Overview
- The non-binding letter of intent outlines a $1.3 billion senior secured loan and $277 million in CHIPS-linked federal funding for USA Rare Earth.
- In exchange, Commerce will receive 16.1 million common shares and warrants for 17.6 million more at $17.17 per share, with the government’s ownership projected at roughly 8% to 16% depending on warrant exercise.
- The package is intended to advance a U.S. mine-to-magnet supply chain, including the Stillwater, Oklahoma magnet facility targeted for 2026 and the Round Top, Texas mine slated to begin operations in 2028.
- USA Rare Earth paired the federal package with a private capital raise, including a $1.5 billion PIPE reported by Investopedia, and engaged Cantor Fitzgerald to assist with fundraising.
- USA Rare Earth shares jumped more than 20% Monday after the announcement, as the deal extended the administration’s recent equity stakes in critical-minerals firms such as MP Materials, Lithium Americas, and Trilogy Metals.