2016 Shareholder Update
From Mark A. Smith, P.E., Esq.
Executive Chairman & CEO, NioCorp Developments Ltd.
Fellow Shareholders –
In advance of NioCorp’s 2016 Annual Meeting of Shareholders, which will convene later this morning (at 10 a.m. Mountain), I thought I would provide you with this progress report on our Company and on our flagship Elk Creek Superalloy Materials Project.
2016 was a year of tremendous progress for NioCorp and for the Elk Creek Project. Here are some highlights:As of yesterday’s TSX close, shareholders have seen our share price rise 44% year-to-date. Over the past three years from yesterday’s close, holders have benefited from a 387% increase in the share price.
NioCorp succeeded in raising more than US$10.5 million from financings that closed in 2016, with the aim of advancing the Elk Creek Project.
We placed under contract another 25 percent of our planned Ferroniobium production in 2016. In conjunction with the agreement we signed with ThyssenKrupp at the end of 2014, this means that three-quarters of our target primary product is now under binding sales contracts.
The final planned metallurgical pilot plant needed for the Elk Creek Feasibility Study is running right now and is expected to complete later today. After more than two years of intense work, we are now wrapping up the final elements of our Feasibility Study.
We plan to begin sending commercial Scandium product samples to prospective customers in early 2017.
We moved forward in our Elk Creek Project permitting process by completing a nearly two-year-long Jurisdictional Delineation process with the U.S. Army Corps of Engineers (USACE). This has allowed us to advance to the next stage of permitting.
We become a U.S. reporting issuer in 2016 with the United States Securities and Exchange Commission under U.S. federal securities laws, which potentially makes it more efficient for any future NioCorp securities offerings under U.S. securities laws.
While 2016 was a very successful year for NioCorp, we believe 2017 promises to be a truly banner year. Following the anticipated release of our Feasibility Study, we plan to launch an effort to secure project financing. It is difficult to assess how long that process will last. However, assuming that our effort bears early fruit, it is possible that we will be able to initiate onsite construction activities before the end of 2017. That is certainly my hope.
Let me provide you with an overview of the progress we made in 2016, with an aim of bringing the Elk Creek Project to commercial reality, and what I see on the horizon for this outstanding Company ...
To read the rest of Mr. Smith's "2016 Shareholder Update,"
please download the full letter in pdf form.
See NioCorp's new virtual tour video of the Elk Creek Project
Source: NioCorp Developments Ltd.
@NioCorp $NB $NIOBF #Niobium #Scandium #ElkCreek
For More Information
Contact Jim Sims, VP of External Affairs, NioCorp Developments Ltd., 855-2-NIOCORP (855-264-6267), jim.sims@niocorp.com
About NioCorp
NioCorp is developing a superalloy materials project in Southeast Nebraska that will produce niobium, scandium, and titanium. Niobium is used to produce superalloys as well as High Strength, Low Alloy ("HSLA") steel, which is a lighter, stronger steel used in automotive, structural, and pipeline applications. Scandium can be combined with Aluminum to make super-high-performance alloys with increased strength and improved corrosion resistance. Scandium also is a critical component of advanced solid oxide fuel cells. Titanium is used in various superalloys and has extensive uses in aerospace, defense, transportation, medical, and other applications. It also is a key component of pigments used in paper, paint and plastics.
