Lakewood, Colorado-Rare Element Resources Ltd. (TSX: RES and NYSE MKT: REE) is pleased to announce rare earth element (REE) assay results from 18 drill holes completed from its ongoing 2012 drilling program at the Company's 100% owned Bear Lodge property, located in northeastern Wyoming, USA.

The objectives of the current drilling program are the expansion and upgrade of the Bull Hill and Whitetail Ridge oxide resources, and the delineation of heavy rare earth element (HREE)-enriched mineralization at the Carbon target area. The results include assays from seven core holes and one reverse circulation (RC) drill hole at the Bull Hill REE deposit, two RC drill holes from the Bull Hill NW resource area, three core holes and two RC drill holes from the Whitetail Ridge resource area, and three RC drill holes from the Carbon REE target area (Figure 1). Additional REE assays reported here include re-assays of pulps from select intervals in 16 historic gold exploration holes at the Carbon (11 holes) and Taylor (5 holes) target areas that were not analyzed initially for REE. The Company announced the identification of significant HREE enrichment at the Whitetail Ridge Resource Area and the Taylor and Carbon target areas in a news release dated August 4, 2011. The updated resources for the Bull Hill and Whitetail Ridge areas were reported by the Company on May 7, 2012 and based on results from the 2009-2011 drill programs.

Of significant note, included in the current results, is the thickest continuous intercept of REE mineralization found to-date at Bull Hill, consisting of 312 feet averaging 4.18% total rare earth oxide (TREO). Re-assay for REE of selected intercepts from historic gold exploration drill holes at the Carbon target also identified significant zones of high-grade REE mineralization, including the highest grades yet reported from the Carbon target. Additional assay results are expected for drill holes from Bull Hill, Whitetail Ridge, and Carbon over the next several months.

Randy Scott, President and CEO, stated, "We are very pleased with the progress of the exploration program and the encouraging results we are able to report today. We expect these results to further expand the reserve and resource base and further define additional HREEs. We look forward to continuing success due to the excellent efforts of our exploration team as the 2012 exploration program continues at full speed."

Highlights of the current drill program include the following intercepts:

r. Jim Clark, Vice President of Exploration, stated: "These initial results from our 2012 drilling confirm our belief in the quality and continuity of the resources. We expect to significantly expand the Measured and Indicated resources at Bull Hill and to develop Measured and Indicated resources at Whitetail Ridge. Simultaneously, we are working to understand the nature and distribution of the HREE-enrichment at the Whitetail Ridge resource, and at the Carbon and Taylor target areas. The HREE-enrichment will be discussed in an upcoming news release. The Bear Lodge district has tremendous upside exploration potential."

Drilling Results
The host for rare earth mineralization in the Bear Lodge Mountains is an alkaline igneous complex that forms the core of the mountain range. Rare earth mineralization intersected in the 18 holes is primarily contained within the near-surface oxidized and leached F (FeOx)-M (MnOx)-R (REE minerals) (FMR) and oxidized and incompletely leached (oxide carbonate/OxCa) equivalents of carbonatite dikes that are widespread in the district and concentrated in dike swarms and stockwork zones along the southwest flank of the Bull Hill diatreme, west of the Bull Hill drainage, and in association with the Whitetail Ridge diatreme, northwest of Bull Hill (Figure 1). The host rocks at Bull Hill and Whitetail Ridge consist largely of heterolithic intrusive breccia, while the host rocks west of Bull Hill are predominantly trachyte, phonolite, and subordinate breccia. FMR refers to the major constituents of the highly oxidized, former carbonatite dikes that occur in the depth range from the surface from 90 to 150 m (300-500 ft) beneath the surface.

