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Round Top Texas Mineral Deposit Contains 100-Year Supply of Rare Earth Elements & Critical Materials

July 15, 2019

USA Rare Earth and its joint venture partner Texas Mineral Resources Corp. (OTCQB: TMRC), developers of the Round Top heavy rare earth and critical

materials mining project in southwest Texas, are poised to end the United States’ dependency on China for its supply of rare earth metals and other critical materials. Later this month, an expanded Preliminary Economic Analysis (PEA) of the Round Top project – assessing both its projected rare earth element production as well as production of another 13 U.S. government-designated critical minerals – will be released.

Rare earth elements (REEs) are essential for military hardware, such as satellites, aircraft engines, glass, photonics and lasers and for mobile and many electronic devices, LED displays, green energy applications like electric vehicles and wind turbines. Currently, the U.S. is 100% import-dependent for rare earths, while China is the world’s leading producer. The reliance on China for processed rare earth minerals places the U.S. in an economically and strategic vulnerable position in both the defense and manufacturing sectors.

Located 80 miles southeast of El Paso, Round Top Mountain hosts 15 of the 17 rare earth elements, all accessible through above-ground, “open pit” mining and other well-established mining techniques. The Round Top deposit contains defense-critical rare earths needed for U.S. national defense stockpile and for U.S. industrial manufacturing. Round Top is among the lowest-cost projects in the world, with a low capex due to due to several factors, including; low extraction costs by heap leaching, efficient ion exchange processing, low separation costs and existing major infrastructure.

While other U.S.-based rare earth projects purport to have deposits that would address the rare earth / critical minerals crisis, they do not contain the strategic and critical materials required by the U.S. government or the required materials are not economic to mine, recover and or contained in sufficient quantities. The Round Top deposit checks all the boxes in this regard making it a completely unique project and among the only in the U.S. that appears to be able to address the Chinese monopoly on supplying rare earths to the U.S.

“Rare earths access is about more than the U.S.-China trade war. Essential tech metals and rare earths are key not only to advanced weapons systems, but also for major technology applications and manufacturing that are defining the 21st Century,” said Pini Althaus, CEO of USA Rare Earth.

“The quest to revive American manufacturing -- and the high-wage jobs it creates -- will require a reliable supply of domestic rare earths, not subject to sudden interruption or a monopoly by the Chinese government.”

“As Deng Xiaoping said more than 25 years ago, ‘The Middle East has oil; China has rare earths,’” said Daniel McGroarty, Advisory Board Member of USA Rare Earth, who has testified to both the U.S. House and Senate on critical minerals issues. “The U.S. has been slow to recognize the strategic importance of these materials, but that is changing now. We are pleased to see the new focus by the U.S. government – both the executive branch and the congress – on developing

a domestic source of rare earths.”

Round Top as a Strategic Materials Resource

“Not all rare earths are created equal,” said Dan Gorski, CEO of Texas Mineral Resources and Director of Operations for USA Rare Earth. “As a deposit comprised primarily of heavy rare earths, Round Top can provide not only the major permanent magnet REEs (dysprosium, terbium, neodymium and praseodymium), but heavy rare earths essential to fiber and solid-state lasers, scarce rare earth alloys like scandium, and even new 5G infrastructure applications (erbium, thulium, holmium, ytterbium, yttrium). No other U.S. rare earth deposit offers the same range of rare earths as Round Top.”

Because Round Top contains an abundance of other valuable minerals — lithium, beryllium, uranium and others — this will offset the costs of rare earth mining and processing at Round Top and USA Rare Earth and its joint-venture partner, Texas Mineral Resources, will be able to operate one of the world’s lowest cost rare earth mining and processing operations. By 2025, the global lithium market is expected to see a shortage of 154 million tonnes. At Round Top, there is enough lithium hydroxide in a highly soluble form to produce 20,000 tonnes per day for the next

137 years.

Advantages of the Round Top Deposit

Round Top also benefits from both its location and the material composition of its host rock, a rare-earth enriched rhyolite that can be heap-leached. Round Top sits on Texas State land with easy access to electricity, highway, rail transport, natural gas and water.

USA Rare Earth and Texas Minerals Resources Corp. are planning to build a pilot plant at Round Top. This will be completed within the next 9 – 12 months and demonstrate at scale the ability to recover and process the various materials contained at Round Top. Thereafter, a Bankable Feasibility Study (BFS) will be completed ahead of construction of the mine.

US Government and Round Top

The White House CEQ (Council on Environmental Quality) has approved and advanced Texas Governor Greg Abbott’s request to designate the Round Top project as a “High Priority Infrastructure Project”. Final approval is pending with the FPISC (Federal Permitting Improvement Steering Council). By way of background, Executive Order 13766, signed by President Trump on January 24, 2017, established a new system by which to fast-track the construction of infrastructure projects. The Order directed executive agencies to expedite

environmental reviews and approvals for all infrastructure projects that are deemed a “high priority to the nation” and should be granted preference in the licensing process. Governors of states and executive agency heads may request that the chairman of the White House CEQ approve infrastructure projects that meet certain criteria. Once approved by the CEQ, projects are then advanced to the FPISC for final approval.

Ore from Round Top project was used in a grant from the Department of Defense (DoD) where a successful demonstration project for the U.S. Defense Logistics Agency (BAA-DLASM-2015-01), overseer of the National Defense Stockpile. The project focused on the ultra-high purity processing of specific high-value rare earths extracted from Round Top rock. Rare Earths as a group as well as scandium are included in the Critical Minerals List published by the U.S. Department of the Interior in 2018.

USA Rare Earth and Texas Mineral Resources Corp. are committed to working with the U.S. government to advance the Round Top project and create a reliable domestic supply of rare earths and other critical minerals.

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