Geomega Resources Inc. (TSX-V: GMA) (OTC: GOMRF) has announced that it has signed a Letter of Intent (LOI) with USA Rare Earth LLC, and through its 80% ownership in Texas Minerals Resources Corp., (OTCQB: TMRC), the companies will work to recycle production waste resulting from future production of sintered neo magnets by USA Rare Earth LLC.

Although USA Rare Earth has not yet determined the location of the plant, it will be the first neo magnet manufacturing facility in North America since 2015 when Hitachi Metals America ceased operations. All current domestic providers of neo magnets import them for assembly in the U.S and this is a big step forward for both US production of magnets, and future feed for GMA to recycle. 

The plant has been designed for the production of more than 2,000 tons of sintered neo magnets per year, which corresponds to 17% of the current U.S. demand for neo magnets. The manufacturing and machining processes to develop these magnets creates as much as 30% swarf and scrap and this is the waste that needs to be recycled and will be fed to GMA’s recycling facility in St-Bruno, Quebec. After the waste has been processed, the output could then become a rare earth oxide feed for the USA Rare Earth plant.

It is expected that the definitive agreement will call for a minimum period of five years wherein USA Rare Earth makes all its swarf and scrap available for GMA to recycle. Permanent magnets of the kind that USA Rare Earth produces are a $21 billion-per-year business. Neo magnets make up $13.8 billion of that. Industry analysts believe the global market for neo markets will grow by around 100% to $27 billion in 2027.

“We see this collaboration with Geomega as an example of the kind of cooperation called for by the U.S. and Canadian Governments, in the area of critical minerals and Rare Earths in particular,” USA Rare Earth CEO Pini Althaus. President and CEO of GMA, Kiril Mugerman was quoted, “Every rare earth magnet factory produces waste. By working together, Geomega and USA Rare Earth will ensure that the rare earths contained in this waste shall remain in North America and are then reused to make more rare earth magnets for the U.S. and Canadian market”.

In April, we featured Geomega Resources, Inc. (GMA) as a volume alert after GMA revealed plans that GMA’s, Innord, Inc., will recycle and refine magnet waste using a proprietary separation process called Innord Separation of Rare Earths (ISR). Since our alert at $.14 cents, shares of GMA have increased 58%, hitting a high of $.23 cents on the recent news. 

Geomega also holds a 100% stake in the Montviel property, an area with 177 mining claims over an area of around 9,831 hectares (roughly 40 square miles) in Waswanipi, Northern Quebec. Geomega also conducts research at this site and research carried out there in 2014 and 2015 led to patents relating to metallurgical extraction of rare earths and Niobium which were recently approved in June.

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