• Drill results reveal enrichment of Critical Rare Earths as a district-wide zonation of Eu, Tb, Dy, and Y surrounding high grade Nd, Pr, La, Ce central core.
• Drill intercepts document significant thicknesses and elevated concentrations of Eu, Tb, Dy, and Y enrichment encountered at Whitetail Ridge Resource Area and Carbon and Taylor target areas.
• The high abundances of Critical Rare Earth Oxides (CREOs include Nd, Pr, Eu, Tb, Dy, and Y) demonstrate that the Bear Lodge rare earth district represents a growing world-class occurrence of those rare earth elements (REEs) that represent the strongest projected future growth in demand and price. The assay grades for Eu, Tb, Dy, and Y are among the highest of the North American REE deposits. Europium grades (currently the highest priced REE) are among the highest in the world.
• Drilling has been extended into December. Complete assay results from the 2012 program are expected in January, followed shortly by an updated NI 43-101 Resource estimate. Metallurgical testing is currently underway at a number of laboratories and additional testing and pilot plant work is planned in conjunction with the start of a definitive Feasibility Study in 2013.

Lakewood, Colorado – Rare Element Resources Ltd. (TSX: RES and NYSE MKT: REE) is pleased to announce rare earth element (REE) assay results from 21 drill holes completed during the ongoing 2012 drilling program at the Company's 100% owned Bear Lodge property, located in northeastern Wyoming, USA. The current drilling continues to demonstrate that the Bear Lodge resource is one of the highest grade total rare earth oxide (TREO) deposits in the world, and now also highlights the significant value of the content of combined Critical Rare Earth Oxides (CREOs).

Dr. Jim Clark, Vice President of Exploration for Rare Element Resources, states "The additional results from our 2012 drilling confirm and expand the quality and continuity of the Bull Hill REE deposit, where the Company expects to significantly increase the Measured and Indicated resources in preparation for its upcoming definitive Feasibility Study. At the same time, work continues on the development of an Indicated resource at Whitetail Ridge, which is slated for inclusion in the definitive Feasibility Study. The zones of heavy rare earth element (Eu, Tb, Dy, and Y) enrichment continue to expand at Whitetail Ridge, Carbon, and Taylor. The most recent drill results include some of the thickest intercepts and elevated concentrations yet encountered at Whitetail Ridge, Carbon, and Taylor."

Expanding Critical Rare Earth Elements

Critical rare earth elements are those for which the strongest future growth is projected and higher values are attributed. We refer here to the oxides of Nd, Pr, Eu, Tb, Dy, and Y as Critical Rare Earth Oxides (CREO). In 2011, the Company identified significant heavy rare earth elements (HREEs) (Eu, Tb, Dy, and Y) in leached FMR (F (FeOx)-M (MnOx)-R (REE minerals)) and oxide-carbonate dikes at the Whitetail Ridge resource area, and at the East Taylor and Carbon target areas (see news releases dated 4 August and 27 October 2011). The assay results further confirm those important observations. Mineralogical studies indicate that the HREE mineralization is found primarily in the rare earth fluocarbonates, synchysite and parisite, at Whitetail Ridge and Carbon, and in xenotime, an yttrium-vanadium phosphate, and rare earth fluocarbonates at East Taylor. Examination of aggregate significant intercepts from the current set of drill assay results indicates that there is a district-wide zonation in which the strongest TREO enrichment occurs within a central zone focused on the Bull Hill and Bull Hill Northwest deposits, while the strongest HREE (Eu, Tb, Dy and Y) enrichment is found in mineralization peripheral to the central zone and focused at the Whitetail Ridge deposit, and at the Carbon and Taylor REE target areas (Table 1 and Figure 2). The peripheral enrichment zone is ascribed to a late-stage, low-temperature hydrothermal event.

Key Objectives and Results of 2012 Drill Program To-Date

The objectives of the current drilling program are to further expand and upgrade the Bull Hill and Whitetail Ridge oxide resources, and further delineate the HREE (Eu, Tb, Dy, and Y) enrichment at the Carbon target area. The drill results highlight more details of a Bear Lodge district-wide zonation, with a central zone of strong TREO enrichment that gives way to a peripheral zone of significant Eu, Tb, Dy, and Y enrichment.

The results announced in this release include assays from 8 core holes at the Bull Hill REE deposit, 5 core holes and 3 reverse circulation (RC) drill holes from the Whitetail Ridge resource area, 2 RC drill holes from the Carbon REE target area, and 3 RC drill holes from the Taylor REE target area (Figure 1). The RC drilling is being conducted for exploration purposes only, and results will not be included in the updated resource estimates.

Other highlights of the current drill program include the following intercepts:

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 21 holes is primarily contained within the near-surface oxidized and leached 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 to 300-500 beneath the surface. Significant assay results for TREO, CREO, Eu2O3, Dy2O3, and Y2O3 for the current set of drill holes are listed in Tables 2 through 5. Drill hole collar locations are given in Figure 1.

Seven of the eight holes in the Bull Hill Resource Area were drilled along a prescribed NE-SW grid, at an azimuth of either 045º as infill holes in the main Bull Hill SW deposit. Drill hole RES12-08 was drilled at an azimuth of 180º as both an infill and a test for mineralized cross structures. 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 in Table 2 below.

The tables use the following abbreviations for the ore types: Oxide (Ox); Oxide Carbonate (OxCa); ); Transition (Trans); Unoxidized (UnOx).

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. The 5 core and 3 RC drill holes were drilled along an azimuth of 270º on an E-W resource grid. The bearing, inclination, and significant assay intercepts from the Whitetail Ridge area drill holes are summarized in Table 3 below.

Table 3. Significant drill assay results from the Whitetail Ridge REE deposit.

The Carbon REE target is located about 1200 feet (370 m) northwest of the Whitetail Ridge deposit along an apparent northwest-trending zone of mineralization. Two reverse-circulation 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 (26 September 2012, 26 March 2012, and 4 August 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 the last 2 holes drilled at the Carbon target area in 2012 are summarized in Table 4.

Table 4. Significant drill assay results from the Carbon REE exploration target (all RC drill holes).

The Taylor target is located approximately 2500 feet (760 m) west of the main Bull Hill rare-earth deposit and 2500 feet southwest of the Whitetail Ridge deposit (Figure 1). Part of the zone appears to have an easterly strike, as opposed to the dominant northwesterly and northerly-mineralized structures in the Bull Hill/Whitetail Ridge deposits. The Company is working to better understand the overall structural regime and the mineralogical distribution, both of which appear to be complex. The identification of the zone and its enrichment in HREE, relative to the Bull Hill deposits, was discussed in a news release dated 4 August 2011, and drilling results from Rare Element's 2011 drill program were reported in news releases dated 27 October 2011 and 26 March 2012). Selected pulps of assay intervals from Newmont Mining's historic gold exploration drilling at the Taylor target were re-assayed for REE in 2012, and results were reported in a news release dated 26 September 2012. Significant assay results from the 3 RC drill holes at the Taylor target are given in Table 5.

Table 5. Significant drill assay results from the Taylor REE exploration target (all RC drill holes).

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 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.

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.

Rare Element Resources Ltd. (NYSE MKT: REE and TSX: RES) is a publicly traded mineral resource company focused on exploration and development of 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 Dave Suleski, dsuleski@rareelementresources.com, 720-278-2466