Categories: Precious Metals
Topics: General Precious Metals

RES Acquires Eden Lake

Oct. 6, 2009

NEWS RELEASE

RARE ELEMENT RESOURCES LTD

TSX-V: RES

October 5, 2009

Ref: 19-2009

Rare Element acquires Eden Lake REE Project, to file Form 20F

Vancouver, BC - Rare Element Resources Ltd. (TSX-V: RES) (the "Company") is pleased to
announce that it has signed a letter of intent to acquire 100% of the Eden Lake Rare Earth
Elements (“REE”) project from VMS Ventures Inc. (“VMS” ). VMS optioned the project in 2001
and has explored the project for REEs intermittently since then. The total claim block area
covers 28 square kilometers.

Eden Lake Rare Earth Element Project, Manitoba, Canada

The Eden Lake REE Project is located 35 kilometers northwest of Leaf Rapids, Manitoba. In
2003 VMS, which was then called Rare Earth Metals Corp., performed detailed geological
mapping, sampling, and petrographic studies that led to the discovery of an extensive area
(approximately 8 square kilometers) of hydrothermal stock-work veining, magmatic carbonatite
dikes, and breccia exposed in outcrop. Carbonatite dikes and plugs were discovered at three
locations, and the property geology has characteristics that suggest a large carbonatite
complex.

REE-enriched minerals identified in petrographic studies include strontium-REE-apatite,
britholite, allanite, and REE mineral inclusions in andradite garnet. REE enrichments occur in all
hydrothermally metasomatized rocks. The highest REE concentrations encountered by VMS are
in the carbonatite dikes (up to 1.6% total REO, 9,764 ppm Sr, and 745 ppm Y), and in
hydrothermal REE-rich veins (up to 13.8% total REO and 5,307 ppm Y). VMS also discovered
heavy REEs (Eu-Lu) on the project during their field work. Rare Element will be evaluating the
carbonatite complex, which may have similarities to the Company’s Bear Lodge project, and the
heavy rare earths plus yttrium in the hydrothermal veins.

A drill program was completed on the project in 2006, and the holes provided additional
favourable geologic indications for a carbonatite complex, but without hitting significant REE
grades. Six holes for a total of 765 meters were drilled in the northeastern half of the 8 square
kilometer zone of intensely altered rocks. Most of the favourable targets have not been
adequately tested, and additional exploration of the project for yttrium and heavy rare earths is
warranted.

Acquisition Terms

Rare Element has agreed to acquire 100% of the Eden Lake REE Project for payment of
300,000 common shares and a 3% Net Smelter Returns (“NSR”) royalty. The Letter of Intent
calls for a due diligence period, which is currently underway, and a formal purchase agreement
to be signed. The common shares will be issued as 75,000 at closing, and 75,000 at 6, 12, and

18 months thereafter. Rare Element also has the right to buy 50% of the 3% NSR for $1.5
million.

Rare Element has also agreed to pay a finder’s fee of 20,000 common shares to two parties for
this acquisition.

The acquisition is subject to various conditions and approvals of the Boards of Directors and
regulatory authorities.