27 August 2014

Rare Earth Minerals Plc.

("Rare Earth Minerals", "REM" or "the Group")

Interim Results for the six month period ending 30 June 2014

Further significant progress on each project

Rare Earth Minerals plc (AIM: REM.L) announces its interim results for the six month period ending ended 30 June 2014, which has been a period of intense and highly encouraging activity. David Lenigas, the Company's Chairman commented: “REM has continued to make excellent progress with each of its principal investments in Mexico, Greenland and Australia, all of which demonstrate much potential for rapid growth. It is a policy with each of our investments that we add value from our mining and capital markets expertise, while supporting the very capable operating management in each investee company. The progress of the Group over the last six months and subsequent period has continued at an excellent pace and all of our key assets and investments continue to show results beyond our expectations.” HIGHLIGHTS:

Sonora Lithium Project:

REM holding in Bacanora Minerals Ltd (“Bacanora”) increased from 5.47% to 11.90%.

Contained Lithium Carbonate Equivalent (“LCE”) at Joint Venture 1 (“JV#1”) with Bacanora increased by 35% to 2.01 million tonnes (30% direct ownership).

Bacanora’s La Ventana concessions contained LCE increased by 37% to 1.273 million tonnes.

Composite samples from JV#1 and La Ventana concessions confirm over 99.5% lithium carbonate purity

Direct ownership in Joint Venture 2 (“JV#2”) increased from 10% to 30% since the period end.

LCE plant design is progressing well, with a lithium carbonate production capacity of up to 50,000 tonnes per annum.

Overall economic interest in Bacanora Mexican projects increased to 38%.

Yangibana Rare Earth Minerals Project:

REM holds a 30% free carried interest to bankable feasibility study on the project.

Subsequent to period end maiden resource estimate declared of 3.36 million tonnes comprising an Indicated Resource of 1.86 million tonnes at 1.38% Total Rare Earth Oxides ("TREO") and an Inferred Resource of 1.5 million tonnes at 1.29% TREO at a 0.5% TREO cut-off.

Greenland:

Initial sampling for Rare Earth Element (“REE”) confirms presence of mineralised micro-kakortokite dyke.

Four samples exceed 2,000 ppm of Total Rare Earth Oxides (“TREO”) with the highest being 2,887 ppm TREO.

Grades are similar to those found at the 4.3 billion tonne ore tonne Tanbreez deposit owned by TANBREEZ Mining Greenland A/S.

For further information please contact:

Rare Earth Minerals plc +44 (0) 207 440 0647 David Lenigas Kiran Morzaria WH Ireland Limited (NOMAD & Joint Broker) +44 (0) 207 220 1666 James Joyce Nick Field Hume Capital plc (Joint Broker) +44 (0) 203 693 1470 Guy Peters Jon Belliss Square1 Consulting David Bick/Mark Longson +44 (0) 207 929 5599 INVESTMENT AND OPERATIONS REVIEW:

Mexico - mineral resource

Within our investment portfolio, most notable is the prominence of Bacanora and our joint ventures with this company on the Sonora Lithium Project. The combined NI 43-101 compliant resource now stands at a total of 3.28 million tonnes of LCE which, at a price of US$6,500 per tonne of LCE, now equates to about US$21 billion of drilled in-ground value. Given the further expansion of the licenses, the prospectivity of these areas and the planned activities in the coming 12 months we expect that these resources should increase materially.

Mexico – battery grade LCE and initial production capacity

In addition to the size of the LCE resource, during the period the metallurgical test work confirmed that we can achieve better than battery grade LCE (+99.5% LCE).

The very recent announcement that plant design is now underway for a project designed to produce up to 50,000 tonnes of LCE per annum, underpins our belief that the Sonora Lithium Project has the potential to be a globally significant lithium producer.

Lithium market developments

We have seen some very positive developments within the lithium market as it has been come even more apparent that the driver for growth in the lithium sector is being led by OEMs such as Nissan, Ford and Tesla.

It is, in particular, the announcement by Tesla of the planned gigafactory that has changed the landscape for lithium cell demand over the coming years.

The gigafactory plans to produce the lithium ion cells for some 500,000 electric cars per annum by 2020. The significance of this is that this single gigafactory will be producing more gigawatt hours in 2020 than the world’s current production.

This has led industry experts to forecast a lithium carbonate demand of up to 480,000 tonnes per annum by 2025 against an identified supply of 300,000 tonnes per annum.

