USA Rare Earth vs. NioCorp: Which Mining Stock Offers Better Prospects?

USA Rare Earth, Inc. USAR and NioCorp Developments Ltd. NB are both familiar names operating in the Zacks Mining - Miscellaneous industry. As rivals, both companies are engaged in the exploration and mining of minerals and metals, primarily in North America.

Both companies have been enjoying significant growth opportunities in the mineral and metal mining industry owing to growing demand for minerals in electric vehicles and renewable energy markets, and increased adoption of advanced technologies like AI, automation and data analytics. Let’s take a closer look at their fundamentals, growth prospects and challenges.

The Case for USA Rare Earth

USA Rare Earth is advancing its Stillwater magnet manufacturing facility in Oklahoma toward commercial production. The plant will produce Neodymium Iron Boron (NdFeB) magnets, which are widely used in defense, aviation, automotive and other high-growth industries. Once operational, the Stillwater facility is expected to be among the first large-scale magnet manufacturing facilities in the United States, supporting efforts to build a domestic rare earth supply chain.

The company remains focused on installing equipment at the Stillwater site, assembling Line 1a and preparing for its commissioning planned for early 2026. USAR also began recruiting and training engineers and technicians to operate the facility. These efforts are likely to improve USAR’s ability to reach commercial-scale production and help it secure long-term customer contracts.

To fund these initiatives, USA Rare Earth boosted its financial position through PIPE financing and warrant exercises, lifting its cash balance to more than $400 million as of end of third-quarter 2025. The funding is being used to upgrade the Stillwater plant, expand magnet finishing capabilities and complete Line 1b, which is expected to raise total NdFeB magnet production capacity to about 1,200 metric tons.

Also, the company’s acquisition of Less Common Metals (in November 2025) will offer a reliable source of critical metal and alloy feedstock for the Stillwater facility. With this buyout and continued progress across its development plans, USA Rare Earth appears well-placed to scale production and expand capacity in the quarters ahead.

However, USA Rare Earth has remained in the exploration and research stages since its inception, incurring losses and it is yet to generate any revenues. Also, the company has been grappling with rising operational expenses, thereby adversely impacting its margins and profitability. In third-quarter 2025, its selling, general and administrative expenses climbed to $11.4 million from $0.8 million in the year-ago quarter, due to an increase in legal and consulting costs, higher headcount and recruiting fees and other costs.

The Case for NioCorp

NioCorp is working to move its Elk Creek Project in Nebraska closer to production. The project will produce niobium, scandium, titanium and rare earth elements, which are essential for electric vehicles, clean energy and defense technologies.

In December 2025, the company’s board provided its approval for the Mine Portal Project, a key initiative to advance the Elk Creek Project. Also, in November, NioCorp acquired the additional land in Johnson County, NE related to the Elk Creek Project. With the acquisition, NB currently owns a square mile of land at the site, which will be used to host both its surface processing facility and underground critical minerals mine.

The company’s deal with the U.S. Department of Defense will also support its engineering and drilling activities at the site. These initiatives will facilitate NioCorp in launching the Elk Creek Project and take it to the commercial operation phase.

However, NB raised about $60 million through public offerings in September 2025 to fund its progress. Although its long-term growth initiatives hold positive, selling shares might cause its dilution, potentially having an adverse impact on earnings per share.

Also, the company applied for a possible loan with the U.S. Export-Import Bank under the “Make More in America” program. NioCorp’s growth will largely depends on securing approximately $1.1 billion in funding to move the Elk Creek project into the production stage.

How Does the Zacks Consensus Estimate Compare for USAR & NB?

While the Zacks Consensus Estimate for USAR’s 2025 bottom line is pegged at a loss of 65 cents per share, the same for NB stands at a loss of 68 cents per share.

USAR's EPS Consensus

NB's EPS Consensus

Price Performance and Valuation of USAR & NB

In the past month, USAR’s shares have risen 26%, while NB stock has gained 16.2%.

USA Rare Earth is trading at a forward 12-month price-to-earnings ratio of negative 42.72X while NioCorp’s forward earnings multiple sits at negative 13.04X.

Conclusion

NioCorp is striving to establish itself as a key player in the mineral-mining industry and capitalize on the growing demand for critical minerals across industries. However, the company’s need to secure a substantial fund to move its Elk Creek project into the production stage will require some additional time.

In contrast, the steady progress at the Stillwater magnet manufacturing facility positions USA Rare Earth for a potential transformation as it moves toward commercial production. However, rising operating and development costs and the absence of revenues present near-term challenges.

Given these factors, USAR seems a better choice for investors than NB currently. While USA Rare Earth carries a Zacks Rank #3 (Hold), NioCorp currently has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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