Interim Results

Rare Earths Global Limited

("REG" or the "Group")

Interim Results

Rare Earths Global Limited (AIM: REG), a leading mining services group focused on the extraction, separation, refinement and trading of rare earth elements, oxides and other related products, today announces its unaudited results for the six months ended 30 June 2012.

Highlights

Post period end highlights

* All amounts are in RMB unless otherwise stated

Commenting on the results, Simon Ong, CEO of Rare Earths Global Limited, said: "Significant progress has been made in REG during the period under review. We have successfully listed on AIM raising US$10 million in the process, commenced business in our newly formed trading division and acquired the remaining 39% of the Sanxie Plant post the period end. However, the progress of the business has been hampered by a number of factors including a smaller than expected fund raising at the time of the IPO; a softening of Rare Earth Oxide prices; delays in the period of confirmations of production and export quotas from the Chinese Government; and, implications of the first Chinese White Paper on the Rare Earths market. Despite these challenges, the Board believes that REG remains in position to meet market expectations for the full year 2012."

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Business Review

On an operational level the planned growth as envisaged had to be scaled back as the Group was only able to raise US$10 million at its IPO rather than the full US$50 million it had been targeting. This has meant that the capital expenditure required to expand the separation plant, mining services division and support the new trading division has had to be scaled back accordingly or delayed. In order to address this issue REG is seeking debt financing and as announced on 20 June 2012 the Company is currently in discussions with Credit Suisse in Hong Kong regarding a potential term loan of up to US$50 million. Credit Suisse are continuing their due diligence and the Board hopes to provide shareholders with an update on the status of this facility in October.

Divisional Review:

Separation & Smelting

At the time of Admission to AIM, the Board set out that a 20% reduction in Rare Earth Oxide ("REO") prices was to be expected in the short term. In fact, the average price decline for REO's during the period has been 29%. This larger than expected decrease has been caused by an increased softening in demand for REO's as the manufacturing slowdown both internationally and in the Chinese economy continues with the result that the requirement for finished products that use REO's has declined significantly. For example, lanthanum oxide (used in hybrid car batteries) dropped from RMB 312,000 per tonne in beginning of the period to RMB 212,000 in June 2012, representing a 32% decrease. In addition, the cost of REO raw material has remained constant in the domestic Chinese market which has further affected the margins at the Sanxie Plant.

The Sanxie Plant has sold 27 tonnes (H1 2011: 4 tonnes) of REO in the first six months of the year and 31 tonnes(H1 2011: 426 tonnes) of rare earth compounds. A significant impediment to the Group's revenue has been the delay in the Chinese Government's confirmation of both the production quota and export quota for 2012. This has been the case for most of the REO producers in China as the government is revisiting its policy following criticism of its Rare Earth practices by the World Trade Organisation ("WTO") in March this year. The Company recently received confirmation of its production quota of 300 mtpa of REE but are currently still awaiting confirmation on the export quota for 2012. With this delay in clarity over exports, the Board fully expects revenues for the full year 2012 to be weighted to the second half of the year as its inventory and new product is sold. The Board is pleased to report that the Sanxie Plant continues to pass all of its environmental inspections without any issues.

Since the period end, the Group acquired the outstanding 39% in the Sanxie Plant from Grace Coast Limited, a company wholly owned by Mr. Tong Man Tak. This acquisition, announced on 19 July 2012, will further ensure that REG's revenue is significantly second half biased.

REG continues to negotiate with Fujian Huaming Enterprises (Group) Co. Ltd regarding the terms of the final joint venture agreement to build a separation facility in Fujian province. However, given REG's current capital constraints this project has been delayed. The Board hope to update shareholders on its status in the second half of the year.

Mining Services

REG's contract with Zhejiang Ke Xin Electronics Co. Ltd ("Kexin") has begun to deliver revenue in H1 2012 and the Board looks forward to this increasing proportionately during H2 2012. This will improve the Group's overall margin as all REO raw materials sourced from Kexin is at a 40% discount to market price.

The Group is working towards securing additional long-term mining service contracts and is actively discussing further opportunities both domestically and internationally. As disclosed at Admission, the Board hopes that there will be further opportunity to partner with other SOE's in this regard. The Board would hope to update shareholders on progress during the second half of the year.

Trading

The Group's new trading division was held back by a delay in the Chinese Government confirming production and export quota levels along with funding being directed onwards the Sanxie Plant operation. In spite of this, REG has traded 10 tonnes of Neodymium oxide during the first half of 2012 which it has sourced from third parties outside of China and sold to international buyers. Since the REO has not been sourced from the REG's Sanxie Plant the overall gross profit from the Group's initial trading has been circa 15%. The Board expects this to increase significantly once export quota levels are confirmed and REG can trade its own production in the international market.

