Arafura Resources : International Rare Earths Conference Presentation

Arafura Resources Limited

"Accelerating Towards Final Investment Decision"

November 2018 Metal Events- International Rare Earths Conference

Important Notice - Disclaimer

This presentation has been prepared by Arafura Resources Limited (Arafura, Arafura Resources or the Company) and is of a summary form only and therefore contains general background information which may not be complete. It should be read in conjunction with and full review made of Arafura Resources' disclosures and releases lodged with the Australian Securities Exchange (ASX) and available atwww.asx.com.au.

This presentation contains certain statements which may constitute "forward-looking statements." Such statements are only expectations or beliefs and are subject to inherent risks and uncertainties which could cause actual values, results or performance achievements to differ materially from those expressed or implied in this presentation. No representation or warranty, express or implied is made by Arafura Resources that any forward-looking statement contained in this presentation will occur, be achieved or prove to be correct. You are cautioned against relying upon any forward-looking statement. Except for statutory liability which cannot be excluded, each of Arafura Resources and its related body corporates and their officers, employees and advisers expressly disclaims any responsibility for the accuracy or completeness of the material contained in this presentation and excludes all liability whatsoever (including in negligence) for any loss or damage which may be suffered by any person as a consequence of any information in this presentation or any error in it or omission from it. Arafura Resources accepts no responsibility to update any person regarding any inaccuracy, omission or change in information in this presentation or any other information made available to a person, nor any obligation to furnish the person with any further information.

This presentation does not constitute an offer of any securities in Arafura Resources, in any jurisdiction, nor an invitation to apply for such securities, in any jurisdiction, and will not form part of any contract for the acquisition of Arafura shares. This presentation does not constitute an offer to sell, or the solicitation of an offer to buy, any securities in the United States or to, or for the account or benefit of, any "U.S. Person" (as defined in Regulation S under the US Securities Act of 1933, as amended ("Securities Act")) (U.S. Person). Arafura shares have not been, and will not be, registered under the Securities Act or the securities laws of any state or other jurisdiction of the United States, and may not be offered or sold in the United States or to any U.S. Person absent registration except in a transaction exempt from, or not subject to, the registration requirements of the Securities Act and any other applicable securities laws. This document may not be distributed or released in the United States or to any U.S. person.

This presentation does not provide investment advice or financial product advice. You should obtain professional advice and carry out your own independent investigations and assessment of the information in this presentation (including any assumptions) before acting. Information in this presentation which is attributed to a third-party source has not been checked or verified by Arafura Resources.

The information in this presentation that relates to Exploration Results or Mineral Resources is based on information compiled by Mr Kelvin Hussey BSc (Hons). Mr Hussey is a Member of the Australian Institute of Geoscientists and he has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code)". Mr Hussey consents to the inclusion in this presentation of the matters based on his information in the form and context in which it appears. Mr Hussey is a full-time employee of Arafura Resources.

November 2018

Agenda

• 1. Introducing Arafura

• 2. NdPr Market Update

• 3. Funding New NdPr Supply

• 4. Nolans Project

• 5. Timeline

November 2018

Introducing Arafura

• ▪ Arafura Resources Limited ("Arafura", "Company") is an ASX listed company focussed on developing its 100% owned Nolans Rare Earths Project located in the Northern Territory, Australia.

• ▪ Neodymium-Praseodymium ("NdPr") are two rare earth elements which are essential ingredients in rare earth permanent magnets. Rare earth magnets are used in electric vehicles, wind turbines and advanced weapon systems.

• ▪ China continues to dominate the global supply chain being the world's largest producer accounting for approximately 80% of the NdPr for global rare earth permanent magnet production.

• ▪ Lynas Corporation Ltd (ASX:LYC) is the only significant miner and processor of rare earth materials outside China enjoying a market capitalisation in excess of $1bn.

• ▪ Nolans Project nearing final investment decision.

NdPr Oxide Pricing US$/kg

$35.0

Share Price Performance and Volume

2,000

1,750

1,500

1,250

1,000

750

500

250

0

0.150

0.120

0.090

0.060

0.030

0.000

November 2018

Investment Highlights

• ▪ Globally Strategic Asset - Nolans Rare Earth Project is one of the world's largest undeveloped NdPr projects with an existing JORC Compliant Resource of 56Mt at 2.6% TREO with 26.4% NdPr enrichment that could come to provide 5-10% of global demand of NdPr oxide for use in permanent magnets.

  Highly Leveraged to NdPr Price

• ▪ Highly Leveraged to Forecast NdPr Price Increases - NdPr accounts for 85% of Nolans rare earth composition by value making Arafura highly leveraged to forecast increases in NdPr prices.

  Low OPEX

• ▪ Lowest Cost Quartile - Very low estimated OPEX of US$6.23/kg TREO and US$24.40/kg NdPr makes Arafura the lowest amongst peers and underpins a 30+ year mine life.

  Australian Project

• ▪ Tier 1 Jurisdiction - 100% owned Nolans Rare Earth Project is located in the Northern Territory, Australia 10 km from Stuart Highway, 135km from Alice Springs railyard and adjacent to Amadeus natural gas pipeline.

  DFS December 2018

• ▪ Advanced Project -environmental approvals secured, final stages of pilot program nearing completion, DFS results scheduled December 2018 and final investment decision expected in 2019.

Final Investment Decision 2019

November 2018