Rare Element Resources Provides an Update on Plans for a Demonstration Scale Rare Earth Processing and Separation Plant

Plant to utilize proprietary technology to produce commercial grade Nd/Pr high-purity oxide for U.S. rare earth magnet production

LITTLETON, Colo.–(BUSINESS WIRE)–Rare Element Resources Ltd. (�RER” or the “Company”) (OTCQB: REEMF) is pleased to provide an update on the pilot scale rare earth processing and separation test work campaign which supports the Company’s progression to the next phase of design and planning for a demonstration scale rare earth processing and separation plant. This plant is intended to demonstrate, at industrial scale, the separation of rare earth elements utilizing the Company’s proprietary intellectual property in preparation for the commercial phase.

Since February 2019, Umwelt-und Ingenieurtechnik GmbH Dresden (“UIT”), an affiliate of Synchron, a significant shareholder in the Company and a General Atomics affiliated company, has operated a hydrometallurgical pilot plant in Germany utilizing ore from the Company’s Bear Lodge Project in Wyoming. Using the Company’s technology, UIT processed 1.1 tonnes of ore, with an average grade of approximately 10% total rare earth oxide (TREO), to produce 13.6 kg of neodymium/praseodymium (Nd/Pr) oxide at commercial grade. This represents an average Nd/Pr recovery rate of 89.5%. Lanthanum (La) oxide, and a mixed mid and heavy rare earth concentrate were also recovered. The Company’s innovative patented process was further optimized and involves significantly fewer steps in a closed cycle with attendant environmental benefits and expected lower operating and capital costs compared with current technologies.

Throughout 2020, UIT will continue conducting additional pilot plant test work to further optimize the separation processes and the development of scale-up design criteria for the demonstration plant along with development of operating and capital cost estimates. To date, UIT has completed the leach-precipitation phase of the campaign, has started the solvent extraction (SX) separation phase, and is anticipated to complete its work by the end of the year.

The demonstration plant will process the already stockpiled high-grade ore, approximately 900 tonnes, from Wyoming’s Bear Lodge Project. The Company anticipates, once funding is secured, the demonstration plant design will be finalized and followed by construction within a period of 18-24 months. Operations to process and separate rare earth elements from the stockpiled ore will follow in an additional 12-month period.

Randall Scott, President and CEO of RER, stated: “We are pleased that over the last several months, the U.S. Department of Defense and Department of Energy have announced significant funding initiatives to advance domestic rare earth production as well as rare earth-containing permanent magnet manufacturing. The overwhelming dependence of the U.S. and allied nations on China as the principal rare earths producer and supplier is comparable with Chinese dominance of the medical supply chain that has been highlighted by the COVID-19 global crisis. America’s dependence on Chinese rare earths poses a grave economic, energy, and technology threat and must be urgently addressed. We are pleased that our government has recognized this. It is our goal to play a key part in these initiatives to bring rare earth production to the U.S.”

Synchron, UIT and General Atomics are privately held companies engaged in the development and production of advanced technology products and systems for the energy and defense sectors.

Rare Element Resources Ltd. is a publicly traded, strategic materials company focused on delivering rare earth products for technology, energy and defense applications by advancing the Bear Lodge Critical Rare Earth Project in northeast Wyoming. Bear Lodge is a significant mineralized district containing many of the less common, more valuable, critical rare earths that are essential for high-strength permanent magnets, electronics, fiber optics, laser systems for health and defense, as well as many technologies like electric vehicles, solar panels and wind turbines.

Please contact Randy Scott at +1 720-278-2460 or rscott@rareelementresources.com, for additional information.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of securities legislation in the United States and Canada. 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,” “plans,” “has potential to,” or “intends,” or by discussions of strategy or intentions. Such forward-looking statements include statements regarding the impact of the proprietary process on costs and efficiencies of rare earth processing and separation, the timing and scope of further pilot plant test work and potential demonstration plant, and the potential for government funding initiatives to be realized or its potential impact on the Company or Bear Lodge Project. Factors that could cause actual results to differ materially include, but are not limited to, results of continued processing test work, ability to obtain demonstration plant licensing and funding, successful further permitting activities for the Bear Lodge Project, availability of sufficient capital, and other matters discussed under the caption “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019, and our other periodic and current reports filed with the U.S. Securities and Exchange Commission (the “SEC”) and available on www.sec.gov and with the Canadian securities commissions available on www.sedar.com. There can be no assurance that future developments affecting the Company will be those anticipated by management. Please refer to the discussion of these and other uncertainties and risk factors set out in our filings made from time to time with the SEC and the Canadian regulators, including, without limitation, our reports on Form 10-K and Form 10-Q. Any forward-looking statement made by us in this news release is based only on information currently available to us and speaks only as of the date on which it is made. While we may elect to update our forward-looking statements at any time, we undertake no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.

Contacts

Randy Scott

+1 720-278-2460

rscott@rareelementresources.com