USAR

Good afternoon, and welcome to the USA Rare Earth First Quarter 2026 Earnings Conference Call. All participants will be in listen-only mode. I would now like to turn the conference over to J.B. Lowe, Vice President and Head of Investor Relations. Please go ahead.

Thank you, Gary. Good afternoon, and welcome to USA Rare Earth's 2026 first quarter earnings conference call. With me today are Barbara Humpton, Chief Executive Officer, and Rob Steele, Chief Financial Officer. Following Barbara and Rob's updates across our business and quarterly results, we will open the lines for Q&A. I would like to remind participants that today's discussion may contain forward-looking statements. Please refer to the press release and our SEC filings for a discussion of risk factors. Listeners who do not have a copy of the press release or associated presentation may access these documents by visiting the investor relations section of the company's website. With that, I will turn the call over to Barbara.

Thank you, J.B. USA Rare Earth is at a defining moment. Our mission remains clear: to be the global champion in rare earths and the partner of choice for the advanced materials that underpin Western national security and technological innovation. The initial months of 2026 were defined by our transformational and strategic actions. By announcing three critical transactions, Serra Verde, Carester, and the consolidation of TMRC, we are successfully closing the loop on our global mine-to-magnet value chain. Upon completion of these transactions, USA Rare Earth will operate a fully integrated industrial platform that spans three continents and we believe will secure the critical materials essential for allied technological leadership. Our agreement to acquire 100% of the Serra Verde Group is a watershed moment for the Western rare earth industry.

This transaction secures a one-of-a-kind operating asset, the Pela Ema mine in Brazil, which is currently the only scaled producer of all four magnetic rare earths outside of Asia. Serra Verde's 100% 15-year offtake agreement with the U.S. government-financed SPV that includes price floors for not only NdPr, but for the first time dysprosium and terbium is a watershed moment. This will provide transparent, reliable price signals previously absent in the market. Additionally, this transaction is expected to accelerate our path to positive cash flow generation, effectively providing an immediate upstream bridge to our domestic Round Top project. We also believe this acquisition strengthens our U.S. and allied government relationships and provides multiple embedded growth opportunities, including a potential phase 2 doubling of Pela Ema's production capacity.

The transaction adds significant leadership depth through the appointment of Sir Mick Davis and Thras Moraitis to our board, with Mr. Moraitis also serving as President of the combined company. Next, our planned strategic investment in Carester amplifies our global leadership in heavy rare earth processing, including from recycled sources. We believe our partnership will provide us with contractual and equity relationships across the allied supply chain. In addition, it will grant us access to world-class engineering capabilities and IP that we can apply to the development of our own facilities. Finally, by consolidating 100% economic ownership of the Round Top project, we will streamline our operations, governance, and decision-making to fully capture the high margin growth of one of North America's most unique heavy rare earth deposits.

Together, we believe these three moves will transform USA Rare Earth from a development stage project into the world's most comprehensive integrated rare earth platform, and we're building this platform from a strong financial position. In January, we announced a letter of intent with the Department of Commerce to provide $1.6 billion in funding. We're currently in the final stages of completing definitive documentation and expect this process to be finalized this month. This support, following an intense due diligence effort, represents a validation of our asset base, business model, and growth plans and will significantly de-risk our path to full scale production. We also successfully closed a $1.5 billion PIPE. This capital, augmented by the anticipated funding from the Department of Commerce, provides the ability for us to accelerate our build-out, not only in the United States, but across three continents.

Beyond our strategic acquisitions and investments, we also made great strides in the development of our operations as we build the partner of choice in rare earth elements, oxides, metals, and magnets. The sense of urgency we're seeing from industrial partners and customers has increased dramatically in recent quarters and is present across each of our businesses. The growing interest in our capabilities includes deep engagement with blue-chip OEMs, tier 1 defense contractors, and pioneers in the data center, aerospace, and physical AI infrastructure sectors. For many of our potential partners, the need for a secure and reliable supply chain for rare earths and critical minerals has moved from an aspiration to a strategic imperative. We're moving with speed to meet this need. We hit the ground running in the first quarter with several major achievements. In March, we commissioned phase 1A at our Stillwater magnet manufacturing plant.

This transition from developer to operational manufacturer will allow us to initiate customer-ready production of sintered NdFeB magnets in the second quarter, followed by fulfilling sales to customers in the second half of 2026. Our commercial momentum is clear, with frequent on-site visits from leaders in the semiconductor, industrial motor, heavy equipment, and aerospace sectors. We're seeing strong interest from potential customers in qualifying and purchasing non-China NdFeB magnets. In several cases, we're seeing demand for safety stocks of semi-finished block magnets that can be finished into final shapes as needed. In our midstream operations, we're scaling metal, alloy, and strip cast capacity to meet our own internal manufacturing demand and increased interest from a broader set of potential customers. Here, too, we're seeing inquiries for both real-time needs and safety stock. Complementing this growth, we have advanced our plans for Less Common Metals in Lacq, France.

