Accelerating the USA Rare Earth strategy
TRMC offers early earn-in for overachieving Round Top partner Metal Tech News Weekly Edition – July 8, 2020
Last updated 7/7/2020 at 4:17pm
Texas Mineral Resources Corp. has added fuel to USA Rare Earth LLC's strategy to establish a complete rare earth mines-to-magnets supply chain in the United States, which is already advancing much more rapidly than either company envisioned when they formed a partnership less than two years ago.
Texas Mineral Resources is an exploration company that has outlined an enormous deposit of rare earth elements, lithium and 10 other critical minerals at its Round Top project about 85 miles southeast of El Paso, Texas.
According to a preliminary economic assessment published in mid-2019, a mine at Round Top would produce 2,212 metric tons of rare earths per year, including healthy supplies of all six permanent magnet rare earth oxides. This includes more than 200 metric tons of dysprosium, 180 tons of neodymium, 67 tons of praseodymium, 65 tons of gadolinium, 65 tons of samarium and 23 tons of terbium once the mine reaches full production.
In addition, the mine outlined in the PEA would produce about 10,000 metric tons of lithium per year, which would help fill the expanding electric vehicle battery market.
According to current calculations, the Round Top deposit is large enough to supply REEs, lithium and other critical minerals at this rate for more than a century.
This enormous lode of minerals needed for high-tech, renewable energy, electric vehicles, military and a wide range of other modern applications drew the interest of USA Rare Earth, a New York-based company that is funding the advancement of establishing a mine at Round Top, as well as a processing facility to separate the rare earths and other critical minerals found there and a magnet manufacturing plant.
"USA Rare Earth is advancing rapidly towards its goal of bringing Round Top into production and establishing a resilient, 100% domestic supply chain for rare earth magnets, as well as its longer-term goal to establish a comparable mine-to-battery supply chain," said Texas Mineral Resources Chairman Anthony Marchese.
Under the original agreement, USA Rare Earth has an option to earn a 70% interest in Round Top by completing a feasibility study that details the engineering parameters and economics of developing a mine at Round Top.
Since entering this option in 2018, USA Rare Earth has funded the upgraded 2019 PEA; established a critical minerals processing facility in Wheat Ridge, Colorado; acquired the only rare earth magnet manufacturing equipment in the Americas; and paid all the carrying costs for the Round Top project. The New York-based company has also maintained a high-level of engagement with government agencies and potential commercial customers and assembled a world-class critical minerals technical team.
"USA Rare Earth has gone beyond the scope of what was initially anticipated in the joint venture with TMRC," said Marchese. "We believe it is in the best interest of TMRC's shareholders for USA Rare Earth to be well funded as it drives the Round Top project forward."
To help ensure USA Rare Earth gets the funding that will be beneficial to both companies, as well as establish a rare earth sector in the U.S., the Texas Mineral Resources board of directors has approved the acceleration of the original 70% earn-in if USA Rare Earth immediately funds the balance of US$10 million it was originally obligated to invest in Round Top.
An independent mining consultant is auditing the amount already invested to determine how much funds USA Rare Earth will be required to put into the joint venture.
USA Rare Earth can increase its Round Top ownership to 80% by paying an additional $3 million in cash to Texas Mineral Resources.
This would leave the Texas-based mineral explorer with a 20% stake in what is shaping up to be America's most important rare earth and critical minerals mine project, as well as full ownership of American Mineral Reclamation, a subsidiary formed to recover minerals from coal byproducts, industrial wastewater, acid mine drainage and scrap metal processing.