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Rare Element Reports More than 125% Increase in Rare-Earth Mineral Resource at Bear Lodge: 9.8 Million-Ton Inferred Mineral Resource Averaging 4.07% Rare-Earth Oxides

Posted on: Monday, 23 March 2009, 08:00 CDT

VANCOUVER, March 23 /PRNewswire-FirstCall/ - Rare Element Resources Ltd. (RES:TSXV) is pleased to announce the results of a new National Instrument 43-101-compliant mineral resource estimate of rare-earth elements (REE) contained in the Bull Hill Southwest deposit, Bear Lodge project, Wyoming (Table 1). The resource was estimated by an independent consultant-Ore Reserves Engineering (ORE).

The new resource estimate is derived from a REE database that includes twelve drill holes completed by the Company since 2004 for a total of 13,326 feet, plus sixteen drill holes, completed by other companies prior to 2004, for which data are available. Approximately 34% of the resource is within 100 feet of a drill hole and 69% of the resource is within 200 feet of a drill hole. For comparison, a historical (non-43-101-compliant) resource of 4.3 million tons averaging 3.8% rare-earth oxides (REO) was estimated previously by Hecla Mining Company in 1991, so the new estimate exceeds the historic one by more than 125 percent. The new resource estimate focuses only on the dike sets in the Bull Hill Southwest target area, and there is significant additional potential for expansion of the Bull Hill Southwest resource and for definition of resources in other areas.

The results of the mineral resource estimate by ORE are summarized at a range of cutoff grades for each of the oxide, transitional/mixed, and sulfide/unoxidized zones, as follows:

Table 1 Inferred Tons and Grade at Various Cut-Off Grades (%REO) ------------------------------------------------------------------------- Oxide Transitional Sulfide Total ----- ------------ ------- ----- Cutoff ----------------------------------------------------------------- Grade Tons Grade Tons Grade Tons Grade Tons Grade (1),(3) (1) (1) (1) (1) ------- ------------------------------------------------------------------------- 1.0 5,350,000 3.83 1,420,000 3.84 4,990,000 3.27 11,770,000 3.60 ------------------------------------------------------------------------- 1.5(3) 4,560,000 4.29 1,140,000 4.50 4,120,000 3.71 9,830,000 4.07 ------------------------------------------------------------------------- 2.0 3,830,000 4.78 840,000 5.54 3,250,000 4.27 7,910,000 4.65 ------------------------------------------------------------------------- 2.5 3,390,000 5.10 760,000 5.84 2,810,000 4.58 6,970,000 4.97 ------------------------------------------------------------------------- 3.0 2,490,000 5.96 670,000 6.26 2,330,000 4.97 5,500,000 5.58 ------------------------------------------------------------------------- 3.5 2,190,000 6.35 610,000 6.60 1,980,000 5.28 4,770,000 5.94 ------------------------------------------------------------------------- 4.0 1,880,000 6.78 480,000 7.36 1,350,000 5.95 3,710,000 6.55 ------------------------------------------------------------------------- 4.5 1,600,000 7.22 440,000 7.65 1,160,000 6.22 3,200,000 6.92 ------------------------------------------------------------------------- 5.0 1,370,000 7.63 360,000 8.30 860,000 6.72 2,580,000 7.42 ------------------------------------------------------------------------- 1. REO (rare-earth oxides) include CeO(2), La(2)O(3), Nd(2)O(3), Pr(6)O (11), and Sm(2)O(3), listed in relative order of decreasing abundance in the deposit, plus minor quantities of other REO. 2. The resource estimate is classified as Inferred Mineral Resources as defined by CIM and referenced in NI 43-101. A Technical Report with the estimate will be filed on SEDAR within 45 days. 3. ORE considers a range of 1.0 to 2.5 per cent REO cut-off grade to be reasonable in preliminary estimation of potentially economic resources. A cutoff grade of 1.5% REO has been selected as the base case.

Resources were estimated using nearest-neighbor assignment. Drill holes were composited to nominal 10-foot intervals for estimation, and grades were not capped. Grades were assigned using a rectangular projection of 300 X 300 X 10 feet, where the longer distance is parallel to the carbonatite/ FMR dike orientation. The resource model blocks are 10 X 10 X 10-foot cubes. Based on current REO prices, the cutoff grade of 1.5% REO was selected near the mid-point of a range of likely cost scenarios.

"We are very excited with this initial mineral resource estimate for the rare-earth elements at Bear Lodge," said Dr. Don Ranta, President of Rare Element Resources. "The resource is based on 26 diamond drill holes that successfully intercepted rare-earth mineralization, fourteen of which include mineralization that contributed to the resource. The resource estimate is currently classified as inferred, but we are confident that upgrading it to the indicated category is primarily a function of completing additional in-fill drilling and further metallurgical work. We are also excited about the potential for expanding the deposit and discovering other rare-earth resources in the vicinity of Bull Hill," he said. The Company plans to evaluate possible strategic alliances in the advancement of its rare-earths resource.

