May 12, 2006 09:30 ET

Rare Earth Metals Corp Regains 100% Option on its Lynn Lake, Manitoba Nickel-Copper Property

VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 12, 2006) - Rare Earth Metals Corp. (the "Company") (TSX VENTURE:REM) reports that project operator North American Palladium Ltd. (TSX:PDL)(AMEX:PAL) has informed the Company that due to a decision to concentrate solely on their more advanced stage projects, it has elected not to renew its option to earn a 50% interest in the Lynn Lake Gabbros property in Manitoba, Canada beyond May 30th 2006. Management wishes to thank North American Palladium for their important work in advancing the project to its current stage and for the strong working relationship developed over the past year.

Since optioning the Lynn Gabbros project in July, 2005, North American Palladium has spent approximately $215,000 on exploration activities, including a high resolution airborne survey, the refurbishing and cutting of 70 line kilometers of grid control lines and a deep penetrating 3D IP ground geophysical survey.

Several new prospective anomalies have been identified following the preliminary processing of the data. These IP anomalies appear to be related to sulphide mineralization at depth, and of particular interest, they appear to be vertically oriented bodies. This is important because the nickel-copper ore bodies in the Lynn Lake nickel mine occur as vertically-oriented massive and disseminated nickel-copper sulphide lenses.

Rare Earth Metals Corp. is pleased with the winter work program North American Palladium completed, as it has resulted in the identification of several new prospective targets on its Lynn Lake Gabbros property. Vice President of Exploration, Dr. George Gale, says, "While losing a partner with North American Palladium's expertise is disappointing, the timing is excellent for Rare Earth Metals. The whole camp is alive right now as our neighbor, Seymour Exploration Ltd. (TSX VENTURE:SEZ) is very active with drilling and exploration on the old Lynn Lake nickel mine property. For us, the presence of a geophysical target at a depth that is just below the level of penetration of geophysical methods used in the early 1980's is very encouraging. North American Palladium has provided us with extremely helpful information on which to base our immediate plans in the search for an economic nickel-copper deposit."

Historically, Lynn Lake is the third largest nickel producing camp in Canada. Sherritt Gordon Mines Ltd. mined the Lynn Lake nickel-copper deposits from 1953-1976. These mined deposits were discovered in two mafic-ultramafic intrusive bodies, known as the "Main" and the "El" gabbroic plugs. The Main and El gabbroic plugs produced 20,151,146 tonnes of ore at an average grade of 1.023% Ni and 0.535% Cu from three mines over the 24 year period. The five claim blocks held by Rare Earth Metals total 2,796 hectares of land and cover the known extent of five separate mafic-ultramafic bodies which have noted similarities to the two mined gabbroic intrusions.

On behalf of the Board of Directors,

John Roozendaal B.Sc., President & Director

Rare Earth Metals Corp.

The TSX Venture exchange does not accept responsibility for the adequacy or accuracy of this release.

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