Canada Rare Earth Acquires Additional Capabilities, Expertise and Relationships to Process Rare Earths - Seite 2

Finding and mining and even concentrating rare earths is not particularly unusual or difficult, however, the downstream processing of the ore/concentrate into oxides is problematic both technically and commercially. By and large, for the past twenty years, separation of rare earths from concentrate into individual oxides has taken place primarily within China by a limited number of closely connected separators. These separators and other very important aspects of the Chinese rare earth industry are in the midst of consolidation by six large state owned organizations which report to the Chinese Central Government in Beijing."

Mr. Moore continued, "Hence, for rare earth deposits situated outside of China there are three choices for separation: (1) sell the concentrate to the Chinese oligopoly (and lose control of the rare earths while failing to optimize the commercial potential of the rare earths); (2) refurbish a mothballed refinery with its outdated processing techniques and technology (with less than optimum processing efficiency, greater costs and lower profitability); or (3) develop one or more new separation approaches and technologies (which have all the risks of developing new technologies and simultaneously placing the mining and concentrating assets at risk). Canada Rare Earth is extremely fortunate to have arranged a fourth and viable alternative. Through the acquisition of the REC Assets and the engagement of its consultants, Canada Rare Earth is now directly connected with one of the most experienced designers, builders and operators of rare earth separation refineries in China and therefore the world."

Canada Rare Earth's strategy for over two years has been the simultaneous development of sourcing rare earths; developing separation capabilities; approaching prospective customers for the separated, individual rare earths; and approaching financiers. The significant accomplishment of connecting Canada Rare Earth with a capable designer, builder and operator and with several of its prospective separation refineries is an important cornerstone to our business strategy and implementation

ON BEHALF OF THE BOARD OF DIRECTORS OF CANADA RARE EARTH CORP:

Tracy A. Moore, CEO & President

"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." The information contained herein contains "forward-looking statements" within the meaning of applicable securities legislation. Forward-looking statements relate to information that is based on assumptions of management, forecasts of future results, and estimates of amounts not yet determinable. Any statements that express predictions, expectations, beliefs, plans, projections, objectives, assumptions or future events or performance are not statements of historical fact and may be "forward-looking statements." Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements, including, without limitation: risks related to failure to obtain adequate financing on a timely basis and on acceptable terms; risks related to the outcome of legal proceedings; political and regulatory risks associated with mining, exploration and operations; risks related to the maintenance of stock exchange listings; risks related to environmental regulation and liability; the potential for delays in exploration or development activities or the completion of feasibility studies; the uncertainty of profitability; risks and uncertainties relating to the interpretation of drill results, the geology, grade and continuity of mineral deposits; risks related to the inherent uncertainty of production and cost estimates and the potential for unexpected costs and expenses; results of prefeasibility and feasibility studies, and the possibility that future exploration, development or mining results will not be consistent with the Company's expectations; risks related to the price fluctuation of rare earths and other commodities; and other risks and uncertainties related to the Company's prospects, properties and business detailed elsewhere in the Company's disclosure record. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking statements. Investors are cautioned against attributing undue certainty to forward-looking statements. These forward looking statements are made as of the date hereof and the Company does not assume any obligation to update or revise them to reflect new events or circumstances. Actual events or results could differ materially from the Company's expectations or projections.