USA Rare Earth Is Burning Through Cash at $57 Million a Quarter. At That Rate, Here's How Long the Money Lasts.
Key Points
USA Rare Earth's cash pile could sustain operations for about seven years at today's cash burn rate.
But that figure doesn't take into account capital expenditures or acquisitions -- a potential concern.
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USA Rare Earth (NASDAQ: USAR) has big ambitions -- and those ambitions aren't cheap. The rare-earth miner -- or would-be miner, since it's not mining yet -- burned roughly $56.7 million in second-quarter operating cash, up from about $19 million in the first quarter. That brings its 2026 cash burn to about $75 million, already more than four times the roughly $18 million it burned in all of 2025.
That's a lot of cash, but USAR, fortunately, isn't scrounging for loose change. It ended June with about $1.5 billion in cash and equivalents. If we were to divide that by its latest quarterly cash burn of $56.7 million, that would give USAR a cash runway of about 27 quarters, or nearly seven years.
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That isn't highly accurate, though. For one, it doesn't take into account capital expenditures (capex), which have already totaled about $108 million through the first six months of 2026. USAR is also building a large-scale rare-earth mine and two magnet factories, and potentially acquiring Serra Verde for $300 million in cash. The next few years are going to be costly, and its cash pile will likely dwindle much faster than seven years will pass.
Image source: Getty Images.
Let's say, for the sake of argument, that USAR ends up acquiring Serra Verde for $300 million. That leaves it with about $1.2 billion. Let's also annualize its first-half capex ($108 million) to about $217 million annually. Combined, then, USAR would spend about $444 million annually. At that pace, USAR has about three years of capital on hand.
Luckily for USAR, it does have financing options. It has access to $277 million in federal funding and up to $1.3 billion in secured capacity. After adding that to its current funds, USAR could theoretically have access to more than $3 billion in capital, a considerable amount of breathing room for a mining company.
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Steven Porrello has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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