Canada Rare Earth Corporation

• A total of 23 holes have now been completed on the Two Tom deposit
• Intersections up to 2.15% TREO, 0.27% Nb2O5 and 0.24% BeO over 120.0 meters
• A 43-101 compliant Resource Report is expected by year end

Thunder Bay, ON – Rare Earth Metals Inc. (“Rare Earth Metals”, “RA” or the “Company”) (TSX-V: RA; OTCQX: RAREF, PINK SHEETS: RAREF) is pleased to report results from the final ten drill holes completed on the Two Tom Mineralized Zone at the Red Wine property, located approximately 110 kilometers northeast of Churchill Falls in west central Labrador. A total of 23 holes have now been drilled on the Two Tom REE/Beryllium/Niobium Zone. This total includes ten holes completed in 2010 and thirteen holes completed between June and September, 2011. All holes intersected the tabular zone. Of particular note is hole TT-15b which intersected 1.68% TREO, 0.21% Nb2O5 and 0.19%BeO over 175.5 meters including a higher grade intersection of 2.15% TREO, 0.27% Nb2O5 and 0.24% BeO over 120.0 meters. Additionally hole TT-24, near the southeast end of the zone intersected 1.26% TREO, 0.38% Nb2O5 and 0.24% BeO over 117.5 meters including a higher grade intersection of 1.89% TREO, 0.61% Nb2O5 and 0.38% BeO over 64.7 meters. The HREO/TREO ratios from these intersections range from 5.2% to 7.1%. The new results compare favourably with previous drilling which included 1.86% TREO over 121.5 meters within a larger zone of mineralization which assayed 1.46% TREO over 195.15 meters in drill hole DDH-TT-13 (see RA press release dated Sept 8, 2011). RA is earning a 100% interest in the Two Tom property which is subject to two option agreements. The northwest half of the zone is optioned from Zimtu Capital Corp. and the southeast half is optioned from Roland and Eddie Quinlan.

Drilling has now defined the Two Tom mineralization as a minimum 1.1 km long arcuate shaped zone striking northwest and steeply dipping to the northeast. Widths vary from 84 meters to greater than 200 meters and the mineralization is completely open. Emphasis to date has been on the TREO grades which contain 14% to 19% Neodymium. These latest results also show quite high Niobium and Beryllium values which may add significant value to the deposit. A total of 23 holes have now been completed on sections 100 meters apart with a nominal 50 to 100 m vertical separation between holes on the same section. Wardrop, a Tetratech Company, has helped guide the drill program and is scheduled to complete a 43-101 compliant resource calculation before the end of the year. A map of the Two Tom drill-hole locations can be found on the Company’s website at www.RareEarthMetals.ca.

A table outlining the complete results of all the 2011 drill holes (TT-12 to TT-24) is presented below. The TREO results from holes TT-12 to TT-16 were released in a previous press release however the Niobium and Beryllium values were pending at the time.

Commented Michael Stares, President and CEO of Rare Earth Metals: “We are very pleased with the final drill results for the Two Tom project. The shallow zone has demonstrated good continuity on strike and to depth and will add great value for our shareholders. We look forward to receiving the final resource calculation from Wardrop.”

The Two Tom mineralization is one of two REE zones in the Red Wine Complex that have been targeted by the Company for advanced exploration. The other, Dory Pond, was also drilled in 2011. A total of six holes were recently completed on a number of targets in the Dory Pond area and initial results indicate this area has a substantial Heavy Rare Earth component. Results from the first reported drill hole in this area returned an intersection of 1.55% TREO (HREO/TREO of 42.1%) over 21.0 meters within a wider intersection of 1.11% TREO (HREO/TREO of 41%) over 42.9 meters. (See previous press release dated Nov 8, 2011 for a full listing of the Dory Pond results). The Dory Pond property is owned 100% by RA.

Core from the Red Wine drill programs was transported by helicopter from the drill sites, logged at Rare Earth Metals’ camp and split in half using a diamond table saw or a manual core splitter. One half of the core was sent to Activation Laboratories Ltd. (“Actlabs”) for analysis and the other half was kept in core boxes at the camp for reference. All samples were delivered by Company personnel to Actlabs’ sample preparation facility in Happy Valley-Goose Bay. The samples were processed and representative pulps sent to Actlabs’ analytical facility in Ancaster, Ontario. The digestion technique was total digestion that employs a lithium metaborate/tetraborate fusion and the analysis is completed using ICP, ICP/MS and XRF techniques. For QA/QC purposes Rare Earth Metals systematically inserts standards, duplicates and blanks into every sample batch. Actlabs is an ISO 17025 (Lab 266) and NELAP (lab E87979) accredited lab for specific registered tests.

