Mr. Mark Brown reports

RARE ELEMENT DISCOVERS HEAVY RARE EARTHS AT WHITETAIL RIDGE, EAST TAYLOR AND CARBON AND HIGH GRADE AT EAST TAYLOR WITHIN THE BEAR LODGE PROJECT

Rare Element Resources Ltd. has identified high grades of heavy rare earth elements in the Whitetail Ridge resource area and the East Taylor and Carbon target areas and discovered high-grade REE mineralization at the East Taylor target at the Bear Lodge project. All three of the mineralized zones are located in the western half of an expanding rare-earth-mineralized district (the Bear Lodge REE district). The western areas are characterized by high grades (3 per cent rare earth oxides) and substantial quantities of the light rare earths, along with some of the highest grades of heavy rare earths in North American deposits. They are particularly enriched in europium, terbium, dysprosium and gadolinium. The East Taylor and Carbon targets also contain significant yttrium.

"We are very pleased with the recognition of substantial grades of heavy rare earths, in addition to the known high grades of light rare earths, in the western part of the Bear Lodge rare earth district," said Dr. Don Ranta, president of Rare Element. "Seven drill holes supported by surface geology in three target areas provide encouragement that we will be able to define significant tonnages of this mineralization with further drilling. Discovery of high-grade REE at East Taylor is a major step forward in expanding the potential size of the district. The higher HREE values and projected increased demand for select light and heavy REE could have strongly positive economic benefits to the Bear Lodge project. These deposits may represent a superior source of the most valuable rare earths, which include neodymium, praseodymium, europium, terbium and dysprosium," he said.

Rare Element is considering a variety of alliances in the advancement of its rare earths project.

Bear Lodge rare earth district; zonation of light and heavy REE

Discoveries of high-grade REE mineralization at Whitetail Ridge, East Taylor and Carbon expand the area of known REE mineralization well outside of the Bull Hill deposits and identify a district underlain by significant and potentially economic REE mineralization. The data indicate that the Bear Lodge REE district covers a crudely elliptical area that extends approximately 5,740 feet (1,750 metres) northwest-southeast by 4,260 feet (1,300 m) northeast-southwest. The Whitetail Ridge resource area and Carbon target are located northwest of the Bull Hill REE deposits, and the East Taylor target is located west of the Bull Hill deposits. Based on a re-evaluation of assay data for the Whitetail Ridge and Carbon areas during the company's most recent resource estimation (news release dated June 14, 2011) and newly received REE assay data from the East Taylor target area, assay grades for individual rare earth elements between deposits and target areas at the Bear Lodge project suggest a zonation of REE distribution in the district. The mineralization at Whitetail Ridge, East Taylor and Carbon has a distribution characterized by elevated abundances of HREE relative to the mineralization at Bull Hill. The three western mineralized zones are characterized by high grades and substantial quantities of the light rare earths, as well as some of the highest grades of heavy rare earths in North American deposits. They are particularly enriched in europium, terbium, dysprosium and gadolinium, as shown in the attached comparison of REO grades table. The mineralized intervals in SUN-090 were submitted for REE analyses earlier this year, and the assay results are reported for the first time in this news release. Total REO assays for drill hole SUN-079 were reported earlier this year in a news release dated April 6, 2011. LREE generally include cerium, lanthanum, neodymium, praseodymium and samarium; HREE include europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium, lutetium and yttrium.

These new discoveries indicate good potential for new deposits of high-grade rare earth elements in the western half of the Bear Lodge REE project, and those deposits appear particularly enriched in the heavy rare earths. A grade comparison of individual rare earth elements between the Bull Hill resource, the Whitetail Ridge resource, and drill holes at the East Taylor and Carbon target areas is given in the attached comparison of REO grades table.

     COMPARISON OF REO GRADES AT BULL HILL, WHITETAIL RIDGE, EAST TAYLOR AND CARBON

Area                                    Bull Hill     Whitetail Ridge           East Taylor
Resource                                Indicated            Inferred   Exploration/SUN-090

La2O3                                        1.08                0.81                  1.23
Ce2O3                                        1.64                1.19                  1.98
Pr2O3                                       0.186               0.158                 0.264
Nd2O3                                        0.65                0.64                 0.894
Sm2O3                                       0.099               0.142                 0.191
Eu2O3                                       0.021               0.042                 0.056
Gd2O3                                       0.048               0.103                 0.173
Tb2O3                                      0.0037              0.0115                 0.026
Dy2O3                                      0.0104              0.0361                 0.092
Y2O3                                        0.032               0.087                 0.319
Eu+Tb+Dy                                   0.0351               0.090                 0.174
Nd+Pr+Eu+Tb+Dy                              0.871               0.888                 1.332
Grade (% REO)                                3.77                3.24                  5.61
Metric tonnes                                4.45                 1.5

Area                              Carbon
Resource             Exploration/SUN-079

