USA Rare Earth entered a non-binding letter of intent with the U.S. Department of Commerce CHIPS Program for access to $1.6 billion in proposed federal funding and a senior secured loan, while completing a $1.5 billion private investment (PIPE).

USA Rare Earth, Inc. (Nasdaq: USAR) (USAR or the Company) today announced its entry into a non-binding Letter of Intent (the LOI) with the U.S. Department of Commerce and a collaboration with the U.S. Department of Energy (DOE). The Department of Commerce’s CHIPS Program has provided an LOI covering a total of $1.6 billion, including $277 million in proposed federal funding and $1.3 billion in a proposed senior secured loan under the CHIPS Act. In conjunction with this announcement, USAR has raised a common stock PIPE in the amount of $1.5 billion anchored by Inflection Point with participation from large mutual fund complexes.

The LOI with the U.S. Government reflects the strategic importance of USAR’s mine-to-magnet platform and its role in closing the rare earth element and critical mineral supply gap for essential industries that underpin U.S. national security, including semiconductors, other critical technologies, and advanced manufacturing. The LOI is subject to further diligence, finalization of agreements, customary closing conditions, and approvals.

This capital is expected to accelerate and de-risk USAR’s growth objectives across mining, processing, metal-making and magnet manufacturing, and supports a business that by 2030 will:

Extract 40,000 metric tons per day of rare earth and critical mineral feedstock from USAR’s Round Top deposit, which is expected to begin commercial production in 2028;

Process a combined 8,000 metric tons per annum (tpa) of third-party MREC and heavy rare earth elements (HREEs) and critical mineral oxides and concentrates at Round Top, including dysprosium (Dy), terbium (Tb), yttrium (Y), gadolinium (Gd), hafnium (Hf), erbium (Er), thulium (Tm), lutetium (Lu), ytterbium (Yb), holmium (Ho), gallium (Ga), and zirconium (Zr), all essential to semiconductors, aerospace, defense and energy production, and largely unavailable domestically;

Reshore 10,000 tpa of heavy rare earth element (heavy REE) metal- and alloy-making and strip-casting capacity, capabilities that do not currently exist in the U.S., through the top-tier expertise of our subsidiary Less Common Metals Ltd. (LCM);

Increase neodymium-iron-boron (NdFeB) magnet-making capacity to 10,000 tpa, more than double previously planned capacity; and

Process 2,000 tpa of swarf resulting from our NdFeB magnet production.

 

“This landmark collaboration with the U.S. Government represents a transformative step in USAR’s mission to secure and grow a resilient, independent domestic rare earth value chain,” said Barbara Humpton, Chief Executive Officer of USA Rare Earth. “We are grateful to President Trump, Secretary Lutnick, and Secretary Wright for their support and recognition of the strategic importance of rare earth materials and permanent magnets. With this unprecedented show of public and private support for our Company, we are positioned to accelerate the build-out of important domestic capabilities that are essential to U.S. national security, global economic competitiveness, and critical technologies of the future.”

“This transformational collaboration with Department of Commerce and the proposed $1.6 billion of CHIPS Act funding, along with $1.5 billion of private sector financial and strategic capital, will help secure the heavy rare earth supply chain for the U.S. and its allies and underscores USAR’s strategic nature in support of national and economic security,” said Michael Blitzer, Chairman of the Board of USA Rare Earth and Chairman and CEO of Inflection Point. “USAR and the Department of Commerce will mobilize a multi-year partnership at unprecedented scale and speed to build out capacity across heavy rare earth feedstock, processing, metal, and magnets, and we are proud to partner with the U.S. Government in support of the Company's next phase of growth. We look forward to successfully implementing this ambitious plan with the goal of generating substantial financial returns for our shareholders.”

“USA Rare Earth’s heavy critical minerals project is essential to restoring U.S. critical mineral independence,” said Secretary of Commerce Howard Lutnick. “This investment ensures our supply chains are resilient and no longer reliant on foreign nations.”

In addition to the collaboration with the Department of Commerce, the U.S. Department of Energy’s National Energy Technology Laboratory has signed a LOI to collaborate with USAR to advance heavy REE separation technologies at the Company’s Wheat Ridge lab and Round Top deposit, leveraging digital twin technology. Under the Trump administration, the DOE has prioritized innovation in process modeling, the use of digital twins, and the deployment of testbeds for material-processing R&D. Through this partnership, the DOE will contribute to the development of digital twins to advance rare earth element separation technologies, with the ultimate goal of establishing the country’s first fully domestic mine-to-magnet supply chain.