Given the rapid pace of development in the market, REM and BCN have been working in conjunction to identify and engage with potential customers for the planned lithium carbonate production from the Sonora Lithium Project.

Lithium producer consolidation

In July this year Albermarle Corporation (“Albermarle”) and Rockwood Holdings (“Rockwood”), announced that they had reached a definitive agreement under which Albermarle would acquire all outstanding shares of Rockwood for approximately US$ 6.2 billion in cash and shares. This transaction occurred only a few months after Rockwood acquired 49% of Tailson Lithium owner of one of the largest hard rock lithium mines in the world, for US$512 million.

One of the key areas which the combined Albermarle and Rockwood group is expected to drive growth in is to penetrate lithium-based energy storage products, including e-mobility batteries and batteries for the automotive industry.

Greenland

In Greenland we have commenced our initial exploration programme and the first batch of assay results were encouraging, confirming a REE mineralised structure near to two of the world's largest REE deposits. The board believes its 100%-owned concessions in this territory have substantial potential.

Australia

The maiden mineral resource, declared at Yangibana after the period’s end, was a significant development, we were particularly pleased with the quantities of Critical Rare Earth Oxides, notably Neodymium which is critical for the manufacturing of Permanent Magnets (wind and power turbines), electronic components (heat resistant ceramics) and rechargeable consumer batteries.

Outlook

The investments made by the Group to date have been both encouraging and potentially very rewarding. We will look to maximise this potential and to continue to evaluate further similar investment opportunities. The board would like to take this opportunity to thank our shareholders, staff and consultants for their extremely valuable and continued support.

PROJECTS:

Bacanora Minerals Ltd:

(11.90% owned by REM – 26 August 2014)

Bacanora is a Canadian TSX.V and AIM listed explorer and developer of industrial minerals in Mexico with a primary focus in lithium and borates. Its major project is the:

Sonora Lithium Project:

Located in the Sonora State Northern Mexico, situated 180 km northeast of Hermosillo. The project consists of the La Ventana and La Ventana 1 (“La Ventana”) concessions, which are owned 100% by Bacanora. During the previous financial year Bacanora published a Preliminary Economic Assessment on the La Ventana deposit with the following summary:

35,000 tonnes per annum of battery grade LCE. (Assuming $6,000 per tonne of LCE)

Capital expenditure US$114 million.

20 year open pit mine life.

Internal Rate of Return of 138%.

1.9 year payback on cost of capital.

Operational expenditure - US$ 1,958 per tonne LCE

Net Present Value (8% discount rate) of US$848 million.

During the last six months the project has made some major steps forward. In early June Bacanora announced and upgrade and increase in the Lithium mineral resources at La Ventana. The new indicated mineral resources, using a base case cut-off of 2,000 ppm lithium, was 75,320,000 tonnes grading 3,174 ppm Li (1,273,000 tonnes of LCE) for the combined Upper and Lower Clay Units. This was an increase of 37% over the previously announced resource of 930,000 tonnes of LCE. The indicated lithium resource for the Upper Clay unit is estimated at 21,470,000 tonnes averaging 2,256 ppm Li (1.20% LCE). The Lower Clay Unit has an indicated lithium resource estimated at 53,850,000 tonnes averaging 3,540 ppm (1.88% LCE). These resources were prepared in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101").

Table1: La Ventana Indicated Lithium Resources (100%)

Cut-off Tonnes Li ppm LCE % LCE tonnes

Upper Clay

1,000 30,690,000 1,824 0.97 298,000

2,000 21,470,000 2,256 1.20 258,000

3,000 10,030,000 3,186 1.70 170,000

Lower Clay

1,000 61,050,000 3,247 1.73 1,055,000

2,000 53,850,000 3,540 1.88 1,015,000

3,000 38,180,000 4,510 2.40 917,000

Total for Upper & Lower Clay

1,000 91,740,000 2,771 1.48 1,353,000

2,000 75,320,000 3,174 1.69 1,273,000

3,000 48,210,000 4,235 2.25 1,087,000

In addition to this increase and upgrade in resources, Bacanora completed the construction of a pilot plant to refine the metallurgical treatment process for the production of lithium carbonate.

The results from this work were published In April this year when Bacanora announced results of bench scale metallurgical and mineral process testing conducted by the Metallurgical Division of Inspectorate Exploration & Mining Services Ltd. ("Inspectorate") on clay composite samples from the La Ventana deposit.

