October 20, 2008

Rare Element Resources-Newmont Gold Venture Makes Progress With 2008 Exploration Program and Provides Financial Position Update

VANCOUVER, Oct. 20 /PRNewswire-FirstCall/ -- Rare Element Resources Ltd (TSX-V: RES) announces that the Sundance gold exploration project, which is a joint venture between Paso Rico (USA) Inc, a subsidiary of Rare Element Resources, and Newmont North America Exploration Limited, a subsidiary of Newmont Mining Corporation (Newmont), has completed additional geologic mapping, geochemical sampling, and an expanded induced polarization (IP) survey. The Newmont exploration team has made substantial progress in the 2008 program including movement toward gaining exploration permits for a larger drilling program on Rare Element's Wyoming property. Using a combination of the new geological, geochemical, and geophysical data, the exploration targets have been enhanced and better defined. Exploration data is being compiled and detailed plans are being formulated for the 2009 exploration program.

Newmont manages the gold exploration for the Sundance project. Exploration work for 2008 was designed to build on the successful 2006-07 exploration programs and to establish a more detailed understanding of the project area geologic setting. Twenty six drill holes had been completed by Newmont on joint venture ground in 2006-07, and permitting and the Environmental Assessment have progressed smoothly, such that the Plan of Operation, allowing an expanded drilling program on up to 200 acres of disturbance, is expected to be approved in late 2008 or early 2009.

Interpretation of the mapping, sampling, drilling, and geophysical survey results to date has prompted an increasing focus on major structural zones through the Taylor target and through the Carbon target, as well as the gold target in the East Taylor Bowl, which may be a major center for igneous and hydrothermal activity. The East Taylor Bowl is a topographic low centrally located between the surrounding Taylor target, the Carbon target, and the Bull Hill rare-earth-element target.

A renewed emphasis on finding high-grade gold mineralization within the Sundance property prompted a review of historical drill holes having better grade mineralization. This type of gold mineralization provides the basis for a comparison of potential deeper high-grade veins at Sundance with those of the Cripple Creek system, which had produced nearly 20 million ounces of gold from deep high-grade veins. High-grade gold samples have been found at the Sundance project both in surface rocks and in drill holes with the following historical drill holes, intercepts, and assay results being representative of this type of mineralization*:

   -   Drill-hole S-33 - 15 ft @ 7.97 g/t Au (0.233 opt)*   -   Drill-hole S-35 - 5 ft @ 33.94 g/t Au (0.991 opt)   -   Drill-hole S-60 - 5 ft @ 10.32 g/t Au (0.301 opt)   -   Drill-hole S-81 - 20 ft @ 5.78 g/t Au (0.169 opt)   -   Drill-hole S-84 - 10 ft @ 4.79 g/t Au (0.140 opt)   -   Drill-hole SU 96-4  -  15 ft @ 4.69 g/t Au (0.137 opt)    * The drill results tabulated above are historical and were prepared   before the introduction of National Instrument 43-101- Standards of   Disclosure for Mineral Projects ("NI 43-101"). They may not be relied   upon until they are confirmed using methods and standards that comply   with those required by NI 43-101. Neither the Company nor its personnel   treat these data as adequate to help define a current mineral resource   as defined under NI 43-101, nor do they rely upon them for evaluation   purposes; however, these data are used to guide exploration as the   Sundance Venture develops information to support a current mineral   resource estimate in accordance with the requirements of NI 43-101.    Financial Position Update   

Rare Element Resources is uniquely positioned to sustain itself in the longer term despite the current stock market volatility because of two main reasons: 1. It has maintained a cost effective overhead model; and 2. Newmont still has approximately $3.5 million in expenditures to be made on exploration at Sundance to earn a 65% interest in the project. These factors allow for Rare Element to keep costs low, to moderate the amount of work it does that it has to pay for, and to react quickly and be selective in accepting any offers of financing. With a total of 23,866,736 common shares currently outstanding, no debt, and a strong working capital position, Rare Element is well positioned to last beyond 2010 without raising additional capital.

Rare Element Resources Ltd (TSX-V:RES) is a publicly traded mineral-resource company focused on gold and strategic metals such as the rare-earth elements. Rare Element 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's 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.

Rare Element's Bear Lodge, Wyoming property also encompasses one of the largest disseminated rare-earth occurrences in North America (M H Staatz, US Geological Survey Professional Paper 1049D). In parallel with the Sundance gold-focused exploration project, Rare Element has completed drilling of three of four holes planned in 2008 to independently advance the rare-earth potential of its property. The Company is expecting to receive a final metallurgical report from the recent testing program and is currently working on NI 43-101 resource estimation of the rare-earth mineralization.

   ON BEHALF OF THE BOARD   Donald E Ranta, PhD, PGeo,   President & CEO   

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. The TSX Venture Exchange has not reviewed, and does not accept responsibility for the adequacy or accuracy of this release.

Rare Element Resources Ltd.

CONTACT: refer to the Company's website at http://www.rareelementresources.com/or contact: Donald E Ranta, President & CEO, (604) 687-3520,[email protected]; Mark T. Brown, CFO, (604) 687-3520 ext 242,[email protected]