Co-located with Carester's Caremag facility, this hub will establish a comprehensive European supply chain for rare earth processing and metal production, further strengthening our globally integrated mine-to-magnet platform. This heightened level of interest for specialized light and heavy rare earth metals underscores the unique technical capabilities we possess at LCM. Beyond our capabilities in magnetic metals and alloys, we're receiving an increasing number of inquiries for more specialized products, including gallium and gadolinium. Just last month, we completed our first commercial yttrium metal pour, which places us among a limited number of producers outside of China for a metal essential to high-temperature aerospace components, such as turbine blades. Executing this vision requires the A team.

We recently expanded our leadership team with the appointments of Valerie Ford Jacob as Chief Legal Officer, Gregory Bowman as Chief Global Policy Officer and Head of External Affairs, J.B. Lowe as Vice President and Head of Investor Relations, and Chaitan Kansal, CK, as Chief Commercial Officer. Upon the closing of the Serra Verde Group transaction, the addition of Thras Moraitis as President will further strengthen our executive leadership team. We've also added vital expertise to our board with Thras, Sir Mick Davis, and GlobalFoundries Executive Chairman, Dr. Thomas Caulfield, whose experience in scaling complex industrial platforms is essential to our global speed. Now, let me hand it off to Rob Steele to cover our financial performance.

Thanks, Barbara. Now turning to our Q1 results. Revenues for the quarter were approximately $6 million, derived from our metal-making business at LCM. We are actively expanding our operations at LCM to meet the growing demand for metals and alloys and expect revenue to increase at LCM throughout 2026. Gross profit was slightly positive, and we expect gross margins at LCM to improve as utilization at the U.K. facility increases throughout the year. Operating expenses in the quarter were approximately $37 million. When adjusted for M&A-related expenses and stock-based comp, our ongoing operating expenses were approximately $25 million. We reported a net loss attributable to common stockholders of $67 million or a loss per share of $0.34. This includes a non-cash fair value adjustment of $43.6 million related to our warrant and earn-out liabilities.

Excluding this, our adjusted net loss was $24.1 million or an adjusted net loss per share of $0.12, which we believe is a more accurate reflection of our core operating performance. Moving to our balance sheet. We are in a very strong financial position, ending the quarter with approximately $1.75 billion in cash, which includes proceeds from the $1.5 billion PIPE that closed in January. Our strong cash position has provided us the flexibility and liquidity to execute and accelerate our mine-to-magnet strategy, which our recently announced investments and activities demonstrate. As we keep advancing, we will continue to actively and prudently manage the capital intensity required to build out a world-class integrated value chain.

Capital expenditures for the quarter were approximately $40 million, largely related to the build-out of our magnet manufacturing capacity and ramp-up at LCM U.K. As Barbara mentioned, we are currently in the final stages of completing definitive documentation for our LOI with the Department of Commerce and expect this process to be finalized this month. Moving to an update on our operations. At our Wheat Ridge R&D headquarters, our hydrometallurgical facility is currently commissioning solvent extraction circuits for the three demonstrations: the Round Top flow sheet, third-party MREC separation and magnet swarf recycling. All three demonstrations are expected to be up and running within the next several weeks. We have also commenced vat leaching at Round Top, which will supply feedstock to the hydrometallurgical facility.

At Round Top, we are moving forward with our definitive feasibility study, which we expect to be completed year-end and published in Q1 2027. We have already put in new infrastructure and have initiated drilling on our water lease. Key process data is currently being validated by Fluor and additional processing inputs critical to the PFS will be completed within the next month. We are also in the process of awarding our civil geotechnical drilling contract for all nine mining infrastructure, including the heap leach pad sites at Round Top. In addition to the demonstration work at Round Top and at Wheat Ridge, we will soon commence a three-rig drilling campaign to drill over 15,000 feet of core for resource upgrading and geotechnical pit design.

At Stillwater, we are ramping magnet capacity to reach a run rate of 600 metric tons per annum by year-end. After commissioning phase 1A in March, we have started to produce commercial magnets that can be used for customer qualification. As Barbara mentioned, much of the near-term demand we see in magnets is from customers looking to build safety or insurance stock of semi-finished block magnets, which we are currently producing at Stillwater. In addition, our finishing equipment is already on site and should be up and running at the beginning of Q3. In midstream, we expect LCM to reach 3,000 metric tons per annum of metal making at strip cast capacity by Q4.

As Barbara mentioned, beyond our growing internal metal and alloy needs, we are seeing heightened third-party demand for the unique technical capabilities we possess at LCM from both NdFeB and samarium cobalt magnet manufacturers and specialty rare earth and critical metal and alloy customers. We are proud of how much we've accomplished this year so far and look forward to closing all of our transactions. While we will not be providing financial guidance at this time, we do look forward to our first Investor Day, which we are planning for Q3 2026 after we close the Serra Verde transaction. Operator, we are now ready to open the lines for Q&A.

