USA Rare Earth Secures $1.55B Government-Backed Offtake, Clearing Key Merger Condition
USAR sits 59% above its 52-week low of $11.45.
Summary
USA Rare Earth announced completion of an upsized $1.55 billion capitalization for the SPV that will purchase 100% of Phase 1 rare earth production from Serra Verde, satisfying a critical closing condition ahead of Friday's shareholder vote on the merger. The funding includes $750 million in equity backed by the U.S. Department of War (up $250 million from original requirements), a commitment letter for up to $500 million in senior secured credit from a Tier-1 bank, and a U.S. government forward purchase contract for at least $300 million of rare earth products over five years. This follows the July 16 amendment making the Offtake Agreement a closing condition, and the August 24 DEFA14A confirming the government upsized its SPV investment. The deal unlocks the Pela Ema mine in Brazil, creating the only mine outside Asia producing all four key magnetic rare earths, and ties directly into the Stillwater, Oklahoma magnet facility targeting 600 metric tons per annum by Q4 2026. Despite the milestone, shares fell 5.14% to $18.27 amid a broader small-cap critical mineral selloff. The merger vote is scheduled for Friday, August 28.
At the time of this announcement, USAR was trading at $18.25 on NASDAQ in the Industrial Applications And Services sector, with a market capitalization of approximately $4.5B. The 52-week trading range was $11.45 to $43.98. This news item was assessed with positive market sentiment and an importance score of 8 out of 10. Source: Benzinga.