File: Attachment CRECNROCT03.pdf

HEAD OFFICE Suite 2110 - 650 West Georgia St.

Vancouver, BC V6B 4N8 Tel +1 604 638 8886

www.canadarareearth.com

TSX.V: LL

Canada Rare Earth Provides Business Update

Vancouver, BC October 3, 2025 Canada Rare Earth Corp. ("Canada Rare Earth" or the "Company") (TSX.V: LL) announces that the acquisition of a 70% interest in a rare earth processing facility, previously described in its January 7, 2025 news release (the "Initial 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 (the "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 minerals 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 notes 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 US$500,000 loan agreement with a third-party lender, bearing 21% annual interest with semi-annual payments and maturing May 31, 2027. The loan may be prepaid at any time without penalty. HEAD OFFICE Suite 2110 - 650 West Georgia St.

Vancouver, BC V6B 4N8 Tel +1 604 638 8886

www.canadarareearth.com

TSX.V: LL

About Canada Rare Earth Corp.

Canada Rare Earth Corp. operates a rapidly growing global essential minerals business built on over a decade of success in the rare earth minerals and products 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.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

FOR FURTHER INFORMATION, PLEASE CONTACT: Peter Shearing, Chief Executive Officer pshearing@canadarareearth.com Telephone: (604) 638-8886 Website: www.canadarareearth.com