The pilot plant used a roast-leach process to take lithium into solution from the clays and the resulting solution is reduced in volume by evaporation in order to concentrate lithium. After duplicating this process in its independent laboratory, Inspectorate concluded that lithium carbonate product with over 99% purity was achieved from condensed leach solutions in laboratory scale test work. XRD ("x-ray diffraction") performed on products from two test samples confirmed over 99.5% lithium carbonate purity. These test results have been confirmed on duplicate samples tested under similar process parameters at Bacanora’s pilot plant in Hermosillo.

In addition during the period the pilot plant began the production of lithium carbonate samples for potential buyers and Bacanora commissioned a scoping study for a 35,000 to 50,000 tonne per year lithium carbonate plant.

El Sauz / Fleur Project, Mexico:

(30% owned by REM – Total Economic Interest 38.3% -26 August 2014)

The contiguous El Sauz, El Sauz 1, El Sauz 2, Fleur and Fleur 1 concessions are owned 70% by Bacanora and 30% by REM under the JV#1 agreement. The licenses cover the 34 square kilometre El Sauz and Fleur concessions adjacent to and along strike from Bacanora‘s La Ventana discovery.

The El Sauz / Fleur project is a strike extension of La Ventana, and has very similar geology and structural controls.

Excellent progress has been made in the development of these concessions. Along with the announcement in June of the increase and upgrade in mineral resources in La Ventana we announced an increase and upgrade in the mineral resources contained in JV #1.

The new indicated mineral resources, using a base case cut-off of 2,000 ppm lithium, was 120,990,000 tonnes averaging 3,120 ppm Li (2,010,000 tonnes of LCE) for the combined Upper and Lower Clay units. This is an increase of 35% over the previously announced resources of 1,486,000 tonnes of LCE. The Upper Clay has an indicated lithium resource of 47,360,000 tonnes averaging 2,222 ppm Li (1.18% LCE). The Lower Clay has an indicated lithium resource of 73,630,000 tonnes averaging 3,698 ppm Li (1.97% LCE).

Table 2. El Sauz and Fleur Indicated Lithium Resources (100%)

Cut-off Tonnes Li ppm LCE % LCE tonnes

Upper Clay

1000 97,080,000 1,657 0.88 856,000

2000 47,360,000 2,222 1.18 560,000

3000 18,390,000 3,773 2.01 369,000

Lower Clay

1000 98,250,000 3,028 1.61 1,584,000

2000 73,630,000 3,698 1.97 1,450,000

3000 58,910,000 4,140 2.20 1,298,000

Total for Upper & Lower Clay

1000 195,330,000 2,347 1.25 2,440,000

2000 120,990,000 3,120 1.66 2,010,000

3000 77,300,000 4,053 2.15 1,667,000

In April this year we announced the results of bench and pilot plant scale metallurgical and mineral process testing. The pilot plant used a roast-leach process to take lithium into solution from the clays and the resulting solution is reduced in volume by evaporation in order to concentrate lithium. After

duplicating this process in its independent laboratory, Inspectorate concluded that lithium carbonate product with over 99% purity was achieved from condensed leach solutions in laboratory scale test work. XRD ("x-ray diffraction") performed on products from two test samples confirmed over 99.5% lithium carbonate purity.

In addition during the period the pilot plant began the production of lithium carbonate samples for potential buyers and Bacanora commissioned a scoping study for a 35,000 to 50,000 tonne per year lithium carbonate plant

Buenavista, Megalit and San Gabriel, Mexico:

(30% owned by REM – Total Economic Interest 38.3% - 26 August 2014)

In December 2013 we announced Lithium bearing units identified in the La Ventana and El Sauz/Fleur deposit were identified at surface in 4 parallel trending sequences. As a result of which REM entered into a new joint venture ("JV #2") with Bacanora that covers these new discoveries.

During the current period REM completed the acquisition of the 10% interest in JV#2 and exercised its option to increase its position to 30% in JV#2. Subsequent to the period end REM announced that it had deposited US$1 million with its joint venture partner in order to increase its direct interest in the JV#2 from 10% to 30%. REM has a right of first refusal (until December 2015) to negotiate terms to increase its interest in JV#2 from 30% to a maximum of 49.9%.

