Mr. Randall Scott reports

RARE ELEMENT RESOURCES REPORTS YEAR-END 2014 FINANCIAL RESULTS

Rare Element Resources Ltd. had a net loss for the year ended Dec. 31, 2014, of $14.0-million, or 29 cents per share, compared with a net loss of $22.2-million, or 48 cents per share, in the same period of 2013 (all amounts are in U.S. dollars). The net loss for the quarter ended Dec. 31, 2014, was $2.9-million, or six cents per share, compared with $5.7-million, or 12 cents per share, for the same period in 2013. At Dec. 31, 2014, the company had cash and cash equivalents of $10.1-million, compared with $12.9-million at Sept. 30, 2014, and $23.9-million at Dec. 31, 2013. The company has filed its Form 10-K for the 12-month period ended Dec. 31, 2014, on EDGAR and SEDAR.

During the first quarter of 2015, the U.S. Forest Service (USFS), the lead agency on the environmental impact statement (EIS) for the project, completed the alternatives selection process and began the impact analysis. Using certain of the identified alternatives to modify its plan of operation, the company now expects to make its application for some of the other required state and federal permits and licences in the next quarter. It also anticipates that the final record of decision (ROD), the decision document from the USFS, will be available in the first half of 2016, which would allow commissioning of the project as early as mid-2017, subject to timely receipt of the necessary permits and licences and financing.

"We made great progress in advancing our Bear Lodge project in 2014 and are undertaking a number of programs in 2015 with the goal of maintaining our momentum," stated Randall J. Scott, president and chief executive officer. "We will look to expand on the positive results we have had to date on elemental separation testwork and will continue the additional technical work necessary for a feasibility study. We intend to do this while we continue to support efforts by the U.S. Forest Service to complete the EIS with the expectation that the draft will be available early in the second half of this year. Now that the alternatives identification process has been completed, we intend to apply for other necessary permits over the next few months. With its ideal location, large long-lived resource, heavy concentration of the more valuable, critical rare earth elements and solid project economics, we believe the Bear Lodge project is in an excellent position to help rebuild America's rare earth supply chain, greatly reducing the nation's dependence on foreign sources."

Quarter-end Dec. 31, 2014, unaudited financial results

The company does not have production-related revenue at this time. The net loss for the quarter ended Dec. 31, 2014, totalled $2.9-million, or six cents per share, compared with a net loss of $5.7-million, or 12 cents per share, for the same period in 2013. The $2.8-million decrease in consolidated net loss was primarily the result of:

• A $2.4-million decrease in exploration and evaluation expense, primarily due to a reduction in drilling and metallurgical testwork, as the company continues to move the Bear Lodge project toward development;
• A $300,000 decrease in corporate administrative costs, predominately related to stock-based compensation;
• A $100,000 positive variance in the loss on currency translation.

Year-end Dec. 31, 2014, financial results

The net loss for the year ended Dec. 31, 2014, totalled $14.0-million, or 29 cents per share, compared with a net loss of $22.2-million, or 48 cents per share, in the same period of 2013. The $8.2-million decrease in the consolidated net loss was primarily the result of:

• A $5.5-million decrease in exploration and evaluation expense;
• A $1.7-million decrease in corporate administrative costs, approximately half of which was related to stock-based compensation;
• A $1.0-million positive variance in the loss on currency translation.

Year-end cash balance

At Dec. 31, 2014, the company has cash and cash equivalents of $10.1-million, compared with $12.9-million at Sept. 30, 2014, and $23.9-million at Dec. 31, 2013. Cash and cash equivalents used during the year were $13.8-million, compared with $23.6-million in 2013.

Activities financed during 2014 included: engineering and trade-off studies necessary to complete a preliminary feasibility study and technical report, filed in October, on the Bear Lodge project; testwork on both the company's proprietary recovery process and initial work on elemental separation, which included the filing of additional patents; completion of an exploration trenching program that gathered valuable structural and geologic data, as well as a near-surface, high-grade 1,000-ton bulk sample; baseline environmental data collection and other efforts to support the EIS under way and advance the permit application process for the project; and general and corporate activities. Activities to be financed in 2015 include: supporting advancement of the project's EIS; making the appropriate federal and state licence and permit applications; continuing the evaluation of elemental separation; and other evaluation, development and construction efforts as deemed necessary and as supported by the company's financial position.

Updated EIS timeline

The USFS completed the alternatives selection process of the EIS in February and began the impact analysis. This process is likely to be approximately six months behind the original schedule supplied to the public by the USFS as part of scoping meetings conducted in April, 2014. While the company is awaiting an updated timeline from the USFS, it now anticipates that the draft EIS will not be available until the second half of 2015. As a result, the company expects the final ROD to be delivered in the first half of 2016, which, pending receipt of all other permits and securing of financing, would allow the company to begin commissioning the Bear Lodge project as early as mid-2017.

We seek Safe Harbor.