Canada Rare Earth Corporation

Thunder Bay, ON – Rare Earth Metals Inc (“Rare Earth Metals” or the “Company”) (TSX–V: RA) is pleased to announce the receipt of final results from a recently completed airborne magnetic and radiometric survey which was completed on its 100% owned Clay-Howells Property located in northern Ontario. A total of 1683 kilometers of flying was completed on lines spaced from 50 meters to 100 meters apart. The magnetic data defines the Clay-Howells Magnetite Zone as a discrete 1.2 km long anomaly and also defines a number of untested airborne magnetic anomalies which may be sourced by similar mineralization.

The Company also announces that additional analysis received from Activation Laboratories of Ancaster, Ontario has shown economically interesting Niobium values associated with the Clay-Howells Magnetite Zone. Analysis of drill core from historic Hole 23 resulted in an intersection of 0.40% Nb2O5 over 46.9 meters, including 0.94% Nb2O5 over 12.2 meters. The high grade portion is located at a down-hole depth of between 73.5m and 85.7m and shows the multi element nature of the Carbonatite-hosted mineralization. This hole also contained a high grade Rare Earth intersection which included a previously reported intersection of 4.71% TREO (Total Rare Earth Oxides) over 4.6 m between 152.4m and 157.0m. (see Rare Earth Metals press release issued on Dec 17, 2009).

Commented Michael Stares, President and CEO of Rare Earth Metals: “ The presence of high grade Niobium is significant and will hopefully add to the economics of the Clay-Howells Prospect which had already shown good potential for economic grades in REE’s and Iron Ore.”

Niobium is mainly used in the production of high-grade structural steel, followed by its use in superalloys. The only North American producer is IAMGOLD’s Niobec Mine in Quebec which is an underground operation producing from a measured and indicated resource in excess of 23 million tonnes at 0.59% Nb2O5.

A 10,000 meter drill program is scheduled to begin on the Clay-Howells Prospect in the second half of January. This program will focus on defining the magnetite resource and in particular its Rare Earth Element content. The Niobium results add another exciting possibility to the program.

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.

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

“Michael Stares”
President and CEO

THE TSX VENTURE EXCHANGE HAS NOT REVIEWED AND DOES NOT ACCEPT RESPONSIBILITY FOR THE ADEQUACY OR ACCURACY OF THIS RELEASE.
Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties.

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