USA Rare Earth Stock Surges Pre-Market Following Acquisition Of LCM – Check Out The Details

USA Rare Earth (USAR) announced on Monday that it has entered an agreement to acquire LCM, an ex-China rare earth metal and alloy producer. 

USAR’s stock was up as much as 12% in pre-market trade. On Stocktwits, retail sentiment around the company remained in ‘extremely bullish’ territory with chatter at ‘high’ levels over the past day. 

The company stated the acquisition represents an acceleration of its mine-to-magnet strategy, helping it establish an end-to-end rare earth supply chain. Under the agreement, USAR will acquire LCM for $100 million in cash and 6.74 million shares of USAR’s common stock. 

LCM, with a 67,000-square-foot facility in the U.K., makes metals and alloys, serving the defense, automotive, EV and industrial sectors. “LCM is the only proven ex-China producer of rare earth metal, alloys, and strip casting at scale and the sole Western provider of critical defense materials such as Samarium Cobalt,” said Michael Blitzer, USAR Chairman. 

USA Rare Earth stated that LCM can process metal oxide feedstocks from both mined and recycled sources, thereby giving it a unique position in the global supply chain. Its production will support USAR’s Stillwater, Oklahoma magnet facility once operational, while continuing to serve its global customer base across the U.S., the U.K., France, Germany, Japan, and Taiwan.

USAR also announced Barbara Humpton as its new Chief Executive Officer, succeeding Josh Ballard. Her appointment will kick in on October 1, and she will also serve on USAR’s Board of Directors. Humpton previously led Siemens USA, where she oversaw major acquisitions and helped grow revenue beyond $20 billion, the company said. 

The company has also gained attention amid reports that the White House is considering reallocating at least $2 billion from the CHIPS Act to fund a critical minerals project. The move would reportedly shift funds already earmarked for semiconductor research and chip plant construction, aiming to reduce the U.S.’s reliance on China for critical minerals, which has been central to Trump’s narrative during his second term. 

Read also: Why Cleveland Fed’s Beth Hammack Remains Worried About Inflation: ‘I’m Seeing It In The Services’

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