Rare Element Resources Reports on Significant Progress in 2014 and Plans for 2015

Rare Element Resources Ltd. (NYSE MKT: REE and TSX: RES), a mineral resources company advancing development of the Bear Lodge Critical Rare Earth Project located in northeast Wyoming, is pleased to summarize key accomplishments achieved in 2014 and outline its planned activities for 2015.

“The progress the Company made in 2014 confirmed our confidence in the value of the Bear Lodge Project and our commitment to continue to move the Project toward production,” stated Randall J. Scott, President and Chief Executive Officer. “Not only did we complete a preliminary feasibility study that showed a long-life project with strong economics, but we also progressed the permitting process by helping the U.S. Forest Service advance the environmental impact statement on the Project. These accomplishments, in combination with the advancements we made during the year on both our proprietary rare earth recovery technology and the initial test work on rare earth separation, resulted in an exceptional year for the Company.”

Highlights of 2014

• Initiated the Environmental Impact Statement (EIS) under National Environmental Policy Act (NEPA) process. The U.S. Forest Service (USFS), with support from the Company, started the process in February 2014 and held public scoping meetings in April. Since that time, the USFS has completed the public scoping comment process and has been working with cooperating agencies on alternatives identification and analysis.
• Finalized the preliminary feasibility study (PFS) on the Bear Lodge Project. The study indicates a 45-year project life, 29% after-tax internal rate of return, $330 million net present value (10% discount rate) and a 2.9 year payback period. The strong economics reflect the benefits of the Project’s location in northeast Wyoming and the deposit’s rich concentration of those rare earth elements essential to critical magnet materials and high-value phosphor applications. For more details, please see the technical report filed with the regulatory agencies and available on the Company’s website at www.rareelementresources.com.
• Significantly improved patent-pending, recovery process technology and initiated test work on downstream elemental separation. Process improvements resulted in the filing of two additional patent applications. Advancements included:
  • In January 2014, announced the ability to selectively isolate and economically remove a significant portion of the low levels of naturally occurring thorium in the ore;
  • In November 2014, completed test work on improvements to this thorium-elimination technology while greatly reducing the amount of cerium, the lowest value rare earth, in the concentrate. This advancement resulted in improved purity (99.999% in bench-scale testing) and substantially reduced the mass of material requiring further separation, which is expected to reduce the costs associated with that process; and
  • Bench-scale tested a post-recovery process on the concentrate that effectively separated the concentrate into light and heavy rare earth fractions.
• Completed a trench on the Bull Hill mineralization that confirmed the location and trending of the high-grade zone that will be the source of initial feed for the Project. Gathered a 1,000-ton (907-tonne) bulk sample to be used for large-scale test work. Bulk samples excavated from the main body of the trench had an average total rare earth grade that exceeded 10%.
• Accepted an invitation to join the Critical Materials Institute, a major initiative sponsored by the U.S. Department of Energy and committed to ensuring a secure supply of the rare earths necessary to support evolving green technologies.
• Initiated studies on areas of potential optimization identified in the PFS, including reagent optimization and assessment of materials of construction alternatives.

“In the new year, we continue to advance the programs we had underway at year-end, including additional test work to expand on the positive results achieved on downstream elemental separation,” said Jaye T. Pickarts, Chief Operating Officer. “We continue to support the USFS in its efforts on the EIS, providing supporting data when requested. In the coming months, we will progress a number of studies and undertake additional test work to generate data necessary for the next stage of engineering for inclusion in the feasibility study. All of these efforts will move us closer to accomplishing our goal of becoming the next North American rare earth producer.”

2015 Planned Activities

• Continue to support the USFS’s efforts to finish the alternatives assessment and complete the draft and final EIS documents. The USFS has indicated that they are preparing an updated EIS schedule, and we anticipate receiving a copy in the next few weeks.
• Submit applications for mine and industrial siting permits to the Wyoming Department of Environmental Quality and for a possession license to the U.S. Nuclear Regulatory Commission. These tasks are dependent upon completion of the alternatives assessment portion of the EIS.
• Confirm positive results of separation test work completed to date in larger-scale pilot plant testing. Test additional elemental separation methods directed at creating product baskets that meet end-users’ specifications and maximize product value to the Company.
• Initiate additional studies, including rheology studies and final geotechnical confirmation of waste rock and tailing characteristics, to support the next phase of engineering for inclusion in the feasibility study.
• Exercise responsible cash management to ensure continued progress toward Project construction.
• Continue to cultivate relationships with potential offtake partners, including supplying upgraded product samples and providing Project updates.
• Design and construct planned demonstration plant. The Company continues to evaluate potential third-party financing options.

Programs undertaken in 2015 will depend upon progress on the EIS, permitting and financing, and therefore are subject to change.

Rare Element Resources Ltd. is a publicly traded mineral resource company focused on exploration and development of rare-earth element deposits, specifically those with significant distribution of critical rare earths. The Company is advancing development of the Bear Lodge Project, located in northeast Wyoming. Bear Lodge is a significant mineralized district containing many of the less common, more valuable critical rare earths that are essential for electronics, fiber optics, laser systems for health and defense, as well as many evolving green technologies, like hybrid cars, solar panels and wind turbines. Permitting and feasibility work on the Project continue to advance. The Company is a member of the U.S. Department of Energy’s Critical Materials Institute, a combined government and private sector organization committed to eliminating supply chain issues for rare earths and other critical elements. Please see CMI’s website at https://cmi.ameslab.gov/ for additional details on its mission and members.

For additional information, please visit the Company’s website at www.rareelementresources.com or contact Robbin Lee at 720-278-2462 or rlee@rareelementresources.com.

Forward-Looking Statements

This news release contains forward-looking statements and forward-looking information within the respective meanings 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", "plans", "has potential to", or "intends" (including negative or grammatical variations thereof) or by discussions of strategy or intentions. Such forward-looking statements include statements regarding the expected timing and completion of permitting, technology test work and results, ability to attract offtake partners and the ability to finance planned activities.

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.

Factors that could cause actual results to differ materially include, but are not limited to, the progression plans for the Bear Lodge Project, the progress and results of the feasibility study, fluctuations in demand for, and price of, rare earth products; success of process technology under testing or development; results from geological evaluations and programs; timing of and unexpected events at the Bear Lodge property; delay or failure to receive government approvals and permits; changes in U.S. and Canadian securities markets; and our ability to raise additional financing necessary to conduct our business. There can be no assurance that future developments affecting the Company will be those anticipated by management. Please refer to the discussion of these and other factors set out in our filings made from time-to-time with the United States Securities and Exchange Commission, and the Canadian securities regulators, including without limitation, the Company’s most recent reports on Form 10-K and Form 10-Q. We do not undertake to update any statements or estimate at any particular time or in response to any particular event. Investors and others should not assume that any forecasts in this news release represent management's estimate as of any date other than the date of this news release.

Rare Element Resources Ltd.
Robbin Lee, 720-278-2462
rlee@rareelementresources.com
www.rareelementresources.com