#152 53 54 55 56 57 58359 January 2017 E Canada Rare Earth Corporation Integrating the Process To Build the Future • Supply Separation Refining · Demand canadarareearth.com TSX.V: LL Electric Vehicle T#2Canada Rare Earth Forward-looking statements Corporation During the course of this presentation, Canada Rare Earth Corporation may make statements with regard to the company's projects, resources, business plans, business strategy, products, partners, and market position which could be construed as forward-looking. Forward-looking statements are subject to risk and uncertainties that could cause results to be materially different from expectations. The presentation has been prepared by Canada Rare Earth Corporation and does not represent a recommendation to buy or sell its securities. Investors should always consult their investment advisors prior to making any investment decision. canadarareearth.com TSX.V: LL 2#3Canada Rare Earth Corporation Vertical Integration Supply Explore, Mine, Concentrate 200+ companies exploring 700+ locations Separation Refining China dominates Rest of world will separate primarily light rare earths Canada Rare Earth Corp refineries will produce all critical rare earths Demand Oxides, Metals and Alloys Major customers have 4 choices Buy from China Manufacture in China Engineer away from rare earths Purchase rare earths from refineries outside of China canadarareearth.com TSX.V: LL 3#4• • • Canada Rare Earth Corporation What Are Rare Earths? 17 elements used for improved performance and quality Found combined together in mineral deposits Rare earths are of little industrial value unless separated Gd Pr Sa Nd hydrogen 1 H 10079 Ichlum baryllum 3 4 Sc Y La Ce Li Be 6.941 odlum 90122 magnesium 11 12 boran carbon nitrogen 5 6 7 C N Ruorine 9 F hebum 2 He 4.0026 near 10 Ne 10.411 12.011 14.007 15.999 18.920 30.10 aluminium icon phosphorus whe chlorine argon Na Mg 13 ΑΙ Si P 14 15 16 17 18 S Cl Ar 22.920 potassium 26.962 24.305 calcium 28.006 30.974 19 20 acandum 21 Stanium 22 vanadham 23 chromium manganese 24 25 Iron 26 cobalt 27 nickel 28 copper 29 she 30 galium germanium 31 32 arsenk 33 33.065 selenium 34 35.4463 bromine 39.940 keypton 35 36 Pr Nd Sm Eu K Ca Sc Ti V Cr Mn Fe Co Ni Cu Zn Ga Ge As Se Br Kr 39.030 rubidiurs 40.076 atrontium 37 38 44.956 ythium 39 47367 irconium 40 50.942 $1.926 54.930 55.445 niobium molybdenum technetium ruthanum 41 42 43 44 58.933 rhodium 45 58.623 paladium 46 63546 sive 47 05.38 cadmium 48 69.723 Indium 49 72.64 th 74.922 70.95 79.304 83.796 50 antimony tellurium 51 52 ladine Xenon 53 54 Rb Sr Y Zr Nb Mo Tc Ru Rh Pd Ag Cd In Sn Sb Te Xe 85 460 Cum Gd Tb Dy Ho 55 67.62 barlumn 56 85.906 91.224 hanum 72 $2,905 tantakam 73 25.95 tungsten 74 [56] Thenkurs 75 101.07 CaTsum 76 102.91 Hdum 77 106.42 platnum 78 107 A7 79 11241 mercury 80 114.42 thalum 81 118.71 had 82 121.75 blaruth 83 127.50 polonium 84 126.90 131.29 artatine 85 edon 86 Cs Ba Hf Ta W Re Os Pt Au Hg Tl Pb Bi Po At Rn Er Tm Yb Lu 37 132.91 handum 87 137.33 radum 88 178.43 180.95 rutherfordum dubnium 104 105 18304 seaborglum bahrium 106 107 186.21 150.23 hakum 106 192.22 meltnerium 109 195.00 196.97 damatachurs scentgenium 110 111 200.59 204.30 207.2 20.20 Fr Ra Rf Db Sg Bh Hs Mt Ds Rg בבנן [226] 13611 12521 [255] [364] 12771 2531 12711 12731 [210] ןבבב! Other rare metals lanthanum cerlure 57 58 praseodymium neodymium promethaum 59 60 61 samarkam 62 elzig kum 63 gadolinium herbium 64 65 dysprosium holmium erbium thulum ytterbian TUME DUTY 00 67 68 69 70 71 Light rare earth elements La Ce Pr Nd Pm Sm Eu Gd Tb Dy Ho Er Tm Yb Lu Heavy rare earth. elements. 138.91 actinium 89 140.12 thorium 90 140.91 14424 protactinium utanium 91 92 [145] neptunium 93 150.36 151.36 plutonium americkum 94 95 15725 curlum 96 150.25 16250 164.93 36726 358.93 17305 99 berkelurs calfamsum inatiniums fermiure mendeleykum nobelum 97 98 100 102 101 174.37 lawrenclum 103 Ac Th Pa U Np Pu Am Cm Bk Cf Es Fm Md No Lr [227] 232.04 231.04 238.03 12371 [244] 12431 12471 [247] 12511 [353] [257] [258] 12591 12521 canadarareearth.com TSX.V: LL 4#5Canada Rare Earth Rare Earth Applications Corporation • Rare earths are used in an • • almost endless list of applications Unique properties make them invaluable for improved performance, efficiency and quality of the end products New applications are being developed in rapid succession canadarareearth.com TSX.V: LL 5#6Canada Rare Earth Corporation Economic Benefit Potential Raw Materials Basic Rare Earth Materials From a report by the American Chemistry Council in April 2014: "each job in the rare earth industry