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Press release from TheNewswire.ca

Canada Rare Earths Announces Pre-Development Agreement with The Grand Council of the Crees (EI)/Cree Regional Authority and The Cree First Nation of Waswanipi

Friday, December 09, 2011

Canada Rare Earths Announces Pre-Development Agreement with The Grand Council of the Crees (EI)/Cree Regional Authority and The Cree First Nation of Waswanipi 07:15 EST Friday, December 09, 2011(via Thenewswire.ca) Vancouver, British Columbia - December 9, 2011 - Canada Rare Earths Inc. ("the Company") (TSX.V: CJC; FSE: YXEN; OTC-BB: CJCFF) is pleased to announce that it has signed a Pre-Development Agreement ("PDA") with The Grand Council of the Crees (Eeyou Istchee)/The Cree Regional Authority and the Cree First Nation of Waswanipi, (collectively referred to as the "Parties") regarding the Company's exploration activities on its Goeland Rare Earth project, Quebec. The PDA has been designed to acknowledge mutual respect and ensure the responsible and cooperative exploration and development of the Goeland rare earth project in the best interests of all parties. Under the terms of the PDA, the Parties will work together to the best of their ability to ensure the continuation of a successful mining venture at Goeland. Under the terms of the agreement, the PDA provides for business, employment and advancement opportunities for the Cree people and the hiring of the tallyman of the W11B Territory as the Environmental Monitor for the Goeland project. The PDA also provides for the completion of a comprehensive Business and Employment Capacity Study to assess the full potential for Cree business and employment opportunities, the creation of a joint communication strategy and the establishment of a PDA committee comprised of two members appointed by the Company and one member appointed by each of Waswanipi and the Grand Council of the Crees (EI)/the Cree Regional Authority. In exchange, the Cree parties have agreed to support the Company's exploration and development activities, including by assisting the Company in the preparation of required environmental and social assessment studies. This framework highlights several key conditions of a mutually beneficial partnership between the Parties during the exploration phase of the project and contemplates terms for a Social and Economic Participation Agreement to be negotiated by the Parties if a successful pre-feasibility study is filed for the project. In consideration for Waswanipi entering into the PDA and the performance of its obligations, the Company will pay to Waswanipi an annual amount of $25,000 for the term of the PDA. In addition, the Company will issue to the Waswanipi Development Corporation the number of common shares of the Company that is equal to $250,000 divided by the greater of $0.40 and a ten day average closing price, subject to approval of the TSX Venture Exchange and the completion of certain legal matters. The shares will be subject to a four month securities law hold period and a contractual undertaking not to sell 50% of the shares before the first anniversary date of the PDA. Chad McMillan, President & CEO comments "I am very pleased to announce that we have successfully negotiated this milestone partnership regarding the future exploration and development of the Goeland project. I would like to thank all parties for their cooperation and assistance in achieving this understanding in such a timely fashion. I look forward to advancing this project in accordance with this balanced and cooperative framework, of course subject to our future results." About Canada Rare Earths Canada Rare Earths is a growth company focused on the exploration and development of rare earth elements at its 100% owned Goeland Rare Earths Project within the Montviel carbonatite complex, Montviel Township Quebec, immediately adjacent to Geomega's (TSX-V: GMA) recent rare earth discovery. The Goeland property is located 215 km north of Val-d'Or, is road accessible and consists of 47 claims totaling approximately 2,600 hectares. Since the acquisition of the Goeland Project, the Company, in a short period of time, has successfully established itself in one of the largest Carbonatite complexes in North America. Worldwide, carbonatite-related deposits are a major host for rare earths elements ("REE"). The world's most advanced and prolific REE deposits in production or development, Bayan Obo (China), Molycorp's Mountain Pass (USA), Lynas's Mount Weld (Aus), and Rare Earth Element Resource's Bear Lodge project, are all hosted by carbonatites. Neither 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. For more information on Canada Rare Earths Inc., please visit www.canadarareearths.com or call 604.685.5851. On Behalf of the Board, "Chad McMillan" President & CEO Cautionary Note Regarding Forward-Looking Statements: Certain disclosure in this release, including statements regarding the Company's Pre-Development Agreement and the exploration of the Goeland Project, constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995 and Canadian securities legislation. In making the forward-looking statements in this release, the Company has applied certain factors and assumptions that the Company believes are reasonable, including that the Company is able to obtain any required government or other regulatory approvals and any required financing to complete the Company's obligations pursuant to the Pre-Development Agreement and planned exploration activities, that the Company is able to procure equipment and supplies in sufficient quantities and on a timely basis and that actual results of exploration activities are consistent with management's expectations. However, the forward-looking statements in this release are subject to numerous risks, uncertainties and other factors relating to Canada Rare Earth's operation as a mineral exploration company that may cause future results to differ materially from those expressed or implied in such forward-looking statements. Such uncertainties and risks may include, among others, actual results of the Company's exploration activities being different than those expected by management, uncertainties involved in the interpretation of drilling results and geological tests, delays in obtaining required government or other regulatory approvals or financing, inability to procure equipment and supplies in sufficient quantities and on a timely basis, equipment breakdowns and bad weather. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements. Readers are cautioned not to place undue reliance on forward-looking statements. Canada Rare Earths does not intend, and expressly disclaims any intention or obligation to, update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by law. 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