We will now begin the question-and-answer session. To ask a question, you may press star, then one on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question is from Derek Soderberg with Cantor Fitzgerald. Please go ahead.

Yeah. Hey, everyone. Thanks for taking my questions. I wanted to start with the Serra Verde acquisition. In the 8-K, it looks like the valuation currently is $3.64 billion. That might be higher than previous targets. But it says, there's potentially a 25% increase, should your share price perform. Can you just remind us what the mechanics of the equity portion of the consideration is? You know, is there a cap on the share issuance? You know, how should we sort of model the ultimate dilution if the stock performs well here?

Yeah, I mean, the way the deal is structured is $300 million of cash and just under 127 million shares of common stock.

Got it. That's helpful. As my follow-up, sort of a two-part question on the CHIPS funding. It looks like the agreement was supposed to be signed last month. Barbara, you talked about some intense due diligence. Can you maybe just expand on what might have caused, you know, the slight delay? I'm curious if anything's changed regarding the milestones the government is requiring to unlock the various tranches of the capital. Thanks.

Okay, great. Yeah, Derek, thanks. Happy to address this. First of all, let me say I am so thrilled to be working with the Department of Commerce because imagine since January, when we first announced the letter of intent, we've had significant announcements on our side. I will tell you that the professionals at the Department of Commerce, first of all, abided by all guidelines in terms of how they treated us through this. They were an investor and recognized the fact that we have a growing business we needed to attend to. When we shared with them our intent to, for instance, acquire Serra Verde, it caused them to have to go back through and review and validate decisions they had already made.

I'm happy to say that every move we've made has actually strengthened our deal. There was great work to be done on the Commerce side. We are in the final stages. We look forward to closing the transaction very shortly, and we'll be back to you with news. Rob, anything you would answer along with that?

No, I think that really covers it. We're in the final stages of the documentation and we'll be sharing more when we complete it.

Grateful to those patriots who are busy helping us get this launched.

Great. Thanks so much.

The next question is from Neal Dingmann with William Blair. Please go ahead.

Good afternoon, Barbara and Rob. Nice details. My question is just on feedstock. You talk about ramping up. I know you continue to be right on schedule for 1A, the 600, I think by the end of this year, and then ramping to the 1,200. Do you already have that feedstock? Will that be coming partly from Carester, or could you just talk about where are you gonna be sourcing that?

I mean, look, we already have the feedstock to commence operation in the initial phases here, and we have a lot of opportunities as we ramp production going forward, including from Carester, where we already have plans and an agreement with them to recycle our swarf that we produce from the Stillwater magnet-making facility. As you know, they have essentially in Europe, unmatched heavy rare earth processing capability. There's also a lot of other sources that we can obtain feedstock, including through Serra Verde, and hopefully the SPV associated with that. We feel very good about the position we're in and our ability to scale our feedstock with our operation.

Perfect. Thanks, Rob. Then just secondly, really, like the Carester deal, the strategic partnership, everything announced there. Could you talk about, you know, just timing behind as far as, you know, I don't know if you?

We lost you, Neal.

Yeah, unfortunately, Neal's line disconnected right now, so we're gonna move on to, Again, if you have a question, please press star then one. The next question is from Suji Desilva with Roth Capital. Please go ahead.

Hi, Barbara. Hi, Rob. Barbara, you highlighted the customers and wanting safety stock. I'm just curious if you could kind of give us some sense, maybe quantify or qualitatively how drastic the situation is relative to where the customers would like to be, and if that could soak up the, you know, first several quarters or years, even if your demand just to get customers in a comfortable position?

Yeah. I think this is a really critical thing for us to be sharing with all of you about our sales strategy and magnets. We recognize that the situation is dire. Should China choose to withhold materials at any time, it's critical for manufacturers in the U.S. and with our allies to be able to get access to materials. Our strategy is not to devote our manufacturing lines to a small number of off-takers. Instead, we're focused in on reaching a broad set of stakeholders across many sectors of the economy. Already we're beginning to hear pronouncements from, for instance, auto OEMs who are directing their suppliers to maintain up to a one-year supply of permanent magnets and/or metals. We know the demand is out there.

We are being approached by aerospace and defense customers who have a January 1st, 2027 deadline for being able to source materials from sources outside of China. Really the key thing here is let me go back to magnets. When we deal with magnets, the process, the sales process is first identify potential demand. That's called at the top of the funnel. There's an on-site validation process. We're entertaining many, many potential customers with on-site visits. Third is to actually get a production line up and running. Check. Completed that during Q1. We're capable of producing the prototype material that customers need in order to do their own independent validation of the quality of our magnets. That process is going on right now.

That ultimately leads to purchase orders, and we expect those to start flowing in the second half of the year. What's interesting is metals are similar, but we've had a lot of success with customers visiting Less Common Metals, having an opportunity to get prototype material, including that very coveted yttrium metal. Look for that to get exciting. The thing I've been most surprised by is that here we are doing our pilot drilling at and the early demonstration work, our pilot plant, et cetera, for Round Top, and already we have customers lining up to establish supply agreements for the oxides that we'll be producing from that deposit. I am very bullish on the demand signal being strong, and the only question we have to our team is: How fast can we move?

