Ucore Secures $18.4M in DoD Backing for Rare Earth Separation-Enough to Prove – But to Scale?

Highlights

• Ucore Rare Metals receives $18.4 million from the U.S. Department of Defense.
• The funding is intended to advance Ucore’s RapidSX rare earth separation technology to commercial scale in Louisiana.
• The company aims to process critical rare earth elements for defense and electrification technologies.
• Early production is targeted for late 2026.
• Despite DoD support, Ucore remains a speculative investment with no current revenue.
• Ucore has significant capital requirements to fully develop its technology.

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Halifax, Canada-based Ucore Rare Metals Inc. (opens in a new tab) (TSXV: UCU | OTCQX: UURAF) has announced (opens in a new tab) an $18.4 million expansion of its U.S. Department of Defense (DoD) contract to scale up its RapidSX™ (opens in a new tab) rare earth separation technology from pilot to commercial phase. The funding supports transferring Ucore’s proprietary technology from its Kingston, Ontario demonstration facility to a new commercial-scale refinery in Alexandria, Louisiana, with “early production” targeted for late 2026. The project aims to deliver processing capacity for critical elements, including praseodymium (Pr), neodymium (Nd), and dysprosium (Dy)—rare earths central to defense and electrification technologies.

While this funding represents a key milestone for Ucore and symbolic validation of its RapidSX™ technology, Rare Earth Exchanges (REEx) notes that $18.4 million may not be enough to complete and scale a full-spectrum rare earth refinery in the U.S., let alone one processing 2,000 tonnes of total rare earth oxides per year. But we remain open to the data.  Rare Earth Exchanges (REEx) will monitor and invite them to share more information.

Comparable commercial-scale separation projects (e.g., MP Materials, Lynas USA) have required well over $200 million in phased investment, not including feedstock sourcing or downstream conversion infrastructure. Ucore’s path to commercialization remains capital-intensive and high-risk, dependent on future funding rounds and successful demonstration of sustained technical performance at scale.

Moreover, the company remains in the early stages and is speculative. The RapidSX™ technology, while promising, has not yet been proven in a continuous commercial environment. Ucore’s “modular” pitch may reduce cost and speed up deployment. Still, without vertically integrated feedstock or established off-take agreements, it remains unclear how Ucore will compete against China’s subsidized juggernaut. The DoD’s support is crucial, but this is still an experiment. The project now has legs. But it still needs lungs.

How About Ucore Rare Metals’ Financial Position?

Ucore’s share price has rallied sharply over the past year, climbing over 110% to CAD $1.59—reflecting rising investor enthusiasm following DoD engagement and geopolitical momentum. Yet the financial fundamentals remain deeply speculative.

As reported by Yahoo Finance, the company (opens in a new tab) has no reported revenue, a trailing EBITDA of—$7.18 million, and a net loss of—$13.47 million. With just $627,000 in cash and a current ratio of 0.51, Ucore is dangerously illiquid, but this just-announced DoD deal certainly should help.

Its 36% debt-to-equity ratio and modest $15 million debt load are manageable for now, but this fragile capital structure is insufficient to sustain aggressive buildout without major new financing.

Critically, the company trades at a 2.67x price-to-book ratio, a premium typically reserved for growth firms with clearer revenue paths. That valuation is built on promise, not performance. REEx suggests potentially Ucore will require tens of millions more in equity or debt to reach its Phase I 2,000 tpa capacity—and likely hundreds of millions more if it ever hopes to build out SMCs in Canada or Alaska, or develop the Bokan-Dotson Ridge resource (opens in a new tab).

With de minimis institutional ownership, retail sentiment, and federal grants currently forming the financial lifeline, suggests REEx. The DoD injection is important.

Compared to a player like MP Materials, which has cash reserves of $759 million, vertically integrated mining operations, and active U.S. magnet production, Ucore’s position is embryonic. It has political tailwinds and a vision of technology. What it needs now is capital, consistency, and a supply chain strategy that can weather real-world economics, not just ride on strategic optimism.

Shareholders include:

Major Shareholder	Details
Randy Johnson*	Holds approximately 15.08% of the company’s shares, totaling 10,663,736 shares
Patrick Ryan	Chairman and CEO, owns about 0.1871% of shares, amounting to 132,290 shares.
Peter Manuel	Vice President, CFO, and Corporate Secretary, possesses around 0.0707% of shares, equating to 50,000 shares.

*A director and the President of Tyler Rental Inc., an Alaska-based enterprise with over 100 employees, which he founded as a start-up in 1989 and subsequently grew to a multi-state enterprise. Mr. Johnson formed Alaska Ship and Drydock (“ASD”) to operate the Ketchikan Shipyard under contract with the State of Alaska Department of Transportation and Public Facilities in 1993. Working in conjunction with the Alaska Industrial Development and Export Authority (AIDEA), he guided an $80 million shipyard expansion project at ASD, including a new 2,500-ton dry-dock, upland ship berthing, and an 80,000 square foot ship assembly hall and production support complex. He sold the company to Vigor Industrial in 2012, having grown it into a thriving enterprise with annual revenues of $35 million and up to 200 employees. He runs or owns other businesses.

Additionally, in January 2024, Hondo Private Equity LLC invested (opens in a new tab) CAD $2.16 million in Ucore through a non-brokered private placement, acquiring 3.6 million units at CAD $0.60 per unit. Each unit consists of one common share and one warrant, exercisable at CAD $0.75 per share over three years.

Please refer to the company’s official filings and disclosures for the most current and detailed information on Ucore Rare Metals Inc.’s ownership structure.

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REEx congratulates Ucore on the DoD funding—a big step. Note that REEx is investigating the quality and capability of RapidSX and will update you with material facts. For discussions, please visit the REEx Forum (opens in a new tab).