Rare Element Reports December 31, 2012 Financial Results, Substantial Increase in Rare Earth Resources and Strong Cash Balance

Rare Element Reports December 31, 2012 Financial Results, Substantial Increase 
in Rare Earth Resources and Strong Cash Balance 
- Cash and short-term investment balance was $40.1 million at
December 31, 2012, sufficient to complete the Feasibility Study (FS)  
- Measured and Indicated (M&I) Resources increased by 65% to 944
million pounds of contained rare earth oxide (REO)  
- Includes first indicated resource at the heavy rare earth (HREE)
enriched Whitetail Ridge deposit  
- Proprietary oxalate purification process produces a 90+ % bulk REO
concentrate 
LAKEWOOD, COLORADO -- (Marketwire) -- 03/18/13 -- Rare Element
Resources Ltd. (NYSE Amex:REE)(NYSE MKT:REE)(TSX:RES) (the "Company")
reports that it has filed its transitional report and audited
consolidated financial statements on Form 10-K for the six months
ended December 31, 2012 on www.sec.gov and www.sedar.com. The
transitional report is filed following the Company's change in fiscal
year-end from June 30 to December 31 and reports the six month period
ending December 31, 2012. 
As to the financial report filing, Randall J. Scott, President and
Chief Executive Officer stated, "We are pleased at the overall
position of the Company at the end of 2012 and into 2013. The
recently announced a 65% increase in our Measured and Indicated
resource at Bear Lodge with its strong Critical Rare Earths content,
the progress on the proprietary oxalate process, and a healthy cash
balance provides an excellent basis for continued progress towards
the Bear Lodge REE project Feasibility Study." 
Update on the Bear Lodge REE Project: 
Resource Estimate Update 
The Company's Form 10-K and recent press release regarding updated
resource estimates announced 14.7 million tons grading 3.22% REO at
1.5% cutoff grade. The Company is preparing an updated National
Instrument 43-101 ("NI 43-101") report, which will be filed and
available under the Company's SEDAR profile at www.sedar.com within
the timeline required by NI 43-101. 
Dr. James Clark, Vice President of Exploration for the Company,
states "We are extremely pleased with the substantial increase in our
estimated M&I Resource at Bear Lodge, as well as the further
confirmation of the continuity of the Bull Hill REE deposit and the
Whitetail Ridge resource area. The increased M&I resources in those
deposits will be incorporated into the upcoming Feasibility Study.
Further, the results we have reported confirm the zones of
HREE-enrichment (Eu, Tb, Dy, and Y) at Whitetail Ridge and Carbon and
illustrate the growing significance of this world-class source of
CREOs." 
Metallurgy and Project Development 
Earlier this year, a coordinated effort of the Company's geologists
and metallurgists provided a selection of eleven sample sites that
exhibit variable mineralogy and are spatially representative of the
expanded mine footprint. SGS Lakefield completed confirmatory
metallurgical testwork and provided additional design data. 
Mountain States Research and Development (MSRDI), under the direction
of Dr. Roshan Bhappu, has conducted HREE testwork on sample material
from the Whitetail Ridge, Carbon and East Taylor areas. Physical
upgrading methods as well as hydrometallurgical processing have been
applied in the testwork. Based on these results, results from
exploration drilling at Whitetail Ridge, and preliminary drilling at
Carbon and East Taylor, we have determined to integrate the
development of the Whitetail Ridge HREE-enriched area into the FS and
permitting timeline for the Bear Lodge REE Project. Inclusion of the
Whitetail Ridge zone in the FS may provide enhanced project
economics. 
Bulk sampling of oxide mineralization from large diameter drill core
and from surface trenches took place in during the 2010, 2011 and
2012 exploration drilling programs on the Bear Lodge property. 
Oxalate purification process 
The Company is further progressing the lab scale testwork on our
proprietary process technology that is designed to enhance the
efficiency of rare earth recovery in concentrates. As previously
announced, the new metallurgical process produces a high purity REO
concentrate and is designed to increase recoveries, reduce raw
material requirements, and enhance the Company's ability to upgrade
final rare earth products. Following the completion of the testwork,
the proprietary process technology will be in incorporated into our
planned pilot plant testwork, leading to the formal start of our FS. 
Tests on the high-grade oxide mineralization indicate a total
recovery of 81% of REO is expected using a two-stage process. The
first stage is mineral concentration, also known as physical
upgrading ("PUG"). 
The rare earth ore from the Bull Hill mine will be upgraded
physically on site to produce the REE-rich pre-concentrate solids for
treatment at the hydrometallurgical facility in Upton, Wyoming. The
hydrometallurgical process will employ a hot chloride solution to
extract over 90% of the REEs into a pregnant leach solution (PLS).
Using closed reactor vessels, the PLS will react with oxalic acid
powder under optimized conditions to facilitate selective
precipitation of REEs. 
The REE-rich oxalate precipitates are converted to their oxide form
in a calcination process. The mass of REE-oxalates is reduced by as
much as 50% and the calcine powder contains 90+% pure mixed REO. This
is a significant improvement from the 45% concentrate which was used
as the basis for the economic calculation in the Pre-Feasibility
Study (PFS) completed in 2012. The REO powder can be re-dissolved
selectively in an appropriate acid to isolate traces of residual
impurities. 
Project Schedule 
With the updated resources announcement, continued drilling program,
advanced metallurgical testwork, ongoing strategic partner and
off-take discussions, environmental and social impact studies well
underway, we are poised to further advance the project in 2013 as
planned, including the commencement of the FS in mid-2013. 
Quarter Ended December 31, 2012 Financial Highlights: 
Please note that financial results published by the Company are all
stated in U.S. Dollars. 
As an exploration company, we do not have revenues at this time. The
net loss for the quarter ended December 31, 2012 totaled $9.6 million
or $0.21 per share as compared to a net loss of $10.1 million or
$0.23 per share for the same period in 2011. The $0.5 million
positive variance in net loss between the periods was due to the
following: 