REE assay values are reported by convention as the combined oxide equivalents (REO) of the fifteen elements in the lanthanide series + yttrium. The oxide equivalents are approximately 15.6% higher than the combined metal assay values. The Bull Hill deposits at the Bear Lodge project contain predominantly the "light" REEs (lanthanum (La), cerium (Ce), praseodymium (Pr), neodymium (Nd), and samarium (Sa)), with economically important quantities of several of the "heavy" REEs (europium (Eu), dysprosium (Dy), and terbium (Tb)). The Whitetail Ridge Resource area, and the Carbon and Taylor REE-gold target areas, can show significant HREE enrichment, with enhanced abundances of Eu, Dy, Tb, and yttrium (Y) (See news release dated August 4, 2011).

Bull Hill Resource Area
Five of the eight holes in the Bull Hill Resource Area were drilled along a prescribed NE-SW grid, at azimuths of either 045º or 225º, the former as infill holes in the main Bull Hill SW deposit, and the latter as tests of the western part of the deposit. The other three holes were drilled along different azimuths to test specific areas of structural complexity. The resource evaluation grid was established for the Bull Hill deposit in conjunction with Ore Reserves Engineering, the Company's resource estimation consultant. The bearing, inclination, and significant assay intercepts from the Bull Hill area drill holes are summarized below.

Bull Hill Northwest Resource Area
Two RC drill holes were completed to test northerly-trending REE-mineralized structures in the Bull Hill NW resource area. The holes were drilled along an azimuth of 090º. Significant assay intercepts are summarized below.

Rare earth mineralization in and adjacent to the Whitetail Ridge Resource area is associated with the Whitetail Ridge diatreme. The REE mineralization occurs in north- and NW-trending dikes, veins, and stockwork zones. All five of the drill holes (3 core and 2 RC) were drilled along an azimuth of 270º on a newly developed E-W resource grid. The significant assay intercepts from the Whitetail Ridge area drill holes are summarized in below.

The Carbon REE target is located approximately 370m (1,200 ft) northwest of the Whitetail Ridge deposit along an apparent northwest-trending zone of mineralization. Two RC drill holes (SUN-076 and SUN-079) completed during the 2010 Sundance gold exploration program cut significant REE mineralization in FMR and unoxidized carbonatite vein material. Assays from drill holes at the Carbon target in 2010 and 2011 were reported in previous news releases (March 26, 2012 and August 4, 2011). The REE mineralization may portend the northwestern extension of the Whitetail Ridge system or, alternatively, a distinct FMR/carbonatite mineralized system. Significant REE-bearing intercepts from current drilling at the Carbon target area are summarized below. A set of pulps from assay intervals from Newmont Mining's historic gold exploration drill holes was selected for quantitative REE re-assay, based on the presence of strongly anomalous REE's in semi-quantitative, multi-element assay data (ALS Chemex analytical package ME-MS41), as well as semi-quantitative Niton X-ray spectrometer analyses of the same pulps and additional pulps conducted by the Company. The multi-element data were not available from all of the assay intervals in the Newmont holes. Results from the re-assay of selected pulps from Newmont historic gold exploration drilling at the Carbon target are also given below.

The Taylor target is located approximately 760m (2,500 ft) west of the main Bull Hill REE deposit and 760m (2,500 ft) southwest of the Whitetail Ridge deposit (Figure 1). The zone appears to have an easterly strike, as opposed to the dominant northwesterly and northerly-mineralized structures in the Bull Hill and Whitetail Ridge deposits. The identification of the zone and its enrichment in HREE, relative to the Bull Hill deposits, was discussed in a news release dated August 4, 2011, and drilling results from Rare Element's 2011 drill program were reported in news releases dated October 27, 2011 and March 26, 2012. Selected pulps of assay intervals from Newmont Mining's historic gold exploration drilling at the Taylor target were also re-assayed for REE. As was the case with the historic pulps from the Carbon target, the Taylor pulp set was selected based on the presence of strongly anomalous REE's identified in the semi-quantitative, multi-element assay data and from Niton X-ray spectrometer analyses conducted by Rare Element geologists. Results from the re-assay of selected pulps from historic Newmont gold exploration drilling at the Taylor target are given below.

