USA Rare Earth (NASDAQ: USAR) on Monday announced a non-binding LOI with the Commerce Department’s CHIPS Program covering $1.6 billion, paired with a $1.5 billion private PIPE, bringing proposed total capital to $3.1 billion as the company targets a mine-to-magnet heavy rare earth value chain by 2030.
The CHIPS LOI totals $1.6 billion, split into $277 million of proposed federal funding and a proposed $1.3 billion senior secured loan under the CHIPS Act, with the company noting the LOI is subject to diligence, final agreements, customary closing conditions, and approvals.
USAR said it will issue the Commerce Department 16.1 million shares of common stock and approximately 17.6 million warrants.
Separately, USAR signed a securities purchase agreement for a $1.5 billion common stock PIPE consisting of 69.8 million shares priced at $21.50 per share, anchored by Inflection Point with participation from large mutual fund complexes.
The PIPE is expected to close January 28, 2026, subject to customary closing conditions. The CHIPS Program’s proposed funding and senior secured loan are expected this quarter, subject to finalization and other customary closing conditions.
USAR’s plan targets extraction of 40,000 metric tons per day of rare earth and critical mineral feedstock from the Round Top deposit, which USAR expects to begin commercial production in 2028. It also targets processing a combined 8,000 metric tons per annum of third-party MREC and heavy rare earth elements and critical mineral oxides and concentrates at Round Top, including dysprosium, terbium, yttrium, gadolinium, hafnium, erbium, thulium, lutetium, ytterbium, holmium, gallium, and zirconium.
The firm said the capital supports reshoring 10,000 metric tons per annum of heavy rare earth metal- and alloy-making and strip-casting capacity through its subsidiary Less Common Metals Ltd., and increasing neodymium-iron-boron magnet-making capacity to 10,000 metric tons per annum, described as more than double previously planned capacity, plus processing 2,000 metric tons per annum of magnet-production swarf.
For the quarter ended December 31, 2025, USAR cited a finalized flow sheet for Round Top validated through bench- and pilot-scale testing, supporting completion of an Accelerated Mining Plan in 2H 2026. It also cited accelerating planned commercial production at Round Top to late 2028, described as two years earlier than previously anticipated.
Subsequent to quarter-end, USAR announced plans to build a 3,750 metric ton per annum plant through LCM Europe in Lacq, France, co-located with Carester SAS’s Caremag oxide and recycling facility, and selected Fluor Corporation and WSP Global as EPCM partners for Round Top.
USAR expects to report cash and cash equivalents in excess of $350 million as of December 31, 2025. For full-year 2025, it anticipates operating expenses and operating loss in the range of $56 million to $62 million, and capital expenditures in the range of $37 million to $43 million.
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