Canada Rare Earths

Vancouver, British Columbia – April 25th, 2012 – Canada Rare Earths Inc. ("Canada Rare Earths" or "the Company") (tsx.v:CJC) DE:YXEN -12.21% (otc-bb:CJCFF) is pleased to announce that an airborne electromagnetic survey (the "GPRTEM – MAG Survey") is now underway covering the Company’s La Loutre and Lac des Isles West Graphite properties located in Quebec.

The GPRTEM – MAG Survey is a high resolution time domain transient electromagnetic survey system. The platform intends to provide very high quality data with a radar altimeter with an accuracy of 1.5 meters and a real-time GPS navigation system with differential corrections providing an in-flight accuracy within 2 meters.

The survey area consists of 1,145 line kilometers of helicopter survey covering the La Loutre and Lac Des Isles West graphite properties located in the Laurentian area of Quebec. The GPRTEM is anticipated to return highly accurate quantitative information about the electromagnetic conductivity of these properties. On or near surface graphite occurrences are commonly associated with positive electromagnetic signatures. The results of this airborne survey are expected in May and will form the backbone of the Company’s upcoming prospecting, trenching and drilling programs planned for this summer.

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, which has also increased the interest in graphite.

Meanwhile, global consumption of natural graphite has increased from ~600,000 in 2000 to 1.2 MM tonnes 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 tonnes 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, with prices for large flake, high purity graphite (+80 mesh, 0.2mm, 94-97% Carbon) having more than doubled.

Canada Rare Earths plans to mount an aggressive exploration campaign on these properties commencing with a complete compilation of historic geologic work followed by surface work, trenching and diamond drilling. The exploration targets are multiple crystalline flake graphite targets similar to other graphite deposits and mines in Quebec such as Focus Metals Inc.’s Lac Knife Deposit and Timcal Graphite and Carbon’s Lac des Iles Mine. The initial exploration plans for the Company’s portfolio of graphite projects are as follows:

Lac Des Isles West:

-Ground sampling, mapping and an EM survey


-Ground sampling, mapping, trenching, and drilling

La Loutre:

-Ground sampling, mapping and an EM survey

Tetepisca North:

-Ground sampling and mapping


-Ground sampling, mapping, and an EM survey beginning upon completion of community consultation

In all areas, the exploration targets are multiple crystalline flake graphite targets similar to other graphite deposits and mines in Quebec such as Focus Metals Inc.’s Lac Knife Deposit and Timcal Graphite and Carbon Inc.’s Lac des Iles Mine.

The Company also announces that Sun Tzu Ventures Inc., a company wholly owned by David McMillan, Chairman and Director of the Company, has agreed to the cancellation of 400,000 incentive stock options having an exercise price of $0.50 per share. The stock options were originally granted on August 15, 2011, and will be cancelled effective April 30, 2012.

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