USA Rare Earth, Inc.

Q3 2025 Earnings Call — November 6, 2025

Analyst Neil Dingman (William Blair): Thank you all, and thanks for the remarks, Barbara. My first question is just on a magnet facility. Specifically, you all mentioned the prepared remarks about being on track for the commission of the commercial scale production first quarter of next year. Just wondering, could you discuss, Barbara, for you or Rob, what steps still are left to achieve this and what will be needed beyond that to bring the entire Line 1 online?

Executive Rob: Sure. Rob, I'll take this one. So in terms of the line itself, it really comes down to execution at this point. And the two big elements of execution are making sure that we have the equipment installed and up and running, which is going to be completed in Q1 as part of our commissioning. And the second piece is human capital and making sure we have the trained engineers and manufacturing personnel to be able to operate the line. So those are the two big pieces that we're focusing on at this point in time. We are on track, as we said, to essentially complete installing what we need for pre-manufacturing by the end of Q1, beginning of Q2.

Analyst Neil Dingman (William Blair): Sounds great. Then my second question is just on LCM. While I know the deal hasn't closed yet, just be able to discuss what gives you all the confidence that going forward that LCM will be able to timely source its needed oxides.

Executive Rob: Yeah, sure. So it's part of our diligence process. What was really important to us is exactly that, that they had the ability to source the range of rare earth oxides and other critical minerals that we need to support not only our efforts, but the needs of their customers as well. And so if you look at what they're going to be doing and have been doing, they are going to be supplying us and they're going to be supplying third-party magnet manufacturers and also supplying us samarium and samarium cobalt to the U.S. government as well. And all of those sources are coming from Europe currently, and we expect that to be sufficient to meet our demand, you know, certainly over the next year to 18 months.

Analyst George Giannourakis (Canaccord Genuity): Hi. Good afternoon. Thank you for taking my questions, and welcome, Barbara. Maybe to start, I know you need to use discretion with regard to the customer conversations that you're having, but can you maybe give a little form and shape as to what end markets they may be involved in, and how broad in scope some of those conversations are? Thank you.

Executive Rob: Yeah, let me jump in on this. Probably the primary thing for us to be thinking about right now is that we prioritize the defense sector. And so conversations with leading aerospace entities and particularly those innovative frontrunners who need to assure reliable supply. Now, we all know that the aerospace sector is a small segment of the addressable market, but we prioritize that because of its criticality. In addition to that, then, we are really pleased at the response from both automotive and then the agricultural sector. Moving forward then, some of the more interesting things are the expanding energy sector. And as you heard in Rob's remarks, the details related to semiconductors as well as data center.

Executive Rob: No, that's great. That's perfect. And I think, George, as you look at the demand curve and overall demand, we don't have enough capacity to supply demand for 2026. And certainly, as you look at the demand curve expand in 27, in fact, our demand curve goes out to 2033. What we have to be doing is investing in capacity and capability to meet that demand for a wide range of magnet types. And so that's exactly what we're doing.

Analyst George Giannourakis (Canaccord Genuity): And maybe as a follow-up to that, to the extent you're trying to build this capacity, you had mentioned previously that it's obviously a capital equipment constraint and a human capital constraint. Which of the two is more tight and more difficult to procure? Thank you.

Executive Rob: I mean, I think they're both critical, and they're both elements that we have to work on. Now, the capital equipment constraint is a little bit easier to plan. And we do have to plan in advance for that because some of the equipment can take as long as a year to arrive. And as a consequence of that, we're already looking at line two. So we're making plans there to potentially move forward on that to make sure we have the equipment we need to expand beyond 1,200 metric tons and into 2,400 metric tons in 2026, 27 timeframe. So that's one piece, but that is somewhat predictable. The human capital front really is all about, again, it's an execution story and making sure you're planning in advance to make sure you have the people you need to be sufficient to run the equipment at full scale. And we're already doing that at our facility right now and making further plans to expand well in advance of our capacity that we have coming online.

