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Recent Corporate Events
Long-term financing efforts continued during the quarter ended December 31, 2017, with principal activities focused on outreach to and discussions with several potential sources of project funding, as well as completing the technical due diligence review (the “technical review”) of the Company’s recently released Revised Elk Creek Feasibility Study by RPM Global USA, Inc. on behalf of a potential debt financing syndicate. The technical review is projected to be completed in the quarter ending March 31, 2018. The technical review will provide an independent analysis and opinion on the technical content of the Revised Elk Creek Feasibility Study, and will be provided to financial institutions expected to form debt and/or equity syndicates that will help finance the Elk Creek Project.
Upon completion of the technical review, the following steps remain in our financing plan:
- Completion of due diligence on the Elk Creek Project’s financial model;
- Completion of technical and environmental due diligence;
- Completion of additional independent market reviews for Sc and Nb;
- Completion of legal due diligence;
- Additional “road show” style presentations to potential debt and equity investors;
- Negotiation and execution of specific debt and equity financing assistance, along with necessary regulatory approvals for such financings.
Pursuant to notice provided by Lind to the Company of its election to advance an additional $2,500 in funding under the Initial Convertible Security and the Lind Agreement (the “Second Tranche Increase”), Lind funded the full $2,500 Second Tranche Increase as of February 7, 2018. In connection with the funding, the Company issued Common Share purchase warrants (the ‘Second Tranche Warrants”) to Lind.
In addition, the terms of the Lind Agreement, as amended, provide for additional funding of up to $2,000 as part of the second tranche, subject to certain conditions, for total gross proceeds to the Company of up to $4,500.
Elk Creek Project Update
On June 30, 2017, we announced the results of the Elk Creek Feasibility Study, and the related technical report was completed and filed in Canada on SEDAR on August 10, 2017 (the “August 2017 Feasibility Study”). In connection with a review by the Ontario Securities Commission (“OSC”), on December 15, 2017, the Company filed the Revised Elk Creek Feasibility Study. The Revised Elk Creek Feasibility Study, which is available for download on SEDAR and on the Company’s website at www.niocorp.com, contains no changes to any previously reported numbers or forecasted economic returns of the Elk Creek Project from those contained in the August 2017 Feasibility Study.
At the OSC’s request, the Revised Elk Creek Feasibility Study provides (1) additional information in Section 19.1.3 on the growth forecast for global scandium markets provided by an independent scandium market expert (OnG Commodities LLC and Dr. Andrew Matheson) and relied upon by the Company in its August 2017 Feasibility Study; (2) an analysis in Section 22.4 showing Net Present Value and Internal Rate of Return sensitivities of the Elk Creek Project at +/- 30% of the August 2017 Feasibility Study’s assumed product pricing, capital expenditures, and operating costs (vs. +/- 20% originally presented in the August 2017 Feasibility Study); (3) disclosure in Section 3 of the reliance on OnG Commodities LLC and Dr. Matheson; (4) the removal in Section 24 of certain disclosure regarding the Company’s relationship with Dr. Matheson; and (5) inclusion in Section 25 of certain risk factors.
The Elk Creek Project is planned as an underground mining operation using a long-hole stoping mining method and paste backfill, operating with a processing rate of 2,760 tonnes per day. Expected total production over the 32-year mine life includes 143,824 tonnes of payable niobium, 3,237 tonnes of scandium trioxide (Sc 2 O 3 ), and 359,128 tonnes of titanium dioxide (TiO 2 ). Estimated up-front direct capital costs are $705 million, in addition to indirect costs of $189 million, pre-production capital costs of $85 million, an overall contingency of $109 million, and pre-production net revenue credit of $79 million.
We continued to advance Elk Creek Project-related work during the quarter. Primary activities included:
- Completed the Revised Elk Creek Feasibility Study written report and subsequent filing on SEDAR, as noted above, as well as completion of the underlying detailed technical report volumes, which are not public documents and are not filed on SEDAR;
- Completed the preliminary air monitoring activities, positioning us to complete the development of an air construction permit with the Nebraska Department of Environmental Quality, which we expect to file in calendar 2018;
- Completed step three of the nine-step Army Corps of Engineers Section 408 permitting process, with fieldwork completed in October 2017 and a subsequent submission of design information in calendar 2018;
- Initiated the competitive process to identify and select engineering, procurement and construction firms for both surface and underground;
- Executed a natural gas supply agreement with Rockies Express Pipeline LLC in November 2017, and continued discussions with drilling companies, energy providers and other related businesses required for initiation of water management and construction activities at the Elk Creek Project; and
- Completed a successful test production of aluminum-scandium ingots. These ingots form the basis for the potential commercialization of new aluminum-scandium alloys and were produced by IBC Advanced Alloys, Inc., through our previously disclosed joint development agreement.
