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Anybody else notice that niobium prices are back in line with historical norms and well below Nordmins assumptions in FS3? They are actually slightly below SRK’s 2017 assumptions. $38/kg for Nb means Sc needs to be about $1800/kg just for the project to break even and we all know smart money doesn’t invest in break even projects.
https://www.niobiumprice.com/
Your Mark:
https://www.wsj.com/articles/SB10001424127887324439804578109000920251888
The funny thing about this is Mark resigned shortly afterward. Jim Sims is on record saying it had nothing to do with the investigation. He said, “As Molycorp transitions from a development-stage company to an operational one, a different style of management was needed to run it.”
https://www.reuters.com/article/molycorp-ceoresignation/update-2-molycorp-ceo-quits-amid-sec-investigation-idUSL4N09L65R20121211
Yet we hear this team constantly say they aren’t in this for the development, they really want to operate a mine. Quite the contradiction, but that’s a genius of spin at work.
More of your Mark:
http://securities.stanford.edu/filings-case.html?id=104852
Google Molycorp lawsuit and Stanford. They have more documentation publicly available than any other source I’ve seen.
Per Mr. Kennedy, the plaintiffs agreed to the $20M settlement just a few months too soon after getting tired of the legal maneuvering by Molycorp to delay. It was shorty after the settlement was reached that it was discovered that Goldman Sachs did indeed sell before the IPO because they were provided information by management that the rare earths that Molycorp claimed they had did not exist at Mountain Pass. Smith, Sims, and the rest of this team were fully aware that their resource estimates in the technical filings were inaccurate but chose not to inform other investors.
For the same reasons that any reasonable person would call out a fraud when they see one.
http://threeconsulting.com/pdfs/SME-RareEarths&DeceptionWebV.pdf
He’s been president of that company for quite some time. Where’s his scandium expertise? Where is OnG? Who are their clients?
I’ll help you. OnG was incorporated in Delaware in the fall of 2014, just before the first PEA. Matheson’s work is literally referenced nowhere except what transpired after the Niocorp PR on his single piece. He has a law firm in Delaware listed as the address in the LLC registration (not uncommon) and the only other address associated with the company is a multi-family home.
So I ask again, what credible entity takes his single piece of work seriously and over all those with verifiable expertise? And finally, why did he pick a name so close to this well established Asian company in the same industry?
Correct on your first sentence. Incorrect on the second. Everyone acknowledges current pricing. None of them believe these are viable prices with an expansion of the Sc supply.
Kennedy and Worstall both believe it can easily fall under $1000, maybe down to $300/kg. Kaiser is generally in the $1500-2000/kg range I believe. Kaiser and Faessel are both viewed as extremely bullish on the mineral and some of the other potential producers. Niocorp doesn’t even appear on their radar.
Try again. The author in your first link is quoting Matheson via the Niocorp press release and Matheson’s LinkedIn article. That’s not a quote from Friedland, just a poorly written article from a site that regularly publishes bot articles.
Your second link is the Asian company I was referring to. Matheson has no connection to them whatsoever.
Exactly my point. One can agree or disagree with Faessel and his investment recommendations, but his experience is easily verifiable. You can do the same for others in the field - Jim Kennedy, Tim Worstall, John Kaiser - but you can’t find anything else on Matheson or OnG.
Why do you think this is?
Anybody find a source that doesn’t originate with Niocorp to verify Matheson’s expertise? Do you think financiers are going to ask what makes him qualified in this field? Why did he name his company after an existing Asian commodity trading company?
I’ll come to Belgium and treat you to a round at the golf club of your choice right after I see that red shovel hit the ground. I’ll even be on site to teach you how to dig a hole since you’ve never held a shovel or got your hands dirty.
I’ll stand by this until the end of 2020. If that red shovel doesn’t hit the ground by then you will publicly call out MS on his repetitive comments that financing is close.
Deal?
My DD goes deeper. As Victoria Bruce says in her book “Sellout”, Sims is a genius at spin.
Not consultants. Consultant. Just one. Interestingly enough, I’ve been trying for the last couple of years to research Mr. Matheson. Can you point me to OnG’s website? I can’t seem to find it. Perhaps you can list some of his other clients for us. I’m sure a consultant with his expertise has many others.
I challenge you to find a single reference to Matheson’s expertise outside of his LinkedIn article widely distributed and promoted by Niocorp.
Quite the contrary. I couldn’t care less about getting retail interest in Aussie junior miners. I very much care about exposing this company and I can’t help but be a little proud that I’ve helped others get out of this fraudulent disaster.
CLQ and SCY can both produce 99.9% Sc. Platina and Australian Mines can as well. The difference is that these four companies project an extremely limited market for such a high degree of purity and have incorporated that limited market into their studies. The technology for such purifies is not in question for the other companies. Nio has 70 ppm Sc. The other companies have between 300-600 ppm. Niocorp assumes demand for Sc will increase by 5-10x as soon as they flip the switch on their “mine”, all while assuming global pricing at the current 10-20 tonnes won’t be disrupted.