The JV#2 concessions cover strategic ground surrounding the entire Sonora Lithium Project, where lithium-bearing clay units have now been identified at surface in 4 parallel and arcuate north-westerly trending sequences that are estimated to extend for at least 40 kilometres in strike length. Previous reconnaissance work by Bacanora has identified clay units on the new concessions where surface samples of the clays have analysed up to 1,350 ppm lithium.

During the 6 month period ending 30 June 2014 Bacanora has carried out a diamond drilling programme to test a new lithium bearing clay prospect (Penasco) located on the Megalit concession, to the south of El Sauz. In addition, a clay occurrence, Cieneguita, to the east of the Penasco prospect was also drill tested.

In conjunction with the drilling, mapping and prospecting will continue on the Megalit concession in order to locate and sample additional exposures of the lithium-bearing clay basin. Trenching is also planned for lithium-bearing clays exposed in a northerly striking direction along 6 kilometres on the Buenavista concession.

The US$ 1 million will be used for further exploration and drilling on JV#2 over the coming 12 months.

Yangibana Project, Australia:

(REM-30% free carry – 26 August 2014)

The Group announced in December 2011 that it had completed an agreement (the "Agreement") with Camelot Trust Corporation Limited ("Camelot") whereby the Group has acquired the entire issued share capital of Mojito Resources Limited which owns a 30% interest in the Yangibana rare earth project ("Yangibana") situated in the Gascoyne region of Western Australia.

Yangibana is centred on narrow, discontinuously outcropping ironstone dykes that have been shown to carry anomalous REE associated with monazite mineralisation. The REE comprise 15 elements with atomic numbers between 57 and 71, plus scandium and yttrium. The heavy rare earth oxides comprise the oxides of europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium and yttrium. The light rare earth oxides comprise the oxides of lanthium, cerium, praseodymium, neodymium and samarium.

Hastings Rare Metals Limited (“Hastings”) is the manager of the Project and holds a 60% interest. REM is free carried by Hastings through to the commissioning of a bankable feasibility study.

During the period Hastings completed the first phase of it’s drilling at the Yangibana project with a total of 44 reverse circulation holes drilled for a total of 1,836 metres. The results from the first 5 holes demonstrated significant TREO assays.

Subsequent to the period end Hastings reported a maiden resource on the deposit. The total JORC Resource was 3.36 million tonnes comprising an Indicated Resource of 1.86 million tonnes at 1.38% TREO and an Inferred Resource of 1.5 million tonnes at 1.29% TREO at a 0.5% TREO cut-off. These resource figures represented a major increase of 290% in contained TREO compared to previous non-JORC estimate and contained significant Neodymium (Nd2O3), a critical rare earth oxide, with average grade of 2,700 parts per million (0.27%).

Significantly, the resource remains open in all directions with mineralisation cropping out to the east and west.

On the 25 August 2014 Hastings announced further assay results and the start of a 6,500 metre drill programme. Of note were the results from the Lion’s Ear Prospect which yielded grades of up to 128,000 ppm (12.8%) TREO and 21,900 ppm (2.19%) Nd203 (neodymium oxide).

The drill programme is being carried out to test the extent of the already declared mineral resource at the Yangibana North Prospect and in addition test the Lion’s Ear, Hook, Gossan, Kane’s Gossan, and Yangibana South Prospects. Hastings expect that at the end of the programme that an initial inferred resource estimate will be feasible at each of the new drilling prospects (Lion’s Ear, Hook, Gossan, Kane’s Gossan, and Yangibana South).

Narsaq, Southern Greenland:

(100% owned by REM – 26 August 2014)

REM has four Exploration Licenses covering an area of approximately 460km2. Two of these licences abut the northern and eastern boundaries of Greenland Minerals and Energy Limited’s ("GMEL") (ASX: GGG) licences that encompass the world class Kvanefjeld, Sørenson, Zone 3 and Steenstrupfjeld REE deposits.

The exploration of these licenses is being carried with the assistance of GMEL whom are a leading operator in Greenland’s emerging minerals industry.

During the six month period REM embarked on it first field exploration programme of its licences in Greenland. REM commissioned SRK Exploration Services Ltd. ("SRK ES") to undertake a structural interpretation in order to generate exploration targets within their 2012/15 exploration licence in South Greenland. This was carried out using stereo aerial photographs and an automated 3D viewer facility at the Geological Survey of Denmark and Greenland.

