Rare Element Resources Ltd. (the “Company”) (NYSE MKT: REE) (TSX: RES) today announced that it has received commitments from institutional investors to purchase US$8.0 million of its common shares and warrants in a registered direct offering in the United States with an additional US$4.0 million oversubscription right. The Company entered into a definitive purchase agreement with the investors pursuant to which it agreed to sell an aggregate of 2,677,376 common shares and warrants to purchase up to 1,338,688 common shares. The price for each unit, consisting of one common share and a warrant to purchase 0.5 common shares, is $2.988, representing a 10% discount to the market price defined as the closing price as of September 24, 2013. The warrants will be exercisable at a price of $4.15 per share beginning six months following issuance and will expire three years from the date of issuance. The closing of the offering is expected to take place on or about September 27, 2013, subject to the satisfaction of customary closing conditions. Proceeds from the offering will be used to advance engineering and metallurgical work as well as permitting on the Bear Lodge Project and for general corporate purposes. The purchasers may also, within 60 days of the closing, elect to purchase up to, in the aggregate, an additional $4.0 million of common shares and warrants. The price for each additional unit (consisting of one common share and a warrant to purchase 0.5 common shares) will be 90% of a market price on the date of exercise of the additional subscription right, but in no event less than $2.49 per unit. The additional warrants would have an exercise price of 125% of the market price at the date of exercise of the additional subscription right, but not less than $3.46 per share. H.C. Wainwright & Co., LLC acted as exclusive placement agent in connection with the offering.
A shelf registration statement (File No. 333-189235) relating to the common shares and warrants issued and issuable in the offering has been filed with and declared effective by the Securities and Exchange Commission (the “SEC”). A prospectus supplement relating to the offering will be filed by the Company with the SEC. Copies of the prospectus supplement, together with the accompanying prospectus, can be obtained at the SEC’s website at http://www.sec.gov, or from Rare Element Resources Ltd., 225 Union Boulevard, Suite 250, Lakewood, Colorado 80228.This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of the Company in this offering. There shall not be any offer, solicitation of an offer to buy, or sale of securities in any state or jurisdiction in which such an offering, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction. Any offering will be made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. Rare Element Resources Ltd. is a publicly traded mineral resource company focused on exploration and development of rare-earth element deposits, specifically those with significant distribution of critical rare earths. The Company is advancing development of the Bear Lodge Project, located in northeast Wyoming. Bear Lodge is a significant mineralized district containing many of the less common, more valuable critical rare earths that are essential for electronics, fiber optics, laser systems for health and defense, as well as many evolving green technologies, like hybrid cars, solar panels and wind turbines. Permitting and feasibility work on the Project is currently underway. For additional information, please contact Robbin Lee at 720-278-2462 or firstname.lastname@example.org. Forward-Looking Statements This news release contains forward-looking statements within the meaning of securities legislation in the United States and Canada. Except for statements of historical fact, certain information contained herein constitutes forward-looking statements. Forward-looking statements are usually identified by our use of certain terminology, including “will,” “believes,” “may,” “expects,” “should,” “seeks,” “anticipates,” “plans,” “has potential to,” or “intends,” or by discussions of strategy or intentions. Such forward-looking statements include statements regarding completion of the offering; exercise of an option to purchase additional securities and the price of such securities; exercise of warrants; the use of proceeds of this offering; permitting process, anticipated progress and success; project development plans for the future. Such forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause our actual results or achievements to be materially different from any future results or achievements expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, whether the election to purchase additional common shares is exercised and, if so, the calculated market price at the date of such election; whether the warrants are exercised; the future price of our common shares, which will be dependent on such matters as the progress of our Bear Lodge Project, fluctuations in demand for, and price of, rare earth products, success of process technology under testing, and any overhang resulting from the issuances in this offering; timing of any unexpected events at the Bear Lodge property; delay or failure to receive government approvals and permits; changes in U.S. and Canadian securities markets; and general economic conditions. There can be no assurance that future developments affecting the Company will be those anticipated by management. Please refer to the discussion of these and other uncertainties and risk factors set out in our filings made from time to time with the SEC and the Canadian regulators, including, without limitation, our reports on Form 10-K and Form 10-Q. We expect that the above estimates will change as new information is received and that actual results will vary from these estimates, possibly by material amounts. While we may elect to update our forward-looking information at any time, we do not undertake to update at any particular time or in response to any particular event. Investors and others should not assume that any forecasts in this press release represent management’s estimate as of any date other than the date of this press release.