That's very helpful color. Thank you, Barbara. Then maybe for Rob, there were some filings after the close registrations. Can you talk about which of those are additional shares versus existing shares, new shares planned? Any color there would be helpful. Thanks.

Sorry, on the registration statements?

Correct. Yeah.

I'm sorry. Where were you?

Oh.

Yeah. I mean, look, we have. Sorry. Go ahead, Suji.

No, I mean, those are new shares versus existing shareholders registering.

Yeah. I mean, it's a combination of shares that are being registered right now. As part of our merger process, of course, we're going through a proxy where we're registering the shares that we're acquiring, and we're maintaining the registration statements for the securities that we issued associated with the PIPE. There's multiple shares that we're registering right now.

Okay. Thanks, Rob. Thanks, Barbara.

Once again, if you have a question, please press star then one. Please stand by as we poll for questions. Our next question is from Neal Dingmann with William Blair. Please go ahead.

Sorry about that. I'm not sure what happened. For you or Rob, my question was, the second question I had was on Carester. Love the strategic partnership there. Any details you could give as far as timing, volumes, you know, kind of all that good stuff, how quickly we might continue to see that ramp up.

Timing of the close is coming up, we're still working on final definitive documentation there. Their facility starts ramping near the end of this year, is when they come online, and they'll scale over the course of 2027. They're gonna be servicing, they're gonna be sourcing and servicing in Europe. Some of that material will ultimately flow back into us as well as into ultimately into Japan.

Do you know what percent, Rob, yet is for you all, or is that too early to tell?

I mean, it's in our agreement, so we have a fixed amount, but it's based upon scaling, and so at this point it's a little bit too early to tell.

Very good. Thanks for the details.

Yeah, I want to pause on Neal's question because you'll see plenty in the press today about the fact that processing is the weak link in the chain. What I think investors really should focus in on is that our ability to bring processing from the world leaders outside of China, have that intellectual property available to the team at USA Rare Earth gives us the ability to work with not only our own deposits, but deposits anywhere. The third party MREC line that we're standing up as part of our deal with the Department of Commerce says we can take material from other deposits and actually produce oxides that, again, flow through this value chain. We're not aiming for an integrated supply chain.

What we're doing is scaling every link in the chain, recognizing there are multiple off-takers for not only the raw minerals, the oxides as well, ultimately the metals and then the magnets.

This concludes our question and answer session. I would like to turn the conference back over to Barbara Humpton for any closing remarks.

Great. Thank you so much. I wanna thank everybody for joining us today. Let me come back to the question that Suji asked about customers, because there's a real distinction here about the strategy we're taking at USA Rare Earth. We know we're creating the platform that will be the leader within the global rare earth industry. As we get started with this flywheel, we're seeking to serve as many customers as possible, supplying safety stock, knowing that this is the high margin play. This is gonna be generating shareholder value as we address those areas of the economy that are most critical. We're playing out this strategy now. You've seen how fast we've been moving, I just wanna call everybody's attention to the things that are still ahead of us this year.

We are on the brink of signing that definitive agreement with the Department of Commerce. We're getting ready to commission the hydrometallurgical demonstration facility in Colorado. You can look for news this quarter. We're gonna be working on this definitive feasibility study for Round Top throughout the year. Look for details as we accomplish significant milestones toward that end. In Stillwater, we're building out the capacity and reaching the 600 metric ton per annum run rate that we're striving for. Then we're scaling out metal making. We'll be providing news to you, the shareholders, as we go because we want you to have insight as we build out this global leader. Thanks for joining us today.

The conference is now con- Goodbye.

The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.

Good afternoon, and welcome to USA Rare Earth's 2025 Third Quarter Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Lionel McBee, Vice President of Investor Relations. Please go ahead.

Thank you, operator. Hello, everyone, and welcome to USA Rare Earth's 2025 Third Quarter Earnings Conference Call. I'm joined today with our Chief Executive Officer, Barbara Humpton; and our Chief Financial Officer, Rob Steele. Earlier this afternoon, we issued our third quarter fiscal 2025 results. Our 10-Q, earnings release and slide presentation can be found on the Investor Relations section of our website at usare.com. Following Barbara and Rob's discussion of our quarterly results and updates on the business, we will open the lines for Q&A. During today's call, we may make projections and other forward-looking statements under the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995 regarding future events or the future financial performance of the company. These statements may discuss our business, economic and market outlook, growth expectations, new products and their performance, cost structure and business strategy. Forward-looking statements are based on information currently available to us and on management's beliefs, assumptions, estimates or projections. Forward-looking statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors. We refer you to the documents the company files from time to time with the SEC, specifically the company's Form 10-K and Form 10-Q. These documents identify important factors that could cause actual results to differ materially from those contained in our projections or forward-looking statements. All statements made during this call are made only as of today, November 6, 2025, and the company expressly disclaims any intent or obligation to update any forward-looking statements made during this call to reflect subsequent events or circumstances, unless otherwise required by law. And with that, I will turn the call over to Barbara. Barbara?