generates an additional 5.0 jobs elsewhere in the North American economy" "the industry generates a total of $1.9 billion in economic output in North America" "The rare earth industry is supportive of $329.6 billion in economic output in "downstream" end-market products and technologies that employ 618,800 workers (with a combined payroll of $37.6 billion) in the United States and Canada" Bastnäsite Monazite lonic Clays Engineered Rare Earth Materials Components & Systems End Market Products & Technologies Batteries Health Care Technologies Hybrid, Electric, Rare Earth Controls PHEV's & Other Alloys Drives Vehicles Magnets & HVAC and Home Separated Rare Earth Oxides Oxylates Chlorides & Nitrates Powders Magnetic Fabricated Appliance Systems Metal Catalysts Consumer Products Electronics Metallurgical Additives Lasers Rare Earth Polishing Powders Motors & Mixed Oxides Rare Earth Generators Phosphors Glass Additives Sensors Metals Ceramics Transducers Water Purification Chemicals Other Systems & Components Energy Efficient Lighting Communications & Electronics Audio Equipment Defense Technologies Other Electronics Advanced Optics & Other Glass Products Oil Refining Electric Power canadarareearth.com TSX.V: LL 6#7Canada Rare Earth Corporation Future growth of RE market Future demand for rare earths in China and ROW¹ . . RE market could grow by 6%py between 2014 and 2020, driven by China Global demand could reach 168,250t REO by 2020, 120,750t REO of which could be in China World: Demand for rare earths in China and ROW, 2000 to 2020 (t) • Demand growth for rare earths is strong and increasing Applications will continue to be developed rapidly especially if a dependable, cost effective, high quality supply is established outside of China 180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 Source: Roskill 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 China ROW 1 2010 2011 2012 2013 2014f 2015f 2016f 2017f 2018f 2019f 2020f 1 Rest of World Rosk Apox on Canada United States Mine Production (mt) Reserves (mmt) Reserve Base (mmt) none 1% from Russia 3% from France 13.0 14.0 91% from China 3% from Japan -2% from Other Brazil Mine Production (mt) Reserves (mmt) Reserve Base (mmt) 250 small Russia and other former Soviet Union countries Mine Production (mt) Reserves (mmt) 19.0 Reserve Base (mmt) 21.0 China Mine Production (mt) 105,000 Reserves (mmt) 55 Reserve Base (mmt) 89 India Mine Production (mt) 2,800 Reserves (mmt) Reserve Base (mmt) 2.7 1.3 Malaysia Mine Production (mt) 280 Reserves (mmt) small Reserve Base (mmt) Australia Africa Mine Production (2011): 108,330 mt Reserves (2010): 110 mmt Reserve Base (2008): 154 mmt China (105,000) 96.9% India (2,800) 2.6% Russia (19) 17% China (55) Malaysia (280) .26% -U.S. (13) 12% 50% China (89) 59.3% -Russia (21) 14% -U.S. (14) 9.3% Australia (5.8) 3.9% Other Australia India (1.3) 1% Brazil (250) .23% (18.7) (1.6) 1.5% 17% -India (2.7) 2.5% Other (23) 12.5% Other: Brazil, Malaysia, Canada, S. Africa, etc. Source: U.S. Geological Survey, Mineral Commodity Summaries, 2008-2013. (Figure created by CRS.) canadarareearth.com Mine Production (mt) Reserves (mmt) 1.6 5.8 Reserve Base (mmt) U.S.Imports Countries with significant REE production, reserves, or reserve base mt: metric tons mmt: million metric tons 7 TSX.V: LL#8Canada Rare Earth SWOT Analysis of our Company Corporation Strengths Unique capability of separating the entire range (light and heavy) of commercially traded rare earths, coupled with extensive industry knowledge and experience from one of the world's top rare earths refiners Weaknesses We are a small company working amongst major customer organizations, financing companies and numerous federal and state governments As is common in the industry, our separation process entails the use of acids (similar to the oil refining industry) and certain radioactive materials (for which there are international standards for handling) Opportunities 200+ major international manufacturing companies are seeking a supply of separated rare earths outside of China, where an oligopoly dominated by six companies currently exists Sources of rare earth ore exist/have been identified outside of China BUT very few outside of China have the capability of refining and separating the concentrate Capital costs, operating costs and operations are serious questions for those without experience Threats China could move more aggressively into the rest of the world acquiring the best rare earth properties canadarareearth.com TSX.V: LL 8#9Canada Rare Earth Corporation Our Vision and Strategy Vision To be