Rare Element Resources Ltd.

Advance Notice Policy

The Board adopted an advance notice policy (the “Policy”) on November 7, 2012. The purpose of the

Policy is to (i) facilitate an orderly and efficient annual general or, where the need arises, special meeting process,

(ii) ensure that all shareholders receive adequate notice of the director nominations and sufficient information

regarding all director nominees, and (iii) allow shareholders to register an informed vote after having been afforded

reasonable time for appropriate deliberation.

The Policy, among other things, includes a provision that requires advance notice to the Company in

certain circumstances where nominations of persons for election to the Board are made by shareholders of the

Company. The Policy fixes a deadline by which director nominations must be submitted to the Company prior to

any annual or special meeting of shareholders and sets forth the information that must be included in the notice to

the Company for the notice to be in proper written form.

In the case of an annual meeting of shareholders, notice to the Company must be made not less than 30

days nor more than 65 days prior to the date of the annual meeting; provided, however, that in the event that the

annual meeting is to be held on a date that is less than 50 days after the date on which the first public announcement

of the date of the annual meeting was made, notice may be made not later than the close of business on the 10th day

following such public announcement.

In the case of a special meeting of shareholders, which is not also an annual meeting, called for the purpose

of electing directors (whether or not called for other purposes), notice to the Company must be made not later than

the close of business on the 15

day following the day on which the first public announcement of the date of the

special meeting was made. The full text of the Policy is available under the Company’s profile at

Qualifications for Director Nominees

The Board, through its NCG&C Committee, considers its size each year when it considers the number of

directors to recommend to the shareholders for election at the annual meeting of shareholders, taking into account

the number required to carry out the Board’s duties effectively and to maintain a diversity of views and experience.

The NCG&C Committee is composed entirely of independent directors.

The Board believes that, as a whole, it should possess a combination of skills, professional experience and

diversity of viewpoints necessary to oversee the Company’s business. In addition, the Board believes that there are

certain attributes that every director should possess, as reflected in the Board’s membership criteria (further

described below). Accordingly, the Board and the NCG&C Committee consider the qualifications of director and

director candidates individually and in the broader context of the Board’s overall composition and the Company’s

current and future needs.

The NCG&C Committee reviews and makes recommendations regarding the composition and size of the

Board in order to ensure that the Board has the requisite expertise and its membership consists of persons with

sufficiently diverse and independent backgrounds. Board membership criteria include items relating to ethics,

integrity and values, sound business judgment, professional experience, industry knowledge, and diversity of

viewpoints, all in the context of an assessment of the perceived needs of the Board at that point in time. The Board,

as a whole, should possess a variety of skills, occupational and personal backgrounds, experiences and perspectives

necessary to oversee the Company’s business. In addition, Board members generally should have relevant technical

skills or financial acumen that demonstrates an understanding of the financial and operational aspects of a rare earth

mining exploration and development company.

In evaluating director candidates and considering incumbent directors for renomination, the Board and the

NCG&C Committee have not formulated any specific minimum qualifications, but, rather, consider a variety of

factors. These factors include each nominee’s independence, financial acumen, personal accomplishments, career

specialization, and experience in light of the needs of the Company. For incumbent directors, the factors also

include past performance on the Board. The Board determines the Chairman among the directors following the

election of directors at the Annual Meeting of Shareholders.