Rare Element Resources Ltd.

diatreme.

Preliminary mineralogical studies by the Company indicate that the REE mineralization occurs in REE

fluorocarbonates (bastnasite, parisite, and synchysite), cerianite, and subordinate monazite (an REE-Th phosphate).

The Whitetail Ridge deposit mineralization is enriched in HREE, relative to the Bull Hill deposit, and both are

enriched in CREE.

Prefeasibility Study

In 2013 and 2014, we worked on optimizing the Bull Hill Mine plan, the mineral process methods and the

Project economics. This resulted in the

Company undertaking and completing an updated PFS to reflect these

significant changes.

The Company’s PFS as reported in the Technical Report for the Bear Lodge REE Project was authored

principally by Norda Stelo, formerly Roche Engineering Inc. (“Roche”), which undertook the process engineering

and mine and mill capital and operating cost estimation for the Project at that time. This PFS for the Bear Lodge

REE Project reflected an increase in the Mineral Resource estimate, based on drilling and assay data.

The technical report dated October 9, 2014 is titled “Rare Element Resources Inc. Bear Lodge Project

Canadian National Instrument 43-101; Pre-Feasibility Study

Report; Technical Report on the Mineral Reserves and

Resources and Development of the Bull Hill Mine” (the “Technical Report”) and is available under our profile at

www.sedar.com .

The Technical Report was authored by Peter S. Dahlberg P.E. of Roche in Sandy, Utah,

and all

sections of the Technical Report were prepared under his supervision

. Mr. Dahlberg is an independent Qualified

Person, as defined by NI 43-101. Other Qualified Persons, as defined by NI 43-101, who participated in the

preparation of the Technical Report are Jaye T. Pickarts, P.E., Chief Operating Officer for Rare Element, who

confirmed that the NI 43-101 and Form 43-101F1 documents and Items 4, 5, 6, 19, and 20 of the Technical Report

were prepared in compliance with the instrument and form; Alan C. Noble, P.E. of Ore Reserves Engineering in

Lakewood, Colorado, who contributed to the preparation of Chapters 7, 8, 9, 10, and 14 of the Technical Report;

William L. Rose P.E. of WLR Consulting Inc. in Lakewood, Colorado, who contributed Item 15 and portions of

Item 16 (subsections 16.1, 16.2, 16.3 and 16.4) of the Technical Report; and Jeffrey A. Jaacks C.P.G of Centennial,

Colorado, who contributed Chapter 11 of the Technical Report, all under the supervision of Mr. Dahlberg, the

primary author.

The PFS estimated initial capital costs of approximately $290 million and life-of-mine capital costs

(including sustaining capital) of

approximately

$453 million.

Permitting Progress

The USFS is the lead agency in the NEPA process to prepare an EIS on the Project. This process is

essential to securing the permits and approvals necessary to move into production. In early 2012, we submitted the

Plan of Operations for the Project, which was accepted by the USFS as complete in May 2013. Since then, the

USFS has selected a project manager and prime contractor for preparation of the EIS, published notice in the Federal

alternatives and proffering a preferred alternative. The U.S. Army Corps of Engineers and the appropriate state and

local government agencies are involved in the EIS process as cooperating agencies. On January 22, 2016, the Board

of Directors directed the Company to continue to conserve cash due to the current difficult market conditions and

suspend all permitting and licensing efforts, including the EIS process. The Company notified the USFS and

cooperating agencies, the NRC and the state of Wyoming of its decision to suspend, and the parties acknowledged

receipt of the notice. Assuming permitting efforts resume within a reasonable time, the final EIS and draft Record of

Decision (ROD), the decision document that establishes the acceptable operating conditions, would be expected

within 12 to 18 months.

Mineral Resources Estimates

The Mineral Resources estimates were developed by Alan C. Noble, P.E. of Ore Reserves Engineering and

approved by the Rare Element management team.