Mr. David Suleski reports

RARE ELEMENT FILES DECEMBER 31 SECOND QUARTER FINANCIAL RESULTS AND UPDATE ON PRELIMINARY FEASIBILITY STUDY FOR BEAR LODGE PROJECT

Rare Element Resources Ltd. has filed its unaudited consolidated financial statements and Form 10-Q for the second quarter ended Dec. 31, 2011, on SEDAR and the Securites Exchange Commission website.

All dollar amounts stated are in United States dollars.

Second quarter ended Dec. 31, 2011, financial highlights

The net loss for the second quarter ended Dec. 31, 2011, totalled $10.1-million or 23 cents per share as compared with a net loss of $2.6-million or seven cents per share for the same period in 2010. The $7.5-million negative variance in net loss between the periods was due to the following:

• Increased exploration spending at the Bear Lodge property ($3.8-million);
• Increased stock-based compensation expenses due to the amortization of past option grants to the recently hired executives ($2.4-million);
• Writedown of the Nuiklavik mineral property located in Canada ($900,000);
• Increased general and administrative expenses due to more employees ($700,000);
• Reduced foreign exchange gain 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 ($500,000);
• Partially offset by positive variances in the mark-to-market gains on purchase warrants ($400,000) and increased interest income ($200,000).

Cash and cash equivalents at Dec. 31, 2011, were $59.5-million compared with $64.2-million as of Sept. 30, 2011. The $4.7-million decrease in cash was primarily due to exploration, and general and administrative spending.

Rare Element currently has 44.2 million common shares outstanding and 49.0 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 on its website. They are also available on the company's website.

Update on the Bear Lodge project preliminary feasibility study

On Jan. 4, 2012, the company announced the results of an updated National Instrument 43-101-compliant mineral resource estimate of rare-earth elements plus yttrium contained in three deposits located in the Bull Hill deposit. The updated resource estimate of the Bull Hill deposit consists of 6.8 million tons (6.2 million tonnes) averaging 3.75 per cent rare-earth oxide (REO) in measured and indicated mineral resources categories, increased from 4.9 million tons (4.4 million tonnes) averaging 3.77 per cent REO last year, both using a 1.5-per-cent REO cut-off grade. The total pounds of REO contained in all the high-grade deposits in all resource categories increased by 26 per cent from 1.45 billion pounds (660 million kilograms) to 1.83 billion pounds (830 million kg). The interim measured and indicated mineral resource estimate for the Bull Hill deposit was provided for inclusion in the current preliminary feasibility study (PFS). However, the interim mineral resource estimate includes less than half of the new assay results from holes drilled in 2011. The company intends to update the mineral resource estimate again by the end of the fourth quarter of 2012, utilizing all of the 2011 drill holes.

The company expects to complete the PFS during the first quarter of 2012. Immediately after completing the PFS, it will start work on the feasibility study. During 2012, the company plans to begin the formal National Environmental Policy Act environmental impact study process followed by the 2013 start of the formal mine permitting process with the Wyoming Department of Environmental Quality. Mine construction will commence immediately upon the successful completion of the feasibility studies, environmental impact studies and permitting.

We seek Safe Harbor.