Rare Element Resources Announces Intent to Launch Rights Offering of Common Shares

Rare Element Resources Ltd. (the “Company” or “RER”) (OTCQB: REEMF) is pleased to announce that it intends to launch a rights offering for gross proceeds of approximately US$36 million, if all subscription rights are exercised under the rights offering. In the rights offering, each holder of the Company’s common shares as of the close of business on the record date of December 15, 2023 will be issued, at no charge, one and four-tenth (or 1.4) non-transferable subscription rights for each common share owned by that shareholder at the close of business on the record date. There is no minimum amount of gross proceeds that is required to be raised under the rights offering.

Each whole subscription right will entitle the holder thereof to purchase one common share of the Company at US$0.12 per share (the “basic subscription privilege”). The rights offering will also include an oversubscription privilege, which will entitle shareholders who exercise all of their subscription rights under the basic subscription privilege the right to purchase additional common shares of the Company in the rights offering, subject to availability and pro rata allocation of shares among rights holders exercising such oversubscription privilege. No fractional common shares will be issued in the rights offering.

The Company will offer common shares in the rights offering, inclusive of the oversubscription privilege, representing approximately US$36 million of gross proceeds, if all subscription rights are exercised. The Company plans to use the net proceeds to progress the Company’s business strategy to support the advancement of the Bear Lodge rare earth elements project (the “Bear Lodge REE Project”), which includes funding the operation of a rare earth processing and separation demonstration plant for a sufficient amount of time to support commercialization, acquiring real property, updating the mineral resource model and technical reports, and advancing permitting, environmental support, and basic engineering, as well as for other general corporate purposes.

In the United States, the Company has filed a registration statement on Form S-1 (the “Registration Statement”) with the U.S. Securities and Exchange Commission (the “SEC”) relating to the rights offering. The launch date, subscription period, and other details of the proposed rights offering have not yet been determined, although the Company anticipates that the rights offering will commence within 45 days. After the SEC declares the Registration Statement effective and the Company obtains clearance or approval from applicable state regulatory authorities with respect to the rights offering, the prospectus and related documents will be mailed to shareholders of record and will also be made available, as applicable, for distribution to beneficial owners of the Company’s common shares. In Canada, the rights offering will be made on a basis that is exempt from the prospectus requirements of applicable Canadian securities laws.