Exhibit 10.1

EMPLOYMENT AGREEMENT
BETWEEN
Rare Element Resources, Inc. and Randall J. Scott

THIS EMPLOYMENT AGREEMENT (“Agreement”), dated effective as of December 15, 2011
(“Effective Date”), is by and between Rare Element Resources, Inc., a Wyoming
corporation (“the Company”) and Randall J. Scott (“Scott”).  The Company agrees
to employ Scott and Scott agrees to accept such employment upon the following
terms and conditions:

1.

Position and Responsibilities. Scott shall devote Scott’s entire business time,
attention and energies to the Company’s (and any affiliate’s) business during
Scott’s employment with the Company.  Scott shall hold the position of Chief
Executive Officer, and shall report directly to the Board of Directors of the
Company’s parent corporation, Rare Element Resources Ltd. The job description
and expectations for these positions are those typical of persons holding
similar positions in companies of similar size and status within the Company’s
industry. Scott shall perform all duties that are reasonable and consistent with
such position, as well as other duties as may be assigned by the Company.
Scott’s principal place of business shall be the Company's office, which will be
located in the Denver metropolitan area of Colorado.  Scott shall be expected to
travel if it is advisable or necessary to meet the obligations of Scott’s
position.

2.

Period of Employment. Scott shall be employed in the position set forth above as
of the Effective Date and shall continue in such position until terminated by
either the Company or Scott pursuant to Section 9 of this Agreement.

3.

Compensation.  Scott’s compensation will be subject to annual review by the
Company's Board of Directors (or an assigned committee).

3.1.

Salary.  Scott shall be paid an annual base salary of US$240,000, commencing on
the Effective Date.  The salary will be paid in equal installments pursuant to
the payroll procedures established by the Company. The Company reserves the
right to adjust Scott’s salary at its discretion as required by business
conditions.

3.2.

Executive Bonus.  Scott shall be eligible for an annual performance bonus (the
“Executive Bonus”). The Executive Bonus is a discretionary bonus that can be
modified and is subject to review and annual approval by the Board of Directors.
Scott must be employed by the Company on the last day of the fiscal year for
which the bonus is earned.  The bonus will be paid to Scott no later than March
14th of the year following the year (“Payment Date”) in which the Executive
Bonus is earned.

3.3.

Stock Options.  Scott will be granted 200,000 stock options on the Effective
Date. Scott’s stock options shall be governed by the established Company stock
option policies.

--------------------------------------------------------------------------------

4.

Benefits.  Scott shall be eligible to participate in the Company’s benefits
programs in accordance with the provisions of each program.  The Company
anticipates establishing benefits programs in the near future and Scott will be
offered access to such benefits programs as they are established.  The Company
reserves the right to amend the benefits programs from time to time at its
discretion. Benefit programs may include health insurance, dental insurance,
life insurance, retirement plans, and paid time off

5.

Business Related Expenses.  All business travel, entertainment, meals, lodging,
and other directly related business expenses for which Scott submits receipts
and a detailed summary on approved expense report forms shall be reimbursed by
the Company. If the Company provides Scott with one or more Company credit
cards, Scott agrees to charge only those expenses that are directly related to
the Company’s business activities and for which Scott would otherwise be
reimbursed. Scott agrees to provide the Company with a timely and complete
reporting of all expenses charged to the company credit card, along with copies
of all credit card charge receipts. Further, Scott will be supplied with
appropriate allowances for cellular phone service, internet access, computer and
other similar costs.  

6.

Company Policies.  In addition to the obligations set forth in this Agreement,
Scott agrees to abide by all current and future policies of the Company.

7.

