Mr. David Suleski reports

RARE ELEMENT FILES SEPTEMBER 30 FINANCIAL RESULTS AND ANNOUNCES COMMENCEMENT OF PRELIMINARY FEASIBILITY STUDY FOR BEAR LODGE PROJECT

Rare Element Resources Ltd. has released its unaudited consolidated financial statements and filed its Form 10-Q for the first quarter ended Sept. 30, 2011, on SEDAR and the U.S. Securities and Exchange Commission website.

All dollar amounts stated herein are in U.S. dollars.

First quarter ended Sept. 30, 2011, financial highlights

The net loss for the first quarter ended Sept. 30, 2011, totalled $10.9-million or 25 cents per share as compared with a net loss of $5.5-million or 17 cents per share for the same period in 2010. The $5.4-million negative variance in net loss between the periods was due to the following:

• $3.7-million negative variance in the foreign exchange loss due to the impacts on the company's Canadian-dollar cash balances as a result of the strengthening U.S. dollar on the balance sheet;
• $2.9-million negative variance in the stock-based compensation expense due to the granting of options to the recently hired executive during a period of high company stock prices;
• $1.0-million negative variance in exploration spending due to increased activity at the Bear Lodge property;
• $400,000 negative variance in general and administrative expenses due to increasing the number of employees;
• Partially offset by $2.5-million positive variances in the mark-to-market gains on purchase warrants ($2.2-million) and an increased interest income ($300,000).

Cash and cash equivalents at Sept. 30, 2011, were $64.2-million compared with $11.1-million as of Sept. 30, 2010. The increase in cash was primarily due to the $57.5-million financing completed in December, 2010, and the exercise of almost all of the company's outstanding warrants.

Rare Element currently has 44.1 million common shares outstanding and 48.0 million common shares outstanding on a fully diluted basis.

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

Preliminary feasibility study

Rare Element is pleased to announce that the preliminary feasibility study has commenced for the Bear Lodge project. A team of internationally recognized engineers and consultancy companies have been assembled to complete this study. Roche Engineering Inc. from Salt Lake City, Utah, will be the lead engineers, with support from Ore Reserves Engineering, JT Boyd and Associates, and Knight Piesold and Co., all from Denver, Colo. This study is scheduled to be completed by the end of January, 2012.

We seek Safe Harbor.