USA Rare Earth could be valued at more than $1B as it considers IPO – Reuters

USA Rare Earth LLC tapped Goldman Sachs Group Inc. and BMO Capital Markets Corp. to explore a potential IPO that could value the company at more than $1 billion, Reuters reported Feb. 2, citing an anonymous source and various documents.

The company is considering going public through a special purpose acquisition company, which is expected to raise between $300 million and $500 million, and it has no plans to issue debt, according to the report. Goldman Sachs is also leading talks with potential customers, the newswire reported.

USA Rare Earth will use part of the proceeds for its Round Top mining development in Texas, which it aims to have in operation by 2023. The company can acquire up to an 80% interest in the project from Texas Mineral Resources Corp. under a November 2018 agreement.

A 2019 update of the preliminary economic assessment of Round Top defined a net present value of $1.56 billion, at a 10% discount rate and before taxes, with a 70% internal rate of return.