Following this structural study, SRK ES concluded that a range of targets were worthy of exploration within REM's licence 2012/15. These targets include a micro-kakortokite dyke of significant width (10-30 m) in the northern part of the licence that has REE potential, given its similarities and possible association to lithologies found at nearby world-class REE deposits.

Most other targets, are associated in some way to the Saarloq Shear Zone that cuts through the licence area. This major crustal-thickness is under-explored and there are no records of previous commercial exploration in this area.

Subsequent to the period end REM reported the initial assay results from its exploration programme. These results were from the micro-kakortokite dyke that lies immediately south of the ilimaussaq complex which contains two of the largest REE element deposits in the world (Tanbreez and Kvanefjeld). This dyke has the same source rock as these deposits and has a strike length of 18 km of which approximately 2-3km is exposed on REM's exploration licences.

Ten samples were collected from the micro-kakortokite dyke. Four samples exceed 2,000 ppm of TREO with the highest being 2,887 ppm TREO. These grades are similar to those found at the 4.3 billion tonne Tanbreez ore deposit owned by TANBREEZ Mining Greenland A/S which lies approximately 2 kilometres to the south west of REM's concessions.

In addition to the above, REM has been carrying out the sampling of the other targets identified by the SRK ES. Sampling was comprised of stream-sediment, rock chip and pan concentrate sampling. Sulphides have been noted in many of the rock chip samples, as has veining of varying intensity and alteration, which are possible indications of a mineralising event.

A total of 361 samples have been collected to date, 176 stream sediment samples, 131 rock chip samples and 217 pan concentrate samples. These samples are being delivered to ALS laboratory in Ireland for analysis for a variety of elements.

Results are expected to start arriving from further rock chip samples in the coming weeks, followed by the stream sediment and pan concentrate samples, and subsequent sample submissions.

REM believes that the exploration licenses over key strategic blocks in Greenland is important and will become more interesting as GGG progress its feasibility study. Moreover the announcement in October 2013 by Greenland’s Parliament that it had voted in favour of removing a long-standing zero-tolerance policy concerning uranium and other radioactive elements, representing a significant step forward for Greenland, as it places the country on the path to a potential uranium-producer status and thereby opens up coincident resources such as rare earth elements to potential exploitation.

Western Lithium USA Corp:

(2.29 % owned by REM -26 August 2014)

Western Lithium USA Corp (“Western Lithium”) is developing a major lithium deposit in Northwest Nevada. The Kings Valley deposit, as it is known, contains a total proven and probable resource of totalling 27,135,000 tonnes, averaging 3,950 ppm lithium at a 3,270 ppm cut-off. Based on its NI 43-101 Prefeasibility Study, the Kings Valley project is forecast to have a comparably low first-quartile cost structure against new and incumbent lithium producers, and to generate a net present value of US$552 million at a discount rate of 8%.

In February 2014 Western Lithium announced that a Lithium Demonstration Plant is expected to be operational in the fourth quarter of 2014. Western Lithium intends to use the plant to collect design data for a definitive feasibility study and to demonstrate the viability of producing low cost lithium carbonate from its Kings Valley Project. Western Lithium has received a USA patent for its proprietary process for separating lithium and potassium by product compounds from lithium-rich clays.

Other Projects

The Group continues to hold an investment in the Cup Lake Project in Canada and continues to look at new investment opportunities in line with its stated investment strategy.

FINANCIAL RESULTS:

During the period the Group made a loss before taxation of £647,000 (6 months ending 30 June 2013: loss £323,000, year ending 31 December 2013: loss £814,000). There was a weighted loss per share of 0.01p (30 June 2013: loss per share 0.01p, 31 December 2013: loss per share 0.03p).

The total assets of the Group increased from £5,172,000 at the end of last year (31 December 2013) to £12,301,000 at the end of this period. Of this amount £4,092,000 is held as cash and cash equivalents.

In March 2014 the Group completed a placing of 1,150,000,000 ordinary shares at a price of 0.4 pence per Share. This raised gross proceeds of £4,600,000.

During the period the Group completed and closed the Equity Swap Agreement with YA Global Master SPV, Ltd (“YAGM”) The Equity Swap Agreement has resulted in gross cash proceeds of £3,017,495 over the last 18 months.

In June 2014 the Group secured a 3-year US$10 million debt facility with YAGM. The first US$3 million was drawn down in June and carries a twelve-month repayment schedule at a fixed coupon of 10%. Any subsequent drawdowns would be on the same terms and subject to approval by YAGM.

