Mr. Donald Ranta reports

RARE ELEMENT FILES PRELIMINARY ECONOMIC ASSESSMENT OF THE BEAR LODGE RARE EARTH ELEMENTS PROJECT

Rare Element Resources Ltd.'s preliminary economic assessment (PEA) report on the Bear Lodge rare earth elements project has now been filed on SEDAR.

The results of the PEA or scoping study (an NI 43-101-compliant preliminary economic assessment or PEA) on the rare-earth resources delineated on its 100-per-cent-owned Bear Lodge project, located in northeastern Wyoming, were announced in Stockwatch on Sept. 28, 2010.

"The preliminary economic assessment completed on Rare Element's Bear Lodge rare-earths deposit demonstrates a potentially robust case, without any government support or incentives," stated Don Ranta, Rare Element's president and chief executive officer. "The Bear Lodge project is expected to significantly contribute to employment, revenues and the economy of the state of Wyoming. Work is continuing to advance the project towards a production decision and a number of opportunities to further enhance the already robust project economics are being evaluated."

Bear Lodge -- rare earth prices and markets

The prices used in this study are based on historic three-year average concentrate prices. It is important to note that the current prices are much higher that these historic prices. In the news release announcing the results of the PEA, it was noted that a 10-per-cent change in the price of REO concentrate would change the base case net present value (NPV) of the project on an after-tax basis by approximately $58-million at a 10-per-cent discount rate and $42-million at a 15-per-cent discount rate.

The price assumptions used by Boyd for the REO concentrates are based on compilations of the past three years that range from $4.59 (U.S.) (2008), to $3.65 (2009), to $7.54 per kilogram (2010). These concentrates contain approximately 43.5 per cent REO and were derived from deposits that have a similar, but slightly less valuable, REO distribution compared with the Bear Lodge deposits. The 2010 concentrate price is based on Metal Pages website data through Aug. 31, 2010.

A recent price quote for REE concentrates on an FOB China basis, as reported on Nov. 4, 2010, by the Metal Pages website, is $37.50/kg. The elements needed for high-strength permanent REE magnets include neodymium, praseodymium, dysprosium and terbium; prices were quoted by Metal Pages (Nov. 4, 2010) at $75 (U.S.), $84, $385 and $595/kg, respectively for those elements. Current REE producers seek to increase production of neodymium, praseodymium, dysprosium and terbium to meet the growing demand from magnet manufacturers. This underlines the need for new producers with mineral resources having an REE distribution that is more reflective of current market demand, such as that indicated for the bastnasite-group minerals at Bear Lodge. A complete list of historic prices used is provided in the technical report filed on SEDAR.

Bear Lodge -- PEA summary

The results of the scoping study (PEA) demonstrate that the Bear Lodge REE project can achieve acceptable after-tax returns on invested capital and therefore warrants further investment to advance the project to a prefeasibilty level of analysis. Increased rates of return are potentially achievable through any combination of higher prices, increased product sales, higher resource/reserve grades, lower operating costs, or higher metal recoveries.

Boyd recommends that the Bear Lodge project proceed to a preliminary feasibility level analysis. The recommended work includes completion of bulk sampling, pilot plant testing, further drilling of the Bull Hill SW and NW deposits to upgrade more of the REE resources to measured or indicated categories of confidence, REO extraction and separation testwork on both the Bull Hill SW and NW deposits, environmental studies, mine permitting, and continuing community engagement.

The estimated cost of this work program is $15-million with the work to be conducted in two phases. Phase 1 comprises preparation of an updated mineral resources estimate that includes 2010 drilling results, continued metallurgical testing and a pilot plant test, which is anticipated to start in the spring of 2011. Phase 1 would include work to be conducted on samples and analyses from the 2010 drilling program. Phase 2 will include another drilling program for further resource expansion, resource definition and collection of metallurgical samples that will be used in a subsequent full feasibility study. The phase 2 program will then proceed to more detailed metallurgical testwork and engineering studies, leading to final process design and commercial testing, market studies, environmental studies and mine permitting, community consultation, engineering design, and economic modelling. Phase 2 work is planned to commence in the late spring of 2011, subject to positive results from phase 1 and arranging additional financing for the project.

Qualified persons

Michael P. Richardson, PE, is the independent qualified person from John T. Boyd Company responsible for the scoping study (preliminary economic assessment) as well as mine planning, capital and operating cost estimation, and developing the economic models. He also reviewed and approved this news release as well as all sections of the scoping study. Alan C. Noble, PE, of Ore Reserves Engineering, is the independent qualified person responsible for resource estimation. Dr. Ron Roman, PE, of Mountain State R&D International, is the metallurgical engineer and an independent qualified person responsible for the metallurgy, process development, and estimation of the mill capital and operating costs. Dr. James G. Clark, LGeo, who has direct experience with the project dating back to 1986, is responsible for the geologic, drilling and sampling data on behalf of the company; these data and descriptions were reviewed and approved by Mr. Richardson. The full study is accessible on SEDAR and the executive summary will be available on the company's website shortly.

Dr. Donald E. Ranta, PhD, PGeo, serves the board of directors of the company as an internal, technically qualified person. Technical information in this news release has been reviewed by Dr. Ranta and has been prepared in accordance with Canadian regulatory requirements that are set out in National Instrument 43-101.