U.S. Rare Earths’ Diamond Creek Deposit Shows Heavy Rare Earths Enrichment

U.S. Rare Earths’ Diamond Creek Deposit Shows Heavy Rare Earths Enrichment

Monday, October 8th, 2012

U.S. Rare Earths’ Diamond Creek Deposit Shows Heavy Rare Earths Enrichment.

Deposit Also Includes Significant Gold Showings. Site Will Be First Focus of Drill Program.

NEW YORK, Oct. 8, 2012 — U.S. Rare Earths, Inc., “USRE,” (OTC BB: UREE), www.USRareEarths.com, announced today the results of a review of its Diamond Creek (Idaho) deposit, based on historical studies supplemented by recent field work.

The review, conducted by James Hedrick (“Hedrick Assessment”), head of the USRE Advisory Board, builds on U.S. Geological Survey (USGS) reports that indicate a total probable potential resource of 68,495 tons of REO (Rare Earth Oxide) in Diamond Creek.

In addition to its Rare Earths findings, the USGS reported gold contents at Diamond Creek of 0.583, 2.40, and 11.931 g/metric ton (0.017, 0.07, and 0.348 oz/short ton) from samples cut across one of the larger veins. A high of 102.857 g/metric ton (3 oz/ton) of gold has been reported for one of the veins by the U.S. Atomic Energy Commission (now the Nuclear Regulatory Commission).

All of the data will shape the Company’s planned drill program.

The historic USGS study considered three of the larger veins in the Diamond Creek District mineable, from which it estimated a total reserve and a probable potential resource based on anticipated mining and processing costs and estimated 11,067 t of ThO2 of the total probable potential resource could be processed for less than $15/lb (historical) containing 57,154 t of REO based on equivalent uranium mining and milling practices and prices of the day.

While the Diamond Creek deposits historically have been referred to as thorium resource veins, the deposits are more accurately termed iron-rare earth-thorium-gold (Fe-REE-Th-Au or FRETA).

As the Hedrick Assessment notes:

“Three recently discovered veins at Diamond Creek, located by Rich Reed of Idaho Engineering and Geology, contain particularly high-concentrations of rare earths and contain relative enrichment of mid-atomic numbered and heavy rare earth elements.”

The study estimates the Diamond Creek deposit contains over 4,700 mt of yttrium, and over 1,300 mt of dysprosium, while the overall REO content averages 25% neodymium.

Diamond Creek is one of four deposits the Company has under claim in Idaho and Nevada.

Elements Atomic No. Resources
Light Rare-Earth Elements (metric tons)
Lanthanum 57 8,220
Cerium 58 22,400
Praseodymium 59 3,425
Neodymium 60 17,125
Promethium 61 NA
Samarium 62 5,480
Europium 63 1,370
Gadolinium 64 3,425
subtotal LREE 61,445
Heavy Rare-Earth Elements
Terbium 65 NA
Dysprosium 66 1,370
Holmium 67 NA
Erbium 68 NA
Thulium 69 NA
Ytterbium 70 NA
Lutetium 71 NA
Yttrium 39 4,795
subtotal HREE 6,165
Total of HREE not listed above (estimate) 685
Total 68,295
NA = Not Analyzed.

Disclosure Note: Historic estimates are inherently speculative and represent resource numbers based on limited drilling, assuming 100% recovery during mining and processing. Actual rates of recovery would be lower during mining and beneficiation; however, recovery during solvent extraction could approach 100%.

James Hedrick, chairman of the USRE Advisory Board, is President of Hedrick Consultants, Inc. He retired from his position as the senior rare-earth commodity specialist at the U.S. Geological Survey in 2010 after nearly 32 years of U.S. Government service. At the USGS, Mr. Hedrick’s responsibilities ranged from preparing the U.S. Government’s reviews and publications on a variety of minerals and metals, and reviewing environmental impact statements, to preparing in-depth cost analyses on strategic minerals deposits, and performing field and office engineering geology studies with the U.S. Army Corps of Engineers.

The Hedrick Assessment of Diamond Creek follows an independent assessment conducted by Howard Dunn of Process Engineering that indicates mineralization of 2.173 million tons REO at the Company’s Idaho and Montana properties.

Drill permits for the properties are currently pending. In July 2012, USRE announced the engagement of Ruen Drilling Inc. (“Ruen”) to lead the Company’s 2012 Drill Program. Ruen has 30 years of drilling experience spanning across three continents.

U.S. Rare Earths’ properties in Idaho and Montana, including Lemhi Pass, have been recognized in the U.S. Department of Energy’s Critical Materials Strategy publications to have significant showings of Heavy Rare Earth Elements, in particular for the five Rare Earths identified by DOE as being at “Critical Risk”: Dysprosium, Europium, Neodymium, Terbium and Yttrium.

About U.S. Rare Earths, Inc.:

U.S. Rare Earths, Inc. (“USRE”, “U.S. Rare Earths” or the “Company”) is a mineral exploration, mining and claims acquisition company based in Lonoke, AR. Formerly Colorado Rare Earths, Inc., the Company holds over 12,000 acres of mining claims for rare-earth elements in Colorado, Idaho and Montana. In Colorado, these claims include the Powderhorn Property in Gunnison County, and Wet Mountain Property in Fremont and Custer Counties. Additional claims include the Lemhi Pass Property in Lemhi County, Idaho and Beaverhead County, Montana; Diamond Creek and North Fork Properties in Lemhi County, Idaho and the Sheep Creek Property in Ravalli County, Montana.

Rare earth elements are critical to many existing and emerging 21st century applications including clean-energy technologies such as hybrid cars and electric vehicles; high-technology applications including cell phones and digital music players; hard disk drives used in computers; microphones; fiber optics; lasers; and in addition, critical defense applications such as global positioning systems, radar and sonar; and advanced water treatment applications, including those for industrial, military, homeland security, domestic and foreign aid use. For more information visit www.usrareearths.com.

Safe Harbor Statement Some statements contained in this news release are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and, therefore, involve uncertainties or risks that could cause actual results to differ materially. These statements may contain words such as “desires,” “believes,” “anticipates,” “plans,””expects,” “intends,” “estimates” or similar expressions. These statements are not guarantees of the Company’s future performance and are subject to risks, uncertainties and other important factors that could cause its actual performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Such statements include, but are not limited to, rare-earth industry risks, estimates of mineralized materials, litigation risks, plans to raise capital, and board, management and governance risks.. Additional information regarding factors that could cause results to differ materially from management’s expectations is found in the Company’s SEC filings. The Company intends that the forward-looking statements contained herein be subject to the above-mentioned statutory safe harbors. Investors are cautioned not to rely on forward-looking statements. The Company disclaims any obligation to update forward-looking statements.

CONTACT: Dan McGroarty, 301-908-1160

SOURCE U.S. Rare Earths, Inc.

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