RARE EARTH MINERALS PLC STATEMENT OF COMPREHENSIVE INCOME FOR THE PERIOD ENDED 30 JUNE 2014

Notes

Unaudited Period ended 30 June 2014

Unaudited Period ended 30 June 2013

Audited Year ended 31

December 2013

£’000

£’000

£’000

Administrative expenses

(641)

(275)

(766)

Total administrative expenses

(641)

(275)

(766)

Loss from operations

(641) (275) (766)

Loss on sale of available for sale investments - (48) (48)

Finance cost (6) - -

Loss before taxation

(647)

(323)

(814)

Taxation

-

-

-

Loss after taxation and loss attributable to the equity holders of the Group

(647)

(323)

(814)

Other comprehensive income

Exchange differences on translating

foreign operations 17 (52) (127)

Fair value adjustment of equity swap

(580)

-

580

Transfer to income statement of available for sale asset reserve - 47 47

Increase/(decrease) in value of available for sale asset 1,009 - (203)

Other comprehensive income for the period net of tax 446 (5) 297

Total comprehensive expenditure for

the period (201) (328) (517)

Loss per share

Basic and diluted (pence per share) 4 (0.01) (0.01) (0.03)

RARE EARTH MINERALS PLC CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE PERIOD ENDED 30 JUNE 2014

Share

capital

Share premium

account

Share-based

payment reserve

Available for sale

asset reserve

Hedging &

Exchange reserve

Retained earnings

Total equity

£'000 £'000 £'000 £'000 £'000 £'000 £'000

Balance at 1 January 2013 628 7,198 712 (47) 3 (7,037) 1,457

Issue of share capital 133 567 - - - - 700

Share issue costs

(11)

- - - (11)

Share based payments - - 9 - - - 9

Transactions with owners

133

556

9

- - -

698

Foreign exchange - - - - (52) - (52)

Transfer to income statement - - - 47 - - 47

Loss for the period - - - - - (323) (323)

Total comprehensive loss for the period - - - 47 (52) (323) (328)

Balance at 30 June 2013 (unaudited) 761 7,754 721 0 (49) (7,360) 1,827

Issue of share capital 58 945 - - - - 1,003

Premium on Share swap - 2,261 - - - - 2,261

Transfer on exercise of options - - (264) - - 264 -

Share based payments - - 43 - - - 43

Transactions with owners

58

3,206 (221) - - 264

3,307

Foreign exchange - - - - (75) - (75)

Fair value adjustment of equity swap - - - - 580 - 580

Decrease in value of available for sale asset - - - (203) - - (203)

Loss for the period - - - - - (491) (491)

Total comprehensive loss for the period

-

- - (203) 505 (491) (189)

Balance at 31 December 2013 819 10,960 500 (203) 456 (7,587) 4,945

Issue of share capital 143 5,203 - - - - 5,346

Share issue costs

(260)

- - - (260)

Premium on Share swap - 456 - - - - 456

Transfer on exercise of options - - (106) - - 106 -

Share based payments - - 90 - - - 90

Transactions with owners

143

5,399 (16)

- - 106

5,632

Foreign exchange - - - - 17 - 17

Fair value adjustment of equity swap - - - - (580) - (580)

Increase in value of available for sale asset - - - 1,009 - - 1,009

Loss for the period - - - - - (647) (647)

Total comprehensive loss for the period

-

- - 1,009 (563) (647) (201)

Balance at 30 June 2014 (unaudited) 962 16,359 484 806 (107) (8,128) 10,376

RARE EARTH MINERALS PLC STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014

Unaudited

Unaudited

Audited

30 June 2014

30 June 2013

31 December 2013

Assets Notes £'000

£'000

£'000

Non-current

Intangible assets

690

806

698

Investment in associate 2,259

-

1,496

2,949

806

2,194

Current assets

Trade and other receivables

1,338

1,137

688

Derivative financial instrument

-

-

630

Available for sale assets

3,922

-

699

Cash and cash equivalents 4,092

6

961

Total current assets

9,352

1,143

2,978

Total assets

12,301

1,949

5,172

EQUITY AND LIABILITIES

Current liabilities

Trade and other payables

296

122

227

Loans

1,629

-

-

Total current liabilities and total liabilities 1,925

122

227

Equity

Share capital 4 962

761

819

Share premium

16,359

7,754

10,960

Share based payment reserve

484

721

500

Available for sale asset reserve

806

-

(203)

