Mr. Randall Scott reports

RARE ELEMENT REPORTS 65 PERCENT INCREASE OF TOTAL M&I RARE-EARTH MINERAL RESOURCES AT BEAR LODGE

Rare Element Resources Ltd. has increased its total measured and indicated (M&I) rare-earth-elements (REE) resources estimate by 65 per cent at the Bear Lodge project, from 571 million pounds to 944 million pounds of rare earth oxide (REO). The updated National Instrument 43-101-compliant resource estimate includes the first indicated resource at the heavy-REE-enriched Whitetail Ridge deposit and high grades of critical rare earth oxides (CREOs) in all deposits.

Randall J. Scott, president and chief executive officer, stated: "We are extremely pleased with the meaningful increase in our estimated M&I resource at Bear Lodge. Our work in 2012 resulted in a much larger quantity of REE resource, confirmation of the peripheral zones of HREE enrichment and highlights the significance of this growing world-class source of CREOs. The increased M&I resource will be incorporated into the upcoming feasibility study, which is on schedule to commence in mid-2013."

Critical rare earth oxides (CREO)

Critical rare earth oxides (CREOs) are those with the highest value and for which the strongest future growth is projected. The company refers here to the oxides of neodymium, praseodymium, europium, terbium, dysprosium and yttrium as CREOs. The resource estimates for the Greater Bull Hill and Whitetail Ridge REE deposits show high grades for all of the CREOs. The Whitetail Ridge deposit is particularly enriched in the HREE component of the CREOs as well as the exploration targets located further to the west.

Resource estimate

The updated resource is derived from an REE drill hole database that includes 216 core holes and 16,920 assay samples, completed by the company between 2008 and the end of 2012. The estimate includes deposits in the Greater Bull Hill area and the HREE-enriched Whitetail Ridge deposit. The drilling indicates significant potential for further expansion of all resources, including additional HREE-enriched resources at the Whitetail Ridge deposit and nearby targets.

Subject to a feasibility study, the data indicate sufficient M&I oxide resources to support the possibility of a 40-plus-year mine life at the previously published preliminary feasibility study production rate of 1,000 tons per day. The resource data indicate that there may be significant enough tonnages of material at higher grades to support an initial higher-grade/lower-production mining option with lower capital costs that could transition into full plant design capacity over a period of several years (for example, six million tons grading 4.72 per cent REO at a 3-per-cent cut-off grade). This option will be considered in the upcoming feasibility study, scheduled to commence mid-2013.

REE resources in the inferred category for all mineralization types increased to 42.3 million tons grading 2.59 per cent REO in 2013 from 34.6 million tons at 2.83 per cent REO in 2012. Total inferred oxide resources increased from 25.7 million tons grading 2.86 per cent REO in 2012 to 31.4 million tons at 2.68 per cent REO in 2013.

Geology and mineralization

The Bull Hill area deposits contain the bulk of the current resources. They comprise steeply dipping FMR (FeOx, MnOx and REE minerals) carbonatite dike swarms with dominant northwesterly and subordinate northerly trends mainly intersecting the Bull Hill diatreme breccia. Carbonatite dikes at depth are interpreted to transition toward the surface into either oxide-carbonate bodies or FMR bodies, which range in size from submillimetre veinlets to large dikes more than 100 feet (30 metres) in width.

The Whitetail Ridge deposit is more enriched in HREEs, and is distinguished by a zone of FMR dikes and stockwork that invade the Whitetail Ridge diatreme breccia and adjacent trachyte/phonolite intrusive rocks. Expansion of the indicated REE resource at Whitetail Ridge is a key objective of the company's planned 2013 drilling program.

The major dike sets in all of the resource areas are accompanied by peripheral zones of lower-grade stockwork REE mineralization. The term stockwork refers to a rock cut by a network of small veins or dikes that contain the mineralization. REE grades in the stockwork zones range between about 0.5 per cent and 2.5 per cent REO. The company is continuing its investigation of low-cost physical processing methods to upgrade the contained REE mineralization in the stockwork for eventual inclusion with the resources.

Cut-off grade and metallurgy

The resource size is sensitive to an assumed cut-off grade, which is sensitive to metallurgical operating costs. The company will conduct pilot-scale metallurgical testing on more than 21 tons (19.1 tonnes) of mineralized material in 2013 in conjunction with its planned feasibility study (FS). Metallurgy of the FMR oxide zone is well established and was reported previously. Metallurgical testing of the oxide-carbonate zone resource is in progress. Bench-scale optimization and variability testing are continuing for both mineralization types.

Mineral resources are not reserves

Mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral resource estimates do not account for minability, selectivity, mining loss and dilution. These mineral resource estimates are in the measured, indicated and inferred mineral resource categories. Inferred mineral resources are normally considered too speculative geologically for the application of economic considerations that would enable them to be categorized as mineral reserves. There is also no certainty that these inferred mineral resources will be converted to M&I mineral resource categories through further drilling or into mineral reserves once economic considerations are applied.

The company announced positive economic results from its prefeasibility study (PFS) on March 1, 2012, and in a revised news release on April 12, 2012. The PFS established a proven plus probable mineral reserve for the Bull Hill deposit that contains 7.9 million tons (7.2 million tonnes) at a grade of 3.12 per cent REO and at a cut-off grade of 1.1 per cent REO.

Quality assurance

The mineral resource estimate was completed by Alan C. Noble, PE, principal engineer of Ore Reserves Engineering (ORE), and is based on geological interpretations supplied by the company to ORE and subsequently modified by ORE. Mr. Noble is an independent qualified person under National Instrument 43-101 -- Standards of Disclosure for Mineral Projects (NI 43-101) of the Canadian Securities Administrators, and Mr. Noble has verified the data disclosed in this release. Mr. Noble will prepare the updated NI 43-101 report, which will be filed and available under the company's SEDAR profile within 45 days.

Rare Element Resources' field programs were carried out under the supervision of Dr. James G. Clark, vice-president of exploration, and John T. Ray, who is a qualified person for the purposes of National Instrument 43-101 -- Standards of Disclosure for Mineral Projects of the Canadian Securities Administrators. A detailed quality assurance/quality control program was implemented for the 2007 through 2012 drill programs. The QA/QC program was organized by Dr. Jeffrey Jaacks. Dr. Jaacks and Dr. Clark have verified the sampling procedures and QA/QC data delivered to ORE. They share the opinion that the data are of good quality and suitable for use in the resource estimate.

A full table of significant drill results from the company's 2012 exploration program, along with maps and sections detailing the location of the drill holes, are available in the press release dated March 11, 2013, posted on the company's website.

Markets for rare earths

REEs are key components of the green energy technologies and other high-technology applications. Some of the major applications include hybrid automobiles, plug-in electric automobiles, advanced wind turbines, computer hard drives, compact fluorescent light bulbs, metal alloys in steel, additives in ceramics and glass, petroleum cracking catalysts and many others. Rare earths are critical and enabling metals for the green technologies.

Cautionary statement

John T. Ray, MS, Rare Element's qualified person under Canadian NI 43-101, supervised the preparation of the scientific and technical information concerning the company's mineral project contained in this news release. For a description of the key assumptions, parameters and methods used to estimate mineral reserves and resources, as well as data verification procedures and a general discussion of the extent to which the estimates may be affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant factors, please see the technical reports for the project as filed on SEDAR.

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