USA Rare Earth Inc. (NASDAQ:USAR) is one of the small-cap stocks that are on fire right now. On April 21, USA Rare Earth entered into a definitive agreement to acquire the Serra Verde Group for ~$2.8 billion to secure a diversified global supply chain for critical minerals. The transaction consists of $300 million in cash and the issuance of over 126 million new USA Rare Earth shares. Expected to close by Q3 2026, the acquisition includes the Pela Ema mine and processing facility in Goiás, Brazil, which is a rare large-scale producer of magnetic and heavy rare earths such as dysprosium, terbium, and yttrium.

The Serra Verde operation, which commenced production in 2024 following a $1.1 billion investment, is backed by $565 million in financing from the US International Development Finance Corporation. To further de-risk the project, the company has secured a 15-year offtake agreement with a special purpose vehicle funded by the US government and private sources. This agreement includes price floor guarantees for essential elements like neodymium and praseodymium, ensuring long-term stability for the production of high-performance NdFeB magnets.USA Rare Earth (USAR) to Acquire Serra Verde Group for $2.8B to Secure Critical Mineral Supply Chain

By the end of 2027, the facility is projected to reach its phase-one capacity of 6,400 tonnes per annum of total rare earth oxides, generating an estimated annual EBITDA of $550 to $650 million. This acquisition complements USA Rare Earth Inc.’s (NASDAQ:USAR) existing capabilities, including its recent commercial production of high-purity yttrium in the UK.

USA Rare Earth Inc. (NASDAQ:USAR) is a domestic supplier of rare earth magnets and heavy rare earth elements, currently developing a vertically integrated, domestic supply chain for rare earth element magnet production.

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