USAR Stock Soars Pre-Market As USA Rare Earth Announces $1.6 Billion Deal With Trump Administration For An Equity Stake

• In exchange, the Commerce Department will receive 16.1 million shares of common stock and approximately 17.6 million warrants, the company said.
• USA Rare Earth also announced that it will collaborate with the U.S. Department of Energy to advance heavy rare earth element separation technologies.
• USAR stated that it has also entered into a private investment in public equity transaction valued at $1.5 billion, in exchange for 69.8 million shares.

USA Rare Earth Inc. (USAR) shares soared nearly 24% in Monday’s pre-market trade after the company announced a $1.6 billion deal with the Trump administration in exchange for an equity stake.

USA Rare Earth announced that, as part of the Department of Commerce’s CHIPS Program, the deal includes proposed federal funding of $277 million and a $1.3 billion senior secured loan.

In exchange, the Commerce Department will receive 16.1 million shares of common stock and approximately 17.6 million warrants, the company said.

Retail sentiment on Stocktwits around USA Rare Earth was in the ‘extremely bullish’ territory, with message volumes at ‘extremely high’ levels. The USAR stock was the top trending ticker on the platform at the time of writing.

USAR To Collaborate With DOE

In addition to the $1.6 billion deal with the Trump administration, USA Rare Earth also announced that it will collaborate with the U.S. Department of Energy to advance heavy rare earth element (REE) separation technologies.

The company will team up with the DOE’s National Energy Technology Laboratory to develop REE separation technologies at its Wheat Ridge lab and Round Top deposit, leveraging digital twin technology, it said.

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

USAR stated that it has also entered into a private investment in public equity (PIPE) transaction for $1.5 billion, with consideration of 69.8 million shares at $21.5 apiece. This implies a discount of over 13% compared to the closing price of USA Rare Earth’s shares on Friday.

USAR Details 2030 Targets

USA Rare Earth also detailed its 2030 targets across mining, processing, metal-making, and magnet manufacturing.

This includes the extraction of 40,000 metric tons per day of rare earth and critical mineral feedstock, and processing a combined 8,000 metric tons per annum (tpa) of third-party MREC and heavy rare earth elements, critical mineral oxides, and concentrates at the Round Top deposit.

The company also plans to reshore 10,000 tpa of heavy rare-earth element (HREE) metal- and alloy-making and strip-casting capacity by 2030.

As for its neodymium-iron-boron (NdFeB) magnet-making capacity, USA Rare Earth is targeting its expansion to 10,000 tpa. It also plans to process 2,000 tpa of swarf resulting from this process.

USAR stock is up 108% year-to-date and 109% over the past 12 months.

Also See: Peter Schiff Says Most People Are 'Clueless' And In For A 'Shock' As Gold, Silver Scale New Highs: SLV, GLD ETFs Soar Pre-Market

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