Ucore Rare Metals (WKN A2QJQ4 / TSXV UCU) is working diligently to commercialize its RapidSX technology for rare earth separation. With financial support from the U.S. Department of Defense – most recently $18.4 million – they are advancing the completion of a first so-called Strategic Materials Complex (SMC) in Louisiana. Rare earth production is expected to start here as early as next year! However, for this, Ucore absolutely needs suitable feedstock – and they have now secured this in a deal that the stock market celebrated with a 16% price increase to CAD 3.82 per share on approximately 3.4 million traded shares!
As Ucore announced yesterday evening, German time, it has signed a Letter of Intent (LOI) with rare earth company Critical Metals (Nasdaq CRML), which includes a ten-year (!) offtake agreement. According to the agreement, Critical Metals is to supply Ucore with 10,000 tonnes of rare earth concentrate annually from its Tanbreez project in Greenland. This would represent approximately 10% of the project’s planned initial production.
After hydrometallurgical processing, the concentrate is then ready for further processing at Ucore’s SMC in the USA, where high-purity, so-called heavy rare earth oxides are primarily to be produced from this mixed feedstock from Tanbreez.
Tanbreez Offers Ucore Enormous Opportunities
Pat Ryan, Chairman and CEO of Ucore, stated: “The Tanbreez project from Critical Metals Corp offers Ucore enormous opportunities, as it contains a high concentration of heavy rare earths, which are crucial for our processing facility in Louisiana and our downstream partners. Both Critical Metals Corp and Ucore share the common goal of reducing China’s influence on the rare earth ecosystem in the West, and we look forward to our partnership, which will enable both of us to meet the growing demand for rare earths while addressing national security challenges.”
According to Tony Sage, CEO of Critical Metals, this deal further validates the strength of the Tanbreez project in Southern Greenland. He emphasized that given the “immense” size of the project, they will subsequently also be able to supply other rare earth facilities in the USA.
Next Steps: Due Diligence and Final Offtake Agreement
The parties are now working diligently to finalize a definitive agreement. The conclusion of such a definitive agreement is subject to customary conditions, including the completion of due diligence, the determination of terms and conditions, and the necessary approvals.
Conclusion: With this long-term offtake agreement for 10,000 tonnes of heavy rare earth concentrates per year, Ucore Rare Metals adds an extremely important building block to its plans for commercializing the innovative RapidSX technology. Its significance is also demonstrated by the overwhelmingly positive market reaction. If, as planned, a first processing line at the SMC in Louisiana is completed as early as 2026 with the support of the US state of Louisiana and the US Department of Defense, the material will – presumably – already be available to immediately commence production. And thus, to come a step closer to building a supply chain independent of the dominant market player, China.