 
--  Increased exploration spending of $1.0 million at the Bear Lodge
    property; 
--  Positive variance in stock-based compensation of $2.1 million due
    primarily to a lower share price and smaller number of options granted; 
--  Positive variance of $0.9 million in write-downs of exploration
    properties; 
--  Negative variance of $1.2 million in foreign exchange due to the impacts
    on the Company's Canadian dollar cash balances related to exchange rate
    fluctuations in the US dollar on the balance sheet date; and 
--  Negative variances of $0.2 million in other non-operating income and
    expenses. 

 
Cash and cash equivalents, and short-term investments at December 31,
2012 were $40.1 million. The decrease in cash and investments in the
quarter ended December 31, 2012 was $7.2 million and was primarily
due to exploration, corporate administrative costs, and foreign
exchange losses on our Canadian cash balances. 
Six Months Ended December 31, 2012 Financial Highlights: 
The net loss for the six months ended December 31, 2012 totaled $15.4
million or $0.35 per share as compared to a net loss of $21.1 million
or $0.48 per share for the same period in 2011. The $5.6 million
positive variance in net loss between the periods was due to the
following: 


 
--  Increased exploration spending of $2.6 million at the Bear Lodge
    property; 
--  Increased corporate administration spending of $0.8 million due
    primarily to an increase in the number of employees; 
--  Positive variance in stock-based compensation of $4.4 million due
    primarily to a lower share price and smaller number of options granted; 
--  Positive variance of $0.9 million due to prior period write-downs of
    exploration properties; 
--  Positive variance of $4.1 million in foreign exchange due to the impacts
    on the Company's Canadian dollar cash balances related to exchange rate
    fluctuations in the US dollar on the balance sheet date; and 
--  Negative variances of $0.4 million in other non-operating income and
    expenses. 

 
Cash and cash equivalents, and short-term investments decreased $11.6
million for the six months ended December 31, 2012. The decrease in
cash and investments was primarily due to spending for exploration,
corporate administrative and Bear Lodge development related costs,
offset by positive impacts from foreign exchange changes on
translating our Canadian cash balances to U. S. dollars, working
capital changes, interest income, proceeds from option exercises and
releases of restricted cash. 
The audited financial statements are available through the Canadian
securities regulatory authorities at www.sedar.com, and with the
Securities and Exchange Commission at www.sec.gov. They are also
available on the Company's website at www.rareelementresources.com. 
Rare Element Resources Ltd. is a publicly traded mineral resource
company focused on exploration and development of rare-earth elements
(REEs), with a significant distribution of critical rare earths
(CREEs). 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. 
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", "plans", "has potential to", or
"intends' or by discussions of strategy or intentions.
Forward-looking statements are statements that are not historical
facts, and include but are not limited to, mineral resource estimates
and their underlying assumptions; the effect of Whitetail Ridge HREE
on project economics; anticipated recovery rates to be obtained with
new process technology; advancement of the project in 2013; and
possible timing of the Feasibility Study. 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, our estimates of mineral resources; capital costs
estimates; plans for pilot scale metallurgical testing; processing
technology effectiveness; fluctuations in demand for, and price of,
rare earth products; timing of and unexpected events at the Bear
Lodge property; delay or failure to receive government approvals and
permits; timing and availability of external financing on acceptable
terms; the timing of a Feasibility Study and matters that will be
discussed therein; technical, permitting, mining or processing
issues; changes in U.S. and Canadian securities markets; and
fluctuations in input costs and general economic conditions. 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 in our Form 10-K for the six
months ended December 31, 2012. We expect that the above estimates
will change as new information is received and that actual results
will vary from these estimates, possibly by material amounts. While
we may elect to update these estimates at any time, we do not
undertake to update any estimate at any particular time or in
response to any particular event. Investors and others should not
assume that any forecasts in this press release represent
management's estimate as of any date other than the date of this
press release. 
Cautionary Statement 
The mineral resource estimate referred to in this release was
completed by Mr. Alan C. Noble, P.E., principal engineer of Ore
Reserves Engineering (ORE), and is based on geological
interpretations supplied by the Company to ORE and subsequently
modified by ORE. Mr. Noble is an independent Qualified Person under
NI 43-101 - Standards of Disclosure for Mineral Projects ("NI
43-101") of the Canadian Securities Administrators, and Mr. Noble has
verified the data disclosed in this release. 
Jaye T. Pickarts, P.E., serves as the Chief Operating Officer of the
Company and as an internal, Qualified Person. Technical information
in this news release has been reviewed by Mr. Pickarts, and has been
prepared in accordance with Canadian regulatory requirements that are
set out in NI 43-101. For a description of the key assumptions,
parameters and methods used by the Company 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. 
Additional information regarding the Company's mineral resources
estimate is contained in the Company's 18 March 2013 press release
titled "Rare Element Reports 65 Percent Increase of Total M&I
Rare-Earth Mineral Resources at Bear Lodge". 
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
www.sec.gov. 
Neither TSX nor its Regulation Services Provider (as that term is
defined in the policies of the TSX) accepts responsibility for the
adequacy or accuracy of this release. 
Contacts:
Rare Element Resources Ltd.
David Suleski
720-278-2468
www.rareelementresources.com