CANADA RARE EARTHS RECEIVES GOELAND RARE EARTH PROJECT DRILL PERMITS

Vancouver, British Columbia, Canada - August 03, 2011 - Canada Rare Earths Inc. ("Canada Rare Earths" or the "Company") (TSX Venture: V.CJC) is pleased to announce that it has received all requisite drill permits to commence drilling on its 100% owned Goeland Rare Earth Exploration Project, located at Montviel, Quebec. Final road preparations for drill site access are nearly complete and it is anticipated crews and equipment will mobilize later this week with drilling set to commence early next week.

The summer diamond drill program has two key objectives: to confirm and expand historic drilling and test the true dimensions and rare earth element potential of the PMVT 5 carbonatite unit. Canada Rare Earth claims at Montviel neighbor those of Geomega Resources' (tsx.v: GMA) whose recent and ongoing rare earth discoveries have also been the focus of drilling on the PMTV 5 carbonatite unit. Canada Rare Earths and Geomega's Montviel holdings currently contain the only two known PMTV 5 carbonatite bodies at Montviel. Worldwide, carbonatite-related deposits are a major host for rare earths elements. The world's most advanced and prolific 'REE' deposits in production or development, Bayan Obo (China), Molycorp's Mountain Pass (USA), Lynas's Mount Weld (Aus), and Rare Earth Element Resource's Bear Lodge project, are all hosted by carbonatites.

Mr. Benoit Moreau, Geo and P. Eng., Vice President of Exploration for the company, is a Qualified Person for the purpose of NI 43-101 and has reviewed the geological information disclosed herein.

ABOUT CANADA RARE EARTHS INC.

Canada Rare Earths is a growth company focused on the exploration and development of rare earth elements at its 100% owned Goeland Rare Earths Project within the Montviel carbonatite complex, Montviel Township Quebec, immediately adjacent to Geomega's (TSX-V: GMA) recent rare earth discovery. The Goeland property located 215 km north of Val-d'Or, is road accessible and consists of 47 claims totaling approximately 2,600 hectares. Since the acquisition of the Goeland Project, the Company, in a short period of time, has successfully established itself in one of the largest Carbonatite complexes in North America.

For further information on Canada Rare Earths, please contact us at our Head Office.

On Behalf of the Board of Canada Rare Earths Inc.

Chad McMillan
President & CEO

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. All of the above is subject to TSX.V and regulatory acceptance.

Cautionary Note Regarding Forward-Looking Statements: Certain disclosure in this release, including statements regarding the Company's plans for and intentions with respect to exploration of the Goeland Project, constitutes "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and Canadian securities legislation. In making the forward-looking statements in this release, the Company has applied certain factors and assumptions that the Company believes are reasonable, including that the Company is able to obtain any required government or other regulatory approvals and any required financing to complete the Company's planned exploration activities, that the Company is able to procure equipment and supplies in sufficient quantities and on a timely basis and that actual results of exploration activities are consistent with management's expectations. However, the forward-looking statements in this release are subject to numerous risks, uncertainties and other factors relating to Canada Rare Earth's operation as a mineral exploration company that may cause future results to differ materially from those expressed or implied in such forward-looking statements. Such uncertainties and risks may include, among others, actual results of the Company's exploration activities being different than those expected by management, uncertainties involved in the interpretation of drilling results and geological tests, delays in obtaining required government or other regulatory approvals or financing, inability to procure equipment and supplies in sufficient quantities and on a timely basis, equipment breakdowns and bad weather. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Readers are cautioned not to place undue reliance on forward-looking statements. Canada Rare Earths does not intend, and expressly disclaims any intention or obligation to, update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law.