Benchmark Investment Research has reaffirmed its Buy rating on USA Rare Earth Inc (NASDAQ:USAR), setting a price target at $15.00 in light of the company's recent announcements concerning its Round Top mine development efforts. The target price from Benchmark closely matches InvestingPro’s valuation, despite USA Rare Earth's shares currently trading significantly higher at $22.71, which may indicate a premium valuation supported by recent investor enthusiasm following a 91.65% yearly price increase.
The company has engaged Flour Corporation and WSP Global Inc. as its Engineering, Procurement, and Construction Management (EPCM) partners to undertake a definitive feasibility study for the Round Top mine project. This collaboration seeks to refine the project’s technical and economic parameters.
Production of heavy rare earth oxides is targeted for late 2028, marking a key milestone in USA Rare Earth's expedited commercialization strategy aimed at addressing supply chain challenges for critical materials.
Benchmark’s latest analysis clarifies that the valuation for the Round Top site has not yet been incorporated into USA Rare Earth's net asset value (NAV) calculations pending conclusive outputs from the ongoing feasibility study. Notwithstanding, the firm acknowledged that prevailing prices for rare earth elements suggest substantial intrinsic value for the mine once development proceeds.
On another front, USA Rare Earth has unveiled plans to establish a metal and alloy production facility in Lacq, France, designed to deliver 3,750 metric tons annually. This facility will complement an associated oxide processing plant operated by Carester SAS, aimed at a capacity of 1,600 metric tons per year and expected to commence operations by late 2026.
The move into Europe is supported by government investment assistance, indicating strong institutional backing for constructing an integrated rare earth supply chain within the region. These initiatives form part of USA Rare Earth's broader Accelerated Mine Plan, designed to accelerate project timelines while upholding rigorous technical and operational standards.
Overall, these strategic steps position USA Rare Earth as a significant emerging player in the international rare earth sector, signaling potential benefits to sectors engaged in technology, defense, and clean energy reliant on rare earth supplies.