Mr. Robbin Lee reports

RARE ELEMENT REPORTS MARCH 31, 2013 FINANCIAL RESULTS

Rare Element Resources Ltd. has filed its unaudited, consolidated interim financial statements on Form 10-Q for the three months ended March 31, 2013, on the U.S. Securities and Exchange Commission's website and on SEDAR.

"The first quarter of 2013 is marked by some major milestones. During the first quarter, we not only substantially expanded the measured and indicated resource at the Bear Lodge critical rare earth project, but also identified the first-ever indicated resource at the heavy-rare-earth-enriched Whitetail deposit," stated Randall J. Scott, president and chief executive officer. "Further, we have significantly improved the concentrate grade to over 90 per cent in bench-scale testing through the use of our proprietary oxalate process. This continues to position us to be the next rare earth mine in production in the western hemisphere," concluded Mr. Scott.

Financial results (please note that financial results published by the company are all stated in U.S. dollars)

For accounting purposes, the company is classified as an exploration company, and, as such, does not have production-related revenues at this time. The net loss for the first quarter ended March 31, 2013, totalled $4.4-million, or 10 cents per share, compared with a net loss of $5.3-million, or 12 cents per share, for the same period in 2012. The $900,000 positive variance in net loss between the periods was due to the following:

• Reduced exploration spending of $700,000 at the Bear Lodge property;
• Positive variance in stock-based compensation of $2.3-million due primarily to a lower share price and smaller number of options granted;
• Negative variance of $2.3-million in foreign exchange due to the impacts on the company's Canadian-dollar cash balances related to exchange rate fluctuations in the U.S. dollar on the balance sheet date;
• Miscellaneous positive variances of $200,000 in other non-operating income and expenses.

Strong cash position

As of March 31, 2013, the company had cash and cash equivalents, and short-term investments of $33.8-million. It is expected that this amount is sufficient to finance the Bear Lodge feasibility study, which is anticipated to commence in mid-2013. The decrease in cash and investments in the quarter was $6.3-million and was primarily due to the expense associated with assay and metallurgical work on core acquired from the 2012 exploration program, third party evaluation of the oxalate process in preparation for the upcoming pilot plant test, continuing permitting, engineering and environmental costs, as well as foreign exchange losses related to the company's Canadian cash balances.

"We continue to focus our efforts on developing the data necessary for permitting and advancing the feasibility study with the goal of optimizing and expediting the Bear Lodge project," said David P. Suleski, chief financial officer. "Because 2012 drilling significantly increased the size of the Bull Hill high-grade zones, we are studying an option that initially focuses on the development of that high-grade zone, at a lower initial capital cost and production rate, that would then allow us to ramp up production as market conditions warrant. Additionally, the 90-per-cent-plus-rare-earth-oxide-grade bulk concentrate expected to be generated by our oxalate process significantly derisks the marketability of our concentrate and gives us more options for separation of the rare earth products. Both of these factors are expected to have positive impacts on the economics of the project," he added.

The unaudited financial statements are available through the Canadian securities regulatory authorities at SEDAR and with the U.S. Securities and Exchange Commission at the SEC website. They are also available on the company's website.

Project highlights:

• Updated the measured and indicated resource estimate to 14.7 million tonnes with an average grade of 3.22 per cent rare earth oxide (REO) at a 1.5-per-cent cut-off grade; the related National Instrument 43-101 report was filed on May 2, 2012, and can be found under the company's SEDAR profile or at the company's website;
• Identified a high-grade measured and indicated resource of six million tonnes with an average grade of 4.72 per cent REO at a 3-per-cent cut-off;
• Confirmed heavy-rare-earth-element-enriched zoning at the Whitetail Ridge resource and the nearby Carbon exploration target, both of which contain generally higher abundances of critical rare earth elements (CREE), those higher-valued elements that the company expects to experience more scarcity as well as better demand growth and price support over the longer term;
• Completed confirmatory bench-scale metallurgical processing tests on the company's proprietary oxalate process technology, which improved the grade of the bulk concentrate from approximately 45 per cent to over 90 per cent REO.

We seek Safe Harbor.