La2O3                               0.96
Ce2O3                               1.89
Pr2O3                               0.23
Nd2O3                               0.91
Sm2O3                              0.165
Eu2O3                              0.040
Gd2O3                              0.097
Tb2O3                              0.013
Dy2O3                              0.062
Y2O3                               0.283
Eu+Tb+Dy                           0.115
Nd+Pr+Eu+Tb+Dy                     1.255
Grade (% REO)                       4.69

Identification of high-grade HREEs at the Whitetail Ridge deposit

The identification of significant HREE mineralization at the Whitetail Ridge resource area is the result of a detailed evaluation of assay data during the most recent resource estimation work (news release dated June 14, 2011). This recognition triggered a review of all the REE mineralized drill holes in the general western area. The Whitetail Ridge deposit is located approximately 1,500 feet (450 m) northwest of the main Bull Hill rare earth deposit. The area was identified previously as an exceptional REE mineralization target (news release dated Oct. 13, 2009), based on factors, including: 1) the intersection of REE mineralization as FMR (FeOx-MnOx-REE; designated as MnOx veins) dikes and veins in five nearby historical drill holes; 2) detailed geological mapping of FMR vein material in historical exploration trenches; and 3) a broad positive ground geophysical anomaly of a type coincident with significant REE mineralization in other parts of the project area. The size of the geophysical anomaly (approximately 1,400 by 2,000 feet, 400 by 610 m, elongate northeasterly) provides an indication that this REE target may be larger than others in the district. Detailed mapping suggests that the REE mineralization consists of northwest-striking FMR dikes and an FMR stockwork zone that is elongate northeasterly, with dimensions of roughly 1,250 feet (380 metres) by 950 feet (290 metres). The enveloping geophysical anomaly is larger and may indicate a broader distribution of REE mineralization beneath the extensive soil and colluvial cover. Preliminary mineralogical studies by Dr. Anthony N. Mariano indicate that monazite (an REE-thorium phosphate) may represent a significant proportion of the REE mineralogy and that the HREE mineralization may reside in the monazite. Grades for europium, gadolinium, terbium and dysprosium for the current Whitetail Ridge resource estimate, as reported in the attached comparison of REO grades table, are among the highest in North American REE deposits.

During the 2010 drilling program, two core holes were completed in the Whitetail Ridge area from a single drill site. Both holes encountered significant intercepts of REE mineralization that exhibit strong enrichment in both LREE and HREE (see attachted comparison of REO grades and REO grades and distribution tables). Only a small portion of the large Whitetail Ridge target area was tested with the holes, but they give a good indication of the total potential of the target. These holes, plus historical drill hole assay data from five widely spaced older holes in the general target area, surface mapping and trench sampling assay data were all used directly or indirectly by Ore Reserves Engineering to estimate an inferred mineral resource for Whitetail Ridge of 1.7 million tons (1.5 million metric tonnes) averaging 3.24 per cent total REO (see news release dated June 14, 2011). Drilling is currently under way at the Whitetail Ridge deposit and surrounding target area. Approximately 12 to 15 additional holes are planned for the target area this year.

             REO GRADES AND DISTRIBUTION IN THE OXIDIZED ZONE OF 
                       THE WHITETAIL RIDGE DEPOSIT

Element                   Ce     La     Nd     Pr     Sm     Gd      Y     Eu     Dy

Assay REO %             1.19   0.81   0.64  0.158  0.142  0.103  0.087  0.042 0.0361
Distribution oxide %   36.73  25.00  19.75   4.88   4.38   3.18   2.68   1.30   1.11

Element                    Tb       Er       Yb       Lu       Ho       Tm

Assay REO %            0.0115   0.0057   0.0033  0.00040  0.00374  0.00052
Distribution oxixe       0.35    0.176    0.102    0.012    0.115    0.016

New high-grade REE discovery at East Taylor and HREE enrichment

The East Taylor target is located approximately 2,500 feet (760 m) west of the main Bull Hill rare earth deposit and 2,500 feet southwest of the Whitetail Ridge deposit. The Taylor target area was principally known as a gold target until the 2010 drilling program intersected a thick FMR zone in reverse circulation drill hole SUN-090. Drill hole SUN-090 and an earlier RC hole drilled by Newmont (SUN-009) were collared adjacent to an outcrop of FMR veins identified by the U.S. Geological Survey (Staatz, 1983). The zone appears to have an easterly strike, as opposed to the dominant northwesterly and northerly mineralized structures in the Bull Hill/Whitetail Ridge deposits. Preliminary geological mapping and projection of FMR intercepts in drill holes suggest that the REE mineralization consists of dikes and adjacent stockwork with dimensions of roughly 700 feet (210 metres) east-west by 250 feet (75 metres) north-south, and the mineralization is open to the east.

The REE mineralization was recognized in drill chips from SUN-090 by Rare Element geologist, Allen Andersen. The mineralized intercepts were sent subsequently for quantitative REE assays, reported here in the attached comparison of REO grades and REE-mineralized intercepts tables. Newmont hole SUN-009 also intersected strong REE mineralization in a correlative intercept. The high-grade REE zone in drill hole SUN-090 is contained within a well-mineralized gold zone that averages 0.038 ounce per ton (1.3 grams per tonne) from zero to 205 feet (zero to 62.5 m). Correlative FMR mineralization was recognized also in Newmont drill hole SUN-023, which was not assayed for REE. Several core holes are planned as further step-off tests of the target area in 2011, including a core hole twin of drill hole SUN-090.

