Mr. Jaye Pickarts reports

RARE ELEMENT RESOURCES COMPLETES TRENCHING PROGRAM WITH ASSAYS INDICATING BULK SAMPLE AVERAGE GRADE OF 10.1% TOTAL RARE EARTH OXIDE

Rare Element Resources Ltd. has completed a trenching program that confirmed geology, structure and grade of the near-surface high-grade zone at the Bull Hill deposit. Additional studies are under way to confirm detailed mineralogy. The trenched area is the anticipated site of initial mining as contemplated in the recently released preliminary feasibility study. Bulk samples excavated during the trenching returned an average assay of 10.1 per cent total rare earth oxide over a length of approximately 225 feet (69 metres). Approximately 1,000 tons (907 tonnes) of mineralized material were excavated from the trench to feed a planned demonstration-scale plant using the process flow sheet that incorporates the company's proprietary recovery technology, including the recently announced process for the production of partially separated rare earth products.

"The results of the trenching and bulk-sample program were positive on multiple levels," said Jaye T. Pickarts, chief operating officer. "We were able to confirm the continuity, orientation and grade of the high-grade zone in that portion of the orebody we intend to mine first. This work allowed us to collect valuable data that will be incorporated into detailed engineering. Most importantly, we excavated a large mineralized sample that we plan to use in a demonstration plant to confirm on a larger scale our process flow sheet, including the recently announced separation technology. It will allow us to thoroughly evaluate and confirm the entire process, from run of mine to the creation of a significant quantity of final separated products on a continuous-run basis. This work will generate important information that will contribute to both the feasibility study and detailed engineering, including testing materials of construction, confirming equipment selection and verifying material-handling parameters. Having this information prior to construction should derisk the project significantly and greatly reduce or eliminate the numerous start-up issues experienced by other companies in the rare earth sector."

The trench exposed the Bull Hill main dike for a total distance of approximately 300 feet (91.4 metres) along a northwesterly strike with widths that varied from eight to 20 feet (2.5 to 6.1 metres). Nine 120-ton bulk samples were collected on 25-foot spacing (7.6 metres), with two-ton (0.9-tonne) representative subsamples collected from each block for preliminary metallurgical testing. Nine 30-pound (13.6-kilogram) representative assay samples were collected from each subsample to provide an estimate of grade and continuity. These assays range from 3.65 per cent to 14.65 per cent TREO and average 10.1 per cent TREO. Four cross-trenches were excavated and sampled (six 12-ton bulk samples, each with a 0.5-ton subsample and an assay sample) to provide material to test the processing character of mid- to low-grade stockwork material, and help ascertain the trend and character of the dike and adjacent stockwork zones.

The excavation confirmed that the main highly oxidized carbonatite dike at the Bull Hill deposit is flanked by parallel dikes, splays and stockwork mineralization, collectively forming a mineralized zone that extends at least 300 feet (91.4 metres) along strike and attains widths of up to 40 feet (12.2 metres). In the subsurface, this zone expands to more than 300 feet (91.4 metres) in width based on detailed drilling and assay data. Geological information collected from the trench proves dike orientation and continuity, mineralogy, and grade along its northwest strike. Structural mapping data collected validate trends utilized in resource modelling and will be incorporated in pit wall stability design.

The 1,000-ton bulk sample collected from the trench is currently being stockpiled on company-owned property at the Bear Lodge project. The area of excavation has been reclaimed in accordance with U.S. Forest Service and Wyoming Department of Environmental Quality standards.

Planned demonstration plant

Pending financing and the successful completion of additional bench-scale testing of the company's recently announced separation technology, the company plans to construct in 2015 and then operate a larger-scale (one to three tons per day) continuous-run demonstration plant to confirm its process flow sheet from physical upgrade to separated rare earth oxide products. It anticipates generating approximately 70 tons (63 tonnes) of rare earth products from processing the trench material based on expected recovery rates. The demonstration plant will contribute important operating data for consideration in the planned feasibility study and inclusion in detailed engineering, with the goal of avoiding some of the start-up issues that have plagued others in the rare earth sector. Additionally, the resultant products will be provided to a wider range of potential off-take partners for evaluation and testing for specific applications.

John T. Ray, MS, Rare Element's internal 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 new release.

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