Analyst Derek Sutterberg (Cancer): Yeah, thanks for taking my questions, and my congrats as well to Barbara. So, Barbara, starting with you, you mentioned that the LCM acquisition is on track to close before year-end. But I imagine because the acquisition is pretty strategic to the U.K. and U.S. militaries that there might be, you know, some added hoops to jump through. You know, to the extent you can, I'm wondering if there's a close collaboration between the U.S. and U.K. governments on the acquisition. And, you know, can you provide some insight into your confidence level that the acquisition will actually close? And then I've got to follow up.

Executive Barbara: Yeah, thanks, Derek. Good question. Yeah, we actually have high confidence in this. Right now, the UK government, of course, will go through a national security interest determination rate of their own. We don't see any signals of issues there. And in fact, you can witness the close collaboration of our governments in their ongoing work, particularly in this critical minerals sector. We believe that expansion in the UK is the appropriate first step as we look to really scale this capability outside of China. The LCM has already begun to just order ahead of demand as we are doing for the Stillwater facility in Oklahoma. They're getting ready for the increased demand on their operations. And in fact, Grant Smith has been circling the globe working with all of his stakeholders to ensure everyone understands, in particular, the value proposition of scaling this business and enabling LCM to continue to address the needs of the full competitive field. This is an area where LCM will have a broad set of customers that even extend beyond those to be addressed by our magnet-making capability.

Analyst Derek Sutterberg (Cancer): Got it. That's helpful. And then, Rob, I think in the past, correct me if I'm wrong, the plan is to sort of do sort of a cost-plus model for magnet agreements. In that scenario, would all of the plant overhead and direct labor be sort of rolled into the target gross margin you're talking about?

Executive Rob: That's correct. That's correct.

Analyst Derek Sutterberg (Cancer): Got it. And then can you help us sort of quantify the variable and fixed costs, you know, maybe for the first 1,200 tons or the first line fully up and running, or maybe it's easier to do for the full plant just as we're nearing production here? I wonder if you can help us understand some of the variable and fixed costs estimates.

Executive Rob: Yeah, let me. I don't have that in front of me right now. Let us follow up on that. I'd be happy to do that.

Analyst Subhash Chandra (Benchmark Company): Yeah, thank you. You know, the question, so you talked about, you know, the comfort with oxides. I'm just curious if that extends to the heavies and sort of, you know, with the LCM relationship and your expansion, I think, of your customer base. Where does the heavies investment, where's your comfort level there?

Executive Rob: Yeah. So, I mean, so in terms of heavies and global sourcing right now, as I mentioned, I mean, we feel based on current global capacity for heavies, we feel very good that the current capacity can supply us over the next year to 18 months. What is happening in parallel is, is there is a number of places where heavy capacity is expanding from upstream feedstock and growing. And the processing capability is being expanded in a number of places in parallel. That capacity does have to be put in place from, you know, processing heavy rare earth concentrates into oxides. but we feel confident based upon the number of different potential sources that are ex-China that we will have the source of heavies in place to be able to supply us going forward. And it's more than a handful of projects that are going on to be able to provide those heavies. And so what you're looking at is global ex-China expansion in parallel, given current capabilities and current investments that are going on.

Analyst Subhash Chandra (Benchmark Company): Got it. And then on the PFS, so the PEA, was it last time, A, does the, you know, sort of the PEA still apply? Does that need to be updated at all? Or should we sort of, you know, assume that as a, you know, a given, a constant before you launch the PFS?

Executive Rob: Yeah, I mean, the PEA is not our PEA. That's TMRC's PEA. I think we've always looked at it as something that provides a general guideline as to what types of minerals are there. But our flow sheet is not based upon their flow sheet. It is a different flow sheet. And so the economics that we're looking at are different than those on the PEA. So I would say it's helpful but doesn't really apply to our approach to deriving economics from the heavies and critical minerals out of Round Top.

Analyst Subhash Chandra (Benchmark Company): Okay, got it. So we should wait for your PSS for the actual economics.

Executive Rob: Yeah, you bet. I mean, the economics that we're looking at are very good, but it is a different, it assumes a different flow sheet and slightly different mix of rare earths and minerals, particularly ours is focused on heavies. Our flow sheet is really focused on heavies and critical metals. It is not really focused on lights.

