USA Rare Earth (NASDAQ:USAR) outlined what it described as a “transformative proposed collaboration” with the U.S. government during an investor update conference call, alongside details of a concurrent private capital raise and updated operational milestones across its mine-to-magnet strategy.
Proposed U.S. government support and PIPE financing
Management said the company has signed a letter of intent under which the U.S. government would provide a total of $1.6 billion in CHIPS Act incentives and debt, consisting of $277 million in proposed federal incentives and a proposed $1.3 billion senior secured loan. CFO Rob Steele said the incentives and loan are intended to be disbursed based on operational milestones and funding needs, with disbursements planned “for the most part” between 2026 and 2028, with “a little bit” extending into 2029.
The company also highlighted a $1.5 billion private investment in public equity (PIPE) transaction that management said was “significantly oversubscribed.” Steele said the proposed U.S. government package and the PIPE, combined with current cash and proposed support from the French government, would give USA Rare Earth access to a potential $3.5 billion in capital to accelerate development across its rare earth value chain.
CEO Barbara Humpton said the structure is intended to keep public-sector funding “following the investments of the private sector,” arguing the approach is designed so the taxpayer is “never over-committed” and not “leading and out in front.”
Accelerated mine-to-magnet buildout and capacity targets
Since going public in March 2025, Humpton said the company has moved quickly to build what it calls an integrated “mine-to-magnet” platform. She cited the acquisition of Less Common Metals (LCM) in September 2025 (closed in November) as a key step, calling it “the only proven ex-China producer of both light and heavy rare earth metals and alloys at scale.” Humpton said the company is expanding the LCM operation and last week announced plans—supported by the French government—to build a plant in Lacq, France, with 3,750 metric tons of annual production capacity.
Steele detailed updated production goals that he said represent a “dramatic acceleration”:
- 10,000 metric tons of annual magnet-making capacity by June 2030.
- 27,500 metric tons of annual metal-making capacity by December 2027, including 10,000 domestic capacity.
- 8,000 metric tons annually of third-party MREC and rare earth oxide processing capacity by 2030.
- Capability to recycle magnet-manufacturing swarf, with in-house swarf processing coming online in 2027.
Round Top timeline, mineral mix, and Stillwater commissioning
Humpton said USA Rare Earth will source raw material from the Round Top deposit in Sierra Blanca, Texas, which she described as the richest deposit of heavy rare earths known in North America. The company originally planned to bring Round Top online in 2030, but Humpton said early results from solvent extraction piloting prompted an accelerated plan targeting the start of commercial production in late 2028.
According to Humpton, Round Top contains 15 of the 17 rare earth elements, including high concentrations of dysprosium and terbium. She also said the deposit is enriched with gallium, hafnium, and zirconium, which she characterized as important to semiconductor manufacturing. Steele added that the company finalized the Round Top flow sheet with successful bench and pilot-scale testing and expects to complete the accelerated mine plan in the second half of this year.
On the downstream side, Steele said the Stillwater, Oklahoma magnet-making facility remains on track to begin commissioning in Q1 2026. In response to questions, he said the company will produce both block magnets (the basis for nameplate capacity) and finished magnets, stating that finished magnets will be produced “this year” as finishing capability is installed throughout 2026.
Steele also said the company expects to source required oxides from third parties in 2026, 2027, and partially through 2028, citing Solvay as one supplier and adding that other mine sources, processors, and recycled sources are expected to contribute. Management said it is also putting in place agreements to recycle swarf externally until in-house swarf processing begins.
Guidance, profitability targets, and other Q&A highlights
Steele provided preliminary 2025 financial expectations for the year ending December 31, 2025, including operating expenses and operating loss in the range of $56 million to $62 million, capital expenditures of $37 million to $43 million, and an anticipated year-end cash and cash equivalents balance of more than $350 million.
Looking ahead, Steele said the company sees a path to:
- Gross profit breakeven in 2027
- EBITDA breakeven in 2028
- Cash flow breakeven in 2029
- By 2030, targets of $2.6 billion in revenue, $1.2 billion in EBITDA, and $900 million in free cash flow
In the Q&A, management said the government arrangement does not include offtake agreements or price floors. Steele argued that, given undersupply outside China for certain materials—citing dysprosium, terbium, and yttrium—the company does not need offtake agreements to support the business model. Humpton also said customer commitments and purchase orders are being developed but are being kept confidential because customers are sensitive about being identified while maintaining global supply chains.
Asked about overall project funding needs, Steele said the company’s combined projects are modeled at about $4.1 billion, and that the PIPE, existing cash and resources, and government funding would get the company “almost all the way there,” with the remaining capital expected to come from equity, including strategic and institutional sources.
Management also pointed to recent selection of Fluor and WSP as EPCM partners for Round Top and discussed efforts to secure an ex-China supply chain for equipment, including one example in which a Japanese supplier intends to bring certain assemblies in-house to avoid reliance on components previously sourced from China.
About USA Rare Earth (NASDAQ:USAR)
USA Rare Earth (NASDAQ: USAR) is a development-stage critical minerals company focused on advancing a fully integrated rare earth element (REE) and lithium project in the United States. Its flagship asset is the Round Top deposit in West Texas, a large, polymetallic concentration of light and heavy rare earth elements, lithium and other co-products. The company seeks to move this asset through resource delineation, pilot-scale processing and eventual commercial production to address growing domestic demand for secure REE supply chains.
In addition to exploration, USA Rare Earth is engineering an on-site separation facility that will utilize dry magnetic separation and hydrometallurgical flowsheets to produce mixed rare earth carbonates.
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