Mr. Peter Shearing reports

CANADA RARE EARTH PROVIDES BUSINESS UPDATE

Canada Rare Earth Corp.'s acquisition of a 70-per-cent interest in a rare earth processing facility, previously described in its Jan. 7, 2025, news release, will not proceed.

Despite significant progress in conducting due diligence, structuring the transaction, arranging financing and initiating preliminary development planning, the company and its financiers ultimately decided not to proceed with the transaction as outlined in the initial news release, due to increasing geopolitical pressures surrounding rare earth investments in Southeast Asia. As a result, the memorandum of understanding related to the refinery transaction has expired and will not be renewed, and, accordingly, the proposed change of business process initiated through the TSX Venture Exchange has been terminated. No advances were made by the company in respect to the transaction, and there are no residual liabilities or guarantees associated with the transaction. The company is working with the exchange for the resumption of trading of its shares.

Canada Rare Earth continues to explore alternative avenues to develop proprietary rare earth refining capabilities, leveraging its established trading business and supply relationships for rare earth concentrates. The company remains committed to its strategy of vertical integration and the expansion of its value chain from concentrate sourcing through to the production of separated rare earth oxides.

Peter Shearing, chief executive officer of Canada Rare Earth, stated: "While we are disappointed that this specific acquisition will not move forward, we remain actively engaged in developing downstream capabilities that align with our strategy. We believe there are compelling alternatives that can deliver value to our shareholders and reinforce Canada Rare Earth's role as a reliable, non-China-based source of rare earth products."

The company continues to expand its critical mineral trading business by broadening its supply network across Africa and South America. These regions provide attractive sources of rare earth concentrates and critical minerals, further strengthening Canada Rare Earth's role as a diversified and reliable global supplier.

Canada Rare Earth is also advancing evaluations of its Bom Futuro project in Rondonia, Brazil, assessing its potential role within the company's broader strategy and exploring a range of commercialization or partnership opportunities. Bom Futuro is a permitted tailings-reprocessing project with an extensive resource of historic tin-mine tailings enriched with tin, zircon, ilmenite and rare-earth-bearing minerals, where the company holds an interest with rights to increase to a controlling position and operator role.

In addition, the company confirms that the proposed note offering announced on May 8, 2025, led by SCP Resource Finance LP, will not proceed. To strengthen its financial flexibility, the company has entered into an unsecured $500,000 (U.S.) loan agreement with a third party lender, bearing 21-per-cent annual interest with semi-annual payments and maturing May 31, 2027. The loan may be prepaid at any time without penalty.

About Canada Rare Earth Corp.

Canada Rare operates a rapidly growing global essential mineral business built on over a decade of success in the rare earth mineral and product sector. The company's strategy focuses on leveraging near-term positive cash flow opportunities to support growth, including acquiring and developing proprietary projects, resources and processing capabilities.