August 2, 2012 – Montreal, Quebec – Critical Elements Corporation (TSX.V: CRE) (US OTCQX: CRECF) (FSE: F12) wishes to provide an update on the progress of the feasibility and environmental impact studies underway on the Rose project and developments regarding agreements with several strategic partners for the sale of the lithium carbonate and tantalite concentrate produced.

Status of discussions on the sale of lithium carbonate and tantalite offtake concentrate:
Last January, Ron MacDonald, Mark Baggio and Jean-François Meilleur joined the Company’s board of Directors to negotiate and finalize forward sales agreements with lithium and Tantalum users for the future Rose mine in Quebec.

In the past few months, the Critical Elements team entered into discussions with a number of potential lithium carbonate and tantalite buyers. The Company is currently negotiating the terms of long-term sales and risk distribution among the buyers. The Company will be able to use the various buyers’ technical specifications to orient pilot plant work. The plant should be ready by the fall to product bulk samples of lithium carbonate and tantalite concentrate. Samples of the finished products are expected to be provided to many of the potential buyers to enable them to build batteries and conduct performance tests on their finished products.

Collection of these specifications will enable Critical Elements to deliver a finished product that meets the requirements of the future buyers and accelerate the signature of forward sales agreements.

To date, the work based on the spudomene concentrates from the Rose deposit has resulted in a 91% recovery on transformation into lithium carbonate. Further testing is expected to increase this recovery to the 94% range. These results support the recoveries used in the preliminary economic assessment.

Particular emphasis has been put on the purity of the lithium carbonate produced, with the intent of meeting battery grade specifications. High purity battery grade has easily been achieved to date, with results of 99.9% Li2CO3. The major impurities usually encountered in lithium carbonate produced from salars or the old sulphuric acid pugging process (magnesium, calcium, sodium, potassium) are present at a level of less than 10 ppm at Rose. We do not expect any major difficulty in achieving higher purity grade product. To merit the “battery-grade” designation, lithium carbonate product must meet a minimum 99.5% level.
Work is also progressing on the recovery of tantaluM. Overall recovery achieved so far by flotation followed by a combination of high gradient magnetic separation and gravity has been 60%, 10% higher than the recovery used in the original PEA. Additional work is also being carried out for the production of pure Tantalum oxide from the Rose concentrate.

The mineralogy of the Rose deposit is homogeneous. Nevertheless, test work is continuing on the primary flotation of spodumene for variability characterization (if any), including comminution from a series of composites from all parts of the deposit

Elimination of potential risks:
In the past few months, Critical Elements has done several tests to measure the potential for acid generation (Humidity Cells)and metals leaching of the tailings and waste rock generated by mine operation. Composite samples of all the mining blocks were tested in order to have representative results for the entire deposit. All the tests showed that the waste rock and tailings from concentration and carbonation will not generate any acidity or metals from leaching. These results confirm the assumption used in the PEA, and allow these risks listed in the study report to be eliminated.

Rose project, feasibility study and environmental impact assessment:
In December 2011, the Company issued a preliminary economic assessment for its wholly-owned Rose Lithium-Tantalumm project in James Bay, Quebec. The study was based on price forecasts of US $260/kg ($118/lb) for Ta2O5 contained in a tantalite concentrate and US $6,000/t for lithium carbonate (Li2CO3). The after-tax Internal Rate of Return (IRR) for the Rose project is estimated at 25%, with an estimated Net Present Value (NPV) of CA $279 million at an 8% discount rate. The payback period is estimated at 4.1 years. The pre-tax IRR is estimated at 33% and the NPV at $488 million at an 8% discount rate. (Mineral resources that are not mineral reserves do not have demonstrated economic viability).

The Rose project hosts a current NI 43-101-compliant Indicated resource of 26.5 million tonnes at 1.30% LI2O Eq. or 0.98% LI2O and 163 ppm Ta2O5 and an Inferred resource of 10.7 million tonnes of 1.14% LI2O Eq. or 0.86% LI2O and 145 ppm Ta2O5.

Following the issuance of the preliminary economic assessment, the board of Directors decided to fast-track the project to production by starting the feasibility study immediately. The Company appointed Paul Bonneville as project manager in charge of the feasibility study, and retained the services of a number of professional firms, including Genivar, SECOR, AMBUCK, BUMIGEME and AMEC, to carry out the various components of the feasibility study.

Work is also ongoing on the environmental impact assessment. In the past few weeks, Genivar carried out the last field survey to collect the final data required for the assessment. The environmental impact assessment should normally be completed by the end of the fourth quarter.

Jean-Sebastien Lavallée (OGQ #773), geologist, shareholder and president and chief executive officer of the Company and a Qualified Person under NI 43-101, has reviewed and approved the technical content of this release.

Investor Relations:
Jean-Sébastien Lavallée, P.Geo.
President and Chief Executive Officer

Paradox Public Relations

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