Thank you, Lionel. This is my first earnings call as the CEO of USA Rare Earth, and I feel privileged to lead this company at such a pivotal moment. Our work addresses what I believe is the defining business challenge of our era. I see this endeavor as mission-critical. The western world has awaken to the stark reality of how dangerously fragile our rare earth supply chain has become over the last 30 years, how critical these materials have become to every sector of our economies and just how dependent we've become on China to supply these critical needs. At USA Rare Earth, we are aggressively working to eliminate that single point of failure, diversify the supply chain and ultimately remove the geopolitical leverage for the benefit of the U.S. and our allies. We are well capitalized, debt-free and working to lead our industry forward. Our goal is to become the partner of choice across the value chain: investing, collaborating and consolidating to rebuild the proprietary technologies that will define the future. I have served just over 1 month as CEO. And during that time, I've had the chance to visit our sites across the United States, meet the team at LCM in the U.K. and hear from numerous customers and stakeholders. You've heard us present our mine-to-magnet strategy. But today, let me take you from magnet-to-mine and share my observations. First, magnets. At our magnet manufacturing plant in Stillwater, I met David Bushi and his team of engineers who are assembling Line 1a and preparing for commissioning. David's plan is rigorous, and the team is executing well. The entire facility from the manufacturing floor to the front door is being brought back to life. The magnet sales pipeline is strong. And while many of you are curious about the customers we are engaging, I know you will also understand our need to be discreet. The work we're doing is highly sensitive, both for national security and commercial reasons. In a moment, Rob will give you additional insights. But for now, I'll move to the next link in the chain, and that's metals. The acquisition of LCM, Less Common Metals, creates a unique competitive advantage and enhances our revenue-generating ability. The transaction is a transformational one that significantly accelerates our strategy and establishes a fully integrated rare earth supply chain. With LCM's proven operations, we gained more than 30 years of unparalleled expertise in metal and alloy production, securing the feedstock for our Stillwater facility and adding a critical link, connecting our domestic mining operations to our downstream magnet production. LCM will continue to meet demand for metals, alloys and strip cast from other customers. One of their most crucial offerings is samarium, recently identified by the U.S. Geological Survey as the #1 critical mineral at highest risk of having supply chain vulnerabilities. LCM's ability to produce samarium and samarium cobalt are vital to sectors, including defense and medicine. With the help of Grant Smith and his team of experts, we're also addressing the shortage of skilled talent in metal making by launching an apprenticeship program that will train U.S. metal makers, transferring critical expertise to rebuild America's rare earth supply chain. In short, this transaction combines domestic resources, advanced technology and world-class talent. We remain on track for closing before year-end and can't wait to welcome the impressive LCM team to our organization. Let's move on to processing. Now Grant Smith is keenly focused on the upstream sources that will provide the oxides needed to produce metals and alloys. And that's why I was thrilled to meet the processing team at USA Rare Earth. Ben Kronholm manages the midstream research and development lab in Wheat Ridge, Colorado, where we continue to progress our proprietary rare earth extraction and purification technologies. This integration across functions differentiates us in the industry and enables us to deliver value to our stakeholders. And that brings us to mining and at Round Top Mountain, North America's largest deposit of heavy rare earth and other critical minerals. We recently announced Alex Moyes, our new VP of Mining, who joins us from Ramaco. We're assembling a team with strong technical skills, operational experience and a shared dedication to building a resilient U.S.-based rare earth supply chain. Their efforts are turning this vision into reality. And it is within this context, vision to reality that we have several important milestones that we are pleased to announce regarding our processing and mining initiatives. The first is related to recycling. Our Wheat Ridge lab has now progressed our swarf recycling flow sheet through bench scale testing with promising results. This allows us to begin progressing with pilot scale testing of our recycling flow sheet in the first quarter of 2026. The ability to recycle our own swarf, which is reusing our scrap material from finishing magnets is an important capability to creating a circular supply chain and making our operating costs more efficient. Second, based on our successful leaching and SX piloting, we are now thrilled to begin the pre-feasibility study phase of Round Top development project. This is particularly exciting as we are moving to the PFS stage with our most challenging SX circuits derisked at pilot scale. We're targeting completion of our PFS around the third quarter of 2026. Lastly, while piloting these SX methods, we found that in addition to our heavy rare earth separations, we've also extracted and isolated hafnium. Hafnium is used in multiple strategic industries, including advanced semiconductors, nuclear reactors and aerospace materials, further broadening the breadth of our offering. As you can tell, this first month has been busy, and I'm motivated by what I've seen so far. And it's the people who matter. And no one has been more helpful to my onboarding than my partner in finance, Rob Steele, CFO of USA Rare Earth. He has exactly the background we need at this phenomenal moment of transformation. Let me hand the baton to Rob, who will take you through more details about the business.

