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USA Rare Earth to take 80% stake in Round Top project in Texas

Round Top rare earths project is located outside El Paso, Texas. Image from USA Rare Earth.

USA Rare Earth, which has ambitious plans to develop a domestic supply chain has fully funded its $10 million commitment to earn its 70% interest in the Round Top heavy rare earths and lithium project in Texas, and exercised its option to acquire an additional 10%.

Round Top Mountain Development LLC has been formed to hold the joint venture interests of joint venture partner Texas Mineral Resources (TMRC) and USA Rare Earth. TMRC will own a 20% interest in Round Top Mountain Development LLC.

Investors are growing more interested in exposure to rare earths – 17 minerals used in military applications, ceramics, wind turbines, electric cars and medical equipment. China is the world’s largest producer and has threatened to stop exporting these minerals to the United States.

Last year, the Canadian and U.S Governments reaffirmed their commitment to strengthening the North American supply chain for critical minerals – essential to both countries’ national security and economic growth. Reviving domestic rare earths production has become a priority in Washington as relations with China have grown more frayed, and with U.S. lawmakers leery of relying on a rival for critical defense components.

Reviving domestic rare earths production has become a priority in Washington as with U.S. lawmakers leery of relying on China for critical defense components

USA Rare Earth has now completed a funding round of $50 million and is now funded through the completion of the Definitive Feasibility Study (DFS), which includes the Pre-Feasibility Study (PFS), the pilot plant and a demonstration plant to be built at the Round Top site later this year which will include test heap leach pads and continuous ion exchange (CIX) processing.

The demonstration plant will support the DFS and permitting as well as producing representative materials for evaluation by prospective customers. The Round Top joint venture has received construction stormwater permits from the Texas Commission on Environmental Quality (TCEQ) and has begun a 20,000 tonne bulk sample to support the feasibility studies and the demonstration plant.

“We are pleased to finalize our joint venture through the creation of the Round Top Mountain Development LLC,” Anthony Marchese, TMRC chairman said in a media statement.

“I have been impressed by their unwavering vision of helping the United States create a domestically based critical mineral supply chain,” Marchese said. Their recently completed funding and the expertise of their financial advisors solidifies our belief that our joint venture will have the necessary resources to succeed.”

The mid- 2019 Round Top PEA include at Net Present Value (NPV) of $1.56 Billion at a 10% discount rate, pretax; Internal Rate of Return (IRR) of 70%, a capital cost of $350.4 Million, including a complete on-site rare earth oxide (REO) and mineral separation plant, and a 25% contingency provision of $65.7 Million.

The mining rate is estimated at 20,000 tonnes per day (TPD), with all mineral processing at site. REO Production is projected to average 2,313 tonnes per year (TPY) total, including approximately 180 TPY of Neodymium (Nd) and 67 TPY of Praseodymium (Pr). The lithium resource is estimated at 9,800 TPY lithium carbonate production.

“We’ve got a very unique deposit in a number of respects – we have 16 of the 17 rare earths, with many in the rare earths categories that speak to a number of defense applications, and manufacturing. It is probably the largest heavy rare earths deposit in the world outside of China,” Pini Althaus, CEO of USA Rare Earth told MINING.COM last year. The company hopes to have it operating by 2023.

USA Rare Earth rival MP Materials Corp, which controls California’s Mountain Pass mine, the only active rare earths mine in the US, went public last year in a SPAC deal worth nearly $1.5 billion.