Vancouver, British Columbia - December 9, 2011 - Canada Rare Earths

Inc. ("the Company") (TSXV:CJC; FSE: YXEN;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 (TSXV: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.