Rare Element Resources Seeks $30.9M to Fuel US Rare Earth Ambitions

FIRESTONE, CO – January 06, 2026 – Rare Element Resources Ltd. has announced its intention to raise approximately US$30.9 million through a rights offering to existing shareholders, a critical financial maneuver aimed at advancing its position in the race to build a domestic U.S. supply chain for rare earth elements (REEs). The funds are earmarked for the company's pioneering Demonstration Plant in Wyoming and for pushing forward the permitting of its larger Bear Lodge Rare Earth Project.

The move comes at a time of heightened geopolitical tension over the control of these strategic materials, which are indispensable for modern technology, from electric vehicles and wind turbines to sophisticated defense systems. The offering allows current shareholders to purchase additional shares at a significant discount, a strategy designed to fund the company's ambitious goals while navigating the capital-intensive reality of mineral development.

A Strategic Play for a Secure Supply Chain

The capital raise by Rare Element Resources (OTCQB: REEMF) is more than a standard corporate financing event; it represents a tangible step in the broader U.S. effort to mitigate its heavy reliance on China for critical minerals. China currently dominates the global rare earth market, controlling over 60% of mining and a staggering 90% of the complex processing and refining stages that turn raw ore into usable high-purity metals. This dominance has been identified by U.S. officials as a significant economic and national security vulnerability.

Global demand for REEs is surging, with some market estimates projecting the market to grow from over $7.2 billion in 2025 to more than $12.6 billion by 2035. This growth is largely fueled by the clean energy transition. Elements like neodymium and praseodymium (Nd/Pr), a key target for RER, are essential components of the high-strength permanent magnets used in EV motors and wind turbine generators.

In response to supply chain vulnerabilities, the U.S. government has initiated several programs, including provisions in the Inflation Reduction Act and funding from the Department of Defense, to encourage and support the development of a domestic "mine-to-magnet" supply chain. While the U.S. has significant rare earth deposits, including RER's Bear Lodge project, the primary bottleneck has been the lack of domestic processing and separation capacity. RER's efforts are aimed squarely at closing this gap.

The Investor's Dilemma: Dilution vs. Opportunity

For existing shareholders, the rights offering presents a clear choice. The company plans to issue one-quarter of a non-transferable subscription right for every common share held as of the January 30, 2026 record date. Each whole right will entitle the holder to purchase one new common share at a subscription price of US$0.24.

This price represents a steep discount to the company's recent trading price, which hovered around US$0.84 per share. While this offers a compelling entry point for participants, it also means that shareholders who choose not to exercise their rights will see their ownership stake significantly diluted. The offering also includes an oversubscription privilege, allowing shareholders who fully exercise their basic rights to purchase additional shares left unclaimed by others, further incentivizing participation.

This is the second major rights offering by the company in recent years, following a similar raise of approximately $35.8 million in March 2024. The recurring need for capital underscores the financial realities of a pre-revenue development-stage company. As of September 30, 2025, Rare Element Resources held $21.7 million in cash and cash equivalents. The new infusion of capital is vital to sustain operations and meet critical project milestones over the coming year.

Proving the Process at the Wyoming Demonstration Plant

The centerpiece of RER's strategy, and a primary beneficiary of the new funding, is its rare earth processing and separation Demonstration Plant in Upton, Wyoming. The facility, which is nearing full operation in the first quarter of 2026, is designed to prove the viability of the company's proprietary and patented technology at a larger scale.

This technology aims to be more environmentally sound and cost-effective than the solvent-extraction methods commonly used in China. The plant's initial goal is to produce up to 10 metric tons of separated high-purity neodymium/praseodymium oxide, providing crucial design, operational, and economic data needed to de-risk a full-scale commercial facility.

The project has already garnered significant government support, seen as a validation of its strategic importance. The U.S. Department of Energy is funding approximately $24.2 million of the plant's estimated $60 million construction cost, and the Wyoming Energy Authority has contributed a $4.4 million grant.

Crucially, the proceeds from the rights offering will also be used to advance projects beyond the initial Nd/Pr separation objectives. This includes applying the technology to separate the less common but highly valuable heavy rare earth elements and exploring the potential to process materials from third-party sources. Success in these areas could position the company not just as a miner, but as a central technology and processing hub for a future American rare earths industry.

Navigating the Path to Production

While the Demonstration Plant validates the processing technology, the long-term vision rests on the Bear Lodge Rare Earth Project in northeast Wyoming. Described as a significant mineralized district, the project's Bull Hill deposit is rich in the critical rare earths needed for permanent magnets.

The company announced in late 2025 that it was restarting the federal and state permitting process for the mine and an associated hydrometallurgical plant. RER plans to leverage the federal government's FAST-41 program, designed to streamline the complex and often lengthy environmental review and authorization process for major infrastructure projects.

Significant work from a previous permitting effort in the mid-2010s is expected to provide a solid foundation for the renewed push. The successful completion of this permitting process is the final major hurdle before a commercial-scale mining and processing operation can be developed. The funds from the rights offering are designated, in part, to see this critical regulatory phase through. The successful operation of the Demonstration Plant is expected to provide key data that will inform and potentially streamline the final design and permitting of the commercial-scale Bear Lodge project.

This capital raise is therefore a pivotal moment for the company, bridging the gap between technological demonstration and the path toward full-scale commercial production in a sector of immense strategic importance.