American Rare Earths Project Rejects $400 Million Buyout Offer From California Firm

American Rare Earths, which may have one of the world's largest rare earths operations near Wheatland, Wyoming, has rejected a $400 million buyout offer from a group of investors from Oakland, California.

Pat Maio

April 29, 20245 min read

The Halleck Creek site in Wyoming, now called the Cowboy State Mine site.
The Halleck Creek site in Wyoming, now called the Cowboy State Mine site. (Courtesy American Rare Earths)

American Rare Earths Ltd., which recently indicated that its rare earth minerals project near Wheatland could need an infusion of $456 million to begin mine development and production, rejected a $400 million buyout offer from a group of investors from California.

The Wheatland-area mine could be one of the richest rare earths deposits in the world with an estimated 2.34 billion tons of rare earth minerals.

American Rare Earths, an Australian-founded exploration company working in Wyoming, wants to mine and process magnet metals, particularly neodymium and praseodymium, through its Wyoming Rare (USA) Inc. unit.

The rare earth minerals bonanza is the result of consumers starved for magnet metals integral to the green transition to electric vehicles, wind turbines, consumer goods, robots and military drones, missiles and chips needed for sophisticated computing power.

The offer to buy the Wyoming business was made by Papaya Growth Opportunity Corp. I, a special purpose acquisition company (SPAC) based out of Oakland, California, and underscores the kind of value American Rare Earths may have on its hands.

A Coveted Asset

SPACs are essentially a corporate shell through which investor money is raised via a public offering. Shares in the companies tend to trade around their IPO prices, at least until there’s some movement to buy a company and take it public. A SPAC has anywhere from 18 months to two years to do an acquisition — and in some cases can get an extension to do a deal.

In its statement rejecting the officer from Papaya, American Rare Earths said that it is aware of the “potential benefits” of the SPAC offer, especially since this was the same path pursued by larger rival MP Materials Corp., a rare-earth materials company headquartered in Las Vegas.

MP Materials, which has close ties with China investors, owns and operates the Mountain Pass mine, the only operating rare earths mine and processing facility in the United States. Mountain Pass is located in the Mojave Desert in southeastern California.

MP Materials went public in a $1.47 billion deal by merging with a SPAC in July 2020.

SPACs are very common, and had garnered a lot of interest nationally until the COVID-19 pandemic slowed their growth.

An example of one high-profile SPAC is Trump Media & Technology, which operates Truth Social, the Twitter-like company launched by former president Donald Trump. Last month, that company went public and became valued at $7.9 billion by merging with a SPAC.

California-based Papaya, the one with eyes on Wyoming’s rare earths, became publicly traded in late February 2022, and has been searching for a company to buy since.

Rare Earths Important

In a statement to Cowboy State Daily, Clay Whitehead, the founder and CEO of Papaya, declined to comment on whether his SPAC would pursue its acquisition of Wyoming Rare Earths or continue with one of the state’s other rare earths companies working to get a mine going.

“All Americans, not just investors, should care about the domestic lack of rare earth supply and processing capability to fuel our security and growth,” Whitehead said Monday.

“Our national defense, green energy, electronic vehicle and technology industries cannot function without free access to these critical minerals, yet China controls virtually all of the global supply chain at every level,” he said. “So, the opportunity and the need to fund great projects run by top-rate management teams here in America is clear, pressing and immense.”

American Rare Earths said the “nonbinding proposal” from Papaya would have resulted in Wyoming Rare (USA) being listed as a SPAC as a separate entity on the Nasdaq trading exchange in New York City.

The board of American Rare Earths said it is aware of the potential benefits of the SPAC proposal, but that it also is “mindful of the significant potential of Halleck Creek and the need to maximize returns to shareholders, while minimizing dilution.”

The Australian company said that it declined to advance in discussion with Papaya “at this time.”

The board said that it would continue to evaluate all “strategic alternatives” for the Wheatland area mine, and maximize returns to shareholders, particularly after reaching “certain near-term operational milestones that will provide investors further confidence in the significant value the company believes is presented by Halleck Creek.”

Last month, American Rare Earths CEO Donald Swartz told Cowboy State Daily that the $456 million investment in the Halleck Creek mine is a realistic path to tangible production over the next few years.

The mine was recently renamed the Cowboy State Mine.

Production levels at the mine are expected to reach more than 64 million tons during the mine’s life, he said.

That business controls 367 mining claims on 6,320 acres of a mix of state, federal and private land across the Halleck Creek Project area near Wheatland, and four Wyoming mineral leases on 1,844 acres on the same project.

Pat Maio can be reached at

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Pat Maio


Pat Maio is a veteran journalist who covers energy for Cowboy State Daily.