US Critical Metals (USCM) and US Critical Materials (Materials Corp.) are set to earn-in up to 75% equity interest in two rare earth projects in Montana and Idaho.

The companies will invest in the Sheep Creek property in Ravalli County, Montana, and the Lemhi Pass Trail property in Lemhi County, Idaho.

Under the terms of the agreement, USCM, through its subsidiary US Energy Metals Corp. (Energy Corp), and Materials Corp formed US Rare Elements Corp. (USRE).

USRE will hold the properties and will be jointly managed by USCM and Materials Corp., with two board members from each party, and equal voting rights in the option period.

USCM will obtain 25% of USRE, in exchange for a $300,000 cash payment to USRE within five business days of closing, and $1,500,000 in capital contributions 16 months after closing.

The company may acquire an additional 25% equity interest in USRE, for a $200,000 cash payment, and $3m in capital contributions 40 months after closing.

USCM CEO and director Darren Collins said: “This partnership positions USCM with increased exposure to commodities essential to US security of supply and national security interests.

“Consistent with our Clayton Ridge Lithium Property in Nevada and Haynes Cobalt Property in Idaho, these rare earth properties in Montana and Idaho have strong grade indications and significant exploration potential.

“I would like to thank all the parties involved in bringing this transaction together for their hard work and dedication.”

Sheep Creek project is located in Ravalli County, southwest Montana, and covers 54 lode claims representing about 1,050 acres of the total land package.

Through its exploration activities last year, Materials Corp. has identified more than 50 carbonatite dikes in the Sheep Creek exploration area.

The Lemhi Pass project is located in Lemhi County in central-east Idaho, close to several other explorers within an area known to host rare earth mineralisation.

The two rare-earth properties are located in the Montana-Idaho alkalic belt, comprising at least eleven of the critical risk elements defined by the US Geological Survey.

Alongside neodymium and praseodymium as key elements, the properties also host cerium, dysprosium, europium, gadolinium, lanthanum, niobium, scandium, strontium, and gallium.

The elements are essential for the production of electric vehicle batteries, various critical technologies, and military and defence applications.

USCM said that the transaction will expand its asset portfolio with rare earth elements and provides diversified exposure to multiple discovery-focused projects in the US.