Geology & Mineralization

Rare-earth-element mineralization occurs in the north-central core of the Bear Lodge alkaline-igneous complex located in northeastern Wyoming. Virtually all of the significant REE occurrences in the Bear Lodge district are controlled by Rare Element Resources' lode claims. Rare-earth mineralized bodies within the Bull Hill area of the district include well-defined, near-surface FMR (iron oxide-manganese oxide-REE) dikes and veins and deeper sulfide-bearing carbonatite (a high-carbonate igneous rock) dikes and veins, with a transitional or mixed zone (oxide + sulfide) in between. The Bull Hill Southwest target is comprised of an FMR-carbonatite dike swarm that strikes northwesterly and dips steeply to the southwest. The dike swarm intrudes heterolithic intrusive breccia of the Bull Hill diatreme. FMR dikes and veins are interpreted to be intensely oxidized and leached equivalents of the carbonatite bodies that are strongly weathered from the surface to depths of about 300-500 feet and moderately weathered for another 100 feet or so. Carbonatite dikes at depth are interpreted to transition toward the surface into FMR bodies and range in size from veinlets to large dikes exceeding 100 feet in width. The Bull Hill Southwest deposit consists of several dike sets in the swarm that is spread across a zone several hundred feet in width. The dikes appear to pinch and swell in both strike and dip directions, and they can be traced in drill holes up to 1000 feet along strike and 1000 feet down dip. Some of the dikes are cut off to the southwest and at depth by a north-northwest-trending, east-dipping fault that is generally coincident with a valley floor. A number of widely dispersed gold occurrences are distributed peripherally to the Bull Hill REE mineralization.

The Company considers the geologic modeling and resource estimation results encouraging for the following reasons:

- Significantly greater tonnage and slightly higher REO grades compare favorably to the prior historical resource estimate. - The Bull Hill Southwest deposit shows good lateral and vertical continuity of grades within the dike sets. - The REE mineralization that constitutes the resource is open for expansion toward the surface, at depth, to the southeast, and to the southwest of the fault; and the Company believes that there is room for the mineral resource tonnage to significantly increase. - Historical drilling identifies other Bull Hill area targets, some possibly with higher grade REE mineralization, including Bull Hill Northwest, Bull Hill Southwest extension, and a conceptual carbonatite plug. These targets have yet to be followed up with a systematic drill program.

The new mineral resource estimate confirms that potentially economic resources are present, and it justifies further technical work including metallurgical testing and drilling. Considerable in-fill definition drilling will be required to increase the confidence level and upgrade the inferred resources to the indicated category. Step-out drilling will likely expand the resource and define the boundaries of the mineralization.

Cutoff Grade & Metallurgy

The resource size is sensitive to an assumed cut-off grade, which is, in turn, very sensitive to metallurgical operating costs. The Company is steadily advancing its rare-earth metallurgical studies at Mountain States Research & Development International under the direction of Dr. Roshan Bhappu, P.E., with the objective of developing a cost-efficient and effective metallurgical flowsheet. A metallurgical testing program will be conducted during 2009 on the mineralized core samples collected during 2008 (see news release February 4, 2009).

Mineral Resources are not Reserves

Mineral resources that are not mineral reserves do not have demonstrated economic viability. Mineral resource estimates do not account for minability, selectivity, mining loss and dilution. These mineral resource estimates are inferred mineral resources that are normally considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is also no certainty that these inferred mineral resources will be converted to measured and indicated mineral resource categories through further drilling, or into mineral reserves once economic considerations are applied.

Quality Assurance

The mineral resource estimate was completed by Mr. Alan C. Noble, P.E., principal engineer of Ore Reserves Engineering, and is based on geological interpretations supplied by the Company to ORE and subsequently modified by ORE. Mr. Noble is an independent qualified person for the purposes of National Instrument 43-101 standards of disclosure for mineral projects of the Canadian Securities Administrators and has verified the data disclosed in this release.

The Rare Element Resources' field programs were carried out under the supervision of Dr. James G. Clark, LGeo, the Company's Vice President of Exploration and a qualified person for the purposes of National Instrument 43-101 standards of disclosure for mineral projects of the Canadian Securities Administrators. He was also a senior geologist and, subsequently, exploration supervisor for Hecla Mining Company during that company's exploration of Bull Hill and the Bear Lodge district during the late 1980's and early 1990's. A detailed QA/QC program was implemented for the 2007 and 2008 drill programs. Dr. Clark has verified the sampling procedures and QA/QC data delivered to ORE and is of the opinion that the data are of good quality and suitable for use in the resource estimate.

The historic mineral resource estimate referred to in this report was prepared before the introduction of NI 43-101 and should be treated as a historical estimate only. Rare Element Resources has independently verified the historical resource estimate. The Company is not treating the historical estimate as a NI 43-101-defined mineral resource verified by a qualified person and the historical estimate should not be relied upon. Nevertheless, the current mineral resource estimate replaces and supersedes the historical estimate which is provided for comparison purposes only.

A full table of significant drill results from the Company's 2004-2008 exploration programs and maps and sections detailing the drill-hole locations are available at: http://www.rareelementresources.com

Rare Element Resources Ltd (TSX-V:RES) is a publicly traded mineral-resource company focused on gold and rare-earth elements. In addition to the REE exploration and evaluation efforts, the Company and Newmont have entered into the Sundance gold-exploration 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.

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

SOURCE Rare Element Resources Ltd.

Source: PR Newswire

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