Answer: An Acquisition, A New CEO, And Deal Speculation
Barbara Humpton’s arrival couldn’t be better timed. Shares of USA Rare Earth (USAR) surged nearly 24% during regular trading on Tuesday, followed by a 7% gain in pre-market hours, after the new CEO told CNBC that the company is in “close communication” with the White House — fueling speculation of a potential deal with the Trump administration.
The stock momentum comes amid the renewed focus on developing a domestic supply chain for rare earth elements (REEs) — a category of minerals critical to a wide range of advanced technologies, including electric vehicles, renewable energy systems, semiconductors, and defense applications. China currently dominates the global rare earth market, controlling 70% of global output and 90% of the world’s rare earth ore processing.
Efforts to reduce reliance on Chinese supply have become a strategic priority for U.S. policymakers. Recent moves, including the U.S. government’s 15% equity stake in MP Materials and a 5% stake in Lithium Americas, suggest increased federal interest in shoring up domestic capabilities.
USAR is aiming to position itself as a key contributor to this effort. The company is advancing development of its Stillwater, Oklahoma magnet facility, which is expected to begin production in early 2026. According to company estimates, the facility’s initial 1,200-ton production line could support up to $200 million in revenue, subject to the completion of construction and commissioning timelines. USAR has indicated strong early interest in its output, with plans to pre-sell a significant portion even before the facility is fully commissioned.
In a related development, USAR announced this week that it has reached an agreement to acquire Less Common Metals (LCM), a UK-based REE metals and alloys manufacturer, in a deal structured as $100 million in cash plus 6.74 million of USAR common stock.
The acquisition should establish USA Rare Earth as a scaled REE metal and alloy manufacturer outside of China, while providing additional capabilities in strip casting, metal and alloy fabrication, and magnet recycling – as LCM is deemed as a Western producer with metal and alloy-making technical capabilities that match the Chinese producers. The acquisition also accelerates USA Rare Earth’s mine-to-magnet strategy, by securing metal supply for the Stillwater magnet facility.
Meanwhile, USAR is also making progress at its Round Top mine in Sierra Blanca, Texas, where it recently reported successful extraction of gallium and heavy rare earth concentrates. The company highlighted the presence of high-value elements such as dysprosium and terbium, both key to high-performance magnet manufacturing and perceived as critical materials underpinning energy transition. USAR achieved a 80% recovery rate for heavy rare earths under mild heap leach conditions, a process that uses a less corrosive chemical solution to extract the elements.
Despite these advancements, USAR remains in the pre-revenue stage and is not yet profitable. For its recently reported second-quarter results, the company reported a wider adjusted net loss of $7.8 million, or $0.08 per share, compared to year-ago loss of $2.8 million, or $0.05 per share. As of August 7, USAR had a cash balance of $128.1 million.
The company has signed 12 memorandums of understanding (MOUs) covering approximately 300 tons per year in potential orders. It reports a “high-confidence” pipeline exceeding 2,000 tons and engagement with over 70 prospective customers.
Shares of USA Rare Earth are up approximately 98% year-to-date, reflecting heightened investor enthusiasm amid the U.S. push to secure a domestic supply chain for critical rare earth minerals. USAR is yet another example where the narrative outpaces the fundamentals.
Please note that I am not a registered investment advisor and readers should do their own due diligence before investing in this or any other stock. I am not responsible for the investment decisions made by individuals after reading this article. Readers are asked not to rely on the opinions and analysis expressed in the article and encouraged to do their own research before investing.