Processing Breakthrough Cuts Costs 93.5% as ARR Advances Billion-Dollar Rare Earth Project

Resource Expansion and Grade Improvement

American Rare Earths (ASX: ARR) has reported a significant 12.2% increase in its Halleck Creek Mineral Resource, now estimated at 2.63 billion tonnes with an average grade of 3,292 ppm total rare earth oxides (TREO). This upgrade, announced in early February 2025, notably includes a 29.7% growth in the Red Mountain area and a 29.4% expansion at the Cowboy State Mine, the project's initial development phase. These results reinforce Halleck Creek’s status as one of North America’s largest rare earth deposits, with the resource remaining open for further expansion both at depth and along strike.

Metallurgical Breakthrough Enhances Project Viability

In a breakthrough metallurgical development, ARR achieved a 10-fold upgrade in rare earth concentration at scale using conventional, low-cost beneficiation techniques such as gravity spirals and induced roll magnetic separation. This process elevates the grade from 3,438 ppm to an impressive 37,200 ppm TREO, while removing 93.5% of non-rare earth material early in processing. The result is a dramatic reduction in processing volumes by over 90%, which is expected to lower operating costs and validate key assumptions in the company’s scoping study. Ongoing optimisation efforts aim to further improve recoveries and impurity removal.

Updated Scoping Study Confirms Robust Economics

The updated scoping study, released in March 2025, integrates the expanded resource and metallurgical advances, presenting a compelling economic case for Halleck Creek. The base case scenario, targeting 3 million tonnes per annum (Mtpa) production, delivers a net present value (NPV10%) of US$558 million and an internal rate of return (IRR) of 24%, with a modest capital expenditure (CAPEX) of US$456 million and a payback period of 2.7 years. A more ambitious 6 Mtpa production case nearly doubles the NPV to US$1.17 billion, with an IRR of 28.4% and CAPEX of US$737 million, shortening the payback to 1.8 years. Notably, only about 2.4% of the total resource is planned to be mined in the first 20 years, indicating substantial long-term growth potential.

Advancing Project Development and Permitting

ARR secured a crucial license enabling test mining, trenching, and bulk sampling at the Cowboy State Mine. This milestone allows the company to collect bulk material samples essential for pilot plant testing and refining processing techniques at its Wyoming facility. The streamlined permitting environment in Wyoming, combined with the project's location on state land, positions Halleck Creek for efficient development and supports ARR’s strategy to establish a domestic rare earth supply chain aligned with U.S. critical mineral priorities.

Corporate and Financial Strength

On the corporate front, ARR repaid $2 million plus interest on a $3 million promissory note from Cobalt Blue Holdings, receiving shares as part of amended loan terms. The company maintains a strong cash position of $12 million as of March 31, 2025, supplemented by strategic funding interest including a letter of interest from the U.S. Export-Import Bank for up to US$456 million in project finance, grant funding from the State of Wyoming, and ongoing engagement with BMO Capital Markets to secure joint ventures and offtake agreements. These financial foundations underpin ARR’s capacity to advance Halleck Creek through pre-feasibility and pilot plant stages.

Strategic Implications

Halleck Creek’s scale, grade, and processing advancements position American Rare Earths as a key player in reshaping the U.S. rare earths industry. The project’s potential to reduce reliance on imports, particularly from China, aligns with growing geopolitical and economic imperatives for critical mineral independence. As ARR progresses towards pilot plant operations and final investment decisions, the market will be watching closely for further validation of project economics and successful financing arrangements.