Dec 22, 2010, 10:38 ET from Rare Element Resources Ltd.

NYSE AMEX: REE                                                       

VANCOUVER, Dec. 22 /PRNewswire-FirstCall/ - Rare Element Resources Ltd. (TSX-V: RES and AMEX: REE) (the "Company") is pleased to announce that it has closed its previously announced short form prospectus offering (the "Offering"), having issued for sale 6,394,000 common shares of the Company (the "Shares") at a price of C$9.00 per Share for gross proceeds to the Company of C$57,546,000. The 6,394,000 Shares issued include 834,000 Shares issued and sold pursuant to the over-allotment option granted to the Agents (as defined below) by the Company, which was exercised in full by the Agents.  After commissions and offering expenses, the net proceeds were approximately C$53.8 million.

The Company paid the Agents for the offering a cash commission equal to 6% of the aggregate gross proceeds from the Offering (including the over-allotment option) and issued to the Agents broker warrants entitling the Agents to subscribe for 383,640 common shares of the Company at an exercise price of C$9.00 per common share for a period of 24 months after the Closing Date.

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 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 the common shares in the United States.

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.

SOURCE Rare Element Resources Ltd.