Analyst Suji Da Silva (Roth Capital): Excuse me, Suji Da Silva, your line is open. Please go ahead with your question.

Executive Suji Da Silva: Apologies, sorry about that. Thank you. Go ahead. So hi, Rob and Lionel, and Barbara, best of luck in the new role. So the initial customer MOUs are hitting a phase now where you'll be getting POs. I'm wondering if the pricing is coming in as expected, if the customers are comfortable with the levels you had kind of guided to earlier.

Executive Rob: As expected, yes.

Analyst Suji Da Silva (Roth Capital): Great. And then your thoughts on larger customers who might support line expansion with capital infusions of their own versus using USAR capital to grow across the diversified customers. Any updated thoughts there?

Executive Rob: Yeah, I mean, we're still primarily focused on using our own capital to expand the line. I mean, you raise a good question. It is a debate. But given the demand and the demand curve that we have across a wide range of customers and industries, it does support going on our own in terms of our investments near term. Now, having said that, of course, we cannot rule out a large customer, many of which we are talking to, coming in and taking down an entire line. But for the time being, we're going with a range of different customers across a range of different magnet types and be able to produce for them over a number of years using batch processing. So, yes, that is our current focus.

Executive Lionel McBee: This concludes our question and answer session. I would like to turn the conference back over to Lionel McBee for any closing remarks.

Executive Lionel McBee: Thank you. And thank you all again for joining us this evening and for your time. Please feel free to reach out to us with any additional questions tomorrow or over the coming days. Look forward to speaking with you. The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Q2 2025 Earnings Call — August 11, 2025

Analyst (Cantor Fitzgerald): Hi, this is Drew Norquist calling for Derek Soderberg. Thank you guys for taking the questions. I do have a few questions, but my first question is regarding the supply chain. You guys said that you should have enough supply to last about until 2087. I was wondering if that roughly equates to supplying that first 1,200-ton production line.

Executive (Title): That's right. Yeah, that's exactly right.

Analyst: Okay. And then... more focused on the mining operations. You guys did a preliminary economic analysis around the Round Top mine. Everything looks good there. I'm just wondering if there's an updated timeline on when the feasibility study could be expected to be done.

Executive (Title): No updated timeline today. What we did talk about last quarter was that we're targeting to build a pilot plant over the next couple of years. In order to build that pilot plant, it's contingent on us getting through our flow sheet and pre-feasibility study within that timeframe. That's what we're targeting. The work we're doing now is what's going to define whether or not we keep to that target or not. That's something we'll keep you guys updated on in the coming months.

Analyst: Sounds good. My next question is to you. MP Materials secured a floor price in their DOD deal for magnet production. I was wondering if that sort of directly or indirectly benefits you guys at all.

Executive (Title): Well, MP has quite a bit of NDPR. Our strength are heavy rare earths, so it doesn't necessarily help us directly

at this time, but where I believe it sends a strong signal and what we take is a great positive from the Trump administration is that they're willing to do price support.

So I would expect them to expand that as they look at the broader industry. I think they know they haven't solved heavy rare earths yet. NP does not have a strong heavy rare earth deposit. So I believe that they're going to be looking at expanding that. And my expectation would be we'd see similar things, not only in rare earths, but also in other minerals probably as well.

Analyst: Okay. And my final question is just regarding cash burn. Do you guys think your current cash level can sustain you up to full 4800 ton production or just go for that first 1200 production line before needing additional funding?

Executive (Title): Yeah, so what we've said previously is that the full four lines from a capex standpoint is at least $250 million and an additional 50 to $100 million of working capital. And our current cash balance right now is north of $130 million, actually. So, clearly, we will need to raise more capital. But having said that, we have about $280 million-plus in unexercised warrants already on our balance sheet. And as you've seen, our capital position has grown over the last three months here since because of the exercise of our warrants. So, we feel like we're in a good position.

