Canada Rare Earth Arranges Long Term Supply of Rare Earth Concentrate from Brazilian Joint Venture Project

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Sept. 22, 2014) - Canada Rare Earth Corp. ("Canada Rare Earth" or the "Company") ( TSX VENTURE:LL) is pleased to announce that it has entered into a long term rights agreement to purchase all of the rare earth concentrate to be produced from a property, known as the Mata Azul property, situated in Tocantins, Brazil. The mineral rights are owned by Mineracao Mata Azul S.A. ("Mata Azul"). The Mata Azul property is of significant interest to Canada Rare Earth as discussed in the news release dated February, 2014. In particular the property has been the subject of several exploration programs including sampling, regional mapping, drilling wells, trenching, auger drilling, chemical and petrographic analyzes, mineralogy and beneficiation tests.

Canada Rare Earth and Mata Azul are continuing to work collaboratively to establish a funded rare earth business which will focus on advancing exploration, mining and concentrating various minerals on the Mata Azul property. The two parties are in the process of negotiating a Definitive Joint Venture Agreement to extend and supersede the joint venture letter of intent announced in February, 2014.

Pursuant to the long term supply/sales agreement Canada Rare Earth has the rights but not the obligation to purchase all of the rare earth concentrate produced from the Mata Azul property for a base price plus a percentage of the difference between the base price and fair market value. The duration of the arrangement is for 20 years plus automatic extensions under certain situations.

The arrangement benefits the Mata Azul mining and concentrating project and enhances the ability to finance the project by providing an off-take customer. In turn, Canada Rare Earth will have secured an excellent source of rare earth concentrate for any future refinery projects CREC becomes involved in including a separation refinery proposed to be built on the Mata Azul site. Additionally, Canada Rare Earth may arrange for follow on buyers to purchase any volumes not required for Canada Rare Earth's own purposes. As per the Company's news release of February 2014 the Company is planning, pursuant to its joint venture with Mata Azul, to design and build a 6,000 metric ton per annum refinery.