American Resources Corp (NASDAQ:AREC)’s ReElement Technologies subsidiary announced a $1.4 billion joint partnership with the US Department of War's Office of Strategic Capital (OSC).
The company said the funding, which includes two separate loans matched by private capital, supports the expansion of ReElement's partnership with Vulcan Elements and will directly support the production of advanced rare earth element separation, metallization, and magnet manufacturing capabilities in the US.
Vulcan Elements will receive a loan of $620 million, while $80 million will be loaned to ReElement Technologies.
"Our ongoing collaboration with Vulcan Elements is driven by a shared vision, mission and culture of execution," ReElement Technologies CEO Mark Jensen said in a statement.
"With support from the United States Government, we are positioned to deliver the secure, scalable, and sustainable solutions that our nation's supply chain urgently needs."
The company noted that with the increased manufacturing and processing capabilities enabled by OSC's loans, Vulcan Elements and ReElement will collectively scale to 10,000 metric tonnes of NdFeB magnet production capability, thereby significantly reducing the US NdFeB magnet supply chain gap.
The US Department of War will also receive warrants in ReElement Technologies in conjunction with the loan commitment.
American Resources Corp added that Vulcan Elements and ReElement Technologies are in ongoing discussions with the OSC to finalize diligence requirements.
Shares of the company jumped nearly 20% on the news first thing Monday morning, reaching $4.62 in early trading.