The Board is pleased to report that a facility of US$2 million was recently agreed with Standard Chartered Bank for use by the Group's trading division which will enable the division to take advantage of both domestic/international oxides coming onto the market at prices which can generate attractive margins for the division.

Financial Results

For the six months ended 30 June 2012,Group turnover was RMB 52.8 million, (H1 2011:RMB 94.9 million- 44%). Turnover for the separation and smelting of rare earth products was RMB 36.7 million (H1 2011:RMB 83.1 million -56%), and accounted for approximately 70% (H1 2011: 87%) of the Group's turnover. Turnover from the mining business was RMB 4.9 million (H12011 RMB 11.84) million, representing around 9% (H1 2011: 12%) of the Group's total turnover. Turnover from the trading business commenced during the period under review and contributed RMB 11.1 million or 21% to total Group turnover. Due to the lower margin in trading business and lower selling price of REG's rare earth products, the Group recorded an overall gross profit margin of 21% in the first half of 2012, compared to 40% margin in the corresponding period last year. During the period, the Group incurred share based payment expenses of RMB 23.1 million, and IPO related expenses of RMB 7.4 million, together with other operational expenses, the Group recorded a net loss of RMB 29.4 million (H1 2011: net profit of RMB 17.7 million). The loss per share was RMB 49 cents (H1 2011: earning per share of RMB 24 cents).

Chinese White Paper on Rare Earth

On 20 June 2012, the Chinese Government published a White Paper on the Rare Earth industry in China (the "White Paper"). The White Paper set out a comprehensive background on the industry in China and its challenges. This included the actions that the authorities have taken against illegal mining and environmental issues. In addition, it was made clear that no new licences for REO production would be granted for the foreseeable future. On balance, the Board felt that the White Paper was of benefit to REG by potentially assisting price stabilisation with regard to all oxides and in addition narrowing the competitive landscape domestically.

However, on 7 August 2012 the Ministry of Industry and Information Technology ("MIIT") released a statement which recommended that mixed rare earth mines in China will have to produce a minimum of 20,000 metric tonnes a year and smelters will have to ensure annual output of 2,000 tonnes.

At current levels, the Sanxie Plant does not meet the MIIT recommendation. China Daily, an English language Chinese national daily newspaper, reported that a ministry spokesman said that up to a third of China's 23 mines and 99 smelting companies will fail to meet the new regulations, resulting in China reducing its mining of the 17 elements by about one-fifth.

The Board would like to stress that at the present time it is unclear whether the White Paper will been acted upon and if so when and in addition that the MIIT statement is simply a recommendation which may or may not be adopted in law. Nevertheless, the Board is aware of the impact this may have on production at the Group's Sanxie Plant in its current form. The Board believes that despite this announcement the Company has several compelling mitigating options open to it which will ensure the Group will continue to operate as a significant commodities business in the region. The options include:

·; Increasing the production capacity at the Sanxie Plant to more than 2,000 tonnes within an acceptable time;

·; Fast track REG's potential agreement with Fujian Huaming Enterprises (Group) Co. Ltdfor a 2,000 tonnes separation plant, details of which were outlined in REG's admission document at the time of the IPO;

·; Agree a Joint Venture with another state owned enterprise for a 2,000 tonne separation plant;

·; Add a more advanced downstream processing capability which will exempt the Company from the minimum production capacity requirement;

·; Focus on producing rare earth compounds rather than final oxides.

The Board is currently considering these options all of which would are viable alternatives to the current format. However, the status may not change as there is currently no certainty that the White Paper will be finally legislated.

Outlook

The rare earth sector, both domestically and internationally, is going through a period of rapid change and development. The White Paper demonstrates the growing importance the Chinese Government places on REO production and the efficient control of its market domestically. This is creating much uncertainty in the short term as market participants position themselves for any new developments. Like most of our competitors REG will have to adapt in the short term but the Board feels that the Company is well positioned to build a solid foundation in the coming months for its long term success.

The Board believes that the demand for REO's for new applications will continue to increase and in absolute terms both domestic and international global demand will return to previous levels. Coupled with increasing regulation and control of production both domestically and internationally we believe that the long term outlook for the price of REO's (and more specifically HRE's) is positive.

On behalf of the Board of Directors

Simon Ong

Chief Executive Officer

25 September 2012

CONSOLIDATED STATEMENT of comprehensive income

For the Six months ended 30 JUNE 2012

CONSOLIDATED statement of financial position

at 30 JUNE2012

___________ ___________

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the SIX months ended 30 JUNE 2012

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the SIX months ended 30 JUNE 2012

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

For the SIX months ended 30 JUNE 2012

1. GENERAL INFORMATION

Rare Earths Global Limited (the "Company") is an exempted company incorporated in the Cayman Islands with limited liability on 8 February 2012. The Company's registered address is Cricket Square, Hutchins Drive, P.O. Box 2681, Grand Cayman KY1-1111, Cayman Island. The Company's shares were traded on the AIM Market of the London Stock Exchange Plc.

