By: Yonatan Brunshtein
For decades, the global supply of heavy rare earths has been a geopolitical choke point, with nearly 90% of processing controlled by a single nation. However, as of January 2026, the strategic landscape has shifted. The United States government is no longer just funding the industry from the sidelines—it has officially entered the arena as a major shareholder.
The latest move by the Department of Commerce to take a 10.1% equity stake in USA Rare Earth (Nasdaq: $USAR.US) is a historic crossing of the Rubicon for American industrial policy.
The "Golden Stake": A New Model for National Security
On January 26, 2026, the Department of Commerce signed a historic Letter of Intent (LOI) to provide USAR with a $1.6 billion funding package, including a $1.3 billion senior secured loan under the CHIPS Act. But the real headline was the equity: the government will receive 16.1 million shares and 17.6 million warrants, making it one of the company's largest stakeholders.
This "National Champion" model provides USAR with something more valuable than cash: a geopolitical moat. By taking a direct ownership stake at an implied entry price of $17.17 per share, the government has established a "hard floor" that de-risks the company for institutional investors and creates a barrier against foreign predatory pricing.
The "Mine-to-Magnet" Execution: 2026 is the Year of Reality
While many mining juniors remain in a "permitting purgatory," USAR is hitting critical operational milestones right now:
Stillwater, Oklahoma: The 310,000-square-foot magnet facility is currently in the final stages of commissioning Line 1a. It is on track to begin commercial production this quarter (Q1 2026), targeting an initial capacity of 1,200 metric tons of high-performance magnets per year.
Round Top, Texas: USAR has officially pulled the commercial production timeline for its Texas mine forward by two years, now aiming for late 2028. This deposit is uniquely rich in "heavy" rare earths like Dysprosium and Terbium, which are essential for EV motors and defense systems.
The Funding Fortress: Combined with a fresh $1.5 billion PIPE (Private Investment in Public Equity) that closed on January 28th, USAR now sits on a $3.1 billion capital stack. This eliminates the "liquidity risk" that often causes junior miners to fail before reaching production.
Market Dynamics: The "PIPE Dip" Opportunity
Despite the massive government endorsement, USAR’s stock recently gapped down from its $43 high to the $22.00–$24.00 range. This is a classic technical reaction to the $1.5 billion PIPE closing at $21.50 per share.
Institutional analysts, including Cantor Fitzgerald, have recently raised price targets to $35.00, noting that the current price levels represent a significant fundamental disconnect from the company’s new $3.5 billion liquidity position. With insiders like Director Michael Blitzer buying millions of dollars in shares at the $21.43 level, the "smart money" is clearly signaling that the floor is in.
Looking Deeper: The Strategic Audit
To truly understand how this $3.1B infusion changes the math on USAR’s 2030 EBITDA and its fair value relative to TSX-V peers, I’ve prepared a comprehensive Strategic Deep Dive Publication.
Inside the Full 5-Page Report:
The Valuation Math: A step-by-step breakdown of my $66.41 fair value target.
The Technical Moat: Why the Hitachi IP license gives USAR a legal monopoly on domestic magnets.
The "Bear Case" Audit: A transparent look at the ramp-up risks at Stillwater and the volatility of HREE prices.
Institutional Positioning: Who else is buying the $21.50 floor?