It’s an absurd argument that literally no one in the professional mining industry is buying into. Hence why they are dependent on retail Nebraska investors and a group of Europeans of modest wealth to keep this afloat.
No worries Pete. You use your liberal arts degree to combat the fallacious arguments and I’ll use my math degree to confirm the numbers you have provided. I’ll also add that the Nordmin study already used revised Nb pricing. Finally I’ll suggest you read the final paragraph on the page before the tables you referenced:
For scandium, the project’s break-even pricing is US$ 1,028/kg (pre-tax) and US$ 1,130 (after-tax).
Seems they have a little discrepancy in their report. FYI, if you use the SRK estimates then they would have required over $1500/kg Sc to break even.
The burn rate did not change significantly. In Q1 accounts payable and current accrued liabilities increased $300k, cash on hand decreased $300k, and ~$100k was drawn from the smith line. It’s still a three month burn of about $750k when you add it all up.
Incorrect. In FS1 and FS2 niobium was projected to pay for production costs of all three minerals. It was not projected to repay the capex and certainly not projected to provide a ROI.
The Project will obviously benefit from becoming a stable, domestic US producer of Nb and Sc2O3 where currently all supplies must be imported from abroad. Nb sales (32% of gross revenue generated) as modelled would cover the cost of production for all three commodities but Sc2O3 sales will be required to generate positive cash flow to cover any Project loan principal repayments/interest expense and meet investment criteria for stakeholders.
At what price?
Even if we go out on a limb and assume they get $3800/kg for that and I’ll even assume it’s guaranteed for LOM, they still have 55% of revenue dependent on a market that doesn’t exist. Furthermore, it’s a market that scandium followers understand that the more dubious have been claiming will take off for at least 15 years now.
Now go calculate what removing 55% of revenue does to the NPV and ask yourself what kind of billionaire financier is going to loan money on Niocorp’s unsubstantiated assumptions.
60% of the revenue is based on selling 100 tpa in a world that consumes 20tpa max, all at $3800/kg - a pricing assumption disputed by literally every other scandium expert on the globe except the one hired by Niocorp.
Looks like a swing and a miss on the PP prediction though lol.
A little history on the fraud while this team was at Molycorp while we wait:
https://seekingalpha.com/instablog/11866471-reeality/5149667-moly-fraud-deja-vu
The similarities to Niocorp are uncanny:
Over 80 percent of the companies projected income was based on metallurgical capabilities the company did not have and projected sales into markets that did not exist.
What are the odds of a PP dropping at 3:30 today? I say 3:2. It’s got to be better than even.
Was that statement recorded? Did MS put it in writing? Why would he say that to a journalist but not a shareholder?
I suspect as he attempts to hide from shareholders with legalese, he figures he can claim heresay with reporters articles.
Don’t be surprised to see construction equipment on site this spring (circa 2016)!
You are exactly right and as such I want to clarify some of my previous comments. MS set a goal two years ago to raise 20-30 million with the intent to let detailed engineering proceed without interruption. He stated as much in the 2017 investor call that has since been scrubbed.
The company’s only real option is that 20-30 million equity raise to further the engineering and allow the Sc market to develop. Any hopes of a tranche that starts construction is fantasy. Best case for the company is to secure the land options for another 5-10 years, pay off the liabilities that put the company at risk, and then take a wait and see approach similar to Scandium International. The Sc market has to prove itself before any major investors will take this seriously. Until then, now is a great time to take advantage of the retail driven share price run up.
Are you referring to the two billionaire investors, mining experts, and board members, Robert Friedland and Zhaobai Jaing?
I copied and pasted from the regulatory filings. If they aren’t correct there’s an even bigger problem here.
$46k in cash on hand and over $3.2M in accounts payable/accrued current liabilities as of 9/30. It’s surely worse now. Hopefully the perpetual longs will keep bidding this up and give the good guys a profitable exit opportunity.
This would also be a good time to reiterate Sims statement not to put undue reliance on forward looking statements in the presentation and to read the risk factors in the 10k, some of which I’ve copied below:
Our ability to operate as a going concern is in doubt.
We will require significant additional capital to fund our business plan.
We are actively pursuing such additional sources of debt and equity financing, and while we have been successful in doing so in the past, there can be no assurance we will be able to do so in the future.
Feasibility study results are based on assumptions that are subject to uncertainty and the estimates may not reflect actual capital and operating costs and potential revenues from any potential future production.
Our management believes the Elk Creek Project would significantly increase the world’s supply of scandium trioxide. Although the Company’s market studies indicate a positive outlook for demand, there is no assurance at present that the Company could sell all of its production. In addition, the sale of scandium represents a significant portion of the Elk Creek Project revenue; achieving the revenue projected in the Company’s studies is subject to market growth in scandium, which is a developing market with a risk of oversupply and/or undersupply disrupting pricing.
There’s also an acknowledgment out there that they may not be able to achieve specialty chem pricing for Sc, although I can’t find it at the moment. At the end of the day, the mine is entirely dependent on achieving specialty chemical pricing, as using the Sc projections from literally everyone but NB and Matheson would give Elk Creek a negative NPV.