Thank you, Barbara. I know I speak for the entire leadership team when I say we're inspired by your vision and the momentum you've already created. It's an exciting time to be part of this mission. Let me start with our cash position, which remains strong at over $400 million as of November 3, 2025. Including the exercise of the remaining investor warrants pursuant to our notice of redemption issued last week, we will obtain an additional $123 million of cash. Our strong cash position allows us the flexibility and liquidity to execute and accelerate our magnet-to-mine strategy as we secure, reshore and grow. For magnets, we continue to see thousands of tons of growing demand for 2026 and in particular, 2027 and beyond, across a wide range of industries, including agriculture, industrial, defense and medical as well as high-growth sectors like drones and data centers, sectors which are projected to double and triple in size over the next decade and require massive quantities of precision-engineered micromagnets with advanced surfacing. The question we consistently receive from our customers is how quickly can you produce, which speaks to the appetite for magnets made in the United States. Given our strong cash position, breadth of customer demand and growing pipeline into and beyond 2026, we are accelerating our plans for growth in our manufacturing capabilities and with our personnel. These plans include enhancing our magnet finishing capabilities to meet customer specifications across multiple industries, accelerating our investment in Line 1b to ramp Line 1 to 1,200 metric tons and making additional customer-facing improvements to our Stillwater magnet plant. Altogether, we should be able to complete this additional work for approximately $100 million. In addition, we will be investing in human capital and hiring in preparation for our Q1 commissioning and enhancing our core infrastructure, including systems and cybersecurity to ensure operational readiness. In September, we announced the acquisition of LCM, which creates value across our entire supply chain. LCM significantly accelerates our strategy and delivers unique ex-China metal making capabilities for the U.S., our allies and importantly, becomes our supply of strip cast for our Stillwater manufacturing facility. Their current capacity includes 1,500 metric tons of NdFeB strip cast and is expected to expand to 2,000 metric tons going into 2026. We will invest in and expand LCM's capabilities, and we will further benefit from an experience curve effect as we grow with LCM. We are planning on expanding LCM's capabilities in the U.S., U.K. and Europe to support the broader ex-China industry, including for a wide range of defense and industrial applications. These plans include establishing a strategic light and heavy rare earth metal and alloy manufacturing facility in France, building upon LCM's strong relationships with governments and supply chain customers. We look forward to sharing more as these plans crystallize over the next several quarters. As Barbara mentioned, the acquisition of LCM is expected to close by the end of the calendar year, subject to customary closing conditions, including regulatory approval in the United Kingdom. Regarding formal guidance for 2026, we look forward to sharing that with you during our fourth quarter results in early 2026. In the meantime, we are intensely focused on ramping our magnet production capacity and ensuring we have the flexibility to scale with customer demand. We are also in the process of securing the metal inventory needed to support projected growth in 2026 and beyond. And our feedstock sourcing strategy incorporates both mined and recycled non-China-based feedstock via our LCM acquisition, enabling us to lay the groundwork for sustained supply into 2027. Operationally at Stillwater, we will begin running metal to test our first manufacturing line in the next few weeks. This will be a key milestone that will allow us to validate our supply chain and qualify the raw materials on commercial scale equipment and paves the way for commissioning in Q1 2026, which remains on track. As for Round Top and Wheat Ridge, given our success with our bench and pilot testing, we will begin investing in our PFS in Q4 2025 and investing in our pilot for swarf recycling in Q1 2026. And as we are accelerating our investment in our capabilities for Line 1 and Round Top, we now anticipate adjusted ongoing operating expenses in Q4 2025 to be $13 million to $15 million. For the third quarter of 2025, we reported operating expenses of $15.9 million. Our ongoing adjusted operating expenses for the quarter were $8.9 million, adjusted for M&A-related expenses, stock-based compensation and severance costs. We reported a net loss attributable to common stockholders of $156.7 million or a loss per share of $1.64. This includes a noncash fair value adjustment of $142.4 million related to our warrant and earn-out liabilities. Excluding this, our adjusted net loss was $14.3 million or an adjusted net loss per share of $0.25, which we believe is a more accurate reflection of our core operating performance. Going forward, we will provide this adjustment to facilitate your analysis of our results. We ended the quarter with $257.7 million in cash and no significant debt, positioning us well to execute on our near-term milestones, the LCM acquisition and accelerate our manufacturing capabilities. In summary, we remain financially strong and are deploying capital with focus and discipline to support scalable long-term growth at attractive returns while meeting the needs of our growing customer base. We now have the financial flexibility to consider lower cost funding options for future phases, and we expect our cost of capital to improve as we continue to execute. Now I will turn it back over to Barbara for closing comments.