Hedging & Exchange reserve

(107)

(49)

456

Retained earnings

(8,128)

(7,360)

(7,587)

Total equity and liabilities

to owners of the Group

10,376

1,827

4,945

Total equity and liabilities

12,301

1,949

5,172

RARE EARTH MINERALS PLC CONSOLIDATED CASH FLOW STATEMENT FOR THE PERIOD 30 JUNE 2014

Unaudited Period ended

Unaudited Period ended

Audited Year ended

30 June 2014

30 June 2013

31 December 2013

£'000

£’000

£'000

Cash flows from operating activities

Loss after tax

(647) (275) (766)

Amortisation of intangibles

24

29

54

Finance cost

6

- -

Equity settled share-based payments

90

9

52

Fees settled in shares

94

-

-

(Increase)/decrease in trade and other receivables

(600)

(648)

(249)

Increase in trade and other payables

75

-

105

Net cash outflow from operating activities

(958)

(885)

(804)

Cash flows from investing activities

Net payments for investment in associate

(763)

-

(1,496)

Payments for investments in AFS assets

(2,219)

-

(902)

Investment in exploration

-

(8)

-

Receipt on sale of AFS assets

-

34

34

Net cash outflow from investing activities

(2,982)

26

(2,364)

Cash flows from financing activities

Proceeds from issue of share capital

5,252

700

1,703

Proceed from settlement of share swap

456

-

2,261

Loans received

1,629

-

-

Finance cost

(6)

-

-

Share issue costs (260)

(11)

(11)

Net cash inflow from financing activities

7,071

689

3,953

Net increase/(decrease) in cash and cash

equivalents 3,131

(170)

785

Cash and cash equivalents at beginning of period

961

176

176

Cash and cash equivalents at end of period 4,092

6

961

NOTES TO THE INTERIM REPORT FOR THE PERIOD ENDED 30 JUNE 2013 1 BASIS OF PREPARATION The interim financial statements have been prepared in accordance with applicable accounting standards and under the historical cost convention. The financial information set out in this interim report does not constitute statutory accounts as defined in section 434 of the Companies Act 2006. The Group’s statutory financial statements for the year ended 31 December 2013 have been delivered to the Registrar of Companies. The auditor’s report on those financial statements was unqualified. The principal accounting policies of the Group are consistent with those detailed in the 31 December 2013 financial statements, which are prepared in accordance with International Financial Reporting Standards (IFRSs), as adopted by the European Union. GOING CONCERN The Directors have prepared cash flow forecasts for the period ending 30 September 2015. The forecasts demonstrate that the Group has sufficient funds to allow it to continue in business for a period of at least twelve months from the date of approval of these financial statements. Accordingly, the accounts have been prepared on a going concern basis. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results 2 SEGMENTAL REPORTING An operating segment is a distinguishable component of the Group that engages in business activities from which it may earn revenues and incur expenses, whose operating results are regularly reviewed by the Group’s chief operating decision maker to make decisions about the allocation of resources and assessment of performance and about which discrete financial information is available. The chief operating decision maker reviews financial information for and makes decisions about the Group’s performance as a whole. The Group has not actively traded during the period. Subject to further acquisitions the Group expects to further review its segmental information during the forthcoming financial year.

3 LOSS PER SHARE The calculation of the loss per share is based on the loss attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period.

Unaudited

Unaudited

Audited

six months

ended six months

ended year ended

30 June 2014

30 June 2013

31 December 2013

£'000

£'000

£'000

Loss on ordinary activities after tax (£'000) (647)

(323)

(814)

Weighted average number of shares for

calculating basic loss per share

4,789,386,747

2,544,558,276

3,174,406,928

Basic and diluted loss per share (pence) (0.01)

(0.01)

(0.03)

The share options are anti-dilutive, as a consequence of the loss for the period. 4 SHARE CAPITAL

Unaudited

Unaudited

Audited

30 June 2014

30 June 2013

31 December 2013

£'000

£'000

£'000

Allotted, issued and fully paid

173,619,050 deferred shares of 0.24p (30 June and 31 December 2013: 173,619,050) 417 417 417

5,453,375,717 ordinary shares of 0.01p (30 June 2013: 3,446,952,383, 31 December 2013: 4,017,952,383)

545

344

402

962

761

819