I don’t have questions. I rely on research instead of salesmanship. Don’t think they’d respond to me even if I did.
Yet he claims they are just a few draftsmen and blueprints from a final design. It’s simply not true. Spec’ing a boiler at cleaver brooks for an EPC firm is quite a bit different than being involved in the front end engineering of a billion dollar project.
BTW, whatever happened to the third party review? It didn’t seem to gain much traction with financiers the first time around and now the underground portion has been completely redone. Are they going to initiate a new third party review or sit back and wait for it until requested?
Cool. Send it as a question for the meeting. I’ll save your post.
Interpret it how you want. Sounds like a great point to be clarified during the investor update. MS stated in 2017 they would need 20-30 million for detailed engineering. Sounds like that involves a little more than drafting. For an engineer I question your knowledge of EPC work and the FEED/FEL process. The project sure seems to be in the FEL2 stage (as would be expected) with the underground portion progressing into FEL3. I’d love to know how Nordmin is being compensated, but clearly the company hasn’t spent anywhere near the $20-30M it will take to finalize engineering. Don’t you think there’d be an announcement when this work commences?
It’s funny how so many on this board have forgotten all about financing in tranches and jumped to a conclusion they are going to wake up to news of $1.5b in funding any day now (Toronto Pete is correct about operating expenses).
Point is, the assumption of construction starting in January is absurd. There’s a lot of work left to be done. With the uranium concerns I’d be surprised if they even have the air permit by then.
The 10k. Page 46 of the pdf.
Our long-term financing efforts continued during the quarter ended June 30, 2019. As funds become available through the Company’s fundraising efforts, we expect to undertake the following activities: ? Acquisition of key land parcels currently subject to the Company’s Option to Purchase agreements; ? Continuation of the Company’s efforts to secure federal, state and local permits; ? Negotiation and completion of engineering, procurement and construction (“EPC”) agreements; ? Completion of the final detailed engineering for the underground portion of the Elk Creek Project; ? Initiation and completion of final detailed engineering for surface project facilities; ? Construction of natural gas and electrical infrastructure under existing agreements to serve the Elk Creek Project site; ? Initiation of revised mine groundwater investigation and control activities; and ? Initiation of long-lead equipment procurement activities.
I said recent, not two years. The rise and fall over the last two years tracks right with cobalt pricing. Long term forecasts for cobalt remain extremely bullish.
Recently nickel has seen some odd trading:
https://www.bloomberg.com/news/articles/2019-10-22/lme-starts-review-of-nickel-trading-after-inventories-plunge
A six month delay on the investment decision certainly doesn’t help either, but many of us favor the move to Fluor from MCC. It certainly gives reason to further question the initial selection of MCC though. It will be interesting to see what develops between the automakers and cobalt producers over the coming months. The early procurement and cash on hand suggest a lot of confidence by a couple billionaire backers.
Correction: detailed engineering for the surface has not started.
Detailed engineering is kind of important too. They still haven’t started on the surface.
Sounds like a great strategy, wish I would’ve thought of it. Here I am shorting the thing through a major brokerage as a retail investor. We should share notes ;)
No. You claimed the contrarians said no company would ever buy scandium. This is demonstrably untrue. The claim is no company will ever buy scandium at the prices and quantities Nio claims. I can’t prove a negative. The burden is on you/Nio to prove the affirmative. Not just to me or the board but to the greater investment community. The offtake agreement did not come anywhere close to achieving this.
I’m surprised no one has pointed yesterday’s volume anomaly vs today. Today was back to normal volume. Seems Lind must have benefited from the Tuesday pump.
That was SRK’s finding. It was in the 2017 presentation which they have completely scrubbed. I’ve linked it multiple times on this board but all links are now broke. SRK examined ground freezing during the initial FS. I’ll defer to world renowned engineering firm SRK well before little known Nordmin. This holds true for the new resource estimates as well.
No comment on your Sc offtake?
That’s a great bit of revisionist history. I think you are referring to the time that I mentioned that the company may be having issues obtaining the required permits for the river disposal which was proven right but only disclosed to investors well after the fact via Jim Sims senate testimony.
No one ever doubted the technical feasibility of ground freezing, but it’s important to note that world renowned SRK viewed it as an inferior option to the pipeline. Even the most recent FS indicates it is more capex intensive.
Second, which company bought scandium? I believe you are referring to the offtake with no disclosed pricing. Hell, I’ll buy all their scandium for a few bucks per kg and they can claim a 100% offtake. The agreement is meaningless to the debt, venture capitalists, and larger institutional investors without a credible index to mark to or other pricing agreement. MS got ahead of himself a year ago when he admitted that Traxys wanted more. Why would Traxys want to sign up for more at NB FS prices when many others will sell for much less? Traxys must have got a sweetheart deal just to sign off on the PR.
I’ll take your third point with one caveat. Financing will never happen under Niocorp. Elk Creek remains an intriguing resource, but it’s simply not economical to mine and refine under current technology.
Where’s the rest of your data set? What’s your methodology? Have you tested it? How did you conclude predictive analytics show a greater chance of financing than not?