P2O5

Y2O3

TiO2

Measured

0

0

0

0

0

0

0

0

Indicated

1.5

0.037

1.40

1.65

0.32

8.90

0.10

5.80

Inferred

36.2

0.024

1.06

1.14

0.3

7.96

0.09

3.94

Total

37.7

0.024

1.07

1.16

0.30

7.99

0.09

4.01

Ore Reserves Within Designed Pit Category

Million Tonnes

REO (%)

Contained REO ('000 tonnes)

Proven

5.2

11.7

608

Probable

4.2

9.3

391

Designed Pit Total

9.4

10.6

999

Ore Reserves on Stockpiles Category

Proven

0.5

14.4

72

Probable

0

0

0

Stockpiles Total

0.5

14.4

72

Total Ore Reserves Category

Proven

5.7

11.9

680

Probable

4.2

9.3

391

Total

9.9

10.8

1071

Criteria

JORC Code explanation

Commentary

Sampling techniques

• Nature and quality of sampling (eg cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.

• Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

• Aspects of the determination of mineralisation that are Material to the Public Report.

• In cases where 'industry standard' work has been done this would be relatively simple (eg 'reverse circulation drilling was used to obtain 1 m samples from which 3 kg was pulverised to produce a 30 g charge for fire assay'). In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (eg submarine nodules) may warrant disclosure of detailed information.

• The Central Lanthanide and Duncan deposits have been evaluated using aircore (AC) techniques with only samples from the carbonatite regolith assayed. The drill holes used for evaluation have been drilled between 1981 and 2011. A total of 774 aircore drill holes were used for evaluation with 18,232 metres assayed. AC samples were collected in one metre intervals from the carbonatite regolith. The samples were collected in polyweave bags to allow them to dry. After drying and breaking of the hardened sample 2 metre composites weighing approximately 1 kilogram were collected from 2 one metre samples using scoops. On lithology boundaries 1 metre samples or 2 metre composites are collected depending on where the lithology boundary falls. The 1 kilogram samples were sent to a laboratory for assaying.

• With each batch of samples sent to the laboratory 1 standard and 1 field repeat for approximately every 50 samples were inserted to check on the repeatability of the sampling and the accuracy of the laboratory.

• All samples sent to the laboratory had the rare earth oxides assayed using ICP-MS using industry standard ICP-MS assaying techniques for rare earth oxides.

Drilling techniques

• Drill type (eg core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).

• Aircore drilling techniques were used to drill the mineralized carbonatite regolith using either 87 mm or 112 mm drill hole diameters. Typical aircore samples were collected from the face of the bit and samples returning to the collection point inside the drill rods and via a cyclone.

Drill sample recovery

• Method of recording and assessing core and chip sample recoveries and results assessed.

• Measures taken to maximise sample recovery and ensure representative nature of the samples.

• Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.

• Recoveries not recorded as good recoveries were obvious during the drilling. Most samples in the carbonatite regolith had a greater than 90% recovery.

• During the drilling of the carbonatite regolith the holes were drilled wet enough to ensure no sample stuck in the cyclone. The drill rigs had metre marks on the mast and as each metre was drilled the bag collecting the sample was changed to ensure all the sample in each bag came from the 1 metre interval being sampled.

Criteria

JORC Code explanation

Commentary

• The grade throughout a metre sample tended to be very uniform with no bias between fine and coarse grains. Also within a sample from a 1 metre interval of the REO mineralization there is very little variation in the grade. Hence no relationship exists between sample recovery and grade.

Logging

• Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

• Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.

• The total length and percentage of the relevant intersections logged.

• Each 1 metre sample was logged by a competent geologist to a level of detail to support the various studies carried out using the geological interpretations and resource estimation.

• The logging is qualitative in nature with a review of the logging carried out after the assay data is received to ensure the logging fits with the geochemistry of the sample.

• A grab sample from each 1 metre bag of sample was sieved and logged by the geologist.

Sub- sampling techniques and sample preparation

• If core, whether cut or sawn and whether quarter, half or all core taken.

• If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.

• For all sample types, the nature, quality and appropriateness of the sample preparation technique.

• Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.

• Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second-half sampling.

• Whether sample sizes are appropriate to the grain size of the material being sampled.

• Most of the samples were very wet coming out of the hole and hence were bagged in polyweave bags and allowed to completely dry in the sun for approximately 2 weeks. The samples dried into hard lumps requiring breaking up with a rubber mallet before sampling. After breaking the sample up the sample in each 1 metre bag was thoroughly mixed by shaking the sample around. For a 2 metre composite a 0.5 kg sample was taken from each bag using a small aluminium scoop with sample taken from different parts of the bag. The 2 0.5 kg samples were then mixed together into a calico bag for dispatch to the laboratory.

• A field duplicate was collected for approximately every 50 samples submitted to the laboratory to ensure the field sampling had good repeatability. Field repeats correlated very well with original samples showing the sampling method was appropriate.

• The grain size of the particles in the samples is generally less than 1mm and hence 1 kg of sample is an appropriate sample size.

Quality of assay data and laboratory tests

• The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

• For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.

• Nature of quality control procedures adopted (eg standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (ie lack of bias) and precision have been established.

