REalloys Inc. (NASDAQ: ALOY), a U.S. mine-to-magnet rare earth company, announced the signing of a non-binding Memorandum of Understanding (MOU) with U.S. Critical Materials Corp. (USCM) to secure up to 10% offtake from the Sheep Creek rare earth project in Ravalli County, Montana. Sheep Creek is reported to be the highest-grade rare earth deposit in the United States, averaging approximately 9% total rare earth oxides (TREO) with confirmed dysprosium, terbium, yttrium, and neodymium-praseodymium (NdPr). The deposit spans over 7,277.5 acres with more than 60 identified carbonatite formations, independently verified by Activation Laboratories and Idaho National Laboratory.
The offtake agreement, once finalized, will supply domestically sourced heavy rare earth materials directly into REalloys' advanced midstream and downstream operations, supporting U.S. strategic defense stockpiles. The heavy rare earths dysprosium and terbium are critical for high-performance permanent magnets used in F-35 fighter aircraft, missile guidance systems, radar platforms, and other advanced defense systems. With procurement restrictions on Chinese-sourced rare earths taking full effect in 2027, this partnership provides a domestic feedstock source that complements REalloys' diversified global allied-nation supply network.
The MOU also establishes a framework for potential strategic equity investment and equity exchange, joint pursuit of government financing, and coordinated government relations. REalloys CEO Lipi Sternheim emphasized the company's strategy of partnering with highest-grade developers across allied nations to build a diversified supply network designed to counteract Chinese dominance. Harvey Kaye, Executive Chairman of USCM, highlighted that Sheep Creek is the highest-grade rare earth deposit in the country and is now connected to the only midstream and metallization platform in the Western Hemisphere capable of converting that resource into defense-ready metals.
Under the MOU, the parties will advance metallurgical test work, optimize HREE processing flowsheets, and negotiate a definitive long-term offtake agreement, with reasonable efforts to execute within one year. REalloys' downstream operations are located in Euclid, Ohio, where the company produces advanced heavy rare earth metals, alloys, and magnet components for defense, clean-energy, and high-performance industrial applications. The facility serves federal logistics and procurement agencies supporting the Department of Defense, Department of Energy, and NASA, as well as the broader Defense Industrial Base.
This strategic alliance aims to fortify the U.S. rare earth supply chain with zero Chinese involvement at any stage, aligning with national security objectives. The partnership is expected to enable coordinated congressional engagement and joint pursuit of government financing mechanisms such as DOE Title XVII loan guarantees, DPA Title III awards, and EXIM Bank financing. As the U.S. seeks to reduce dependence on foreign adversaries for critical minerals, the Sheep Creek deposit and REalloys' processing capabilities present a fully domestic solution for heavy rare earth supply.