Confidentiality.  In the course of providing services to the Company, Scott will
have access to confidential information concerning the Company and its
affiliates.  Scott agrees that he will not, either during the term of this
Agreement or thereafter, divulge or utilize to the detriment of the Company or
its affiliates any such confidential information.  Scott in his position as the
President and Chief Executive Officer will determine, in association with other
senior executives of the Company and in accordance with applicable law, if and
when confidential information beneficial to the Company will be released to the
public.  This requirement of confidentiality will not apply to information that:
 is or becomes publicly available other than as a result of a disclosure by
Scott; is demonstrated to have previously been properly in Scott’s possession or
control at the time of disclosure of that confidential information to Scott by
the Company, its affiliates or its representatives; or is required by law to be
disclosed provided that Scott shall immediately notify the Company in writing of
such requirement and shall limit the extent of disclosure to that which Scott’s
legal counsel advises in writing must be disclosed in order to comply.  The
provisions of this Article 7 shall survive the termination of this Agreement.

8.

Proprietary Information.  Scott shall not use or bring to the Company any
technical information, data, trade secrets, processes, formulae, inventions or
other intellectual property, which are proprietary to any person other than the
Company. The provisions of this Article 8 shall survive the termination of this
Agreement.

--------------------------------------------------------------------------------

8.1.

Obligations of Scott. Upon the termination of his position with the Company, or
upon the Company’s earlier request, Scott shall promptly deliver to the Company
all documents and other tangible items comprising or referring to any
confidential information of the Company or its affiliates, together with all
copies, summaries and records thereof.  Scott shall forward to the Company all
electronic copies of documents comprising or referring to confidential
information of the Company or its affiliates held by or under the employee’s
control, and thereupon delete the same.

8.2.

Work Product.  Scott acknowledges and agrees that all proprietary interests
including all patent rights, trade secrets and confidential information in and
to any product of the Company’s business (the “Work Product”) shall be the sole
and exclusive property of the Company or such other party as the Company may
from time to time designate, and Scott hereby assigns to the Company or to such
other party as the Company may direct all such rights which it possesses or may
possess or is entitled to or which vests or may vest in connection with the Work
Product.  Scott agrees to execute all such instruments, certificates or
documents required by the Company to confirm such ownership and implement such
assignment. The provisions of this section will survive the termination of this
Agreement.

9.

Termination of Employment.  Either party to this Agreement may terminate Scott’s
employment with the Company for any reason whatsoever. If Scott elects to
terminate this Agreement, Scott agrees to provide the Company with at least
sixty (60) days’ written notice in advance of the planned termination date. If
Scott fails to provide the Company with a least sixty (60) days’ written notice,
Scott shall, at the Company’s option, forfeit any and all Executive Bonus
payments under Article 3.2 of this Agreement. Notwithstanding the foregoing, the
Company shall have the option, in its complete discretion, to make Scott’s
termination effective at any time prior to the end of such notice period,
provided the Company pays Scott all compensation due and owing through the end
of the notice period.  

9.1.

Financial Obligations for Termination with Cause.  In the event the Company
elects to terminate Scott’s employment for cause during the course of this
Agreement, the Company shall pay Scott all compensation due and owing, which
includes (a) earned but unpaid salary, prorated to the date of termination; (b)
earned and accrued but unpaid paid time off benefits; and (c) incurred and
properly documented but unpaid business related expenses. In the event the
Company elects to terminate Scott’s employment for cause during the course of
this Agreement, Scott will be ineligible for any Executive Bonus payments. As
used herein, “cause” means the Company’s reasonable belief that any of the
following have occurred: (A) the continued failure by Scott to substantially
perform his duties with the Company (other than any such failure resulting from
Scott’s incapacity due to physical or mental illness pursuant to Section 9.3
below), after a written demand for substantial performance is delivered to
Scott, and Scott fails to cure such failure within fifteen (15) days after
receipt of such demand,

--------------------------------------------------------------------------------

(B) the engaging by Scott in conduct which is demonstrably and materially
injurious to the Company, monetarily or otherwise (other than such conduct
resulting from Employee’s incapacity due to physical or mental illness pursuant
to Section 9.3 below), (C) action by Scott toward the Company involving
dishonesty, unethical practices or disloyalty, (D) any verbal, written, or other
statement by Scott that disparages the Company or any of its agents, owners,
directors, officers, employees, representatives, successors or assigns, or
impedes or damages the Company’s ability to do business, (E) the violation by
Scott of any statute, rule or regulation, any of which in the judgment of the
Company is harmful to the Company’s business or reputation, and (F) any reason
that would constitute cause under the laws of the State of Colorado. Scott may
appeal any determination of “cause” pursuant to this Agreement to the board of
directors of the Company within five (5) days of receipt of notice of
termination for cause by providing notice to the Company. Upon receipt of such
notice, the board of directors will meet to consider the appeal no later than
thirty (30) days following the receipt of such notice, and will notify Scott
within five (5) days of such meeting as to the board’s determination of the
appeal.

