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      Rare Element Makes Significant Progress with Rare-Earths
      Metallurgical Testing
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Vancouver B.C. - Rare Element Resources Ltd. (TSX-V: RES) is pleased to
announce further progress in rare-earth-element (REE) metallurgical
test results on oxide samples from the Company's 100%-owned Bear Lodge
property, Wyoming, USA. The favorable metallurgical test results on the
near-surface oxide material allow the following interpretations:

1. With vigorous attrition scrubbing, a recovery potential of 90% was
achieved in 32 wt-% of the original sample weight while still retaining
a grade of 13% rare-earth oxide (REO); the REO resides in the finest
fraction (minus 500-mesh) pre-concentrate.
2. Further upgrading of the minus 500-mesh (25μ) pre-concentrate by
flotation may be able to achieve concentrate grades of 40-50% REO.
3. Hydrochloric acid leaching in an agitation leach system is predicted
to recover up to about 85% of the total REO from the original
mineralized material.
4. Additional testing is likely to provide further improvements to the
processing methods.

Metallurgical testwork is continuing at Mountain States R&D
International of Vail, Arizona. Dr. Roshan Bhappu of MSRDI states that
"Since the results of the preliminary metallurgical tests on the REO
oxide samples are quite encouraging, MSRDI recommends a more detailed
test program to determine the best operating and design parameters for
developing a conceptual flowsheet... In addition a flotation step would
be ideal for the minus 500-mesh Bear Lodge REE mineralization since it
would be technically feasible to obtain a relatively high grade (40 to
50% REO) concentrate in about 12 to 15 wt-% with a recovery of plus 70%
of the REO values. Accordingly, additional flotation testing of the
fine pre-concentrate is planned."

The metallurgical testing is being conducted on oxide samples from an
NI 43-101-compliant inferred resource of oxide  mineralization
consisting of 4.5 million tons averaging 4.3% REO. The oxide resource
is part of a larger inferred resource estimated at 9.8 million tons
averaging 4.07% REO using a 1.5% REO cutoff grade. The oxide zone of
mineralization extends from surface to depths of 300 to 500 feet.
Excellent exploration potential for expansion of the oxide zone is
being tested by a current program of step-out drilling.

The test program on this oxide mineralization was specifically designed
to take advantage of the mode of mineral occurrence of the REE
mineralization unique to this mineralized material type. This
uniqueness is characterized by the occurrence of fine-grained REE
minerals that variably adhere to the surfaces of the coarser gangue
minerals. The REE minerals in oxide mineralization from the resource
area are nearly all from the bastnasite-group---listed in decreasing
order of abundance: synchysite, parisite, and bastnasite. Initially the
REE minerals were readily liberated by gentle scrubbing of the oxide
mineralized samples that had been crushed to minus � inch (6 mm). The
scrubbed preconcentrate product consisting of the fine particles less
than 500 mesh contained more than 70% of the REO in about 20 wt-%
pre-concentrate product of the original sample material and assayed 14%
REO.

Most of this news release is derived directly from an MSRDI progress
report received in late August, 2009.

Summary

In general, the MSRDI tests have shown that the following conclusions
apply:

1. The oxidized REE-mineralized material should be initially crushed to
minus �".
2. Beneficiation is best accomplished by scrubbing the material with
vigorous agitation for an extended period of time.
3. Screened or cycloned minus 500-mesh particles contain up to 90% of
the REE values.
4. Sulfuric acid leaching would require extended times and/or the use of
an acid roasting circuit to be viable.
5. Concentrated hydrochloric acid leaching at room temperature is
preferable to sulfuric acid leaching; it removes the rare-earth oxides
within 6 to 24 hours and recovers up to 98% of the values from the
treated minus 500-mesh pre-concentrate.
6. Economic evaluations can be made on acid consumption versus weight
percent rejection of the gangue based on value of the discarded rare
earth oxide content.
7. Heavy media separation recovers some of the larger particles but is
minimally efficient and probably not cost effective.
8. Flotation of original oxide mineralized material can recover a
substantial amount of the REE values, but the flowsheet would be
complicated with recirculation and stages of cleaning; final
concentrate grade may approach that of other plants but the recovery
may suffer.
9. Flotation of the minus 500-mesh REE-bearing pre-concentrate has the
potential for higher concentrate grades with good recovery and removal
of more of the acid-consuming gangue minerals.