Thank you, Rob. So here's what you can expect from us. While the industry is in the middle of the geopolitical spotlight, we are focused on controlling what we can to capitalize on the market opportunity. We're advancing each of our key initiatives with precision. Our job is disciplined execution of our plan. We appreciate your outreach. Since we announced our acquisition of LCM, we've heard from many of you. You recognize the unique opportunity we have to transform the supply chain as well as the approach we're taking: open, collaborative and trustworthy. We aspire to be the partner of choice in this sector. The increased focus on critical rare earth only reinforces what we are building, a fully integrated U.S.-based rare earth material and magnet platform that supports national priorities, delivers supply chain stability and creates long-term value for our shareholders. We're working at the intersection of global necessity and technological innovation at a level not seen in decades. The simple truth is that industries worldwide cannot meet their ambitious goals without a stable supply of rare earth materials, and USA Rare Earth is helping to make that happen. But this isn't something we can do alone. As I've said publicly, networks beat hierarchies. We're collaborating across industries and governments to create an ecosystem that guarantees a reliable, sustainable supply for America and our allies. We are proud to be part of this mission and energized by the scale of what lies ahead. Operator, let's open the line for Q&A.

[Operator Instructions] The first question comes from Neal Dingmann with William Blair.

My first question is just on the magnet facility. Specifically, you all mentioned in the prepared remarks about being on track for the commissioning of the commercial scale production in first quarter of next year. Just wondering, could you discuss, Barbara or for you Rob, what steps still are left to achieve this? And what will be needed beyond that to bring the entire Line 1 online?

Sure. It's Rob. I'll take this.

Go ahead, Rob.

So in terms of the line itself, it really comes down to execution at this point. And the 2 big elements of execution are making sure that we have the equipment installed and up and running, which is going to be completed in Q1 as part of our commissioning. And the second piece is human capital and making sure we have the trained engineers and manufacturing personnel to be able to operate the line. So those are the 2 big pieces that we're focusing on at this point in time. And we are on track, as we said, to complete -- to essentially complete installing what we need for premanufacturing by the beginning of -- end of Q1, beginning of Q2.

Sounds great. And then my second question, just on LCM. While I know the deal hasn't closed yet, just be able to discuss what gives you all the confidence that going forward that LCM will be able to timely source its needed oxides?

Yes, sure. So as part of our diligence process, what was really important to us is exactly that, that they had the ability to source the range of rare earth oxides and other critical minerals that we need to support not only our efforts, but the needs of their customers as well. And so if you look at what they're going to be doing and have been doing, they are going to be supplying us and they're going to be supplying third-party magnet manufacturers and also supplying samarium and samarium cobalt to the U.S. government as well. And all of those sources are coming from Europe currently, and we expect that to be sufficient to meet our demand certainly over the next year to 18 months.

The next question comes from George Gianarikas with Canaccord.

Welcome, Barbara. Maybe to start, I just -- I know you need to use discretion with regard to the customer conversations that you're having, but can you maybe give a little form and shape as to what end markets they may be involved in and how broad in scope some of those conversations are?

Yes. Let me jump in on this. Rob, sorry, let me just jump in on this quickly with some information about those customer segments. The -- probably the primary thing for us to be thinking about right now is that we prioritize the defense sector. And so conversations with leading aerospace entities and particularly those innovative front runners who need to assure reliable supply. Now we all know that the aerospace sector is a small segment of the addressable market, but we prioritize that because of its criticality. In addition to that then, we are really pleased at the response from both automotive and then the agricultural sector. Moving forward then, some of the more interesting things are the expanding energy sector. And as you heard in Rob's remarks, the details related to semiconductors as well as data center. Rob, sorry, I jumped in on you.

No, that's great. That's perfect. And I think, George, as you look at the demand curve and overall demand, we don't have enough capacity to supply demand for 2026. And certainly, as you look at the demand curve expand in '27, in fact, our demand curve goes out to 2033. What we have to be doing is investing in capacity and capability to meet that demand for a wide range of magnet types. And so that's exactly what we're doing.

And maybe as a follow-up to that, to the extent you're trying to build this capacity, you had mentioned previously that it's obviously a capital equipment constraint and a human capital constraint, which of the 2 is more tight and more difficult to procure?

I mean, I think they're both critical, and they're both elements that we have to work on. Now the capital equipment is a little bit easier to plan, and we do have to plan in advance for that because some of the equipment can take as long as a year to arrive. And as a consequence of that, we're already looking at Line 2. So we're making plans there to potentially move forward on that to make sure we have the equipment we need to expand beyond 1,200 metric tons and into 2,400 metric tons in 2026-'27 time frame. So that's one piece, but that is somewhat predictable. The human capital front really is all about -- again, it's an execution story and making sure you're planning in advance to make sure you have the people you need to be sufficient to run the equipment at full scale. And we're already doing that at our facility right now and making further plans to expand well in advance of our capacity that we have coming online.

The next question comes from Derek Soderberg with Cantor.

