Rare Element Begins a Scoping Study on Rare-Earth-Element Potential at Bear Lodge and Updates the Exploration Status

Rare Element Begins a Scoping Study on Rare-Earth-Element Potential at Bear
Lodge and Updates the Exploration Status

TSX-V: RES

VANCOUVER, Oct. 20 /PRNewswire-FirstCall/ - 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.

Figure 1. Bull Hill Southwest Resource Area and Other Exploration Targets:
http://files.newswire.ca/675/RES_Figure_1.doc

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)(CO(3))(2)F),
parisite (Ca(REE)(2)(CO(3))3F(2)), and bastnasite ((REE)CO(3)(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

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.

SOURCE Rare Element Resources Ltd.

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