USA Rare Earth announces $75 million investment in Stillwater magnet manufacturing facility
May 2, 2025
USA Rare Earth (USAR), Inc, Stillwater, Oklahoma, USA, has entered into a securities purchase agreement with a new fundamental institutional investor to raise $75 million of equity capital via a private investment in public equity (PIPE). The company intends to use the proceeds to fund capital expenditures for its Stillwater magnet manufacturing facility, as well as for working capital and operating expenses.
“We are thrilled by the reception we received from potential investors during our PIPE process,” said Joshua Ballard, CEO. “This sizeable commitment from a single institution allows us to fully fund the capex required for the first phase of our rare earth magnet facility. It comes at a pivotal moment in USA Rare Earth’s push to build one of the largest domestic sintered rare earth magnet facilities in the country at a time when we as a country most need it. We are on a mission to bring domestic rare earth magnets back to the United States defence, consumer, technology, and industrial sectors. We are now one step closer to achieving our goal.”
Under the terms of the securities purchase agreement, the company will issue – for an aggregate purchase price of $75 million – an aggregate of approximately 8.55 million shares of common stock (the issued shares), pre-funded warrants to purchase an aggregate of approximately 2.16 million shares of common stock and warrants to purchase shares of common stock, in an amount equal to 100% of the aggregate shares at a strike price of $7.00 per share, with an expiry date of six years from the issue date of the PIPE warrants. The shares and the PIPE warrant shares are entitled to customary resale registration rights.
USA Rare Earth, Inc will hold a special meeting of stockholders to approve the issuance of the warrant shares. Stockholders holding a majority of voting power of the outstanding securities of the company have executed stockholder support agreements to vote their shares in favour of such issuance. The closing of the PIPE also is subject to other customary closing conditions for financing of this nature.
USAR is working to build a vertically integrated, domestic rare earth magnet production supply chain. The company is currently constructing a 94,488 m2 rare earth sintered neo magnet manufacturing facility in Stillwater. It is expected to go commercial in the first half of 2026.
USAR also controls mining rights to the Round Top Mountain rare earth and critical minerals deposit in West Texas, which contains deposits of heavy rare earths such as dysprosium and terbium, as well as gallium, beryllium, lithium and other critical tech minerals.
