USA Rare Earth Inc. (USAR) saw its shares soar 5.05% in pre-market trading on Thursday, following a significant positive development for the company.

The sharp rise comes after the company announced it has been selected by the U.S. Department of Energy (DOE) to receive up to $19.3 million in funding under the Critical Materials Innovation, Efficiency and Alternatives program. The award is designated for a pilot-scale rare earth element (REE) separations project, which aims to advance domestic processing capacity for materials critical to U.S. energy, defense, and advanced manufacturing supply chains.

The total project value is approximately $50.5 million, including the potential DOE funding and about $31.2 million in non-DOE funding. This initiative is seen as a key step in building a more resilient, domestic rare earth value chain, reducing reliance on foreign sources for these strategically important minerals.