RARE ELEMENT RESOURCES LTD

Subscriptions by Record Holders

A Record Holder is a holder of Common Shares whose shares are registered in such holder’s name. To exercise your Subscription Rights, complete your Subscription Rights Certificate and send the properly completed and executed Subscription Rights Certificate evidencing such Subscription Rights, with any signatures required to be guaranteed so guaranteed, together with payment in full of the Subscription Price for each Share subscribed for pursuant to the Basic Subscription Privilege and the Oversubscription Privilege, to the Subscription Agent so that it will be actually received by the Subscription Agent prior to 5:00 p.m., Eastern Time, on the Expiration Date. Payment of the Subscription Price for the Basic Subscription Privilege and the Oversubscription Privilege will be held in a segregated account to be maintained by the Subscription Agent until the Shares are issued.**All payments must be made in U.S. dollars for the full number of Shares being subscribed for by a certified check, bank draft or money order, payable to Computershare Investor Services Inc.**Please reference your Subscription Rights Certificate Number on your check.

The Subscription Rights Certificate and payment of the Subscription Price must be delivered to the Subscription Agent by hand, mail or overnight courier to the following address:

By Hand or Overnight Courier:

Computershare Investor Services Inc.

Attn: Corporate Actions

320 Bay Street, 14th Floor

Toronto, Ontario M5H 4A6

By Mail:

Computershare Investor Services Inc.

Attn: Corporate Actions

P.O. Box 7021

31 Adelaide Street East

Toronto, Ontario M5C 3H2