Rare Element Resources Uses Net Proceedings from Offering for Work Program at Bear Lodge Deposit

Rare Element Resources Ltd. (TSX-V: RES and AMEX: REE) has announced that it has filed a preliminary short form prospectus with the securities regulatory authorities in each of the provinces of Canada, except Québec, in connection with a fully marketed public offering in Canada with a concurrent private placement in the United States to raise aggregate gross proceeds of up to C$50 million on a best efforts basis with a syndicate of agents.

The Offering will consist of the sale of common shares (the "Shares") at an issue price to be determined in the context of the market (the "Issue Price"). The agents for the Offering shall also have the option to purchase from the Company up to that number of additional Shares equal to 15% of the number Shares issued under the Offering during the 30 day period immediately following the closing of the Offering (the "Over-Allotment Option").

The net proceeds from the Offering will be used to fund the work program at the Company's Bear Lodge rare earths deposit in Wyoming, USA, including the completion of a pre-feasibility study, pilot plant testing, drilling, metallurgical work, exploration programs and for general working capital purposes.

The Company has agreed to pay to the agents for the Offering a cash commission equal to 6% of the aggregate gross proceeds from the Offering (including the Over-Allotment Option). As additional consideration, the Company will issue to the agents for the Offering broker warrants (the "Broker Warrants") entitling the agents to subscribe for that number of Shares as is equal to 6% of the total number of Shares sold pursuant to the Offering, including the Over-Allotment Option. Subject to regulatory approval, each Broker Warrant will be exercisable to acquire one Share at a price equal to the Issue Price for a period of 24 months after the closing of the Offering.

The Offering is expected to close on or about December 9, 2010. The Company shall obtain the necessary approvals to list the Shares on the TSX Venture Exchange ("TSX-V") and the NYSE Amex Equities ("AMEX"), which listings shall be conditionally approved prior to the closing of the Offering.

A preliminary short form prospectus has been filed with the securities regulators in each of the provinces of Canada, except Québec, pursuant to National Instrument - 44-101 Short Form Prospectus Distributions. The Shares have not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), or the securities laws of any state of the United States, and may not be offered or sold, directly or indirectly, in the United States (as defined in Regulation S under the U.S. Securities Act) unless registered under the U.S. Securities Act and applicable securities laws of any state of the United States or in reliance on an exemption from such registration requirements. This news release does not constitute an offer to sell, or a solicitation of an offer to buy any of the Company's securities set out herein in the United States.

Source: Rare Element Resources Ltd.

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