REalloys Inc. (NASDAQ: ALOY) signed a non-binding memorandum of understanding with U.S. Critical Materials Corp. to secure up to 10% of production from the Sheep Creek rare earth project in Ravalli County, Montana.

The Sheep Creek deposit averages approximately 9% total rare earth oxide content across a 7,277.5-acre land package with over 60 identified carbonatite formations. The deposit contains dysprosium and terbium, elements used in defense applications including F-35 fighter aircraft and missile guidance systems.

Under the agreement, REalloys would gain access to domestically sourced heavy rare earth material for its midstream and downstream operations. The company stated this would help supply U.S. strategic defense stockpiles as procurement restrictions on Chinese-sourced rare earths take effect in 2027.

The MOU establishes a framework for potential strategic equity investment, joint pursuit of government financing, and coordinated government relations between the companies. The parties plan to advance metallurgical test work and negotiate a definitive long-term offtake agreement within one year.

"While others rely on a single source for their rare earth feedstock, REalloys is executing a fundamentally different strategy - partnering with the highest-grade developers across allied nations to build a diversified supply network," said Lipi Sternheim, Chief Executive Officer of REalloys.

REalloys operates processing facilities in Ohio and owns the Hoidas Lake rare-earth asset in Saskatchewan. The company serves federal agencies supporting the Department of Defense, Department of Energy, and NASA.

U.S. Critical Materials Corp. is a private exploration company focused on developing rare earth elements and critical minerals. The Sheep Creek project has been verified by Activation Laboratories and Idaho National Laboratory.