Activation Laboratories Ltd. of Ancaster, Ontario, Canada (ActLabs) conducted the assaying for the rare earth elements in the 2012 drill holes reported here in their Ontario assay facility. ActLabs also performed the re-assays for REE on a set of the historic gold exploration drill holes (SUN-001, SUN-007c, SUN-011c, SUN-021, SUN-022, SUN-023, SUN-033, SUN-107, SUN-109, SUN-111, and SUN-112). ActLabs is accredited to ISO 9001 and ISO 17025 methods. The samples were prepared and subjected to lithium metaborate fusion, followed by ICP analysis and a mass spectroscopy finish. ALS Chemex conducted the assaying for the rare earth elements reported here from a second set of historic gold exploration drill holes (SUN-032, SUN-034, SUN-035, SUN-037, and SUN-038) in their Vancouver, British Columbia assay facility. ALS Chemex Vancouver is also accredited to ISO 9001, and it operates according to ALS Group standards consistent with ISO 17025 methods at other laboratories. The samples were prepared and subjected to lithium metaborate fusion, followed by ICP analysis and a mass spectroscopy finish.

For the 2012 drill hole assays, analytical quality is monitored through the use of randomly inserted quality control samples, including standards, blanks, and duplicates, which are blinded to the analytical laboratory. Results from the analyses at ActLabs are evaluated continuously by Dr. Jeffrey Jaacks, the Company's QA/QC consultant, who is a Qualified Person according to National Instrument 43-101. The results from the current data set of 2012 drill hole assays indicate acceptable accuracy and precision. Blank analyses also indicate no issues with carry-over contamination. For the re-assay of intervals from historic gold exploration drill holes, only internal quality control data from Actlabs and ALS Chemex were used to monitor the quality of the assay data, and those assay data are deemed to be of acceptable accuracy and precision.

Figure 1. Location map for drill holes reported in this news release.

Rare Element Resources Ltd. (NYSE MKT: REE and TSX: RES) is a publicly traded mineral resource company focused on exploration and development of rare-earth elements (REEs). In addition to the REE exploration and evaluation efforts, the Company controls the Sundance gold project, which is located on the same property in Wyoming.

For information, refer to the Company's website at www.rareelementresources.com or contact Anne Hite, 720-278-2466

Forward Looking Statements
This news release contains forward-looking statements within the meaning of securities legislation in the United States and Canada. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements. Forward looking statements are usually identified by our use of certain terminology, including "will", "believes", "may", "expects", "should", "seeks", "anticipates", "has potential to", or "intends' or by discussions of strategy or intentions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results or achievements to be materially different from any future results or achievements expressed or implied by such forward-looking statements. Forward-looking statements are statements that are not historical facts, and include but are not limited to, estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to the effectiveness of the Company's business model; future operations, products and services; the impact of regulatory initiatives on the Company's operations; the size of and opportunities related to the market for the Company's products; general industry and macroeconomic growth rates; expectations related to possible joint and/or strategic ventures and statements regarding future performance.

Cautionary Statement
Donald E. Ranta, Ph.D., Rare Element's 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 news release. For a description of the key assumptions, parameters and methods used to estimate mineral reserves and resources, as well as data verification procedures and a general discussion of the extent to which the estimates may be affected by any known environmental, permitting, legal, title, taxation, socio-political, marketing or other relevant factors, please see the Technical Reports for our project as filed on SEDAR at www.sedar.com.

Cautionary Note to U.S. Investors - The United States Securities and Exchange Commission permits U.S. mining companies, in their filings with the SEC, to disclose only those mineral deposits that a company can economically and legally extract or produce. We may use certain terms in public disclosures, such as "measured," "indicated," "inferred" and "resources," that are recognized by Canadian regulations, but that SEC guidelines generally prohibit U.S. registered companies from including in their filings with the SEC. U.S. investors are urged to consider closely the disclosure in our Form 10-K which may be secured from us, or from the SEC's website at http://www.sec.gov.