9.2.

Financial Obligations for Termination for Reasons other than Cause. In the event
the Company elects to terminate Scott’s employment for reasons other than cause
during the course of this Agreement, the Company shall pay Scott all
compensation due and owing, which includes (a) earned but unpaid salary,
prorated to the date of termination; (b) earned and accrued but unpaid paid time
off benefits; (c) incurred and properly documented but unpaid business related
expenses; and (d) severance payment equal to six (6) months of salary if Scott
has been employed by the Company for less than one year or twelve (12) months of
salary if Scott has been employed by the Company for more than one year. Such
severance payment will be paid on the first of the month following Scott’s
termination and each such monthly installment will equal Scott’s final monthly
salary.  Further, if the Company terminates Scott’s employment for reasons other
than cause, or Scott terminates his employment by giving proper notice in
accordance with this Article 9, compensation shall include a pro-rated bonus
based on Scott’s Executive Bonus. Such pro-ration shall be based on the
Company’s good faith estimate of Scott’s achievement and on the Company’s actual
results through the date of termination for the calendar year during which
termination takes place.  Executive Bonus payments, if any, shall be paid in
accordance with Section 3.2 of this Agreement.

9.3.

Physical and/or Mental Impairment.  In the event the Company terminates Scott’s
employment for physical and/or mental impairment, Scott agrees that the
Company’s financial obligation to Scott is limited to that which Scott would
otherwise receive if the Company terminated Scott’s employment for reasons other
than cause. It is Scott’s obligation to elect and maintain any Company or
personal disability and/or medical plans.

--------------------------------------------------------------------------------

9.4.

Return of Company Property.  Scott shall return to Company all Company (or
affiliate) property, including, without limitation, all equipment, vehicles,
keys, credit cards, company product, tangible proprietary information,
documents, books, records, reports, notes, contracts, lists, computer software
and hardware (and other computer-generated files and data), and copies thereof,
created on any medium and furnished to, obtained by, or prepared by Scott in the
course of or incident to Scott’s employment.

9.5.

Change in Control. For purposes of this Agreement, a “Change in Control” of the
Company shall be deemed to have occurred if the business or businesses of the
Company for which Scott’s services are principally performed are disposed of by
the Company pursuant to a partial or complete liquidation, dissolution,
consolidation or merger of the Company, a sale or transfer of all or a
significant portion of the Company’s assets; provided, however, the Company is
not the majority shareholder of the surviving entity. Either Company or Scott
may terminate this Agreement if there is a Change in Control of the Company. In
the event of a Change in Control subsequent to the Effective Date of this
Agreement and either (i) termination of Scott’s employment by the Company or
(ii) a reduction in Scott’s annual base salary of greater than 10% or a material
demotion in Scott’s title and position in the Company, in either case within 12
months of the Change in Control, Scott shall receive compensation equal to two
years of Scott’s annual salary to be paid in a lump sum. Scott shall not be
entitled to payment under this section if he is terminated by the Company for
cause.

10.

Arbitration.  Any dispute between the parties that cannot be resolved without
seeking legal remedy shall be finally settled by arbitration held in Jefferson
County, Colorado by one arbitrator in accordance with the rules of commercial
arbitration then followed by the American Arbitration Association. The
arbitration shall apply Colorado law in the resolution of all controversies,
claims and disputes and shall have the right and authority to determine how his
or her decision or determination as to each issue or matter in dispute may be
implemented or enforced. The parties consent to the jurisdiction of the
arbitrator and waive any objection to the jurisdiction of such arbitrator. The
ruling of the arbitrator shall be binding on the parties and the non-prevailing
party shall pay the cost of the arbitration proceeding, including reasonable
attorney’s fees.  Notwithstanding the foregoing provisions of this section,
nothing contained in this provision shall be deemed to preclude any party from
bringing an action for injunctive relief in any court having jurisdiction.