The Company together with its subsidiaries (collectively referred to as the "Group") is principally engaged in the production, separation and refining of rare earth products and provisions of mining management services.

This condensed consolidated interim financial information has not been audited.

2. THE REORGANISATION AND BASIS OF PREPARATION

Basis of Preparation

This interim report, which incorporates the financial information of the Company has been prepared on the historical cost basis except for certain financial instruments that are measured at fair values, as appropriate; using accounting policies which are consistent with those set out in the accountants report set out in the AIM admission document and Dressport Limited ("Dressport") consolidated financial statement for the year ended 31 December 2011.

The unaudited condensed consolidated financial statements are presented on a condensed basis as permitted by IAS 34 'Interim Financial Reporting' and therefore do not include all disclosures that would otherwise be required in a full set of financial statements and should be read in conjunction with the accountants report set out in the AIM admission document and Dressport Limited;

This interim financial information for the six months ended 30 June 2012, was prepared in accordance with IAS 34 and thereby International Financial Reporting Standards ("IFRS"), both as issued by the International Accounting Standards Board ("IASB") and as adopted by the European Union ("EU"); and was approved by the Board of Directors on 24 September 2012.

Group Reorganisation

Rare Earths Global acquired its 100% interest in Dressport by way of share for share exchanges. This is a business combination involving entities under common control and the consolidated financial statements are issued in the name of REG but they are a continuance of Dressport. Therefore the assets and liabilities of Dressport have been recognised and measured in these consolidated financial statements at their pre combination carrying values. The retained earnings and other equity balances recognised in these consolidated financial statements are the retained earnings and other equity balances of REG and Dressport. The equity structure appearing in these consolidated financial statements (the number and the type of equity instruments issued) reflect the equity structure of REG including equity instruments issued by the Company to effect the consolidation.

The comparatives included are for Dressport prior to the group reorganisation.

3. RECENT ACCOUNTING PRONOUNCEMENTS ISSUED BUT NOT YET ADOPTED

The International Accounting Standard Board (the "IASB") issued a number of new and revised International Accounting Standards ("IASs"), International Financial Reporting Standards ("IFRSs"), amendments and related Interpretations ("IFRICs") (hereinafter collectively referred to as the "New IFRSs") which are effective for the Company's financial period beginning on January 1, 2013. At the date of this report, the IASB has not issued any new or revised standards, amendments and interpretations.

4. REVENUE AND SEGMENT INFORMATION

IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Operating Decision Maker ("CODM") of the Group to allocate resources to the segments to assess their performance.

The Group determines its operating segments based on the report reviewed by the directors of the Group, who are also the CODM, to make strategic decisions.

Information reported to the Group's CODM for the purposes of resource allocation and performance assessment focuses specifically on the separation and sales rare earth products, the mining management services, and the trading of rare earth products. Accordingly, the Group categorises its business into three operating segments, namely (i) separation and sales of rare earth products; (ii) mining management services; and (iii) trading of rare earth product

Separation of rare earth products - production and sales of rare earth products .

Mining management services - provides mining management servicesand technical supportto PRC rare earth mining companies and factories in the PRC.

Trading of rare earths products - trading of rare earth products in the PRC and overseas.

The Group's CODM make decisions according to the operating results of each segment. Information of segment assets and liabilities is not part of the regular reports provided to the Group's CODM for the purpose of resources allocation and performance assessment. Accordingly, only segment results are presented.

Segment result represents the gross profit earned by each segment based on internal management reports prepared in accordance with accounting policies similar to the accounting rules and financial regulations applicable to enterprises in the PRC, without allocation of other income, changes in fair values of financial assets at fair value through profit or loss, selling and distribution costs, administrative expenses and finance costs. This is the measure reported to the chief operating decision makers for the purposes of resource allocation and assessment of segment performance.

The financial information as reviewed by the Company's CODM are as follows:

For the six months ended 30 June 2012

For the six months ended 30 June 2011

For the six months ended 30 June 2012

Reconciliation of segment revenue and segment results of the Group

Other segment information

For the six months ended 30 June 2011

Reconciliation of segment revenue and segment results of the Group

Other segment information

5. INCOME TAX EXPENSE

The provision for PRC current income tax is based on a statutory rate of 25% (six months ended 30 June 2011: 25%) of the assessable profit of the entities comprising the Group as determined in accordance with the relevant income tax rules and regulations of the PRC, except for certain branches and subsidiaries of the Group, which are taxed at preferential rates.

