Blackboxstocks Merger Target Strikes Major Partnership to Secure Critical Rare Earth Metals for US Defense

Blackboxstocks Inc. (NASDAQ:BLBX), ("Blackbox" or the "Company"), is pleased to announce that its merger target, REalloys Inc. ("REA" or "REalloys"), has entered into a historic partnership with the Saskatchewan Research Council ("SRC"), anchored by a commercial processing and long-term offtake agreement to expand the heavy rare earth refining capability at SRC's Rare Earth Processing Facility in Saskatoon, SK. Under the partnership, REalloys has secured 80% of annual production of the upgraded capacity from the facility1 enabling a compliant, North American supply chain for the Company's defense industrial base clients, including the U.S. Department of Defense.

The agreements reestablish North America's midstream rare earth capability and reposition SRC's facility — now nearing completion — as the continent's first fully integrated, commercial-scale rare earth processing and metals facility. Equipped with monazite processing, AI-controlled rare earth element ("REEs") separation, and advanced metal-smelting systems, the facility anchors a supply chain previously available only in China and is dedicated to the extraction and refining of heavy rare earth elements ("REEs") including Dysprosium (Dy), Terbium (Tb), and Neodymium-Praseodymium (NdPr). The facility will be fully operational for heavy rare earth production in early 2027.

Production Capacity and Expansion

Under the agreements, REalloys will invest approximately US$21 million to expand SRC's facility, increasing its heavy rare earth (Dy and Tb) processing capacity by an estimated 300% and boosting its light rare earth (NdPr) capacity by 50%. Once fully operational in early 2027, the expanded facility is designed to produce up to 30 tonnes of Dy oxide, 15 tonnes of Tb oxide, and 400 tonnes per year of high-purity NdPr metal, with NdPr output increasing to 600 tonnes per year after the expansion is complete.

REalloys has secured the majority of this output under the long-term offtake agreement from SRC under a cost-plus model.

This facility expansion positions REalloys to deliver a secure, North American supply of these mission-critical materials just as new U.S. defense procurement rules take effect on January 1, 2027. Under 10 U.S.C. §4872 and DFARS 252.225-7052, the U.S. Department of Defense will be prohibited from sourcing rare earth metals, magnets, or components from China, Russia, Iran, or North Korea — ensuring American national security relies on trusted, domestic and allied partners.

Under Title 50, the framework governing U.S. defense and national-security sourcing, the United States now requires critical materials to originate from trusted domestic or allied producers. The REalloys–SRC partnership answers that requirement directly, establishing North America's first commercial-scale, zero-China nexus, heavy rare earths supply chain.

REA Commercial Facility

SRC's facility will serve as the precursor to REalloys' planned Commercial Facility in Saskatoon, SK, designed for annual output of approximately 200 tonnes of Dy metal, 85 tonnes of Tb metal, and 2,700 tonnes of NdPr metal. Together, these developments position REalloys as a central contributor to North America's secure supply of high-performance magnet materials essential to defense, clean energy, and advanced manufacturing.