REalloys Inc. (NASDAQ: ALOY) signed a non-binding letter of intent with Patriot Exploration & Mining, LLC to secure priority access to up to 30% of Patriot's rare earth production, according to a company statement.

Patriot operates across more than 150 sites in the Appalachian Basin from Alabama to Pennsylvania, with reported access to 2 billion metric tons of above-ground rare earth element-bearing material. The materials include neodymium, dysprosium, praseodymium, and terbium, which are used in magnet production.

Under the agreement, the companies will conduct metallurgical testing on Patriot's materials and complete bench-scale and pilot-scale validation to confirm compatibility with REalloys' processing platform. The arrangement is subject to negotiation and execution of a definitive long-term offtake agreement.

The letter of intent is part of REalloys' strategy to build a domestic supply network ahead of January 2027 statutory requirements under 10 U.S.C. §4872 and DFARS 252.225-7052, which prohibit certain foreign sourcing for defense applications. REalloys currently has feedstock relationships in the U.S., Brazil, Kazakhstan, and Greenland, alongside its Hoidas Lake asset in Saskatchewan, Canada.

"The defense industrial base has a 2027 deadline and a supply chain gap that REalloys intends to resolve," said Lipi Sternheim, Chief Executive Officer of REalloys.

REalloys operates processing and manufacturing facilities and serves federal agencies including the Department of Defense, Department of Energy, and NASA. The company is developing a mine-to-magnet supply chain for rare earth elements used in defense and technology applications.