American Tungsten Corp. (TSXV: TUNG, OTCQB: DEMRF)
Building America’s Defense Critical Metals Supply
While industry attention has largely focused on rare earths giant MP Materials, a dark horse is making a spectacular run on the market. Shares of USA Rare Earth (NASDAQ: USAR) have skyrocketed approximately 94% over just five weeks. However, this impressive rally is fueled by more than just speculation about potential Trump administration investment; it’s backed by the company’s unique assets: a valuable mix of heavy rare earths and the critical mineral gallium, coupled with promising early customer commitments.
According to data from S&P Global Market Intelligence, USA Rare Earth’s stock climbed 15.2% in September and has surged another 57% so far in October, hitting all-time highs.
The recent explosive growth was ignited by two key catalysts. First, the company appointed Barbara Humpton, the former CEO of Siemens USA, as its new Chief Executive Officer in September. Then, in an early October CNBC interview, Humpton revealed that the company is in “close communication with the administration” regarding a potential investment deal, sending the stock soaring.
Market analysts note that President Donald Trump has been actively increasing stakes in critical minerals companies to bolster domestic supply chains. A notable example includes the U.S. Department of Defense’s acquisition of a 15% stake in MP Materials. This strategic push addresses a clear vulnerability: in 2024, 80% of rare earth elements consumed in the U.S. were imported, with a staggering 77% originating from China.
Unlike MP Materials, which specializes in light rare earths neodymium and praseodymium, USA Rare Earth is building a fully integrated U.S. supply chain. Its key advantage lies in the rights to the Round Top Mountain deposit in Texas, which holds the potential to produce both light and heavy rare earths, as well as gallium.
The company’s sintered neodymium magnet manufacturing facility in Stillwater, Oklahoma, is on track to produce its first batch of magnets in early 2025, with full production commencing in Q1 2026. At full capacity, the plant will produce 5,000 metric tonnes annually.
Gallium, a critical material for semiconductors and defense applications whose global production is also dominated by China, presents another significant market opportunity for USA Rare Earth. Management asserts that this diversified product portfolio gives it access to a total addressable market representing over $3 trillion in U.S. GDP, vastly exceeding MP Materials’ estimated $1 trillion market.
Despite not yet generating significant revenue, USA Rare Earth is gaining commercial traction. The company has secured a dozen initial signed agreements with customers in the automotive, defense, and data center sectors, accounting for 300 to 400 metric tonnes of pre-orders. It is also actively engaged in discussions with over 70 other companies.
Management anticipates selling out the entire initial 1,200 metric tonnes of production line capacity even before it reaches full operation by the end of next year. To secure raw materials, the company acquired UK-based LCM in September for $10 million in cash and $6.74 million in stock; LCM’s rare earth and strip cast alloys will be key feedstock for the Stillwater plant.
With a market capitalization nearing $3 billion, investors are betting heavily on USA Rare Earth’s growth potential as it moves closer to production and its first revenue. Against a backdrop of energy transition and geopolitics, companies building domestic rare earth supply chains are firmly in the spotlight.
