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On 8/31 the 10-K should be released which should be more informative than the potential Nordmin report.
I believe they still own both, but have not asked for confirmation. Given that neither appears in any recent 10k, I view the current value as negligible.
They did try to sell a majority stake in Archie Lake in 2014, but the buyer did not meet the conditions of the agreement. I've never found any additional information on jungle wells.
http://niocorp.com/index.php/press-releases/206-niocorp-meets-conditions-on-archie-lake-offering-commitments-surpass-10m
https://www.elyseedevelopment.com/projects/archie-lake-saskatchewan
http://niocorp.com/index.php/archie-lake-uranium-rare-earth
Because those "in the circle" are likely in possession of material insider information and trading with that non-public knowledge would be illegal.
To add to this, the report will still be reviewed by Niocorp and their legal counsel before anything is put into a press release, so don’t anybody fret or make dozens of “where’s the PR?” posts on 8/31 if you don’t see anything.
Never heard of it.
NIOBF closed at .636 on 6/29/2017. The results of the feasibility study were released 6/30/2017 and precipitated a slow decline to .313 on 12/14/17, losing over half of its value. Why was this?
Could be. If management gives up a significant portion of equity at this price then I am out. I still take the equity portion to be more of a consideration fee than a direct contributor to the billion needed. I expect a full billion in loans and bonds.
If a total package required ~50% of capex in equity purchase at this price you would be looking at a billion more shares and those equity investors would own over 80% of the company at that point. An outright purchase plus a nice deal to retain management would seem more likely to me at that point. A 2-3 hundred million buyout plus a committed 2-3 hundred million in financing along with other debt investors seems like a better deal for all under that scenario.
I’m aware. I thought such a change to the executive order would have been published in some way though. I’ve searched to no avail, so I’m not sure what to believe.
Has your Roth declined since you converted in the first place? Isn’t that the only way a recharacterization makes sense?
No. The report shall include:
(i) a strategy to reduce the Nation’s reliance on critical minerals;
(ii) an assessment of progress toward developing critical minerals recycling and reprocessing technologies, and technological alternatives to critical minerals;
(iii) options for accessing and developing critical minerals through investment and trade with our allies and partners;
(iv) a plan to improve the topographic, geologic, and geophysical mapping of the United States and make the resulting data and metadata electronically accessible, to the extent permitted by law and subject to appropriate limitations for purposes of privacy and security, to support private sector mineral exploration of critical minerals; and
(v) recommendations to streamline permitting and review processes related to developing leases; enhancing access to critical mineral resources; and increasing discovery, production, and domestic refining of critical minerals.
I am also yet to find any documentation corroborating the September date. Per the executive order it is due August 16th. It will come from the Secretary of Commerce. The Senate Committee will likely send (or likely already has) their own internal report to the Secretary.
Roth accounts grow tax free regardless of what you hold in them.
I posted it last week. There is absolutely nothing. It actually removes language about scandium that was present last year.
I had never heard of them before the post yesterday, but there are a couple other interesting things to pull out of it.
They had a FS in 2016 and then released another one this past February. I don't yet know why, but they had their financing package wrapped up just three months after the FS summary was released.
Market cap today is roughly $600MM USD, so let's just call it double what it was pre-financing. As you pointed out, due to dilution this resulted in a very small share price increase.
The big difference I see is the market cap to NPV ratio. Nemaska's market cap was 1/6 of its NPV prior to financing and 1/3 today.
Niocorp currently trades with a market cap 1/15 of it's NPV. A lot of this can be attributed to the fact that lithium already has a well established market, but if you trust the scandium numbers it gives you a better idea of what you can possibly expect the share price to do after the risk of financing has been eliminated.
Assume the share count doubles (this is a real possibility). To get to that 1/3 market cap to NPV, Niocorp would need to trade around $1.50. 400 million shares outstanding and a ~$600 million market cap.
I thought so too. I think I previously posted that I questioned whether it would save anything. I can't imagine Sims telling a reporter it would save a hundred million unless he was very confident. I even wondered if the reporter didn't misinterpret the statement, but "out of the final bill" is pretty conclusive.
It's an article reporting on the current state of the project and other facts. It doesn't imply that those permits are difficult or easy to obtain, simply that getting them is one of the other steps to be accomplished prior to construction.