The Company's PRC subsidiary, Sanxie, is a foreign invested entity. In accordance with Foreign Enterprise Income Tax Laws in the PRC, Sanxie was approved in 2007 to be exempted from income tax for two years starting from its first profit making year and following by a 50% tax relief for the next three years. Sanxie was therefore exempted from income tax for each of the years ended 31 December 2007 and 2008 and subject to 12.5% tax rate for each of the years ended 31 December 2009, 2010 and 2011.

6. DIVIDENDS

No dividend was paid or proposed during the period presented, nor has any dividend has been proposed since the end of the reporting period.

7. EARNINGS PER SHARE

The calculation of the basic and diluted earnings per share attributable to the owners of the Company is based on the following data:

The weighted average number of shares in issue during the six months period ended 30 June 2011 represents the 60,994,790 shares in issue before the listing of shares of the Company on the AIM of the London Stock Exchange, as if such shares had been outstanding during the entire six months period ended 30 June 2011.

The Group has no dilutive instruments during the six months period ended 30 June 2011. No adjustment has been made to the basic loss per share amounts presented for the six months ended 30 June 2012 in respect of a dilution as the impact of the share options issued by the Company outstanding had an anti-dilutive effect on the basic loss per share amounts presented.

8. TRADE AND OTHER RECEIVABLES AND PREPAYMENTS

Note: The amount as of 30 June 2012 and 31 December 2011 includes non-current other receivables of RMB3, 000,000, which represents long-term deposits for renting professional mine detection equipment.

The Group allows an average credit period of 60 days to its trade customers. The following is an aged analysis of trade receivables presented based on the invoice date at the end of the reporting period:

9. MOVEMENTS IN PROPERTY, PLANT AND EQUIPMENT

During the six months ended 30 June 2012, the Group spent approximately RMB 167,656 on acquisition of property, plant and equipment in order to upgrade its operating capacities.

10. TRADE AND OTHER PAYABLES AND ACCRUALS

In general, the Group is required to make full advance payments (including issuance of bills) to suppliers for the purchases of its major raw materials, rare earth. Suppliers of raw materials other than rare earth generally allow the Group a credit period of 60 to 90 days.

11. AMOUNTS DUE FROM/TO RELATED PARTIES

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12. SHARE CAPITAL OF THE COMPANY

The share capital of the Group at 31 December 2011 represented the amount of paid-in capital of Dressport contributed by its equity holders which is the same as the owner of the Company.

The share capital of the Group at 30 June 2012 represented the issued and fully paid capital of the Company.

Notes:

(a) Pursuant to an ordinary resolution passed in the meeting on 20 February 2012, each of the authorised and issued shares of the Company were subdivided into 10 shares of US$0.001 each.

(b) Upon incorporation, the authorised capital of the Company was US$100,000 divided into 10,000,000 shares of US$0.01 each, of which one subscriber share was allotted and issued at par to Citywell Limited as the sole subscriber.

(c) On 7 March 2012, the Company repurchased ten of its own shares for a consideration of US$0.01.

(d) Pursant to a Share Exchange Agreement dated 7 March 2012, the Company purchased from the Sellers the entire issued share capital of Dressport in exchange for the issue of 60,994,790 ordinary shares in the Company as exactly mirrored the proportion of shares held by them in Dressport prior to completion of the share exchange agreement.

(e) On 29 March 2012, 2,592,891 ordinary shares of US$0.001 each were issued at a price of GBP 247 pence per share under the placing. The proceeds of US$ 2,593 (equivalent to approximately RMB 16,372) representing the par value, were credited to the Company's share capital. The remaining proceeds of GBP 6,402,811(equivalent to approximately RMB 64,392,000), after the issuing expenses, were credited to the share premium account. The new shares rank pari passu with the existing shares in all respect.

13. RELATED PARTY DISCLOSURES

(a) Except for transactions and balances disclosed elsewhere in the condensed consolidated financial statements, the Group has no other significant transactions and balances with its related parties during the six months ended 30 June 2012.

(b) During the period, the Group granted share options of 2,861,462 (30 June 2011: nil) to Directors and advisors of the Group with exercise price of GBP 247 pence.

(c) Compensation of key management personnel of the Group

14. CAPITAL COMMITMENTS

15. EVENT AFTER THE REPORTING PERIOD

On 14 July 2012, the Company has exercised its call option to acquire the remaining 39% of Pingyuan Sanxie Rare Earth Smelting Co Ltd from Grace Coast Limited, a company wholly owned by Mr. Tong Man Tak. The 39% of the Sanxie Plant will be acquired by the issue of 4,000,000 new ordinary shares in REG and a further US$10.0 million in cash which shall be paid in three tranches, US$3.0 million up on signing of the agreement, a further US$3.0 million on or before 15 August 2012 and a final tranche of US$4,000,000 on or before 15 September 2012. The total consideration being paid by REG for the 39% of the Sanxie Plant (based on the closing middle market price of an ordinary share in REG on 18 July 2012, being 337.5 pence per share) is approximately US$31.06 million.

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