On June 2nd, Ucore Rare Metals reiterated the significance of a combined total of US$22.4M = C$30.8M in free-money grants awarded by the Dept. of Defense (“DoD“). Ground-breaking ceremonies in Louisiana, USA were held late last week.
On top of DoD funds, the State of Louisiana is providing US$15M of financial support (tax incentives, payroll rebates, infrastructure improvements, etc.) and the Canadian Federal government delivered a C$4.3M grant.
Together, that’s C$55M in grants + incentives — a very significant sum compared to Ucore’s market cap of C$92M. Readers should note the following two quotes from the press release,
” … upon the successful completion of the objectives of the OT Agreement, a follow-on or amended OT Agreement may be issued by the DoD to further support Ucore’s REE separation capabilities in North America…” AND,

“…the Company awaits further support opportunities which could result from Trump’s April 15th Executive Order, which encompasses a Section 232 investigation headed by the Dept. of Commerce to identify critical mineral shortfalls & projects to restore domestic capability.”
While not guaranteed, there’s a good chance of additional grants in the coming years from the DoD and/or other U.S. & Canadian entities.
In addition to free-money grants, management has been in discussions with prospective off-take partners for upfront cash payments. Upcoming news of off-take(s), funding & REE feedstock agreements offer near-term catalysts.
Since its April 30 high of $2.26, the stock is down 45% to $1.24. The June 2nd PR is a reminder that the Company is making real progress towards turning a profit as soon as next year. This valuation could offer an attractive entry point.
Most REE stocks, including Ucore, rallied hard on April’s shock & awe tariff news, but have since fallen precipitously based on the Trump Administration’s perceived easing of its stance via a mid-May “truce” with China.
U.S. stock markets have regained virtually all of April’s losses as if nothing happened. Yet, in the past week it’s become clear that U.S./China relations remain highly strained & volatile. The headlines below from just the past 24 hours demonstrate heightened tensions.

Both sides are engaging diplomatically to prevent further escalation, but the underlying strategic rivalry remains intact, and there’s a meaningful lack of trust.
The primary Chinese complaint centers on U.S. actions targeting Huawei Technologies’ (the Nvidia of China’s) AI chips. According to Bloomberg news, China accused the Trump Admin. of telling other countries that using Huawei’s chips would violate U.S. export controls.
A few days ago, the Secretary of State announced that the U.S. will “aggressively revoke visas for Chinese students,” a major escalation of tensions as an estimated 25% of foreign students are Chinese.

The U.S. demanded that companies stop selling chip-design software to Chinese groups. China responded by threatening legal action against anyone enacting U.S. restrictions on Huawei or other top Chinese tech firms.
I could go on and on about China/U.S. relations, but suffice it to say, they’re not good! This is more than just a trade war… It’s a Cold War spanning military, economic, technological, cultural & ideological realms.
This, plus other grave geopolitical risks: China/Taiwan, Russia/Ukraine, India/Pakistan, the Middle East, the U.S./Europe, etc., could place a floor under REE stocks.
Current events are a HUGE problem as China processes & refines over 90% of heavy REEs and manufactures ~90% of the permanent magnets. Today’s situation is as bad as when the U.S. briefly had a 145% tariff on China.
REE prices soared from early April to mid-May but have eased back…

Everyone knew it would be rolled back, and it was, to 30%. The buildout of critical domestic mining/processing/refining capacity is being compared to Operation Warp Speed to ramp up COVID-19 vaccines.
Why is this such a big deal? Adamas Intelligence forecasts a +8.3% CAGR in demand through 2035, triple that of copper. Adamas believes that robotics, especially humanoids, could dominate REE magnet demand from 2040 on.
So far, humanoid capabilities are limited, but they will improve every year for the next few decades, and prices will come down, ushering in a multi-trillion dollar industry larger than the global passenger vehicle market.
Notably, there are surprisingly few high-quality REE juniors trading in the U.S. & Canada to choose from. The U.S. needs a new “Manhattan Project” to kickstart domestic REE production, and I think it’s coming.

Ucore shares have doubled from their 52-week low, but the Company has only 74M shares outstanding. Ucore could look to up-list shares in the U.S., perhaps on NASDAQ, to expand its horizons.
Unlike most peers, Ucore’s REE processing facility is in the U.S., one of the best locations on earth amid this treacherous Trade/Cold War. Even better, the Company’s first manufacturing plant is in a highly strategic place in Louisiana that’s NOT subject to tariffs!
Unlike most pre-revenue peers, operations are expected to start next year. Unlike peers, Ucore will have significant flexibility in the REEs it works with and the crucial ability to opportunistically switch across light & heavy REEs.
The Company has been separating, processing & purifying REEs at its RapidSX™ commercial demo plant in Ontario. Thousands of hours have been logged. Management is developing a Louisiana, USA, Strategic Metals Complex (“SMC“).

The SMC is designed to process both heavy & light mixed REE chemical concentrates. Additional SMCs are being studied for the Canada & Alaska.
This is a facility poised to offer superior operating flexibility, plus the ability to scale up rapidly. Management outlines the deployment of 2-3 modular operating lines in Louisiana by mid-2026, and seven by 12/31/26.
RapidSX is (up to 3x-7x faster, cheaper, more efficient, greener), and promises to utilize up to a 70% smaller footprint, with significantly lower cap-ex & power intensity.
A closed-loop, modular operation that’s “feedstock agnostic,” and can be stopped & started in hours, not days or weeks.

If all goes reasonably as planned, in two years run-rate revenue on seven lines could be over C$260M. REE & Uranium producers MP Materials, USA Rare Earth, Inc., Cameco Corp., and Energy Fuels are valued at ~9.5x 2027e revenue.
Ucore is valued at under 0.5x 2027e (prospective, higher risk) revenue. I’m not suggesting Ucore should have a 9.5x revenue multiple anytime soon, but 2x-3x 2027e revenue seems reasonably achievable as de-risking milestones continue to occur.
Later this decade, the development of Ucore’s 100%-controlled Bokan-Dotson Ridge Rare Heavy REE project on Prince of Wales Island in SE Alaska could be partially funded with cash flows from Louisiana’s SMC.
The addressable market for REEs/magnets (especially heavy REEs) outside of China is immense compared to virtually zero mining, processing & refining of REEs across North America. Ucore has ambitious goals, but it will not flood the market with REEs, not even close.

To recap, under 75M shares outstanding, cash flow next year, valued under 0.5x 2027 expected revenue, critical operating flexibility with disruptive RapidSx technology to process, refine & sell both light & heavy REEs in the U.S.
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