Capital Markets & Funding
Based on the unprecedented demand, and limited supply of critical minerals, the Company is currently exploring many options regarding funding, and sale of mineral rights. US Critical Materials has been approached by funding sources and continues to seek the best scenario for the Company and its shareholders.
The Company is confident that it will be able to execute forward offtake contracts based on the imbalance in the marketplace, and activity of competitors. The contracts could be broad or targeted to each of the Company’s many critical minerals. Rare earths projects with significantly lower critical mineral levels are currently negotiating and signing contracts with major end users. The contracts are long term, and do not require production for a few years.
End User Investments
Due to the shortage of critical minerals, end users are investing at the beginning of the supply chain so they will not be shut out. Auto companies have recently been entering into contracts with, and have even been purchasing outright, mining companies with a focus on critical minerals. With the expected continuation of geopolitical volatility around the globe, and the ever-increasing need for a secure supply, we believe US Critical Materials will become an acquisition, joint venture or other target for not only auto companies, but a variety of other end users.
Investment Consideration For US Critical Materials
There is a global rush to secure critical minerals, many of which are vital for consumers, industry, and military applications. The demand for these metals will accelerate sharply in the coming years as the world continues its transition to electric vehicles and more renewable energy sources. Critical minerals are important for electronics such as semiconductors, batteries, magnets, and electric vehicle motors. Unprecedented amounts of capital are entering the critical minerals sector, with many believing the world is entering a “super cycle.”
Commodity Super Cycle
Goldman Sachs recently released a report calling commodity outlook “An Underinvested Super Cycle.” Goldman forecasts raw materials will be the best performing asset class in 2023 with a return of 43 %. Many believe that some of the billions invested in cryptocurrencies will be redeployed in areas that forecast high returns and have underlying physical assets.
There is limited supply of critical minerals globally. China controls 80-90 % of rare earths in the world. The U.S. is dependent on China for many of the elements necessary for not only consumer uses, but critical military and industrial applications as well, and is not permitted to buy and import these raw materials from China, but rather only to buy fully processed rare-earth-containing products and product components manufactured within China itself, under CCP rule. Thus in summary, the Chinese Communist Party in China has essentially weaponized its global rare earths domination.