A rare earth company preparing for the January 1, 2027 rare earth deadline…

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Preparing For The Rare Earth Deadline Ahead

On January 1, 2027, new restrictions take effect on Department of War procurement of certain rare earth magnets from China and other covered countries…and supply outside China remains limited.
 

One company is working to assemble a North American supply chain from mine to magnet.
 

Now REalloys (Nasdaq: ALOY) and the U.S. Army have executed a non-binding term sheet for a potential long-term Enhanced Use Lease of up to 75 years at Tooele Army Depot in Utah.
 

The proposed framework would give the Army a right of first offer to purchase product from a potential heavy rare earth processing facility, subject to applicable federal law and procurement requirements.

On January 1, 2027, Section 857 of the FY2023 National Defense Authorization Act will prohibit the Department of War from procuring covered permanent magnets containing rare earth materials mined, refined or produced in covered foreign countries, including China.

That’s a challenge, because China accounts for more than 90% of global magnet rare earth separation and refining capacity…and the West spent decades letting that capability leave.

Beijing has already restricted exports of rare earth separation and magnet-making technology, and it now requires licenses for key heavy rare earths.
 

REalloys (Nasdaq: ALOY) is working to assemble what it believes Washington needs: a North American supply chain spanning feedstock, processing, metallization and potential magnet manufacturing, with existing operations at its facility in Euclid, Ohio.
 

And as you’re about to see, the U.S. Army is now considering a potential role for REalloys.

Where The Chokepoint Sits

The United States has rare earths in the ground. What it lacks is the ability to process them into the metals and alloys that go inside magnets.
 

Processing is where raw minerals are separated, purified, converted into metals and alloyed to exact specifications. It takes specialized furnaces, a trained workforce and years of accumulated know-how.

REalloys estimates a new competitor starting from scratch could need three to seven years to build comparable alloy production.

The stakes are high, too. By the Department of War’s own figures, an F-35 requires more than 900 pounds of rare earth elements, a DDG-51 destroyer 5,200 pounds and a Virginia-class submarine 9,200 pounds. McKinsey projects demand for magnet rare earths roughly tripling by 2035.

A Platform Built Link By Link

REalloys is assembling activities across the supply chain, from feedstock to metallization and potential magnet manufacturing.

On the upstream side, REalloys holds a 100% interest in the exploration-stage Hoidas Lake project in Saskatchewan, which is supported by an S-K 1300 Technical Report Summary with a Mineral Resource Estimate of 711,000 tonnes Measured at 1.858% total rare earth oxides (TREO) and 1,442,000 tonnes Indicated at 1.929% TREO (2,153,000 tonnes Measured and Indicated at 1.884% TREO). No Mineral Reserves have been established, and economic viability has not been demonstrated.

REalloys has a definitive long-term offtake agreement with Critical Metals Corp. covering 15% of monthly Phase 1 production from the Tanbreez project in Greenland. Tanbreez is not in production, and deliveries depend on product specifications, qualification requirements and development of the project. REalloys also has non-binding arrangements with U.S. Critical Materials, Ramaco Resources and Patriot Exploration & Mining, none of which provides for the purchase or sale of material.

In the midstream, REalloys partners with the Saskatchewan Research Council (SRC), a Canadian provincial research and technology organization that operates one of the few heavy rare earth separation facilities outside China.

In exchange for funding the upgrade of SRC’s facility, REalloys has an upfront allocation of 80% of the NdPr metal and dysprosium and terbium oxides produced at SRC’s Rare Earth Processing Facility, purchased at SRC’s cost of production plus an agreed margin, and a right of first refusal on uncommitted volumes.

Downstream, the Euclid facility produces rare earth metals, alloys and magnet materials. Q2 2026 net revenues were $0.8 million, primarily from sales under short-term contracts with the Defense Logistics Agency and the U.S. Department of Energy’s Ames National Laboratory.
 

In July 2026, REalloys signed a non-binding letter of intent with South Korea’s JS Link to evaluate a North American magnet platform. Any future magnet production remains subject to further development, qualification and definitive arrangements.

The Army Opens Its Gates

On June 25, 2026, the U.S. Army selected REalloys for exclusive negotiations toward a potential Enhanced Use Lease at Tooele Army Depot in Utah.