“Thanks to President Trump’s leadership, the Department of Energy is ending America’s reliance on foreign nations for the critical materials essential to our economy and national security,” said U.S. Energy Secretary Chris Wright. “The DOE is partnering with USAR to rebuild the critical minerals supply chain. By expanding domestic mining, processing, and manufacturing capabilities, we are creating good-paying American jobs and safeguarding our national security.”

“Accelerating the onshoring of rare earth minerals, metals, and magnets is paramount to national and economic security,” said the Executive Director of the U.S. Investment Accelerator, Michael Grimes. “With the Department of Commerce’s funding for USA Rare Earth’s vertically integrated mine-to-magnet operations, we will significantly increase the domestic supply of crucial components for semiconductors, defense, and numerous other industries strategic to the United States.”

"The CHIPS Program’s proposed $277 million funding and $1.3 billion loan will be instrumental for the construction of a domestic integrated supply chain for critical minerals and NdFeB magnets, which are essential for semiconductor chip manufacturing,” said Bill Frauenhofer, Director of the CHIPS Program. “Yttrium, gallium, terbium, and the other nine critical and strategic minerals that will be mined in Texas, along with the Oklahoma magnet production, provides U.S. semiconductor companies a reliable domestic source and removes choke points in their manufacturing supply chain that enable chemical vapor deposition, high-k materials, compound semiconductors, dopants, and other foundational applications.”

The U.S. Government’s proposed funding will feature milestones consistent with USAR’s funding needs and create a structure that aligns taxpayer returns and the objectives of institutional investors and excludes the need for government price supports or government offtake agreements. The collaboration reflects the U.S. Government’s commitment to strengthening supply chains, reducing reliance on foreign sources of critical minerals, rebuilding strategic industrial capabilities, and ensuring secure access to materials essential for semiconductor manufacturing, robotics, industrial motors, electric vehicles, drones, fighter jets, nuclear submarines, satellites, and other advanced technologies.

Transaction Overview

The non-binding LOI with the Department of Commerce’s CHIPS Program includes $277 million of proposed federal funding and a proposed $1.3 billion senior secured loan.

Additionally, USAR will issue to the Department of Commerce 16.1 million shares of common stock and approximately 17.6 million warrants.

USAR has also signed a securities purchase agreement for a $1.5 billion PIPE transaction (69.8 million shares issued at $21.50 per share) with Inflection Point and other fundamental and strategic investors. The PIPE transaction, together with the proposed U.S. Government funding and loan, would bring the total amount of capital to $3.1 billion.

The PIPE is expected to close on January 28, 2026, subject to the satisfaction of customary closing conditions, and the CHIPS Program’s funding and senior secured loan are subject to finalization of agreements and other customary closing conditions, expected this quarter.

 

USAR Q4 2025 Highlights

The Company also announced the following achievements and milestones, which occurred during the quarter ended December 31, 2025.

Business Highlights

Finalized flow sheet for the Round Top development project, validated through bench- and pilot-scale testing, supporting completion of the Accelerated Mining Plan in 2H 2026.

Accelerated plans to begin commercial production at Round Top in late 2028, two years earlier than previously anticipated.

Stillwater, Oklahoma magnet facility remains on track to complete commissioning in Q1 2026.

Closed the acquisition of LCM, a manufacturer of specialized rare earth metals and both cast and strip-cast alloys.

LCM established a strategic relationship with Solvay S.A., a multinational chemical company, to supply rare earth metals to Permag, a leader in high-precision magnets and magnetic assemblies.

LCM signed a supply agreement with Solvay and Arnold Magnetic Technologies Corp., a subsidiary of Compass Diversified, for production of advanced permanent magnets.

Subsequent to quarter-end:

Announced plans to build a 3,750 mtpa plant through LCM Europe to produce metal and alloy in Lacq, France, co-located with Carester SAS’s Caremag oxide and recycling facility.

Announced selection of Fluor Corporation and WSP Global Inc. as engineering, procurement, and construction management (EPCM) partners for the build-out and commercialization of the Round Top mine.

 

Preliminary Financial Highlights

The Company expects to report that as of December 31, 2025, the Company had cash and cash equivalents in excess of $350 million. For the year ended December 31, 2025, the Company anticipates both operating expenses and operating loss in the range of $56 million and $62 million, and capital expenditures in the range of $37 million and $43 million.

These estimates are preliminary and subject to normal end-of-year closing procedures and audit, and accordingly, are subject to change. As a consequence, actual results may differ from the preliminary results described above.

Analyst Conference Call

USAR will host a conference call today at 8:30 a.m. ET to discuss the U.S. Government partnership, PIPE transaction, and the accelerated and expanded development plans.

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