MP Materials Corp. (NYSE:MP) is one of the stocks that are flying past expectations.
MP Materials soared 50.62 percent on Thursday to hit a new high after sealing a multi-billion-dollar deal with the Department of Defense (DOD) to ramp up the production of rare earth minerals in the US.
At intra-day trading, MP Materials Corp. (NYSE:MP) touched a new 52-week high of $48.01 before paring gains to end the day just up by 50.62 percent at $45.23 apiece.
In a statement, MP Materials Corp. (NYSE:MP) said that part of the agreement will see the construction of a new magnet manufacturing facility—to be called the 10X Facility—at a soon-to-be-chosen location, to serve both defense and commercial customers. The company secured a $1-billion loan from JPMorgan Chase Funding Inc. and Goldman Sachs Bank USA for the site development, which is set to be fully operational in 2028 and boost rare earth minerals production to 10,000 metric tons.
Additionally, the DOD and MP Materials entered into a 10-year agreement where the government agency agreed to ensure that 100 percent of the magnets produced will be purchased by the defense and commercial customers, and that profits will be shared.
Heavy machinery at work in a mining facility, excavating the earth for rare earth minerals.
Both parties also established a floor price commitment of $110 per kilogram for NdPr products stockpiled or sold.
Lastly, the DOD acquired worth $400 million of MP Materials Corp.’s (NYSE:MP) newly-created preferred shares convertible into common stocks, and a warrant permitting the government agency to purchase additional shares of its common shares.
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Disclosure: None. This article is originally published at Insider Monkey.