• A considerable amount of work was carried out by Lynas Corporation and Genalysis Laboratories in Perth, Western Australia to develop accurate assaying of rare earths using ICP-MS. This was achieved and the techniques developed have been implemented for the drill hole data used for resource estimation of the Central Lathanide and Duncan deposits. Standards have been submitted with each batch of samples to ensure the accuracy of the assaying. These standards are unrecognizable to the laboratory and the results have been within the expected tolerances for each standard submitted.

Criteria

JORC Code explanation

Commentary

Verification of sampling and assaying

• The verification of significant intersections by either independent or alternative company personnel.

• The use of twinned holes.

• Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

• Discuss any adjustment to assay data.

• One area of the project has been mined and processed with very good reconciliation between the resource modelling, the grade control data and the processing data. This indicates the drilling intervals used for the resource modelling were reasonably accurate.

• The pre-Lynas drilling data was compiled into a data base by a geologist who had work on the project for previous explorers. The geologist validated the data was as per the original assays. The drilling data collected by Lynas has been loaded from spreadsheets supplied by the laboratory directly into an Access database to ensure no human error occurred in transferring the data into the database.

• The assaying gives rare earth element grades whereas rare earths are produced and sold as oxides. For consistency all the rare earth element grades have been converted to rare earth oxide grades in the database.

Pre-Lynas Corporation data was reviewed by Golder Associates and later by Hellman and Schofield. They concluded the pre-1991 data was suspect due to large water inflows in the area. This data has only been used to estimate inferred resources. The data from post 1991 was considered to be of high quality suitable for indicated and measured resource estimations. In 1991 the area was dewatered and since 1991 large water inflows into drill holes has not been a problem.

Location of data points

• Accuracy and quality of surveys used to locate drill holes (collar and down-hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.

• Specification of the grid system used.

• Quality and adequacy of topographic control.

• Each drill hole collar has been surveyed to an accuracy of +/- 10 cm. All the holes are vertical and less than 120m and hence no down-hole surveys have been carried out. Each metre down-hole is measured from marks on the drill rig indicating to the drilling crew when the end of 1m finishes and the start of the next metre begins. The depth of each metre interval is likely to have an accuracy of +/-10 cm.

Data spacing and distribution

• Data spacing for reporting of Exploration Results.

• Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied.

• Whether sample compositing has been applied.

• For the bulk of the drilling the assaying was carried out over an interval of 2 metres. In some of the pre-Lynas drill holes the assay spacing was 3 metres. Where lithology changes occur an assay spacing of 1 metre was used if it fitted the lithology change better than the 2 metre spacing. All geological logging was carried out on 1 metre intervals.

• The majority of the resource estimations was from drill holes with 2 metre assay spacing and considering the size, shape and low grade variability over this range a 2 metre sample interval was appropriate for Mineral Resource and Ore Reserve estimations.

• Sample compositing has been carried out with 1 metre samples collected in approximately 20 kg bags composited into 2 metre

Criteria

JORC Code explanation Commentary

sample intervals with 0.5 kg from each 1 metre bag going into the 2 metre composite to make up a 1 kg sample for submission to the laboratory.

Orientation

• Whether the orientation of sampling achieves unbiased sampling of

• The rare earth

mineralization

in

the

carbonatite

regolith

is

in

of data in

possible structures and the extent to which this is known, considering

horizontal layers and vertical holes were drilled to intersect the

relation to

the deposit type.

mineralization at

90 degrees

to

the

strike and

dip of

the

geological

• If the relationship between the drilling orientation and the orientation

mineralization.

structure

of key mineralised structures is considered to have introduced a

• No sampling bias has been introduced by the drilling orientation.

sampling bias, this should be assessed and reported if material.

Sample security

• The measures taken to ensure sample security.

• All samples were collected and bagged by Lynas staff and shipped directly to the assay laboratory by a reputable trucking company.

Audits or reviews

• The results of any audits or reviews of sampling techniques and data.  Pre-Lynas data sets were audited by Golder Associates and Hellman

  • During a due diligence SRK reviewed the data used for the 2012 resource estimation. The review found some spurious assays of minor rare earth elements were in the database but overall these had no significant effect on the resource estimation.

and Schofield. They deemed the pre-1991 data was not accurate and it was concluded the assay results were biased. The assay results were likely to be lower than the reality by 5-10%. However, post 1991 data was concluded to be of a high quality.

Criteria

JORC Code explanation

Commentary

Mineral

• Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

• The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.



The Mt Weld Rare Earths Project is covered by 4 mining tenements

tenement

with long term tenure that can be automatically renewed for 20 year

and land

periods upon application. These tenements are M38/58, M38/59,

tenure status

M38/326 and M38/327. All these tenements are 100% owned by Mt

Weld Mining Pty Ltd a 100% subsidiary of Lynas Corporation.



There are no impediments to operate in the area with operating

licenses in place.

Exploration

• Acknowledgment and appraisal of exploration by other parties.



The Mt Weld Rare Earths Project has been explored by a number of

done by

other parties before Lynas Corporation took control of the project.

other parties

Feasibility studies have been carried out by CSBP Wesfarmers on

mining phosphate in the 1980s and Ashton on mining the rare earths

in the 1990s.

Geology

• Deposit type, geological setting and style of mineralisation.



The rare earth deposits at Mt Weld are supergene enriched deposits sitting in the Mt Weld Carbonatitie regolith. The deposits have formed