Did you expect less out of me?
RE: Borrowing against house to invest in a penny stock.
Pretty sure the OP was trolling on the hopes that he’d get a bunch of responses that this was a sure thing and why not borrow.
The company made a big deal over it's inclusion last year under "Industrial Use Preparedness". There have also been numerous discussions about it's addition to the stockpile. A recommendation in this year's NDAA would have been a step in that direction.
Ultimately nothing matters in the NDAA. It all comes down to the appropriations bills later this year.
While it's expected that the critical minerals report from the Commerce Department will influence appropriations, the NDAA would have made an ideal starting point for the addition to the stockpile so I am disappointed with the exclusion. Nb was first stockpiled after a recommendation in the NDAA.
The Senate passed the FY19 National Defense Authorization Act last week and it will now head to the President's desk and almost certainly be passed into law.
The 2018 act included specific language about scandium and the need to develop domestic resources.
This language was not included in the 2019 act.
2019 page 725:
https://www.gpo.gov/fdsys/pkg/BILLS-115hr5515enr/pdf/BILLS-115hr5515enr.pdf
2018 page 679:
https://www.congress.gov/115/plaws/publ91/PLAW-115publ91.pdf
Added 20k shares of CTEQF at .515 today.
If you are interested in this I would suggest reading section 4 of the FS to see the drilling and estimates by Molycorp, as well as the indicated and inferred resources in the FS.
The grade declines with the confidence level. It is quite likely that the areas outside the two targeted parcels are not economically viable to mine. The OPEX costs are based only on the probable reserves.
I would say the upside is roughly 20% based on the molycorp estimates for Niobium. Drill results suggest the scandium upside is similar.
The biggest unknown is the depth. This could certainly prove fruitful, but the prospect of going deeper is so far in the future that it’s affect on the share price in the next 5-10 years would be minimal.
They have options to purchase. Some are only options to purchase mineral rights, some are mineral and surface. This is detailed in a map on page 60 of the revised FS.
IB's shortable stocks list:
https://www.interactivebrokers.com/en/?f=%2Fen%2Ftrading%2FViewShortableStocks.php%3Fcntry%3Dusa%26a
No NIOBF listed.
You are comparing share price and disregarding market capitalization. That is apples and oranges to the “nth” degree.
That comment is as obscene as the comments that retail investors are shorting this.
I’m convinced one of three things are going on. We are either waiting for some sort of government support, financiers are not fully convinced by the third party engineering review and are waiting for Nordmin to finish detailed engineering, or financing simply isn’t going as well as we’ve been told.
I think it’s a combination of the first two. Management obviously can’t talk about a lot of things, but I would think they could discuss what engineering Nordmin has done and anything that Rockwell Automation, or Rockies Express Pipelines has done.
That being said, I’m not ruling out financing by the end of the year. The report from the senate committee on energy and natural resources should be telling, but ultimately I don’t expect an announcement until we start seeing appropriations bills passed to fund the US government for FY19.
Offtake prices for other minerals are typically pegged to some standard, index, or similar. For instance, the contracted niobium prices are contracted at a 3.5% discount to mineral prices (mineralprices.com), subject to TK or CMC getting higher prices on the secondary market, although the details of that are unclear.
That being said, scandium pricing has never been widely reported, so there is not a reliable benchmark for current pricing. Do you think a Sc cumstomer would agree to a price up front that is not pegged to some standard?
If I invested in this six years ago I’d be long gone at this point. Well, maybe I’d leave some in on the prospect of a 5-10x increase in 5-10 years. But with a ~5x increase in six years I would seriously look at locking in some profits.
I would settle for a quarterly letter to shareholders on recent ongoings.
The company has previously stated that they are not attempting to secure an offtake for the remaining 25% of niobium.
Financing, scandium, and federal government support are the three things that matter.
P/E is not relevant to a mine. A mine is a limited asset. Sure, there is the possibility of growth in the sector and further development, but ultimately the revenue producer of the mine is limited in supply. Hence the value is based on the NPV of the assets in the ground. For a company with a single mine, this means the share price is directly proportional to the remaining asset. Assuming the resource is fully understood, there is no room for growth, hence no reinvestment by the company, and all profits are paid in dividends. As the resource dwindles the duration of dividends shortens so share price goes down to zero when it has been fully mined.
http://ehrenworthsyme.com/casadeleon/docs/valuationofmining.pdf
I’m not understanding you. PEA1 and PEA2 both had 7500 tpa of Nb. I don’t see a reason to question the difference in th FS. Only major difference between PEA1 and PEA2 was the Sc production.
