DoD awards $2 million to ReElement for rare earth refining capacity

FISHERS, Indiana - The Department of Defense has awarded $2 million to ReElement Technologies Corporation to boost domestic rare earth element (REE) refining capabilities, according to a press release from American Resources Corporation (NASDAQ:AREC). The company, with a market capitalization of approximately $155 million, has seen its stock surge over 229% in the past six months, according to InvestingPro data.

The funding, provided through the DOD’s Industrial Base Analysis and Sustainment Program, aims to address challenges in sourcing allied raw materials and establishing a reliable industrial base for rare earth minerals in the United States.

ReElement’s technology uses Ligand Assisted Displacement chromatography to separate and purify rare earth elements to purity levels of 99.5% or higher. The company claims its process is up to 100 times more efficient and produces 80% less waste than traditional methods. While the technology shows promise, InvestingPro analysis indicates the company currently operates with significant debt obligations and weak gross profit margins. Get access to 13 additional ProTips and comprehensive financial analysis with an InvestingPro subscription.

The Marion, Indiana-based facility processes various feedstocks including ores, recycled magnets, and manufacturing waste, supporting the Department of Defense’s 2027 mine-to-magnet goal.

"We are proud to work with the Department of Defense to deliver innovative refining solutions that strengthen and secure the midstream segment of our domestic supply chain," said Mark Jensen, CEO of ReElement Technologies, in the statement.

Rare earth elements including neodymium, praseodymium, dysprosium, and terbium are critical components in defense applications such as fighter jets, nuclear submarines, missiles, and satellites, as well as commercial products like electric vehicles.

The company’s modular refining platform, originally developed by Purdue University for pharmaceutical purification, has been adapted to handle multiple minerals and feedstocks with what the company describes as exceptional efficiency and minimal environmental impact.

ReElement Technologies is a portfolio company of American Resources Corporation, which focuses on the extraction and processing of metallurgical carbon, iron ore, and critical minerals for the electrification market. Despite current challenges, analysts tracked by InvestingPro expect the company to achieve profitability this year, with a positive EPS forecast. Discover detailed valuation metrics and in-depth analysis in the exclusive Pro Research Report, available for over 1,400 US stocks including AREC.

In other recent news, American Resources Corporation has announced several key developments. The company has regained compliance with Nasdaq’s minimum bid price requirement, following a letter from Nasdaq confirming that its stock maintained a closing bid price of $1.00 or greater for 12 consecutive business days. This compliance satisfies the conditions set forth in Nasdaq Listing Rule 5550(a)(2). Additionally, American Resources confirmed it remains in compliance with Nasdaq listing standards after addressing a delayed quarterly filing, which was submitted on time.

In related news, ReElement Technologies Corporation, a subsidiary of American Resources, has entered a long-term supply agreement with Vulcan Elements to provide high-purity rare earth oxides for domestic magnet production. ReElement will supply magnet-grade neodymium, neodymium-praseodymium, and dysprosium oxides to support Vulcan’s manufacturing operations. Furthermore, ReElement has launched a new urban mining-to-magnet supply chain, offering toll processing services for recycled rare earth magnets. This initiative will produce high-purity oxides at competitive prices, ranging from $25 to $35 per kilogram.

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