Then, on November 3, REalloys and the U.S. Army executed a non-binding term sheet setting out the principal commercial terms for a potential Enhanced Use Lease of up to 75 years at Tooele Army Depot.

If a definitive lease is executed, REalloys would develop, finance, build, operate and ultimately decommission a heavy rare earth processing facility on approximately 200 acres at Tooele Army Depot, under an initial 50-year lease term with one potential 25-year renewal option, subject to specified conditions, including Army consent. The United States would retain title to the land.

The Army would have a right of first offer to purchase product from the facility, subject to applicable federal law and procurement requirements.

The facility would process and refine target critical minerals, including dysprosium and terbium.

Project consideration would consist of annual base rent at fair market value beginning at lease commencement, plus participation rent beginning upon commercial operations, with terms to be agreed in the definitive lease. The term sheet is non-binding, other than certain customary provisions, and the Army is not obligated to purchase any product.

Execution of a definitive lease remains subject to conditions, including agreement on base rent and participation rent, Army acceptance of REalloys’ development plan, completion of environmental reviews and permitting, a satisfactory foreign ownership, control or influence review, project financing, REalloys Board approval, and applicable Army determinations and Congressional notifications. If these conditions are not satisfied or waived within 18 months, either party may terminate the term sheet. There can be no assurance that a definitive lease will be executed.

What Comes Next

The company has laid out a two-phase plan:
 

Phase 1: SRC’s upgraded facility targets roughly 525 tonnes of NdPr metal, 30 tonnes of dysprosium oxide and 15 tonnes of terbium oxide a year, with commercial intake expected in Q3 2027.

SRC’s Saskatoon facility anchors the midstream of REalloys’ platform…and REalloys has committed to fund its upgrade, with $13.6 million advanced as of June 30, 2026.

Phase 2: A planned, wholly owned, larger-scale integrated separation and metallization facility with design targets of approximately 3,000 tonnes of NdPr metal, 200 tonnes of dysprosium metal and 45 tonnes of terbium metal a year, with initial operating capability targeted no later than 2030. These design targets are not guidance, and the capital required is expected to be substantial and materially in excess of REalloys’ current cash resources.
 

The first milestone: REalloys is targeting separated material for potential customer qualification as early as Q4 2026. Qualification targets do not mean that commercial supply will be available by January 1, 2027.
 

REalloys has committed approximately $58.3 million to fund the SRC upgrade and its planned metallization facility through commissioning, which is targeted for Q1 2028, with dysprosium and terbium metal output targeted for the first half of 2028.
 

In its Q2 2026 Form 10-Q, the Company stated that it does not expect funding of these commitments to depend on any specific future financing, although additional capital will be required for longer-term initiatives, including Phase 2, Hoidas Lake and the potential Tooele project [Company to confirm this remains current]. REalloys closed an approximately $100 million private placement (gross proceeds) in June 2026 and was added to the Russell 3000® Index.
 

A non-binding memorandum of understanding with Japan’s JOGMEC may support efforts to develop, qualify and supply rare earth materials and magnets.

A Board With Deep Industry And Defense Ties

Executing a plan like this takes relationships as well as capital, and REalloys’ leadership brings both:

• Chairman Stephen duMont is president of GM Defense and a former Raytheon executive who also worked at Boeing.
• General Jack Keane, a retired four-star general and former Vice Chief of Staff of the U.S. Army, has advised presidents and defense leaders.
• David MacNaughton, Canada’s former ambassador to the United States during USMCA negotiations, adds cross-border credibility for a supply chain spanning both countries.
• Joe Kasper, who chairs the Advisory Board, is a former chief of staff to the Secretary of Defense with two decades across the Department of War, Homeland Security and Capitol Hill.

A Head Start Measured In Years

REalloys estimates that a new competitor starting from scratch could need three to seven years to build comparable alloy production. The Section 857 procurement restriction takes effect January 1, 2027.
 

REalloys is advancing several pieces: a definitive Tanbreez offtake and non-binding feedstock arrangements, supply rights at SRC, existing operations in Euclid and a non-binding Army term sheet for Tooele. Execution remains subject to financing, approvals, construction, feedstock availability, customer qualification and other risks.
 

Follow REalloys (Nasdaq: ALOY) as these developments unfold.

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