REalloys Inc. (NASDAQ: ALOY), a U.S.-based mine-to-magnet rare earth company, announced the signing of a non-binding Memorandum of Understanding (MOU) with U.S. Critical Materials Corp. (USCM), owner of the Sheep Creek rare earth project in Ravalli County, Montana. The agreement establishes a framework for REalloys to secure up to 10% offtake from the deposit, which averages approximately 9% Total Rare Earth Oxides (TREO) and is independently verified by Activation Laboratories and Idaho National Laboratory.
The Sheep Creek deposit contains confirmed dysprosium and terbium, two heavy rare earth elements critical for high-performance permanent magnets used in F-35 fighter aircraft, missile guidance systems, radar platforms, and other advanced U.S. defense systems. By securing a domestic feedstock source, REalloys aims to complement its diversified global supply network as procurement restrictions on Chinese-sourced rare earths take full effect in 2027.
The MOU also outlines a framework for potential strategic equity investment and equity exchange, joint pursuit of government financing, and coordinated government relations. REalloys CEO Lipi Sternheim stated that the company is executing a strategy to build a diversified supply network specifically designed to counteract Chinese dominance, with zero Chinese involvement at any stage. Harvey Kaye, Executive Chairman of U.S. Critical Materials Corp., emphasized 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 in Euclid, Ohio, produce advanced heavy rare earth metals, alloys, and magnet components for defense, clean-energy, and high-performance industrial applications. The company's Ohio facility serves federal logistics and procurement agencies supporting the Department of Defense, the Department of Energy, and NASA.
This partnership is significant because it addresses a critical vulnerability in the U.S. defense supply chain: dependence on foreign adversaries for heavy rare earths. The Sheep Creek deposit, with its high grade and confirmed dysprosium and terbium content, offers a domestic alternative that can meet defense procurement requirements. By integrating this resource into REalloys' midstream and downstream ecosystem, the partnership aims to create a fully domestic supply chain for strategic heavy rare earth materials, enhancing national security and reducing reliance on Chinese sources.
