New York, January 26, 2026, 13:09 EST — Regular session
- Shares of USA Rare Earth jumped roughly 17% in early afternoon trading following the announcement of a proposed U.S. funding package alongside a $1.5 billion PIPE.
- The company said the plan would back a Texas rare earth project along with an Oklahoma magnet facility connected to defense and high-tech needs.
- Investors are focused on whether the non-binding U.S. deal will lead to final agreements and if new equity raises come next.
Shares of USA Rare Earth jumped roughly 17% to $28.94 in early Monday afternoon trading, continuing a choppy stretch for the rare-earths company.
The company announced a non-binding letter of intent with the U.S. Department of Commerce’s CHIPS Program, involving $277 million in proposed federal funding and a $1.3 billion senior secured loan. It also includes a $1.5 billion private investment in public equity, or PIPE. CEO Barbara Humpton described the move as a “transformative step,” while Commerce Secretary Howard Lutnick said the investment would strengthen supply chains, making them “resilient” and less dependent on foreign countries.
Timing is key as Washington ramps up its focus on critical minerals as a national security concern. The goal: develop supply chains for magnets and specialty metals—essential in weapons systems, chips, and electric motors—outside of China. The Commerce Department’s latest action fits into a wider effort to boost domestic mining and processing capacity. (AP News)
A regulatory filing revealed the company inked a securities purchase agreement for a private placement of 69,767,442 common shares, raising roughly $1.5 billion at $21.50 per share. The deal is set to close on January 28. The filing also detailed terms for the anticipated U.S. transaction, noting the proposed $1.3 billion loan would carry a 15-year term and an expected interest rate of Treasury plus 150 basis points, or 1.5 percentage points.
The U.S. package includes equity components. According to the company’s terms, the government would get common shares and warrants — which allow the holder to purchase stock at a predetermined price in the future — as part of the proposed awards and loan.
USA Rare Earth pointed to a lengthy list of hurdles before reaching definitive agreements, such as raising non-federal capital and locking in memoranda of understanding with semiconductor end-users or midstream players, among other key steps.
Reuters reported the Commerce Department will take a 10% stake, noting the deal excludes a government-backed price floor like the one MP Materials secured in an earlier federal investment. On a call, Humpton told investors the company’s early sales strategy was driven by the “cost of having access to nothing.” (Reuters)
The company is working on a “mine-to-magnet” supply chain. It plans to start commercial production at its Round Top deposit in Texas by 2028, while its magnet facility in Stillwater, Oklahoma, is set to finish commissioning in early 2026.
Preliminary figures also showed cash and cash equivalents exceeding $350 million by the end of 2025. The company anticipates annual operating expenses and operating losses between $56 million and $62 million, alongside capital spending of $37 million to $43 million.
Shares of MP Materials fell roughly 6.5% by the close, despite a strong jump at the session’s start. The drop rippled through its sector peers.
The risk remains clear. The U.S. deal is just a letter of intent, with funding expected to arrive in stages linked to milestones. The company has been upfront about requiring additional capital and operating without signed customers.
The next key date is January 28, when the company anticipates closing the PIPE. Traders will then turn their attention to finalizing government package agreements, along with any customer MOUs and potential extra financing moves that might surface before quarter-end.