the leading producer of refined rare earth products outside of China within 5 years. Strategy ■ Organic growth with M&A activities ■ Collaborate with key customers ■ Collaborate with capable & proven partners Industry proven separation and refining technologies ■ Produce full range of rare earth products ☐ Target stable geopolitical locations ■ Commit to sustainability as a core value ☐ Leading environmental protection processes canadarareearth.com TSX.V: LL 9#10Canada Rare Earth Rare Earth Minerals to Market Chain Corporation Factors • Skewed to Critical REES • Timing · Consistency Long-term engagement Concentrate Monazite and Xenotime from mineral sands, and partner and third party rare earth mines Tailings Traders and brokers Mixed Rare Earth Concentrate (Heavy and SEG) . Elements not processed by other refineries CREC Refineries • Globally strategic sites Full spectrum of critical elements (heavies and lights) Custom designed to meet customer specifications and concentrate attributes Modular expansion Strategic customers · Long-term contracts · 50-70% output canadarareearth.com TSX.V: LL Other Channels Spot market Trading 10#11Canada Rare Earth Corporation Prospective Projects and Alliances Mineral Resources/ Monazite/Xenotime Concentrate Sources . Africa • Brazil • Chile • Australia Laos • Southeast Asia • India Pretreatment (Hydrometallurgy) Rare Earth Separation Facilities Rare Earth Downstream Processing Ganzhou Zhanhai Hunan China China Hunan China Laos End Customers Laos Southeast Asia Southeast Asia Southeast Asia Brazil Brazil India India Brazil Europe Middle East Middle East Middle East Prospective In Place 11#12Canada Rare Earth Corporation Key People Tracy A. Moore - CEO & Director Corporate finance experience in 20 countries Peter Shearing - COO & Director Broad international experience at the executive level in the electronics and high-tech manufacturing Gordon J. Fretwell - Director, Secretary & Legal Counsel Multiple clients and directorships in the exploration and mining industry Bill Purcell - Director Background in downstream oil industry Christopher F. Goodman - Director Commodity trading and international business development experience Salil Dhaumya - Chief Financial Officer Extensive experience in the resource sector Rojer Li - Chairman of the Advisory Board Extensive network of relationships in rare earth market, inside and outside of China, former Chairman of CEC Rare Earth Corp. Li Family – Advisors, capability partners, and major shareholders The Li family business owns and operates the premier rare earth engineering and design company, as well as a refinery, in China Wencai Zhu- Advisor An experienced chemical engineer with multiple patents and publications relating to rare earth processing. General Manager of a major refinery in China Mike Fillipoff - Advisor Experienced in large-scale project management Bob Schafer - Advisor Global exploration/mining experience John Treleaven - Advisor Experienced in domestic and foreign government relations canadarareearth.com 12 TSX.V: LL#13Canada Rare Earth Corporation Strategic Capabilities The Canada Rare Earth Corp team has unparalleled experience and skills in the rare earth industry. • Successful track record of designing, building and operating rare earth separation plants inside and/or outside of China Proven capability and technology for the separation of ALL critical rare earth products The foundation for Canada Rare Earth to fulfill its vertical integration strategy includes: . • Identifying and securing optimal sources of rare earth concentrate Design, build and operation of Canada Rare Earth full spectrum refineries Customer engagement and sales support Access to and supply from affiliate refineries canadarareearth.com TSX.V: LL 13#14Canada Rare Earth Corporation Capital Structure Shares Directors, Sr. Management & Other Advisers Basic and Fully Diluted 36,036,167 (22%) 130,903,826 166,940,141 Options Range: 5¢-17¢ Average: 9¢ 17,934,700 5,640,300 23,575,000 Total 53,970,867 (28%) 136,545,126 190,515,141 Trading Prices: 4.5¢-1.5¢ 52 Week high/low Market Capitalization: $5,842,900 canadarareearth.com TSX.V: LL 14#15Canada Rare Earth Corporation Vancouver Office Contact Information 15th Floor 1040 West Georgia St. Vancouver, BC V6E 4H1 (+1) 604-638-8886 Tracy A. Moore, CEO & Director [email protected] Peter Shearing, COO & Director [email protected] Website www.canadarareearth.com Corporate Data Transfer Agent Listing Computershare Legal Counsel TSX Venture Exchange Gordon J. Fretwell TSX:LL canadarareearth.com TSX.V: LL Auditors DeVisser Gray LLP 15