11.

Governing Law and Severability.  This Agreement shall be governed by, and
construed and interpreted in accordance with, the laws of the State of Colorado.
If in any jurisdiction any provision of this Agreement or its application to any
party or circumstance is restricted, prohibited, or unenforceable, that
provision shall be deemed ineffective only to the extent of such restriction,
prohibition, or unenforceability without invalidating the remaining provisions
of this Agreement and without affecting the validity or enforceability of such
provision in any other jurisdiction or its application to other parties or
circumstances.

--------------------------------------------------------------------------------

12.

Tax Considerations.  The personal tax consequences of any compensation or
benefits paid or accruing to Scott under this Agreement are Scott’s obligation.
 The Company will conform to all applicable tax law, codes, and regulations,
including withholding and/or reporting of taxable compensation in respect to
payments made to Scott or made on Scott’s behalf.

13.

Notices.  Any notice required or permitted to be given hereunder must be in
writing and shall be effective upon delivery by hand, upon verified facsimile
transmission, or three (3) business days after deposit in the United States
mail, postage prepaid, certified or registered, and addressed to the Company, to
the attention of the then current CFO or COO of the Company or to Scott at the
address or fax number provided in this Agreement.  Both parties have a mutual
obligation to notify the other party in writing of any change of address or
facsimile number.

14.

Attorney’s Fees.  In the event of any default under this Agreement, all costs of
enforcement shall be paid by whichever party does not substantially prevail.

15.

Assignment. This is an Agreement for the performance of personal services by
Scott and may not be assigned by either party, except that the Company may
assign this Agreement to any affiliated company of, or any successor in interest
to, the Company.

16.

Entire Agreement.  This Agreement constitutes the entire Agreement between the
parties superseding any other prior agreement, written or oral, relating to the
terms of employment contained herein. This Agreement can be changed or modified
only by a writing signed by both parties.

17.

Compliance with Section 409A.

Notwithstanding anything to the contrary in this agreement, to the extent that
any payment due hereunder is (i) deferred compensation subject to Internal
Revenue Code section 409A (“IRC 409A”), and (ii) is payable to a specified
employee (as that term is defined in IRC 409A), and (iii) is payable on account
of the specified employee’s separation from service as that term is defined in
IRC 409A), payment of any part of such amount that would have been made during
the six (6) months following the separation from service shall not then be paid
but shall rather be paid on the first day of the seventh (7th) month following
the separation from service.

(i)

For this purpose, specified employees shall be identified by the Employer on a
basis consistent with regulations issued under IRC 409A, and consistently
applied to all plans, programs, contracts, etc. maintained by the Employer that
are subject to IRC 409A.

(ii)

For this purpose “termination of employment” or “termination” shall be defined
as “separation from service” as that term is defined under IRC 409A.

--------------------------------------------------------------------------------

(iii)

To the extent that IRC 409A is applicable to this Agreement, this Agreement
shall be construed and administered to comply with the rules of IRC 409A.
 Neither the Company nor any of its officers, directors, agents or affiliates
shall be obligated, directly or indirectly, to Scott or any other person for any
taxes, penalties, interest or like amounts that may be imposed on Scott or other
person on account of any amounts under this Agreement or on account of any
failure to comply with any Internal Revenue Code section.

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
as of the date first above written.

Rare Element Resources, Inc. a Wyoming Corporation

By:

/s/ Donald E. Ranta

By:

/s/ Randall J. Scott

Donald E. Ranta

Randall J. Scott

Chairman of the Board

Chief Executive Officer

225 Union Boulevard, Suite 200

Lakewood, CO 80228

Phone No.: 720-278-2460

Facsimile No.: 720-278-2490