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Re:   News Release - Tuesday, October 20, 2009
      Rare Element Begins a Scoping Study on Rare-Earth-Element
      Potential at Bear Lodge and Updates the Exploration Status
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Rare Element Resources Ltd. (TSX-V: RES) ("Rare Element" or the
"Company") is pleased to announce that it has engaged the services of
some of the top technical professionals in their fields of expertise
with Ore Reserves Engineering (resource estimation), John T. Boyd
Company (mining engineering), Knight Piesold (geotechnical
engineering), Mountain States R&D International (metallurgy), and
Enviroscientists (environmental and permitting). This group of
technical professionals will conduct a preliminary economic assessment
(Scoping Study) of the rare-earth-element (REE) development potential
of the Company's Bull Hill Southwest rare-earths deposit, Wyoming, USA.

Following completion of the current drilling program, Alan C. Noble,
P.E. and an Independent Qualified Person, of Ore Reserves Engineering
(ORE) will update the previous estimate of REE resources in the Bull
Hill Southwest deposit (see news releases of March 23 and April 15,
2009). The resource estimate will be based on a combination of
historical drilling data and the Company's drilling results from 2004
through 2009. ORE is anticipating completion of this effort with
release of a NI 43-101 Technical Report late in the first quarter of
2010.  ORE will also identify specific areas for follow-up definition
drilling with an objective to complete an NI 43-101-compliant reserve
estimate following a 2010 drilling and evaluation program. 
 
The Scoping Study will follow resource estimation and will be
coordinated by Michael P. Richardson, P.E. and an Independent Qualified
Person, of John T. Boyd Company with completion of a NI 43-101
preliminary assessment report scheduled for mid-year 2010. This study
will include more detailed metallurgy, specifics on environmental
studies, permitting requirements, and preliminary mine, plant, and
geotechnical engineering. In addition it will model potential
development scenarios for the deposit in order to determine preliminary
estimates of operating costs and capital cost requirements to construct
mine and processing facilities at the site. 
 
Of the distribution of rare-earth elements within the Bull Hill
Southwest deposit, more than 50% are those that have the widest use and
the greatest projected growth potential. These include lanthanum,
neodymium, praseodymium, and samarium. Lanthanum has a growing market
in nickel-metal-hydride batteries, and neodymium and praseodymium are
in demand because of their use in high-intensity permanent magnets,
which are critical components in the electric motors and generators for
hybrid cars and wind turbines. Initial work on the Scoping Study is
currently underway.
 
2009 Fall Drilling Program 
 
The decision to proceed with a new resource estimate and a Scoping
Study evaluation of the project follows completion of a NI
43-101-compliant resource estimated this past spring and the initiation
of a major drilling program in August to expand and upgrade the oxide
resources of the Bull Hill Southwest deposit. All studies completed to
date confirm the exceptional REE potential of the deposit because of
its high grade, large size, and amenability to processing the oxide
portion of the resource. Geological work this fall includes: 1)
systematic sampling of unsplit portions of twelve core holes from past
exploration programs, 2) REE analyses of approximately 2500 ten-foot
core samples, 3) selected geophysical surveys, and 4) detailed
mineralogical studies to confirm the identity and distribution of the
REE-bearing mineral phases. Assaying of the samples is being conducted
by Activation Laboratories of Ancaster, Ontario utilizing lithium
metaborate fusion and ICP-MS (inductively-coupled plasma -- mass
spectroscopy) procedures. The project work is being done under the
supervision of Dr. James G Clark, L.Geo., Vice President, Exploration,
and a qualified person under NI 43-101. The mineralogical work has
been, and continues to be, done as a collaborative effort between Dr.
Clark, a widely recognized and respected rare-earth deposit geologist,
and Dr. Anthony Mariano, a world renowned expert in rare-earth
mineralogy. 
 
The Bull Hill area rare-earth mineralization is very extensive and only
a small portion of its known extent has been drill-tested. Soil and
colluvial cover mask the bedrock geology, and the area has much less
than 5% outcrop, severely hindering interpretations of structure and
detailed geologic features. The total NI 43-101-compliant inferred
resource within the Bull Hill Southwest deposit is estimated at 9.8
million tons averaging 4.07% rare-earth oxide (REO) (see news release
of March 23, 2009). The deposit comprises sets of carbonatite dikes and
intervening stockworks, and their near-surface oxidized equivalents
(FMR), which occur in a swarm of steeply dipping bodies that intrude an
alkalic diatreme breccia. FMR is named for its principal mineral
components---iron oxides (FeOx), manganese oxides (MnOx), and REE
minerals. Some dikes have true thicknesses in excess of 100 feet. The
dike and vein system extends from the surface to depths of more than
1000 feet, with a strike length of more than 1000 feet along a
northwesterly trend. The upper part of the deposit, ranging from
surface to depths of 300 to 500 feet, is the "oxide zone". This
near-surface weathered, oxidized rock contains an inferred resource of
4.5 million tons averaging 4.3% REO, plus another 1.1 million tons of
partially oxidized material that averages 4.5% REO. 
 
