Neo Performance Materials selected for €126 million EU Innovation Fund grant for Estonia magnet project

Neo Performance Materials has been invited by the European Climate, Infrastructure and Environment Executive Agency to prepare a grant agreement for up to €126 million under the EU Innovation Fund for its Project GAUSS in Estonia. The Newswire lead report said the grant is approximately US$141 million.

Neo's Project GAUSS Scope in Estonia

Project GAUSS, or Green Assets from European Union Strategic Supply, would support an expanded rare earth magnet value chain in Estonia spanning separation, metallization and magnet manufacturing. The project includes adding up to 3,000 metric tonnes of permanent magnets per year, with one third of that capacity allocated to offshore wind farms in the EU.

The scope covers Silmet 2.0, which would triple total rare earth separation capacity for light and heavy rare earths. The European Commission designated Silmet 2.0 a Strategic Project under the EU Critical Raw Materials Act earlier in October 2026. The project also includes metallization, converting separated light and heavy rare earth oxides into metals, and the Phase 1B expansion of the European permanent magnet facility, which is expected to increase nameplate capacity from 2,000 metric tonnes to approximately 5,000 metric tonnes per year.

"Neo's strategy includes building the most vertically integrated rare earth magnetics value chain in Europe, and this project brings that strategy together, from separation to metallization and finished magnets," said Rahim Suleman, President and Chief Executive Officer of Neo. "This funding would help us further scale magnet production for European customers in wind energy, electromobility and industrial automation."

Neo expects the value of the project to be approximately €400 million and intends to update the capital cost estimate as planning and engineering progress. The timetable set by CINEA provides for signature of the grant agreement by March 23, 2027, and the project is expected to take between two and three years to complete. The project remains subject to final investment decisions and a final grant agreement, including legal entity validation, a financial capacity assessment, a non-exclusion check and ethics and security reviews.

Neo's Recent Funding and Partnerships

According to akta.pro company records, Neo completed a C$115 million bought deal treasury offering of common shares at C$28.75 each in May 2026 to fund equipment and automation at European facilities and expansion of the bonded magnetics business. The same records list a 2024-11 post-IPO debt round of $50 million led by Export Development Canada, a 2022-11 grant of $18.7 million led by the European Commission, and a 2022-08 post-IPO secondary of $103.2 million led by Hastings Technology Metals.

Silmet 2.0's Path to EU Selection

On October 12, 2026, Stock Titan reported that Greenland Mines welcomed the EU's selection of Neo Performance Materials' Silmet 2.0 as a Strategic Project under the Critical Raw Materials Act. In May 2026, Neo partnered with Greenland Mines to transfer the Sarfartoq rare earth project in Greenland via Neo North Star Resources in a US$35 million transaction, according to akta.pro company records.

The same records show Neo formed a multi-year AI and machine learning research partnership with Tallinn University of Technology in May 2026, embedding machine learning into rare earth separation and magnet manufacturing using more than 30 years of proprietary operational data.

Grant Agreement Deadline

The timetable set by CINEA provides for signature of the grant agreement by March 23, 2027, according to the report.