A high energy rare earth-ferromagnetic metal permanent magnet is disclosed which is characterized by improved intrinsic coercivity and is made by forming a particulate mixture of a permanent magnet alloy comprising one or more rare earth elements and one or more ferromagnetic metals and forming a second particulate mixture of a sintering alloy consisting essentially of 92-98 wt. % of one or more rare earth elements selected from the class consisting of Gd, Tb, Dy, Ho, Er, Tm, Yb, Lu, and mixtures of two or more of such rare earth elements, and 2-8 wt. % of one or more alloying metals selected from the class consisting of Al, Nb, Zr, V, Ta, Mo, and mixtures of two or more of such metals. The permanent magnet alloy particles and sintering aid alloy are mixed together and magnetically oriented by immersing the mixture in an axially aligned magnetic field while cold pressing the mixture. The compressed mixture is then sintered at a temperature above the melting point of the sintering aid and below the melting point of the permanent magnet alloy to thereby coat the particle surfaces of the permanent magnetic alloy particles with the sintering aid while inhibiting migration of the rare earth element in the sintering aid into the permanent magnet alloy particles to thereby raise the intrinsic coercivity of the permanent magnet alloy without substantially lowering the high energy of the permanent magnet alloy.