Australian-based American Rare Earths Ltd. has restructured its rare earths project in Wyoming as part of a new strategic direction to attract Wall Street investment and accelerate development of its critical ores needed for national security purposes.
With Wyoming becoming ground zero for new development of rare earths deposits, companies are in a race to be the first to start producing.
The restructured project is now a 100%-owned, independent Wyoming-based entity that will make it easier to attract investors in compliance with federal securities rules rather than clash with foreign ownership restrictions.
“It’ll make the operation of the property a lot easier,” said Mel Sanderson, a board member of American Rare Earths, in an interview with Cowboy State Daily. “It’ll be a Wyoming project with Wyoming leadership.”
The new entity, called Wyoming Rare (USA) Inc., is considering moving its headquarters to either Laramie, where its technical staff is now based, or Cheyenne.
It’s developing it’s Halleck Creek rare earths deposit north of Wheatland.
“That will put us closer to our key partners in the state of Wyoming,” Sanderson said.
The company may even stay headquartered in Denver, Colorado, said Joe Evers, who was named president of the newly created Wyoming Rare (USA).
The decision to move the headquarters will be made before the end of the year, as well as rounding out the composition of its board of directors.
Evers, who was formerly the business’ general counsel, was instrumental in securing a $7.1 million grant in June from the Wyoming Energy Authority and the University of Wyoming’s Energy Resources Council to advance further exploration of rare earths.
Proximity to Laramie is important because it gives the company “a really good nexus into the University of Wyoming, which was very collaborative on the grant we recently received,” Evers told Cowboy State Daily.
Also noteworthy in Monday’s announcement is the departure of Don Swartz, the CEO who had headed the Halleck Creek rare earths project.
He will “explore new opportunities” while continuing to provide advisory services during the transition to new leadership through mid-November.
His replacement is Chris Gibbs, who previously was CEO and managing director for American Rare Earths, where he continues to sit on the board of directors.
Opening The Aperture
The project’s backers said in the announcement Monday that the new corporate structure “opens the aperture” for a range of possible investors to accelerate development of the project.
“We made the decision to relinquish some of that direct control out of Australia, and we put all of the operational controls, all of those decision-making responsibilities in the U.S., where they rightfully belong,” Sanderson said.
Capital raising for the Halleck Creek project was a motivating factor behind the restructuring.
“This enables us to evaluate a number of avenues to bring capital to the project,” said Sten Gustafson, vice chair of the Australian parent firm, American Rare Earths, who also was appointed chairman of Wyoming Rare (USA) Inc., the new Wyoming business unit.
In the interview with Cowboy State Daily, Gustafson cited the possibility of raising investment money from private equity firms or special purpose acquisition companies, commonly known as SPACs.
“That’s the point of this restructuring, to basically open the aperture of opportunities to bring in capital,” said Gustafson, who pointed to “going public via merging with a SPAC,” or a “big private equity fund that is looking at developing these sorts of assets.”
These are not typical avenues of investment in Wyoming.
“We’re keeping all of the options open and we’re going whichever way delivers the maximum value,” Gustafson said.
He declined to comment on whether any discussions were taking place with investors.
Australia’s American Rare Earths Ltd. has created a 100%-owned, independent business unit, Wyoming Rare (USA) Inc., to attract more investors and accelerate its rare earths project, located north of Wheatland, Wyoming. Above, geologists with Wyoming Rare (USA) have been testing the size of the deposit and quality of its rare earths materials over the past year. (Matt Idler for Cowboy State Daily) 
Core samples from the rare earths development north of Wheatland, Wyoming. (Matt Idler for Cowboy State Daily) 
Australia’s American Rare Earths Ltd. has created a 100%-owned, independent business unit, Wyoming Rare (USA) Inc., to attract more investors and accelerate its rare earths project, located north of Wheatland, Wyoming. The company has been testing for the size of the deposit and quality of its rare earths materials in an area north of Wheatland, Wyoming. (Matt Idler for Cowboy State Daily)
Chinese Dominance
Rare earths have caught the attention of military brass with the Pentagon who want domestic sources in the United States developed because of Chinese dominance in the rare earths sector.
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.
The exploration company 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.
This U.S. national security play has caught the attention of companies eyeballing Wyoming for mining rare earths resources, including American Rare Earths and Kentucky-based Ramaco Resources Inc., which is digging in an old coal mine in Ranchester where it hopes to begin a $100 million full-scale commercial processing plant by 2027.
Earlier this year, American Rare Earths indicated that project near Wheatland could need an infusion of $456 million to begin mine development and production.
In April, plans by American Rare Earths to develop its Cowboy State rare earths mine on Halleck Creek caught the attention of a group of investors from California who made a $400 million buyout offer. The offer to buy the Wyoming business was made by Papaya Growth Opportunity Corp. I, a SPAC based out of Oakland, California, and underscores the kind of value American Rare Earths may have on its hands.
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, otherwise it must return the money to its original investors.
American Rare Earths rejected the Papaya offer in late April.
Billionaire’s Influence?
Others outside of the U.S. have been looking at U.S. rare earths deposits, including Australian billionaire Gina Rinehart, who sparked consolidation possibilities earlier this year when she took a 5.3% stake in U.S. rare-earths producer MP Materials Corp. in Las Vegas.
Rinehart’s move is significant to Wyoming because the mining magnate with a fortune of more than $30 billion and the richest person in Australia, seems to be clearly making a move to consolidate rare earths, and has even made a play in the related lithium field.
Lithium is a key metal used in electric vehicle batteries.
Hancock not only took the MP stake, but also became a major shareholder in April in Australian-based Lynas Rare Earths, the largest producer of rare earths outside of China.
The news in April involving Rinehart’s ownership positions in Lynas and MP comes on the heels of Lynas ending discussions on a potential merger with MP in February.
The backers told Cowboy State Daily in a video conference call that the newly restructured corporation wasn’t designed as a “foot race” to beat out rivals in Wyoming who want to get the shovel in the ground ahead of their project.
“I’m not sure that we think of it directly as a race, because the potential needs, particularly in the United States for critical materials, means that there’s room for all,” Sanderson said.
The goal is to wean America off of Chinese rare earths supplies, she said.
“Part of the objective for Washington is breaking ties and dependence on China,” she said. “So the more rapidly that we can advance a variety of projects in the United States, the better off it is for America, because at the end of the day there is no more secure of a supply chain than what is mined and refined in the U.S.”
Evers offered another perspective.
“Maybe the race is more about what good things can come to the state of Wyoming, and if everybody advances a project, then this makes Wyoming a more attractive place to continue this step of development in the rare earth elements and critical minerals space,” Evers said.
Pat Maio can be reached at pat@cowboystatedaily.com.
