USA Rare Earth to Produce Nearly Half of U.S. Critical Minerals List

USA Rare Earth LLC, an 80 percent operator and owner of the Round Top heavy rare earth, lithium, and critical minerals project in Hudspeth County, Texas, along with its joint venture partner Texas Mineral Resources Corp. will produce nearly half of the U.S. critical minerals list.

"The company will bring nearly half of the key minerals identified by the US Geological Survey into domestic production, including gallium, which tops the new list of key minerals." Thayer Smith, the company's president, said, "The list identifies Round Top as a strategic national asset in a supply chain that is critical to the US economy."

In February 2021, the US Geological Survey identified Round Top as the largest deposit of gallium in the United States. Gallium is a key semiconductor chip material that currently has no producer in the United States. The USGS also identified 16 rare earths as key materials, including neodymium, dysprosium, praseodymium, and terbium, which are used to make rare earth permanent magnets and will be produced by USA Rare Earth.

The company is creating a new fully domestic mine-to-magnet supply chain that will provide the rare-earth magnets and materials needed to ensure compliance with the recent presidential executive order. Rare earth magnets are necessary for defense, medical, green energy, and electric vehicle production. Currently, the vast majority of rare earth materials and magnets for US companies are sourced from China.

In November, the U.S. Geological Survey released a draft of 50 mineral commodities to be included in the 2021 Critical Minerals List. This is the first update since the Department of the Interior identified 35 critical minerals in 2018. Under federal regulations, the critical minerals list is updated every three years.

USA Rare Earth is developing the Round Top project in Sierra Blanca, Texas, which is expected to be in operation by 2023. Round Top is a unique heavy rare earth-rich polymetallic deposit containing 16 of the 17 rare earth elements, as well as lithium, gallium and other key minerals listed by the U.S. At the planned initial production rate, Round Top has sufficient firm resources to operate for more than 100 years.

"American Rare Earths is developing a completely domestic supply chain from mine to magnet, and Round Top's lithium will support the manufacture of battery electric vehicles. These are two important components of the future of electric transportation," said Thayer Smith. "Our project is a geologically unique and diverse deposit that will help enhance the production of key minerals in the United States."

American Rare Earths LLC owns an 80% operating joint venture interest in the Round Top heavy rare earth and key minerals project located in Hudspeth County, West Texas. Round Top has a broad portfolio of key heavy rare earth elements, high technology metals including lithium, gallium, zirconium, hafnium, and beryllium. The Preliminary Economic Assessment (PEA, dated August 16, 2019) projects a pre-tax net present value of $1.56 billion based on a 20-year mine plan using a 10% discount rate, representing only 13% of the identified measured, indicated, and inferred resources.

The PEA estimates an internal rate of return of 70% and an average annual net revenue of $395 million after an average annual royalty payment of $26 million to the State of Texas. Based on the cost estimates presented in the PEA, Round Top would be one of the lowest cost rare earth producers and one of the lowest cost lithium producers in the world.

The Round Top Deposit of USA Rare Earth hosts 16 of the 17 rare earth elements, as well as other high-value technology minerals (including lithium), including 13 of the 35 minerals considered "critical" by the Department of the Interior, and contains key elements required by U.S. defense and industry.

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