Canada Rare Earth Corporation

- Winter Drilling Results
- Mineralogy Report Follow-up

Thunder Bay, ON – Rare Earth Metals Inc. (“Rare Earth Metals”, “RA” or the “Company”) (TSX-V: RA; OTCQX: RAREF) is pleased to announce an update on its 2011 exploration program at the Clay-Howells project located 40 kilometers north-northeast of Kapuskasing, Ontario.

A recently completed drill program was designed to test a number of magnetic targets located outside of the Clay-Howells Main Iron/REE/Niobium Deposit. These outside targets consist of both discrete magnetic highs and magnetic lows associated with circular features within the 110 square kilometer Clay-Howells Alkaline-Carbonatite Complex. Eight drill holes totalling 2154 meters of drilling were completed.

Highlights from this set of drill results include:

• Drill Hole CH -11-02 on a magnetic high anomaly situated approximately 3 km northeast of the Clay- Howells Main Iron/REE/Niobium Zone intersected 26.9 meters of 0.12% TREO, 51.55% Fe203, 0.07%Nb2O5.
• Drill Hole CH -11- 06 on a magnetic high anomaly situated within a smaller ring structure 2 km east of the Clay-Howells Main Iron/REE/Niobium Zone intersected 6.9 meters of 0.57% TREO, 18.33% Fe203, 0.15%Nb2O5.
• Drill Hole CH -11- 08 on a magnetic high anomaly situated 350 meters southwest of the Clay-Howells Main Iron/REE/Niobium Zone intersected 15.8 meters of 0.67% TREO, 48.41% Fe203, 0.05% Nb2O5 and a second zone of 23.4 meters of 0.46% TREO, 33.48% Fe203, 0.05% Nb2O5.

A tabulation of the results follows:

The other five holes did not encounter significant Rare Earth or magnetite mineralization. A map of the location of the drill holes in this release is available on the Company’s website at www.RareEarthMetals.ca .

“These results complete our 2011 winter program and we are beginning to see mineralization in general very similar to the Main Fe/REE/Nb Deposit,” said Michael Stares, President and CEO of Rare Earth Metals Inc. “Mineralization again is hosted by magnetite enriched carbonatite lenses delineated by geophysical magnetic high anomalies,” said Stares. “To date we have still only tested a fraction of these anomalies and have yet to significantly test any of these geophysical features along strike.”

A fairly continuous 15 to 30 meter thick blanket of clay overburden has hindered the effectiveness of grassroots exploration and a follow-up reverse circulation (RC) overburden drilling and till sampling program is being contemplated for later this year to better evaluate the entire Complex. The RC program will sample the basal till and bedrock geology for indicator REE mineralization and will help vector in on the areas with the higher concentrations of REEs and Niobium.

As a follow-up to a mineralogical report on the main Clay-Howells Deposit, a SEM (Scanning Electron Microscope) mineralogy study on drill core samples from the 2010 drilling campaign has been completed by Dr. David Lentz of the University of New Brunswick.Dr. Lentz is a professional geoscientist registered with the Association of Professional Engineers and Geoscientists of New Brunswick and is a full professor on the Fredericton campus of UNB and holds the UNB Economic Geology Chair. Dr. Lentz is a technical advisor for Rare Earth Metals Inc. on its Rare Earth properties. He has reported that the REE bearing monazite at Clay-Howells is a low thorium bearing variety with replacement bastnaesite. In a recent presentation at the 2011 CIM Conference and Exhibition in Montreal, Dr. Lentz concluded that

• Clay-Howells is a NeoProterozoic Intrusive Complex that has many classic features of circular (ring dike) anorogenic alkalic complexes worldwide.
• The late, locally discordant carbonatitic complex was very rich in LREE, Nb, with notable HREE & Y, associated with a ferrocarbonatite that has evolved to a magnetite-rich calciocarbonatite.
• Magnetite saturation has resulted in crystal settling to produce numerous magnetite-rich layers enriched in ( monazite, fergusonite, brithloite, bastnaesite, columbite, pyrochlore and apatite).
• The ratios for ore-forming elements with proportion of magnetite, suggests that the magnetite is key and that the mineralization is entirely of igneous origin.

The Company is presently seeking business opportunities for the Iron component of the deposit. The iron at Clay-Howells is in the form of the natural iron oxide, magnetite. Preliminary 2010 metallurgical/mineralogical test work carried out by Xstrata Process Support in Sudbury, ON demonstrated that magnetic separation will result in two products being produced, one a high grade iron concentrate and the second being a higher grade REE product that may be amenable to further upgrading (see previous press release, June 30, 2010). When compared to other common iron minerals such as hematite, magnetite has a higher natural iron concentration of approximately 65 percent and is more responsive to magnetic separation techniques resulting in efficiencies regarding shipping and smelting costs. M agnetite is a high value iron ore with potential to be equivalent or of superior quality to other material currently being marketed around the world, at a time when the market prices for iron ore are predicted to be at their peak. In addition to its iron ore potential, the magnetite at Clay-Howells has potential for use as an industrial mineral with several industrial applications including:

Heavy media separation – coal washing, scrap metal separation

• Catalysts – for production of ammonia and synthetic fuels
• Foundry – mouldable chill sand/anti-finning additive; iron oxide additive to foundry sand
• Heat storage media – heat retaining bricks for night storage heaters
• Iron oxide additive – glass, mineral wool

Core from the Clay-Howells drill program was transported by helicopter from the drill site, logged at Rare Earth Metals’ camp and split in half using a hydraulic core splitter. Drill core samples were taken at geologically significant intervals, typically over one and half meters. Core recovery was approximately 90%. 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. Care was taken to ensure that neither half of the core represents a bias with respect to the nature and mineral content of the sample. The sample interval and methodology are consistent with industry standards. All samples were either delivered by Company personnel to Manitoulin Transport in Kapuskasing for transport to Actlabs’ sample preparation facility in Thunder Bay, Ontario or transported directly by Company personnel from the camp to Actlabs’ sample preparation facility in Thunder 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 duplicates and blanks into every sample batch. The Company has also established a program of third party check-assays with other labs to confirm the original results. 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 Iron assays are given as Iron Oxide (Fe2O3). 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 aqualified person as defined in National Instrument 43-101, and has reviewed and approved the technical information forming the basis for release.

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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 website 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 to be 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.