Quest rare minerals

TORONTO, ONTARIO--(Marketwire - Jan. 26, 2011) - Quest Rare Minerals  Ltd. (TSX VENTURE:QRM) is pleased to report that Dundee Securities  Corporation initiated investment research coverage on the Corporation  today. The author of the report, entitled "Canada's Best Heavy Rare  Earth Opportunity," Mr. Rodney Cooper, Senior Analyst, Mining, initiated  a BUY, Speculative Risk recommendation for QRM at a 12-month target  price of $8.88. A full copy of the Dundee Analyst Report has been posted  to the Quest Rare Minerals website homepage at http://www.questrareminerals.com/pdfs/QRM%20Initiating%20coverage.pdf for viewing.   In the report, Mr. Cooper wrote, "Quest has a compelling in-situ value  exceeding C$18 billion, representing a C$274 in-situ value per share,  the highest of any Canadian rare earth project. With a market  capitalization of only C$0.021 per dollar of contained TREO value, Quest  is truly undervalued compared to an average of C$0.14 per dollar  contained TREO for 15 peer projects." In addition, by assuming long-term  price for a basket of total rare earth oxides ("TREO"), niobium, and  zirconium of US$19.68/kg, US$25/kg, and US$3.77/kg, respectively, a Net  Asset Value (at a 10% discount rate) of $701 million Canadian, or $11.11  per share was calculated. Mr. Cooper discounted the NAV by 30% to come  up with his $8.88 minimum target price in his evaluation.    Other positive parameters for the project and Quest that the author has identified include:   COMPELLING ECONOMICS   The in-situ value exceeding C$18 billion, representing a C$274 in-situ value per share, based on:   /T/   --  a project net present value (January 2012) at a 10% discount rate, after      taxes but pre-financing, USD 354 MILLION,  --  an after tax internal rate of return of 18%   --  Average annual after-tax cash flow is USD 162 MILLION   --  Payback is less than 4.1 years.   /T/   INVESTMENT UPSIDE / BLUE SKY   Quest is an opportunity for investors at the current level:   /T/   --  has a TREO value of US$274 per share and 156% higher than the average of      only US$107 per share  --  undervalued compared to the sector in situ average for 15 peer projects      of C$0.14 per dollar contained TREO vs Quest's C$0.021 per dollar of      contained TREO)  --  A revised resource estimate based on the 2010 drill program is expected      to be released in February, which will update global resource data   --  The value of TREO at Strange Lake is US$16/kg based on 2009 prices, the      third highest in the universe of 26 project compared to Strange Lake by      Dundee Securities  --  Quest's TREO value per share exceeds the two companies with projects      that will be in production in 2011 and 2012, being Lynas Corporation      (Mount Weld) at US$9 per share, and Molycorp (Mountain Pass) at US$99      per share.    /T/   "We appreciate the support shown by Dundee and by Mr. Cooper in the  analysis of QRM as it vindicates what we have been communicating to the  market from the very beginning in that Strange Lake should become a  highly valuable, world-class rare earth resource in the future," said  Peter J. Cashin, Quest's President & CEO.   About Quest Rare Minerals   Quest Rare Minerals Ltd. is a Canadian-based exploration company focused  on the identification and discovery of new and significant Rare Earth  deposit opportunities. The Corporation is publicly listed on the TSX  Venture Exchange as "QRM" and is led by a highly respected management  and technical team with a proven mine finding track record. Quest is  currently advancing several high potential projects in Canada's premier  exploration areas: the Strange Lake and Misery Lake areas of  northeastern Quebec, the Kenora area of northwestern Ontario and the  Plaster Rock area of northwestern New Brunswick. Quest's 2009  exploration led to the discovery of a significant new Rare Earth metal  deposit, the B-Zone, on its Strange Lake property in northeastern  Quebec. The Corporation recently filed a 43-101 Inferred Resource  Estimate on the B-Zone deposit and has completed a Preliminary Economic  Assessment (PEA) for the deposit. In addition, Quest announced the  discovery of an important new area of REE mineralization on its Misery  Lake project, approximately 120 km south of Strange Lake project. Quest  continues to pursue high-value project opportunities throughout North  America. As a result of a recently-completed marketed equity financing,  Quest has a strong working capital position in excess of $51.0 million.  This will be sufficient to advance the Corporations plans of completing a  pre-feasibility study of the B-Zone REE deposit by 2011-2012 and to  continue exploration on its other rare earth property interests.   Forward-Looking Statements    This news release contains statements that may constitute  "forward-looking information" or "forward-looking statements" within the  meaning of applicable securities legislation. More particularly, this  news release may contain forward-looking information concerning the  Strange Lake B-Zone Rare Earth Element (REE) deposit held by Quest Rare  Minerals Ltd. ("Quest"). This forward-looking information is subject to  numerous risks and uncertainties, certain of which are beyond the  control of Quest. Actual results or achievements may differ materially  from those expressed in, or implied by, this forward-looking  information. No assurance can be given that any events anticipated by  the forward-looking information will transpire or occur, or if any of  them do so, what benefits that Quest will derive. In particular, no  assurance can be given with respect to the development by Quest of the  Strange Lake B-Zone Rare Earth REE deposit. Forward-looking information  is based on the estimates and opinions of Quest's management at the time  the information is released and Quest does not undertake any obligation  to update publicly or to revise any of the forward-looking statements,  whether as a result of new information, future events or otherwise,  except as may be required by applicable securities laws.