My congrats as well to Barbara. So Barbara, starting with you, you mentioned that the LCM acquisition is on track to close before year-end. But I imagine because the acquisition is pretty strategic to the U.K. and U.S. militaries that there might be some added hoops to jump through. To the extent you can, I'm wondering if there's a close collaboration between the U.S. and U.K. governments on the acquisition? And can you provide some insight into your confidence level that the acquisition will actually close? And then I've got a follow-up.

Yes. Thanks, Derek. Good question. Yes, we actually have high confidence in this. Right now, the U.K. government, of course, will go through a national security interest determination, right, of their own. We don't see any signals of issues there. And in fact, you can witness the close collaboration of our governments in their ongoing work, particularly in this critical minerals sector. We believe that expansion in the U.K. is the appropriate first step as we look to really scale this capability outside of China. So the LCM has already begun. So just order ahead of demand as we are doing for the Stillwater facility in Oklahoma, they're getting ready for the increased demand on their operations. And in fact, Grant Smith has been circling the globe, working with all of his stakeholders to ensure everyone understands, in particular, the value proposition of scaling this business and enabling LCM to continue to address the needs of the full competitive field. This is an area where LCM will have a broad set of customers that even extend beyond those to be addressed by our magnet-making capability.

Got it. That's helpful. And then, Rob, I think in the past, correct me if I'm wrong, the plan is to sort of do sort of a cost-plus model for magnet agreements. In that scenario, would all of the plant overhead and direct labor be sort of rolled into the target gross margin you're talking about? And then...

That's correct. That's correct.

Got it. And then can you help us sort of quantify the variable and fixed costs maybe for the first 1,200 tons or the first line fully up and running or maybe it's easier to do for the full plant just as we're nearing production here? Wondering if you can help us understand some of the variable and fixed cost estimates.

Yes. Let me -- I don't have that in front of me right now. Let us follow up on that. I'd be happy to do that.

The next question comes from Subhasish Chandra with Benchmark Company.

The question -- so you talked about the comfort with oxides. Just curious if that extends to the heavies and sort of with the LTM relationship and your expansion, I think, of your customer base, where does the heavy investment? Where is your comfort level there?

Yes. So I mean -- so in terms of heavies and global sourcing right now, as I mentioned, I mean, we feel based on current global capacity for heavies, we feel very good that the current capacity will -- can supply us over the next year to 18 months. What is happening in parallel is there is a number of places where heavy capacity is expanding from upstream feedstock and growing. And the processing capability is being expanded in a number of places in parallel. That capacity does have to be put in place from processing heavy rare earth concentrates into oxide. But we feel confident based upon the number of different potential sources that are ex China that we will have the source of heavies in place to be able to supply us going forward. And it's more than a handful of projects that are going on to be able to provide those heavies. And so what you're looking at is global ex-China expansion in parallel given current capabilities and current investments that are going on.

Okay. Got it. And then on the PFS, so the PEA, was it last time -- a, does the sort of the PEA still apply? Does that need to be updated at all? Or should we sort of assume that as a given a constant before you launch a PFS?

Yes. I mean the PEA is not our PEA. That's TMRC's PEA. I think we've always looked at it as something that provides a general guideline as to what types of minerals are there. But our flow sheet is not based upon their flow sheet. It is a different flow sheet. And so the economics that we're looking at are different than those on the PEA. So I would say it's helpful, but doesn't really apply to our approach to driving economics from the heavies and critical minerals out of Round Top.

Okay. Got it. So we should wait for your PFS for...

You bet, yes. You bet. I mean the economics that we're looking at are very good. But it is a different -- it assumes a different flow sheet and slightly different mix of rare earths and minerals, particularly ours is focused on heavies. That's really important to understand. Our flow sheet is really focused on heavies and critical metals. It is not really focused on lights.

The next question comes from Suji Desilva with ROTH Capital.

Rob, Lionel and Barbara, best of luck in the new role. So the initial customer MOUs are hitting a phase now where you'll be getting POs, I'm wondering if the pricing is coming in as expected if the customers are comfortable with the levels you had kind of guided to earlier?

As expected, yes.

Great. And then your thoughts on larger customers who might support line expansion with capital infusions of their own versus using USAR capital to grow across the diversified customers. Any updated thoughts there?

Yes. I mean we're still primarily focused on using our own capital to expand the line. I mean you raised a good question. It is a debate. But given the demand and the demand curve that we have across a wide range of customers and industries, it does support going on our own in terms of our investments near term. Now having said that, of course, we cannot rule out a large customer, many of which we are talking to coming in and taking down an entire line. But for the time being, we're going with a range of different customers across a range of different magnet types and be able to produce for them over a number of years using batch processing. So yes, that is our current focus.

This concludes our question-and-answer session. I would like to turn the conference back over to Lionel McBee for any closing remarks.

Thank you. And thank you all again for joining us this evening and for your time. Please feel free to reach out to us with any additional questions tomorrow or over the coming days. Look forward to speaking with you.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.