Vancouver, British Columbia - July 24th, 2012 - Canada Rare Earths Inc. ("Canada Rare Earths" or "the Company") (TSX.V: CJC; FSE: YXEN; OTC-BB: CJCFF) is pleased to announce that it has received graphite grab sample assay results derived from the Company's recent sampling and mapping program on the La Loutre property. The La Loutre property consists of contiguous claim blocks totaling approximately ? 2,500 hectares (25Km2) situated approximately 53 km to the east of Timcal's Lac des Iles Graphite Mine, 117 km northwest of Montreal. The sampling program has confirmed a graphite bearing structure covering an area approximately 7 kilometers by 1 kilometer with results of up to 22.04% Graphite in multiple parallel zones of 30 to 50 meters wide. Another area has also been identified covering approximately 2 kilometers by 1 kilometer in multiple parallel zones of 20-50 meters wide which includes results up to 18% Graphite. All assays are show in the table below*.

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 |Sample|Graphite| |Sample|Graphite| |Sample|Graphite| |Sample|Graphite| |Sample|Graphite|

 |No    |%       | |No    |%       | |No    |%       | |No    |%       | |No    |%       |

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 |98557 |22.04   | |98581 |4.89    | |98567 |2.97    | |98563 |1.72    | |98660 |1.04    |

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 |98577 |18.08   | |98670 |4.49    | |98593 |2.76    | |98628 |1.69    | |98619 |1.02    |

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 |98667 |18.04   | |98655 |4.35    | |98552 |2.63    | |98629 |1.65    | |98631 |1.00    |

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 |98597 |16.52   | |98560 |4.29    | |98595 |2.60    | |98592 |1.64    | |98603 |0.98    |

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 |98578 |15.52   | |98574 |4.28    | |98626 |2.60    | |98651 |1.61    | |98602 |0.97    |

 |---------------------------------------------------------------------------------------|

 |98653 |10.19   | |98579 |4.25    | |98652 |2.58    | |98669 |1.58    | |98661 |0.94    |

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 |98622 |8.20    | |98671 |4.21    | |98654 |2.48    | |98556 |1.49    | |98564 |0.94    |

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 |98663 |7.34    | |98668 |3.96    | |98586 |2.43    | |98585 |1.47    | |98598 |0.92    |

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 |98615 |6.85    | |98610 |3.89    | |98627 |2.27    | |98575 |1.46    | |98606 |0.87    |

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 |98662 |6.60    | |98617 |3.80    | |98562 |2.27    | |98571 |1.46    | |98596 |0.86    |

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 |98657 |6.53    | |98558 |3.77    | |98591 |2.21    | |98599 |1.44    | |98565 |0.85    |

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 |98656 |6.45    | |98561 |3.72    | |98582 |2.11    | |98621 |1.41    | |98601 |0.82    |

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 |98607 |6.28    | |98559 |3.67    | |98630 |1.99    | |98551 |1.36    | |98612 |0.80    |

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 |98568 |6.25    | |98580 |3.59    | |98620 |1.98    | |98625 |1.25    | |98666 |0.78    |

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 |98576 |6.25    | |98665 |3.55    | |98658 |1.96    | |98589 |1.19    | |98613 |0.77    |

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 |98566 |6.05    | |98673 |3.40    | |98609 |1.96    | |98623 |1.16    | |98600 |0.73    |

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 |98618 |5.48    | |98588 |3.24    | |98572 |1.96    | |98570 |1.15    | |98611 |0.72    |

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 |98569 |5.46    | |98583 |3.21    | |98659 |1.92    | |98604 |1.14    | |98553 |0.65    |

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 |98664 |5.36    | |98584 |3.16    | |98614 |1.87    | |98674 |1.11    | |98555 |0.46    |

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 |98672 |5.06    | |98587 |3.01    | |98608 |1.82    | |98590 |1.10    | |98554 |0.30    |

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 |98616 |5.00    | |98594 |3.01    | |98605 |1.73    | |98624 |1.10    | |98573 |0.16    |

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Please click the following link to see the sampling results overlying the Company's recent GPRTEM electromagnetic airborne survey map:

Surface Sample Results

Management is encouraged that these samples confirm the presence of graphite, on surface, and over a large area, all of which offers great potential to develop a graphite resource on the La Loutre property.

Conference Call

The Company would also like to remind shareholders and other interested parties that the Company has scheduled a 'webcast' to discuss this and other recent news. The webcast is scheduled for Tuesday July 24th, 2012 at 10am PST. Please visit the following link http://event.on24.com/canadarareearths to register if you wish to listen in or pose any questions to management at that time.

About Graphite

Natural graphite comes in several forms: flake, amorphous and lump. Graphite has many important new applications including its use in lithium ion batteries, fuel cells and nuclear and solar power that have the potential to significantly increase the demand for this critical element. For instance, there is between 10 and 30 times more graphite required by weight to produce a lithium-ion battery than there is lithium. In addition, the recent discovery of a new material called graphene, which is actually derived from graphite, has also heightened interest. International research is now underway into a number of its potential applications including enhancing the speed and processing power of many modern electronic devices. This has also increased the interest in graphite.

Meanwhile, global consumption of natural graphite has increased from ~600,000 in 2000 to 1.2 MM t in 2012. Demand for graphite has been increasing by approximately 5% per year since 2000 due to the ongoing modernization of China, India and other emerging economies, resulting in strong demand from traditional end uses such as the steel and automotive industries. Of the 1.2 million tons of graphite produced annually, approximately 40% is of the most desirable flake type. China, which produces about 73% of the world's graphite, is seeing production and export growth leveling and export taxes and a licensing system have been instituted. A recent European Commission study regarding the criticality of 41 different materials to the European economy included graphite among the 14 materials high in both economic importance and supply risk (Critical Raw Materials for the EU, July 2010). As a function of these fundamentals, demand for graphite and thereby prices are expected to rise as electric vehicles and lithium battery technology continue to be adopted and while the material performs a greater role in new technology applications. Graphite prices have been increasing in recent months and over the last couple of years and prices for large flake, high purity graphite (+80 mesh, 0.2mm, 94-97% Carbon) have more than doubled.

For more information on the Company, please visit www.canadarareearths.com.

*Grab samples are selective by nature and are unlikely to represent the average grade of a deposit.

Jean-Sebastien Lavallee P.Geo, geologist, a Qualified Person as defined by National Instrument 43-101, has reviewed and approved the content of this release.

Neither the 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.

On Behalf of the Board,

"Ron MacDonald"

Executive Chairman, Director