No. That’s the NPV if you assume year 33 of production replicates year 32 for all materials, which is actually at least 35 years off so you’d need to discount that for three more years.
I get what you’re saying though, and yes, I am still saying it’s insignificant. No analyst, institution, or reasonable mind is attempting to value a non funded junior mine based purely on their NPV. Right now Niocorp is less than 10% of NPV, so your nickel is now less than half a cent.
These numbers only come into play after the risk of funding, construction, and ramp up have been removed. If all three of those things are successful, then a nickel is insignificant at ~1-2% of share price.
A lot of questions there, but I’ll try to answer them in order for you.
I read. I respond. Preferably in facts sometimes in reasonable conjecture. In this case, it is purely based on the data at hand.
I don’t dispute that Nb prices went up, but I dispute that they have stayed up. There was one reference point that showed them to be higher a few months back. All other outlooks indicate pricing aligned with the long term forecasting in the FS. With CBMM’s extra supply coming online soon, the price is expected to be relatively stable even with added demand.
I wouldn’t suggest adjusting anything. When you type numbers into a calculator it is just as easy to use 284 as it is 300.
My projections are based off the FS numbers and Mark Smith’s comments. You can call that a guess if you’d like. Smith, SRK, Nordmin, et al may disagree. Unless you want to say Matheson’s scandium projections are also a guess?
Yes, really. Income projections (or guesses?) for the last 10 years of production are $201MM. The NPV of $201MM 33 years from now is $17MM. $17MM divided by 330 million shares is a nickel a share. In other words, it’s not significant.
My past posts and the others directed towards me will be the extent of my comments towards your final paragraph.
Ignoring the fact that you rounded up cash flow and payback time while rounding down projected total share count, why would anybody pay $10 for a $1 dividend (let alone $20) on a diminishing asset? That’s less than a 10% return as share price of a mine decreases at the same time.
Also, changing the LoM to 50 years would have minimal impact today or in the near future. The NPV of those 18 years of profit is very low today. In year 32 if the mine is believed to be tapped out and all the sudden there is 18 years worth of more material then that is a different story.
No. In theory $5.15 should be the price the moment that construction commences as that is the point in time when it matches NPV, but I don’t expect that as it doesn’t account for construction and ramp up risk. One should expect $5.15 when it proves profitable, and slowly trickle to zero throughout the life of the mine. One could plot the NPV over the life of mine and it would peak at the first point of full production. It would be greater than $1.7 billion at that point as profit is closer in the future, but not by a lot.
My $5.15 already assumes the dilution is at NPV, if that’s how you want to figure it. Look at it this way, the current 230 million times $5.15 gives ~1.2 billion. The 100 million shares that are given as equity at 5.15 gives the other half billion.
I don’t think it is wise to attach a price to the equity given up as part of the debt package. I’ve said before, I think a hypothetical financing agreement would look like this: in exchange for an offer to loan a billion dollars at x% require, funder ABC requires 100 million shares of the company.
Essentially ABC isn’t buying shares. They are given shares and interest for the loan.
Now I don’t expect it to be a single source and as simple as that. I just don’t expect large personal placements, secondary offerings, or anything similar. I expect Niocorp to incur the full debt required by the projected CAPEX. The equity that is given up should be looked at more as a loan origination cost with approximately every $250MM of funding worth 10% of the company.
I was being sarcastic with my comparison. This has come up before. You hit the nail on the head. Materion has 20 million shares outstanding to Niocorps some 230 million fully diluted. I agree with all points of your post, but also take it one step further. Estimates are at least 40% of the caped is funded via equity. So let’s add 40% to the total share count and assume ~330 million shares outstanding when it’s said and done. That gives us a PPS of $5.15 using the NPV. Still basically a 10 bagger at today’s price, but my target shall remain $3.00.
Is that how you got your $40-$60 estimate?
MTRN is now at $61.90. Maybe you should up your estimate.