   REE-MINERALIZED INTERCEPTS AT THE EAST TAYLOR TARGET AREA

Drill hole     Interval (feet)    Mineralized intercept (feet)  Total REO (%)

SUN-090                45-100                              55           3.38
                      105-160                              55           7.84
SUN-009*               80-165                              85           >1.4*
                      540-575                              35           >1.4*

* REE assays for Newmont drill hole SUN-009 were done using partial
digestion analytical methods. In many cases, values exceeded the upper
limit of the method for individual REE (that is, upper assay limit for 
cerium was 5,000 parts per million).

It should be noted that the company's proprietary internal standards submitted with the samples from drill hole SUN-090 were certified at that time for only yttrium, lanthanum, cerium, praseodymium, neodymium, samarium, thorium and uranium, and not for the other REE. The samples are now being resubmitted with the newly developed standards that are certified for yttrium, lanthanum, cerium, praseodymium, neodymium, samarium, europium, gadolinium, terbium, dysprosium, holmium, thorium and uranium. Rare Element's rigorous quality assurance/quality control program exceeds industry standards, as REE assays are routinely reported and assessed using only analytical laboratory standards for evaluation of data quality.

Discovery of high-grade HREEs at the carbon REE target

The carbon REE mineralization was identified by Rare Element geologist, Allen Andersen, in drill hole SUN-079, which is a reverse circulation drill hole that was part of the company's 2010 gold exploration program. The carbon REE target is located about 1,200 feet (370 m) northwest of the Whitetail Ridge deposit along an apparent northwest-trending zone of mineralization. Two reverse circulation drill holes (SUN-076 and SUN-079) completed during the 2010 Sundance gold exploration program cut significant REE mineralization in FMR vein material. REE-bearing intercepts from the Carbon target area are summarized in the attached drill hole SUN-076 table. Total REO assays for drill holes SUN-079 and SUN-076 were reported earlier this year in a news release dated April 6, 2011. If this mineralization is a continuation of the Whitetail Ridge dike system and the Bull Hill system, the total mineralization trend may reach more than 5,000 feet (1,500 m) in length.

REE-mineralized intercepts at the Carbon target area drill hole SUN-076 (total depth 615 feet)

                 DRILL HOLE SUN-076

Interval (feet)      Mineralized intercept (feet)     Mineralized lithology     TREO (%)

100-110                                       10            FMR drill chips        1.66

            DRILL HOLE SUN-079 (TOTAL DEPTH 775 FEET)

Interval (feet)   Mineralized intercept (feet)   Mineralized lithology   TREO (%)

0-5                                         5          FMR drill chips      1.69
15-45                                      30          FMR drill chips      4.69
700-760                                    60          FMR drill chips      3.58

Assays, quality control and standard certification

ALS Chemex conducted the assaying for the rare earth elements reported herein in its Vancouver, B.C., assay facility. ALS Chemex Vancouver is accredited to ISO 9001 and operates according to ALS Group standards consistent with ISO 17025 methods at other laboratories. The samples were prepared and subjected to lithium metaborate fusion, followed by ICP analysis and a mass spectroscopy finish.

Analytical quality is monitored through the use of randomly inserted quality control samples, including standards, blanks and duplicates, which are blinded to the analytical laboratory. No duplicates were submitted for the SUN-090 samples, owing to insufficient samples. Results of the analyses at ALS Chemex are evaluated continuously by Dr. Jeffrey Jaacks, the company's quality assurance/quality control consultant, who is a qualified person according to National Instrument 43-101. The results from the current data set indicate acceptable accuracy and precision. Blank analyses also indicate no issues with carry-over contamination.

Rare Element Resources developed a set of proprietary internal REE analytical standards using Bear Lodge deposit mineralized material during late 2009 and early 2010 under the supervision of Dr. Jaacks. The original round robin assay series at four laboratories indicated that these materials could be used as standards for Y, La, Ce, Pr, Nd, Sm, Th and U analyses. However, the results also indicated that the concentration of the remaining elements in the REE series were at the lower end of the working range of the analytical method, and standard values gave unacceptable accuracy and precision for Eu, Gd, Tb, Dy, Ho, Er, Tm, Yb and Lu analyses. The company conducted a new round robin standard certification program during the first half of the current year. The results from most recent round robin assay series qualify the reference materials for a greater number of rare earth elements. Improvements in analytical methods and a larger base of certification analyses generated by utilizing eight analytical laboratories indicate that the standards can be used as reference materials for gold, Y, La, Ce, Pr, Nd, Sm, Eu, Gd, Tb, Dy, Ho, Th and U analyses.

Dr. Ranta, PhD, PGeo, president and chief executive officer

Dr. 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. This news release was prepared by company management, which takes full responsibility for the content.

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