Canada Rare Earth Corporation

Thunder Bay, ON – Rare Earth Metals Inc (“Rare Earth Metals” or the “Company”) (TSX Venture Exchange:RA) is pleased to announce that it has entered into investor relations consulting agreements, effective January 15, 2010, with both First Canadian Capital Corporation (“First Canadian”) and Linx Inc. (“Linx”). The First Canadian and Linx agreements each provide for a monthly consulting fee of $3,500 plus GST and the issuance of 100,000 incentive stock options exercisable for two years at $0.55 per share and which are subject to the Company’s incentive stock option plan (the “Plan”) including vesting provisions. The investor relations agreements, which are subject to the approval of the TSX Venture Exchange, are for an initial term of 12 months with a three month performance review period after which time either party may terminate on 30 days notice.

The Company also announces the granting of 2,750,000 stock options to directors, officers, employees and consultants of the Company. These options will have a term of five years, an exercise price of $0.55 per share and will be subject to the Plan including vesting provisions. Following these grants, the Company will have a total of 3,265,000 stock options outstanding.

The Company would also like to report that the previously announced drill program at its Clay-Howells Project is scheduled to begin later this month. A 10,000 meter contract has been let to Norex Drilling in Timmins and road up-grades and camp construction is being completed. This drill program will focus on defining the Clay-Howells Prospect magnetite resource and in particular its rare earth element and niobium content.

Wayne Reid, PGeo, is a qualified person as defined in National Instrument 43-101, and has reviewed and approved the technical information forming the basis for release.

ON BEHALF OF THE BOARD OF DIRECTORS OF RARE EARTH METALS INC.:

“Michael Stares”
President and CEO

The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or the 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