American Rare Earths saw a significant rise in shares after reports emerged that the United States is considering $456 million in debt financing for its Halleck Creek project in Wyoming, one of the largest rare earth projects globally.
The proposed funding, which matches the initial capital required for the project’s first stage, known as the Cowboy State mine, is set to come from the US Export-Import Bank. The financing could carry a repayment term of 15 years, pending successful due diligence, according to a non-binding letter of interest from the bank.
Following the announcement, American Rare Earths’ shares surged over 16%, closing at A$0.30, boosting the company’s market capitalization to A$143.2 million.
“This letter of interest from EXIM Bank is a significant milestone, underscoring the US government’s commitment to establishing a robust domestic rare earth supply chain,” said CEO Chris Gibbs. He added that the potential funding could facilitate the acceleration of offtake agreements and attract strategic investors.
The Halleck Creek project, developed by the company’s US subsidiary, Wyoming Rare, has been recognized as one of the world’s top 10 rare earth projects based on total rare earth oxides (TREO). The company envisions it as a multi-generational mine aimed at challenging China’s dominance in rare earth production, crucial for electric vehicle motor magnets.
Recent resource estimates indicate that Halleck Creek contains ore with grades of 3,196 parts per million (ppm) TREO, including valuable elements like neodymium and praseodymium, totaling approximately 7.5 million tonnes of contained TREO. The updated estimate, adhering to Australian JORC standards, includes 1.42 billion tonnes classified in the measured and indicated category.
“We are grateful for the recognition and support from EXIM Bank, which will be instrumental in securing the funding needed to expedite the development of this vital project,” stated Joe Evers, president of Wyoming Rare.
The proposed financing will be sourced from the federal agency’s Make More In America Initiative. Previously, American Rare Earths had planned to spin off Wyoming Rare into a separate special purpose acquisition company but canceled those plans in April. The company had aimed to replicate the successful model of MP Materials, which operates the only rare earths mine in the US, Mountain Pass in California.
In addition to Halleck Creek, Wyoming Rare holds other valuable properties, including the La Paz rare earth deposit in Arizona, the Searchlight project in Nevada, and the Beaver Creek project in Wyoming.