Effect of Scrubbing

If the rare-earth mineralized sample material is first gently scrubbed
in the preconcentration step, the REO values are enhanced, such that
the remaining 22 wt-% of the initial sample contains 70% of the values,
with a pre-concentrate grade of 14.25% REO. Subsequent testing showed a
recovery potential of 90% of contained REE with vigorous agitation in
32 wt-% of the original material while still retaining a
pre-concentrate grade of 13% REO. Because the abundance of rare-earth
elements in the mineralized material is quite high, vigorous scrubbing
with attendant higher energy costs may be justified to recover the
optimum amount of REO values at the expense of somewhat lower rejection
of the gangue. In this case, attritioning over extended times generates
additional fines in the final product, but the ratio of REO recovery to
weight gain is 20% additional recovery to 10% weight gain, which
indicates that the vigorous attrition scrubbing is both a liberation
technique and a beneficiation procedure.

Figure 1 shows the relationship among the techniques to scrub the
original mineralized material. Test results demonstrate that:

1. Scrubbing enriches the minus 500-mesh fraction in REE.
2. Gentle scrubbing produces a higher grade but with reduced recovery.
3. Vigorous agitation results in higher REE recoveries but increases the
gangue presence.
4. There is less than one percent difference in pre-concentrate REO grade
among the techniques.
5. A projected line connecting the two flotation machine tests shows the
estimated weight and recovery at points between 10 and 60 minutes.

Figure 1. Scrubbing Comparison Showing Weight, Recovery, and
Grade for minus 500 mesh Fraction.

(View this at:
http://www.rareelementresources.com/s/NewsReleases.asp?ReportID=365741)

Effect of Scrubbing Methods and Time on -500 mesh Product Grade and
Weight Plotted Against Recovery

(View this at:
http://www.rareelementresources.com/s/NewsReleases.asp?ReportID=365741)

Oxide Mineralization Flotation

Flotation recovery of REO values for ores from other rare-earth
deposits has been documented and practiced by a few companies in the
USA and China. The classical example of REO flotation is the Mountain
Pass operation in California. At Mountain Pass the REO feedstock
averages approximately 8.0% REO and most of the REO values are
contained in the mineral bastnasite. A similar flotation process, if
workable, would be ideal for the Bear Lodge REO mineralization that is
at the pre-concentrate stage, because it would be technically feasible
to obtain a relatively high grade (40 to 50% REO) concentrate in about
12 to 15 wt-% of the original bulk mineralized material with a recovery
of more than 70% of the contained REO values.

Oxide Material Leaching

Sulfuric acid and hydrochloric acid leach tests for rare earths were
conducted on both the original oxide mineralized material and the oxide
pre-concentrates to determine the preferred extraction method.
Variables include acid concentration, leach time, and leach
temperature. Sulfuric acid leaching is very slow at lower
concentrations, whereas at higher concentrations, there are
complications owing to high acid consumption from gangue dissolution,
relatively low recovery, and expensive washing to remove the sulfuric
acid from the rejected material prior to disposal as tailings.

Hydrochloric acid (HCl) leach tests in a simulated agitation leach
system demonstrated possible recoveries up to about 85% of the total
REO from the mineralization (90% recovery after beneficiation
multiplied by 95% HCl leach recovery). Tests were conducted to
determine the preferred extraction method by exploring acid
concentrations, time under leach, leach temperature, and type of acid.
Testing is continuing because the leaching process is not optimized in
terms of reagent consumption.

Hydrochloric acid was chosen to continue the testing. A series of tests
varied the leach time from six to forty eight hours to determine the
most favorable recovery curve. REO recoveries varied from 95% to 99% in
this series of tests. It is apparent that an ambient-temperature
concentrated hydrochloric acid leach can deliver excellent recovery in
a brief time frame and that acid consumption is moderate over the
shorter time. In these tests initial acid addition produced a vigorous
reaction, liberating great quantities of gas and creating a froth that
was hard to disperse. Acid addition techniques can be devised to
mitigate this effect, for example by conducting a preliminary leach
using diluted HCl to consume the carbonates followed by full strength
acid for recovery purposes.

There are a few techniques available for acid regeneration that MSRDI
will present as part of the final flowsheet. The last two leach tests
indicated that reducing the concentration of HCl also reduces the leach
recovery. Acid regeneration or, more properly, re-concentration of the
HCl is critical to driving the reaction and to reducing the acid costs.

Additional Testing

A small suite of additional tests should be run to determine the most
efficient scrubbing procedure. Minimization of gangue is critical to
the hydrometallurgical process in order to control acid consumption for
cost reduction.

The application of the flotation alternative to the further up-grading
of the minus 500-mesh pre-concentrate obtained from the initial
attritioning step may be technically and economically attractive since
such a step would reduce the overall consumption of hydrochloric acid
required in the subsequent hydrometallurgical step for recovering the
REO values.

Because hydrochloric acid leaching produces the greatest recovery to
date from the enhanced minus 500-mesh pre-concentrate, and concentrated
HCl is necessary to promote the most efficient recovery, further
hydrometallurgical testing will focus on enhancing the leaching process
after removing more of the gangue minerals prior to leaching.

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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