The Rare Earth Element assays are reported as Total Rare Earth Oxides (TREO), the Niobium assays are given as Niobium Oxide (Nb2O5), and the Beryllium assays are given as Beryllium Oxide (BeO). The TREO includes all the Rare Earth Oxides plus Yttrium Oxide. As per industry standard the TREO are broken down into Light Rare Earth Oxides (LREO) and Heavy Rare Earth Oxides (HREO). The LREO consists of Ce2O3, La2O3, Nd2O3, Pr2O3 and Sm2O3 and the HREO consists of Eu2O3, Gd2O3, Tb2O3, Dy2O3, Ho2O3, Er2O3, Tm2O3, Yb2O3, Lu2O3 and Y2O3. The %HREO is calculated by dividing the HREO by the TREO. The most abundant REEs from the drill hole composites described above are in decreasing order: Cerium, Lanthanum and Neodymium. A breakdown of the most abundant REE’s from the drill holes can be found on the Company’s website at www.RareEarthMetals.ca.

Wayne Reid, PGeo, is a qualified person as defined in National Instrument 43-101, and has reviewed and approved the technical information forming the basis for release.

About Rare Earth Metals Inc.

Rare Earth Metals is a well-funded company with a focus on exploring for Rare Earth Element deposits. The Company’s shares are listed on the TSX-V exchange under the symbol RA and the OTCQX exchange under the symbol RAREF. The Company presently has two advanced projects in Ontario and Newfoundland and Labrador, both exhibiting multi element potential (REEs, Niobium, Beryllium, Zirconium and Iron Ore) and proximity to available infrastructure. Its flagship properties are the Clay-Howells Prospect and the Red Wine Project. The Company has recently acquired additional properties in the Coldwell Complex near Marathon, Ontario and the Lavergne-Springer REE Prospect near Sturgeon Falls, Ontario. Additional information concerning the Company is contained in documents filed by the Company with securities regulators, available under the Company’s profile at www.sedar.com. For more information please visit the Rare Earth Metals web site at www.rareearthmetals.ca.

ON BEHALF OF THE BOARD OF DIRECTORS OF RARE EARTH METALS INC.:

”Michael Stares”
President and CEO

“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.”

This release includes certain statements that may be deemed forward-looking statements. All statements in this release, other than statements of historical facts, that address future production, reserve potential, exploration drilling, exploitation activities and events or developments that the Company expects are forward-looking statements. Although the Company believes the expectations expressed in such forward-looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results or developments may differ materially from those in the forward-looking statements. Factors that could cause actual results to differ materially from those in forward-looking statements include market prices, exploitation and exploration successes, continued availability of capital and financing, and general economic, market or business conditions. Investors are cautioned that any such statements are not guarantees of future performance and those actual results or developments may differ materially from those projected in the forward-looking statements. For more information on the Company, Investors should review the Company’s filings that are available at www.sedar.com.

FOR FURTHER INFORMATION PLEASE CONTACT:

Rare Earth Metals Inc.

Michael Stares
President and CEO
Phone: (807) 623-6840
Fax: (807) 623-9526
www.RareEarthMetals.ca

Consultant:
Nick Vermeulen
Phone: (807) 623-6840
Cell: (604) 741-4150
Fax: (807) 623-9526
Email: nick@rareearthmetals.ca

Standard and Poor’s Customer Contact:
Richard Albanese
(212) 438-3647
Email: richard_albanese@standardandpoors.com

Standard and Poor’s Media Relations Contact:
Michael Privitera
(212) 438-6679
Email: michael_privitera@standardandpoors.com

Company information distributed through the Market Access Program is based upon information that Standard & Poor’s considers tobe reliable, but neither Standard & Poor’s nor its affiliates warrant its completeness or accuracy, and it should not be relied upon as such. This material is not intended as an offer or solicitation for the purchase or sale of any security or other financial instrument.