Analyst (Roth Capital):

Our next question comes from Suji Da Silva from Roth Capital. Joshua, Rob, Lionel, congrats on the progress here. Trying to understand on the equipment, I think I heard you say you're putting some of the equipment in 1Q26. I guess some of that will come in even as the line starts to produce. I'm just curious on the timeframe there. And the CapEx 60 million, you said, will the bulk of that occur in calendar 25 or is that spread over the next two years?

Executive (Title): Yeah, I'll take the first half and Rob can take the second. So right now what we're commissioning is what I like to call the backbone. It's everything from where we get strip cast metal, the pieces of metal, all the way through the centering furnace where we would have magnet blocks come out of the centering furnace ready for finishing and coating and so forth. That is what we're commissioning actively now and what we're focused on getting commissioned by the end of the year. The finishing and equipment and coating equipment is what arrives next year and allows us to finish out the line. Much of that is arriving throughout the first quarter, and then we'd be commissioning throughout the first quarter to get into our finishing phase. Rod, do you want to take the second half?

Executive (Title): Yeah, sure. In terms of the CAP Act, as we said, we expect another $60-plus million this year. That is the bulk of the first phase of Line 1.

Analyst: Okay, great. And then I think, Joshua, you referred to an inorganic element of your strategy. Can you just talk about what? Um, that some of that may entail strategically is it tack on increasing sort of demand, um, geographic perhaps in terms of sourcing or technical capabilities, any color there would be helpful.

Executive (Title): Yeah, sure. You bet. I mean, I think when you look across the supply chain, from mine deposit to processing, to metalmaking strip casting all the way to magnets, what we're looking at is how we can fill in and strengthen any gaps we have. And as we look forward, how we can make sure that we're covering our own scaling as we grow. So I really look at it in three pieces. One is, you know, first is we need to build scale, right? And we need, second, we need that certainty of supply as we scale. And third is we want to control where we can the portions of supply chain just from a profitability perspective so we can avoid having profit on top of profit on top of profit. So what we'll be looking at is first is how, and then potentially recycling that can come in on the back end to provide oxide outside of everything else. So what we'll be looking at first is how we strengthen that supply chain, which could potentially add new capabilities, and it could potentially add just surety on supply. This could be joint ventures. This could be investments in our partners in other ways to ensure that we're locked and loaded for 26, 27 and onward. Because generally this industry is pretty undercapitalized outside of China. So we know we're going to need to invest to make sure that the capital is there so that we can scale. That's the goal.

Analyst: Makes sense. Last question and I'll pass it on. In terms of the end market applications, There's some pretty large-volume technical applications emerging right now, obviously data center, but then beyond that, drones, humanoid robots. I'm just curious, more generally, your ability to handle these customer requests for investigating customized magnets for them. How that scales to be customer-specific and tackle all these? Do you have to kind of stagger these so you can meet the initial requests? I'm curious whether some of these can be near-term or are more longer-term opportunities.

Executive (Title): Yeah, and you've cited a few that we've announced, right, drones and other areas, and it's a wide range of sizes in particular, and we'll be investing in the equipment we need to support them. These customers tend to congregate into, you know, general sizes and general shapes that we can hone in on, so it's not like it's bespoke for every customer, but some of it will get phased in, so it's not all going to be ready. What we're commissioning in the first quarter going into the second quarter as we start to commission and ship is not necessarily going to be all these capabilities. Some of those capabilities we'll be adding in mid-year. I think I talked last quarter about the fact that we'll be starting out with about 600 tons capacity, and then we'll be increasing that to 1,200 tons throughout the year. So some of that will happen as we're increasing throughout the year, and then some of that could follow on even from there. But we're certainly looking closely, you know, making sure at least from an ROI perspective that the equipment we're adding has the volume and profitability we need to have a good ROI on what we're investing in. But our goal is to be a broad player to a lot of these customers who right now don't have a home.

Analyst: Okay. Very helpful. Thanks, everybody.

Executive (Title): Thank you. And, ladies and gentlemen, with that, we'll be concluding today's question and answer session, as well as today's conference call. We do thank you for attending. You may now disconnect your lines.