Dr. Donald Ranta reports

RARE ELEMENT REPORTS SECOND QUARTER FINANCIAL RESULTS

Rare Element Resources Ltd. has filed its unaudited condensed consolidated interim financial statements as well as its management's discussion and analysis for the six months ended Dec. 31, 2010, on SEDAR. These financial statements were prepared using international financial reporting standards which Rare Element early adopted as of July 1, 2010. Note 17 in the financial statements reconciles the changes in the comparative periods from Canadian generally accepted accounting principles to international financial reporting standards, which will be fully adopted in Canada in 2011. (All dollar amounts are in U.S. dollars.)

Six months ended Dec. 31, 2010, financial highlights:

• Exploration expenses amounted to $5,634,144 (2009 -- $2,653,690) during the six months ended Dec. 31, 2010, of which $4,684,275 (2009 -- $1,646,439) was spent on the Bear Lodge rare-earth project and $910,237 (2009 -- nil) was spent on the Sundance gold project. Both projects are located on the same property position.
• Administrative expenditures, including the non-cash share-based payments, amounted to $1,553,394 (2009 -- $1,056,777) for the period, up 47 per cent compared with the same period last year.
• The loss for the period was $1,482,214 (2009 -- $1,039,150), or four cents per share (2009 -- four cents), up 43 per cent from the same period in the prior year.
• Cash and cash equivalents at Dec. 31, 2010, were $67,008,719 (June 30, 2010 -- $11,460,476), reflecting the $57.5-million financing completed in December, 2010.

Business highlights:

• The geological team completed its 2010 rare-earth drilling and exploration program on the Bear Lodge property in November, 2010. The company received positive assay results from the Bull Hill Southwest resource area and Whitetail Ridge target area. Assays are pending from another 14 drill holes. The goal for these drill hole results is to upgrade a portion of the rare-earth-element resources from the inferred category to measured and indicated category, and to expand the resource area.
• The gold geological team completed the 2010 gold drilling and exploration program on the Sundance gold project at Bear Lodge in November, 2010. All the assay results were encouraging, and the company's evaluation effort on the gold system is to culminate in a National Instrument 43-101-compliant resource estimate that is scheduled for completion early in 2011.
• The company completed the NI 43-101-compliant preliminary economic analysis of the Bear Lodge rare-earth-element deposit as announced in Stockwatch on Sept. 28, 2010, which shows that the project has an initial rate of return of approximately 40 per cent using historical REO concentrate prices, which have recently increased greatly. The technical report was prepared by an independent consultant, John T. Boyd Company, with the assistance of consultants Mountain States R&D International and Ore Reserves Engineering. This press release highlights some of the information contained in the technical report released in Stockwatch on Nov. 9, 2010, and for investors to fully understand the information in this press release, they should read the technical report in its entirety, including all qualifications, assumptions and exclusions that relate to the information set out in this press release.

Rare Element currently has approximately $69-million in cash and no debt.

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