Cautionary Statements
Neither TSX nor its Regulation Services Provider (as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this document or of the video that it is linked to. Certain statements contained in this document and in the video may constitute forward-looking statements, including but not limited to statements regarding potential future production at the Elk Creek Project, anticipated products to be produced at the Elk Creek Project, the future critical and strategic nature of Niobium and Scandium, expected growing demand for metals to be produced at the Elk Creek Project, potential future customers for such metals, stable future pricing for Ferroniobium and Scandium, NioCorp potentially being the only producer of Ferroniobium and Scandium in the United States, estimated resources at the Elk Creek Project, future state and local support of the Elk Creek Project, potential returns for investors, anticipated costs of production at the Elk Creek Project being competitive, anticipated competitive advantages, expected date for beginning future commercial production, the timing, completion and results of a Feasibility Study for the Elk Creek Project, and results and estimates in the Preliminary Economic Assessment, including but not limited to, potential life of mine, pre-tax Net Present Value (NPV), after-tax NPV, Internal Rate of Return and estimated cash flows from production and the ability to reach positive cash flow solely through the production of Ferroniobium, the anticipated timing and outcome of project permitting efforts and potential future project financing and anticipated analysis of the project by likely participants in the project financing efforts. Such forward-looking statements are based upon NioCorp’s reasonable expectations and business plan at the date hereof, which are subject to change depending on economic, political and competitive circumstances and contingencies. Readers are cautioned that such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause a change in such assumptions and the actual outcomes and estimates to be materially different from those estimated or anticipated future results, achievements or position expressed or implied by those forward-looking statements. Risks, uncertainties and other factors that could cause NioCorp’s plans or prospects to change include changes in demand for and price of commodities (such as fuel and electricity) and currencies; changes in the market price and demand for the likely products from the Project, including Ferroniobium and Scandium, and potential and historical instability in those markets, changes or disruptions in the securities markets; legislative, political or economic developments; the need to obtain permits and comply with laws and regulations and other regulatory requirements; the possibility that actual results of work may differ from projections/expectations or may not realize the perceived potential of NioCorp’s projects; risks of accidents, equipment breakdowns and labor disputes or other unanticipated difficulties or interruptions; the possibility of cost overruns or unanticipated expenses in development programs; operating or technical difficulties in connection with exploration, mining or development activities; the speculative nature of mineral exploration and development, including the risks of diminishing quantities of grades of reserves and resources; and the risks involved in the exploration, development and mining business. NioCorp disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Cautionary Note Regarding Mineral Resource Estimates
The Company filed a technical report on SEDAR dated October 16, 2015 entitled “Amended NI 43-101 Technical Report - Updated Preliminary Economic Assessment - Elk Creek Niobium Project – Nebraska” (October 15, 2015 PEA"). This Preliminary Economic Assessment is preliminary in nature and it includes a level of engineering precision and assumptions which are currently considered too speculative to have the economic considerations applied to them that would enable Mineral Resources to be categorized as Mineral Reserves as defined in accordance with Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”) Standards of Disclosure for Mineral Projects (NI 43-101) and the Canadian Institute of Mining, Metallurgy and Petroleum (the “CIM”) CIM Definition Standards on Mineral Resources and Mineral Reserves, adopted by the CIM Council, as amended. There is no certainty that the economic estimates and projections in the October 2015 PEA will be realized and investors should consider such estimates and projections to be highly speculative. Mineral Resources that are not Mineral Reserves do not have demonstrated economic or legal viability. NioCorp has classified NI 43-101 Inferred Mineral Resources and Indicated Mineral Resources at Elk Creek that are disclosed within the Preliminary Economic Assessment; however, Inferred Mineral Resources are not included in the mine plan for the October 15, 2015 PEA. The Elk Creek Project is exploratory in nature and investors should not assume that Mineral Resources at the Project will ever be converted to Mineral Reserves with demonstrated economic and legal viability. The pricing of Scandium is a significant portion of the Project revenue, and achieving the revenue projected in the October 2015 PEA is subject to market growth in Scandium, which is a developing market with a risk of oversupply and/or undersupply disrupting pricing.
The Mineral Resource estimates and economic assessments in this letter and contained in the Preliminary Economic Assessment have been prepared in accordance with the requirements of NI 43-101, which differ from the requirements of United States securities laws. The definition for Mineral Reserves differ from the definitions in the SEC’s Industry Guide 7 under the United States Securities Act of 1933, as amended. Under SEC Industry Guide 7 standards, a “final” or “bankable” feasibility study is required to report Mineral Reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority.
The terms “mineral resource,” “measured mineral resource,” “indicated mineral resource” and “inferred mineral resource” are defined in, and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. Investors are cautioned not to assume that all or any part of a mineral deposit in these categories will ever be converted into mineral reserves. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian securities laws and regulations, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Investors are cautioned not to assume that all or any part of an inferred mineral resource exists or is economically or legally mineable.
Accordingly, information contained in this letter and contained in the Preliminary Economic Assessment or incorporated by reference herein or therein contain descriptions of our mineral deposits that may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements under the United States federal securities laws and the rules and regulations thereunder.
