200 Acres for Rare Earth Facility in Utah Under Nonbinding Term Sheet With U.S. Army

Key Facts

REalloys announced on November 3 that a subsidiary and the U.S. Army had signed a nonbinding term sheet for a potential lease that would allow development of a heavy rare earth processing facility at Tooele Army Depot in Utah. The term sheet envisions a facility on about 200 acres to process dysprosium and terbium, with the possibility of adding other rare earth elements in the future. The company said the agreement sets out key commercial terms for a potential enhanced use lease, but does not guarantee that a final contract will be signed. That puts the project at the negotiation stage, ahead of implementation commitments, even though the proposed site is within an Army facility. Chief Executive Leonard Sternheim described the agreement as "an important step for the Tooele project as we work toward a long-term lease."

Under the terms announced by REalloys, the proposed initial lease term is 50 years, with one 25-year renewal option, subject to specified conditions and Army approval. That would give the project a potential operating period of up to 75 years if the agreement's stages are completed and the renewal is approved. But those periods remain part of the proposed contractual framework and are not the term of a lease that has already been executed. The company said a final lease depends on completing a range of commercial, regulatory and financing requirements. These include agreeing on the fair market value of the base rent and the methodology for a participation-based rent, as well as Army approval of the development plan. The review also includes environmental review, permits, foreign ownership review, securing financing and board approval.

The proposal makes REalloys responsible for developing, financing, building and operating the facility, and ultimately dismantling it. The United States, in turn, would retain ownership of the land on which the project would be built. As for the Army's role in buying output, the company said it is limited to a right of first offer to purchase products from the facility. That right does not obligate the Army to buy any volume or product. This structure keeps the purchase decision separate from the grant of land use rights, while the company would bear the costs of developing and operating the project if the deal proceeds to a final contract. If the conditions are not satisfied or waived by the parties within 18 months of executing the term sheet, either party may terminate it.

The agreement is part of a U.S. Army program linking the use of military facility land to the creation of domestic critical minerals processing capacity. In June 2026, the Army announced REalloys' conditional selection to negotiate a dysprosium and terbium processing project at Tooele, one of four conditional selections for long-term leases for critical minerals processing facilities at Army installations. The Army said its Strategic Capital Initiative uses enhanced use leases to facilitate critical minerals processing at its facilities, including rare earth elements at Tooele. In its June announcement, REalloys said development work could begin as early as 2027 and that it was targeting initial operating capacity by 2028 at the latest. That timeline remains a company target announced before the current term sheet agreement and does not remove the conditions required to complete the lease.

The effort to expand domestic processing takes on significance given the United States' reliance on foreign supplies. The U.S. Geological Survey has reported that the country relies on imports for more than two-thirds of its consumption of rare earth compounds and metals. A U.S. defense procurement rule also provides for expanding restrictions on specified materials and products from covered countries, effective January 1, 2027, to include materials mined, refined, separated, smelted or produced in those countries. The proposed Tooele project offers a path to process some elements in the United States, but on its own does not establish that the facility will be built or that its output will meet the Army's needs. In trading, REalloys shares, listed under the ticker ALOY, closed at $6.85 on November 9, 2026.