Rare Element Resources-Newmont Gold Venture Makes Progress with 2008 Exploration Program and Provides Financial Position Update

    TSX-V: RES
    Ref: 11-2008

    VANCOUVER, Oct. 20 /CNW/ - Rare Element Resources Ltd (TSX-V: RES)
announces that the Sundance gold exploration project, which is a joint venture
between Paso Rico (USA) Inc, a subsidiary of Rare Element Resources, and
Newmont North America Exploration Limited, a subsidiary of Newmont Mining
Corporation (Newmont), has completed additional geologic mapping, geochemical
sampling, and an expanded induced polarization (IP) survey. The Newmont
exploration team has made substantial progress in the 2008 program including
movement toward gaining exploration permits for a larger drilling program on
Rare Element's Wyoming property. Using a combination of the new geological,
geochemical, and geophysical data, the exploration targets have been enhanced
and better defined. Exploration data is being compiled and detailed plans are
being formulated for the 2009 exploration program.
    Newmont manages the gold exploration for the Sundance project.
Exploration work for 2008 was designed to build on the successful 2006-07
exploration programs and to establish a more detailed understanding of the
project area geologic setting. Twenty six drill holes had been completed by
Newmont on joint venture ground in 2006-07, and permitting and the
Environmental Assessment have progressed smoothly, such that the Plan of
Operation, allowing an expanded drilling program on up to 200 acres of
disturbance, is expected to be approved in late 2008 or early 2009.
    Interpretation of the mapping, sampling, drilling, and geophysical survey
results to date has prompted an increasing focus on major structural zones
through the Taylor target and through the Carbon target, as well as the gold
target in the East Taylor Bowl, which may be a major center for igneous and
hydrothermal activity. The East Taylor Bowl is a topographic low centrally
located between the surrounding Taylor target, the Carbon target, and the Bull
Hill rare-earth-element target.
    A renewed emphasis on finding high-grade gold mineralization within the
Sundance property prompted a review of historical drill holes having better
grade mineralization. This type of gold mineralization provides the basis for
a comparison of potential deeper high-grade veins at Sundance with those of
the Cripple Creek system, which had produced nearly 20 million ounces of gold
from deep high-grade veins. High-grade gold samples have been found at the
Sundance project both in surface rocks and in drill holes with the following
historical drill holes, intercepts, and assay results being representative of
this type of mineralization(*):

    -   Drill-hole S-33 - 15 ft @ 7.97 g/t Au (0.233 opt)(*)
    -   Drill-hole S-35 - 5 ft @ 33.94 g/t Au (0.991 opt)
    -   Drill-hole S-60 - 5 ft @ 10.32 g/t Au (0.301 opt)
    -   Drill-hole S-81 - 20 ft @ 5.78 g/t Au (0.169 opt)
    -   Drill-hole S-84 - 10 ft @ 4.79 g/t Au (0.140 opt)
    -   Drill-hole SU 96-4  -  15 ft @ 4.69 g/t Au (0.137 opt)

    (*) The drill results tabulated above are historical and were prepared
    before the introduction of National Instrument 43-101- Standards of
    Disclosure for Mineral Projects ("NI 43-101"). They may not be relied
    upon until they are confirmed using methods and standards that comply
    with those required by NI 43-101. Neither the Company nor its personnel
    treat these data as adequate to help define a current mineral resource
    as defined under NI 43-101, nor do they rely upon them for evaluation
    purposes; however, these data are used to guide exploration as the
    Sundance Venture develops information to support a current mineral
    resource estimate in accordance with the requirements of NI 43-101.

    Financial Position Update

    Rare Element Resources is uniquely positioned to sustain itself in the
longer term despite the current stock market volatility because of two main
reasons: 1. It has maintained a cost effective overhead model; and 2. Newmont
still has approximately $3.5 million in expenditures to be made on exploration
at Sundance to earn a 65% interest in the project. These factors allow for
Rare Element to keep costs low, to moderate the amount of work it does that it
has to pay for, and to react quickly and be selective in accepting any offers
of financing. With a total of 23,866,736 common shares currently outstanding,
no debt, and a strong working capital position, Rare Element is well
positioned to last beyond 2010 without raising additional capital.

    Rare Element Resources Ltd (TSX-V:RES) is a publicly traded
mineral-resource company focused on gold and strategic metals such as the
rare-earth elements. Rare Element 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's 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.
    Rare  Element's Bear Lodge, Wyoming property also encompasses one of the
largest disseminated rare-earth occurrences in North America (M H Staatz, US
Geological Survey Professional Paper 1049D). In parallel with the Sundance
gold-focused exploration project, Rare Element has completed drilling of three
of four holes planned in 2008 to independently advance the rare-earth
potential of its property. The Company is expecting to receive a final
metallurgical report from the recent testing program and is currently working
on NI 43-101 resource estimation of the rare-earth mineralization.

    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. The TSX Venture Exchange has not
reviewed, and does not accept responsibility for the adequacy or accuracy of
this release.

For further information:

For further information: refer to the Company's website at
www.rareelementresources.com or contact: Donald E Ranta, President & CEO,
(604) 687-3520, don@rareelementresources.com; Mark T. Brown, CFO, (604)
687-3520 ext 242, mtbrown@pacificopportunity.com.

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