One of the key exploration targets being tested is Bull Hill Northwest
(Figure 1), which is located approximately 1000 feet northwest of the
Bull Hill Southwest deposit. Bull Hill Northwest is defined primarily
by historic Hecla Mining Company angled drill-hole WP-2, which has a
near-surface intercept of 186 feet assaying over 9% total REO in the
depth interval from 26 to 209 feet. The orientation of the mineralized
bodies encountered in drill hole WP-2 is uncertain. One interpretation
is that the FMR/carbonatite diking may strike northwesterly and be the
continuation of the Bull Hill Southwest dike sets. This interpretation
opens up a large area between the two targets for further exploration.
A second interpretation is that mineralization at Bull Hill Northwest
is controlled by northeast to east-northeast structural trends that may
be related to similar FMR/carbonatite-hosted REE mineralization in the
recently identified Whitetail Ridge target, located west of the West
Bull Hill fault. Other targets in the Bull Hill area include Bull Hill
Southeast Extension, a potential deep carbonatite plug, and a potential
fault offset of the Bull Hill Southwest dike system. 

http://www.rareelementresources.com/i/maps/NR-Oct-13-2009.jpg
1. Bull Hill Southwest Resource Area and Other Exploration Targets

Key Mineralogical Observations 
 
Mineralogical studies of the oxide zone mineralization indicate that this
higher-grade REE mineralization (4.3% REO) is contained in aggregates of
fine-grained bastnasite-group minerals: synchysite (Ca(REE)(CO3)2F),
parisite (Ca(REE)2(CO3)3F2), and bastnasite ((REE)CO3(F,OH)), listed in
decreasing order of abundance. Ancylite, the principal REE mineral in
the deeper unoxidized zone, has not been observed in the near-surface
oxide resource. The oxide-zone REE minerals occur most often within
hexagonal pseudomorphs, accompanied by microcrystalline quartz, iron
oxides (FeOx), manganese oxides (MnOx), and/or minor barite. The
bastnasite group minerals are very fine-grained and form polycrystalline,
fasciate bundles or aggregates within the pseudomorphs. They are also
found as very fine, bundled aggregates outside the pseudomorphs and
intergranular to the gangue phases. 
 
The oxide zone REE minerals are contained within FMR dikes and veins
that are typically black to rusty brown in color. Most are friable and
vuggy, and drill core recoveries are often poor. A combination of the
loose friable character of the FMR material and the fine-grained nature
of the REE minerals allows a unique metallurgical pre-concentration
method of crushing, attritioning, and screening to get 90% recovery of
the REE with a 13% REO grade in the minus 500 mesh (-25 micron)
fraction. Additional testwork is anticipated to produce a concentrate
with a significant increase in grade. 
 
Future Exploration Work Plans 
 
In addition to planning the Scoping Study, the Company is contemplating
substantial drilling and additional exploration work on the property in
2010. A development drilling program to define NI 43-101-compliant REE
resources and reserves in the deposit will be conducted on the Bull
Hill Southwest deposit. Multiple other targets will be tested and
resources estimated, if drilling is successful. This work will include
further analysis of archived drill cores from the various targets,
accompanied by detailed mineralogical studies. 
 
The mineralogical data will also provide the basis for continuing
metallurgical studies on the mineralized material from different
targets to design processes for concentrating the REE mineralization.
Preliminary metallurgical work done by Mountain States R & D
International on samples from Bull Hill Southwest successfully produced
a pre-concentrate with threefold grade increase, thus providing
encouragement that further concentration of the REE mineralization will
be achievable. 
 
RES is a junior mineral exploration and development company, with a
primary focus on rare-earth elements with high technology applications.
The language used in this News Release may contain forward-looking
statements that may involve a number of risks and uncertainties. Actual
events or results could differ materially from the Company's
forward-looking statements and expectations.
 
Rare Element Resources Ltd (TSX-V:RES) is a publicly traded mineral
resource company focused on rare-earth elements and gold. In addition
to the REE exploration and evaluation efforts, the Company and Newmont
have entered into the Sundance gold exploration joint venture on the
Company's Wyoming property. Newmont has the right to earn a 65% working
interest in Rare Element Resources' property, excluding any rights to
the rare-earth elements and uranium but including rights to gold and
other metals, by performing US$5 million in property work expenditures
over a five-year period.  Newmont also has the right to earn an
additional 15% working interest by completing a positive project
feasibility study.  Gold exploration drilling began in July for the
2009 program, and rare-earth drilling began in August.

ON BEHALF OF THE BOARD

Donald E. Ranta, PhD, PGeo, President & CEO

For information, refer to the Company's website at
www.rareelementresources.com or contact:
 
Mark T Brown, CFO,
(604) 687-3520 ext 242
mtbrown@pacificopportunity.com.

Donald E Ranta,
(604) 687-3520
don@rareelementresources.com
 
Donald E. Ranta, PhD, PGeo, serves the Board of Directors of the
Company as an internal, technically Qualified Person.  Technical
information in this news release has been reviewed by Dr. Ranta and has
been prepared in accordance with Canadian regulatory requirements that
are set out in National Instrument 43-101.  This news release was
prepared by Company management, who take full responsibility for
content. Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of this
release.

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Copyright (c) 2009 RARE ELEMENT RESOURCES LTD. (RES.V)  All rights
reserved.  For more information visit our website at
http://www.rareelementresources.com/ or send
mailto:info@rareelementresources.com
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