U.S. Department of Defense funds Ucore's rare earth technology with US$4 million!

Rare earths are raw materials of crucial importance for numerous commercial technologies. Among other things, these not-so-rare but difficult-to-process elements are needed for permanent magnets, which are required, for example, in wind turbines to produce energy. This makes rare earths critical for the global energy transition. But they are also used in numerous defense applications. Both apparently reasons for the U.S. Department of Defense to provide Canadian Ucore Rare Metals (WKN U9UA / TSXV UCU) with $4 million. This is to be used for a project aimed at demonstrating the separation technology capabilities of Ucore's RapidSX rare earth technology.

Especially since it is the declared goal of the U.S. government and especially of U.S. President Joe Biden to significantly reduce the dependence of the U.S. on its geopolitical rival China in this area. Not only does the People's Republic have more than 60% of the world's total production of rare earths (USA, 15%), but China also accounts for 85% of the processing capacity for rare earths! And the United States imports about three-quarters of its rare earths from China, as U.S. Geological Survey (USGS) figures also show. Apparently, the U.S. Department of Defense now believes that Ucore's RapidSX technology could be part of the solution to this problem.

Comprehensive project specifically for the U.S. Department of Defense

As Ucore announces in the hot off the press release, the goal of the project is to demonstrate to the U.S. Department of Defense that it has the capability to commercially operate a sustainable domestic (i.e., U.S. and Canadian) processing facility for the conversion of heavy and light REE materials into saleable individual rare earth products. In addition, Ucore intends to demonstrate that its innovative separation process has the capability to enable the construction of additional domestic rare earth processing facilities.

In any case, the $4 million provided by the U.S. Department of Defense will allow Ucore to operate its RapidSX demonstration plant in Kingston, Ontario, almost continuously for extended periods of time, and will also allow demonstrating to the Department that RapidSX operates more efficiently than conventional solvent extraction processes. In addition, the project is to show that Ucore's separation technology can process both light and heavy rare earth elements using the same equipment, that the plant can be operated continuously using this process to process tons of material, and that an increase in technology readiness of Ucore's RapidSX process can be achieved.

More funding to come?

In parallel with the work at the Kingston demonstration plant, Ucore is moving forward with the development of a first, commercial production site - called Strategic Metals Complex (SMC) by the company. Ucore had decided in early April to build the first SMC at the England Airpark site in Alexandria, Louisiana, in part because of the extensive potential grant programs available, particularly from the local and state governments.

But Ucore also anticipates that, if the project with the U.S. Department of Defense is successful, follow-up funding from that is possible, which would support Ucore's rare earth separation capabilities in North America, led by its Louisiana operations.

Ucore's CEO Pat Ryan emphasizes the importance of the agreement with the U.S. Department of Defense beyond the project itself: "We believe Ucore has one of the most compelling business models for a Western rare earth supply chain. This U.S. DoD project will allow us to demonstrate the RapidSX™ rare earth separation technology platform and will include qualification trials for original equipment manufacturers in coordination with our commercial development activities at the planned SMC in Louisiana.

The rare earth processing opportunity presented to Ucore by this grant is critical as the company continues to seek and work with like-minded upstream and downstream partners as part of a Western rare earth supply chain solution."

Conclusion: The granting of US$4 million in funding to a Canadian (!) company by the United States Department of Defense is, to our knowledge, unusual and, we believe, strongly demonstrates once again the importance placed on Ucore Rare Metals' RapidSX process by the authorities! Especially since the granting of the subsidy also already represents a vote of confidence in the RapidSX separation technology. After all, the decision-making process spanned from November 2022 to early June 2023 and likely included in-depth reviews of the information provided by the company. In any case, we too believe that the U.S. Department of Defense grant represents a great opportunity for Ucore. The prospect of further funding following a successful project is also very promising.

Ucore will execute the project in phases, reporting and providing information on a regular basis. Payment milestones are divided into fixed installments and are tied to the successful completion of each phase. We look forward to hearing more of the further developments in the exciting relationship between Ucore and the US Department of Defense!

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