RARE ELEMENT FILES FINAL PROSPECTUS IN CANADA

/NOT FOR DISTRIBUTION TO UNITED STATES NEWSWIRE SERVICES OR FOR DISSEMINATION IN THE UNITED STATES/

TSX-V: RES NYSE AMEX: REE

VANCOUVER, Dec. 14 /CNW/ - Rare Element Resources Ltd. (TSX-V: RES and AMEX: REE) (the "Company") is pleased to announce that it has obtained a receipt for its final short form prospectus filed with the securities regulatory authorities in each of the provinces of Canada, except Québec, and has entered into an agency agreement with a syndicate of agents (collectively, the "Agents") for its previously announced "best efforts" public offering (the "Offering") of up to 5,560,000 common shares of the Company (the "Shares") at an issue price of C$9.00 per Share (the "Issue Price").  The Offering will raise aggregate gross proceeds to the Company of up to C$50,040,000. The Agents also have the option to purchase from the Company up to 834,000 additional Shares at the Issue Price exercisable for a period of 30 days from the Closing Date (as defined herein) (the "Over-Allotment Option").  The syndicate of Agents was co-led by Byron Securities Limited and GMP Securities L.P., and includes Jacob Securities Inc., Global Hunter Securities, LLC (as a U.S. placement agent) and Salman Partners Inc.

Mark T. Brown, CFO & Director commented that "Rare Element has spent the past three weeks meeting with important investors in many locations. This is an important step in continuing the growth of the Company and ensuring that shareholders are well informed about our plans to become a rare earth oxide producer. The Agents have done an excellent job of introducing the Company to new institutional investors and we are very pleased with the positive response."

The net proceeds from the Offering will be used to fund the work program at the Company's Bear Lodge rare earths deposit in Wyoming, USA, including the completion of a pre-feasibility study, pilot plant testing, drilling, metallurgical work, exploration programs and for general working capital purposes.

The Company has agreed to pay to the Agents a cash commission equal to 6% of the aggregate gross proceeds from the Offering (including the Over-Allotment Option). As additional consideration for the services of the Agents, the Company shall also issue to the Agents broker warrants (the "Broker Warrants") entitling the Agents to subscribe for that number of Shares as is equal to 6% of the total number of Shares sold pursuant to the Offering, including the Over-Allotment Option. Subject to regulatory approval, each Broker Warrant will be exercisable to acquire one Share at a price equal to the Issue Price for a period of 24 months after the Closing Date.

The Offering is expected to close on or about December 22, 2010 (the "Closing Date"), subject to customary closing conditions. The Company has received conditional approval to list the Shares distributed under the Offering on the TSX Venture Exchange and has applied to list the Shares on the NYSE Amex.

The Shares have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or the securities laws of any state of the United States, and may not be offered or sold, directly or indirectly, in the United States unless registered under the U.S. Securities Act and applicable securities laws of any state of the United States or in reliance on an exemption from such registration requirements. This news release does not constitute an offer to sell, or a solicitation of an offer to buy any of the Company's securities set out herein in the United States.

During the review process, the Company received comments from the British Columbia Securities Commission on various documents and has re-filed its preliminary economic assessment, financial statements for the first quarter ended September 30, 2010, and its management's discussion and analysis for the same period with minor corrections.

Rare Element Resources Ltd. is a publicly traded mineral resource company focused on exploration and development of rare-earth elements and gold on the Bear Lodge property.

Rare-earth elements are key components of the green energy technologies and other high-technology applications. Some of the major applications include hybrid automobiles, plug-in electric automobiles, advanced wind turbines, computer hard drives, compact fluorescent light bulbs, metal alloys, additives in ceramics and glass, petroleum cracking catalysts, and a number of critical military applications. China currently produces more than 95% of the 130,000 metric tonnes of rare-earths consumed annually worldwide, and China has been reducing its exports of rare earths each year. The rare-earth market is growing rapidly, and is projected to accelerate if the green technologies are implemented on a broad scale.

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

This news release was prepared by Company management, who take full responsibility for content. Neither the 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.

Forward Looking Statements
Except for statements of historical fact, certain information contained herein constitutes forward-looking statements. Forward looking statements are usually identified by our use of certain terminology, including "will", "believes", "may", "expects", "should", "seeks", "anticipates", "has potential to", or "intends' or by discussions of strategy or intentions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause our actual results or achievements to be materially different from any future results or achievements expressed or implied by such forward-looking statements. Forward-looking statements are statements that are not historical facts, and include but are not limited to, estimates and their underlying assumptions; statements regarding plans, objectives and expectations with respect to the effectiveness of the Company's business model; future operations, products and services; the impact of regulatory initiatives on the Company's operations; the size of and opportunities related to the market for the Company's products; general industry and macroeconomic growth rates; expectations related to possible joint and/or strategic ventures and statements regarding future performance.

Forward-looking statements used in this discussion are subject to various risks and uncertainties, most of which are difficult to predict and generally beyond the control of the Company. If risks or uncertainties materialize, or if underlying assumptions prove incorrect, our actual results may vary materially from those expected, estimated or projected. Forward-looking statements in this document are not a prediction of future events or circumstances, and those future events or circumstances may not occur. Given these uncertainties, users of the information included herein, including investors and prospective investors are cautioned not to place undue reliance on such forward-looking statements.

For further information:

For information, refer to the Company's website at www.rareelementresources.com or contact:
Mark T Brown, CFO, [phone] ext 242 [email protected]
Donald E Ranta, [phone] [email protected]