Anyone read the 10-Q that was released today? Some good information in there.
I agree with you. Its not death-spiral financing.
They're selling 500 share blocks to their advantage and they are able to mute any PPS climb because the volume is so low.
I've noticed the exact same thing. That's why I didn't want to get excited over yesterdays news.
Maybe when we get financing we'll see the biggest drop in SP yet LOL
So frustrating.
For those asking about the 500 share trades. I'm sure its Lind. There's no other explanation. It will continue until we see financing and/or scandium news.
How is it right?
And thats why most of us here are holding and/or keep accumulating.
Citigroup did a reverse split in 2011 so its not that extreme of a gain. Still would have done amazing if anyone bought the low in 2009.
I do agree that its best to hold during rough times if you believe in what you own. Trying to day trade is rough unless you're extremely skilled.
Holding during ups and downs can test ones patience. I think most of us here know what that feels like. NioCorp has pushed our limits.
I think we might drop under 0.53 unless buyers step in.
The 500 share lots appear to be always sold at the bid and because the lack of volume, it artificially pushes down the PPS.
Do you think we'll touch 0.40 CAD again?
I agree that TA definitely has its uses but I just don't see it fully applicable to this stock. We can still see some levels of support and resistance but the volume is way too low to be sure of anything.
Its always the same pattern - PPS drifts lower on periods without news.
In my opinion, I don't think we'll see financing news until later this year.
Also, I assume an SC offtake is dependent on the goverment's position on recognizing it as a critical mineral. If its not added to the list, it'll be a long year for us. If it is added, NioCorp has leverage on agreements.
Patience is required with stock as usual.
Thanks for the article. Good read.
The spike from 0.37 to 0.78 was because of a group of new investors according to Mark in one of his latest interviews. It had nothing to do with technical analysis.
Technical analysis does have its place, but not with this stock.
In my opinion, technical analysis doesn't work on a stock like this.
Its news driven and very low volume. One person can easily move the PPS +/- 10%
These type of lenders protect themselves from risk.
I do see where you're coming from. Its not hard to believe that they do have some insider information and do see this project as low risk with high reward.
It's not a burden for them to lend money. Read the details of the agreement.
You're right that they are in the business to make money but not because they think the company will do well but because of the conditions on which they trade money for shares.
I'm not saying that NioCorp isn't going to be successful. The deal with Lind is to keep the lights on until they can get financing in the next 6-12 months. There is nothing positive about this and nothing negative other than dilution and most likely a slow PPS drop if buyers don't step in.
Doesn't it matter if the share price drops? It has a big effect on the equity financing.
I remember Mark saying during the last investor call that they were directed to look for debt financing first because the share price was too weak for equity financing.
I do agree that if Scandium is added to the critical material list, it will give NioCorp some leverage.
What are your observations for the day?
I see a bunch of 500 blocks going through which is usually associated with a slow drip in the PPS.
That is correct.
I was trying to show that Lind is not the best "institutional" investor. When you specifically have to ask them not to short, that's not a good sign.
I agree also. Its not good news.
Lind is a predatory investing firm. Look at what they've done to other junior mining companies. NioCorp had to specifically ask them not to short sell they're shares.
Google this "Lind Partners death spiral"
I agree.
Could they not find a better source of financing?
They get 5 million warrants in return don't they?
Could this be why we are seeing the 500 share blocks coming through?
I'm not sure why they don't distance themselves from Lind.
Why don't you focus on when the PPS will be above $1, or even $10 before saying it might be $100. It doesn't help anybody.
These posts are as bad as the ones that say this stock is a zero and won't get financing.
That means the market cap would be around 50 billion after dilution. I don't think that's happening.
Posts calling for a PPS of 116 makes this board a joke.
Once we see a Scandium offtake and/or financing, that's when the PPS will takeoff. The market cap is far too little for a future billion dollar company.
Does anyone know when they have to raise money again for daily operations? From what I remember, they had enough cash to last until mid-2018.
I expect to see material news regarding financing by mid to late 2018. That'll give Mark enough time to get all ducks in row and receive the right price for the SC offtake. Don't want to rush the process now.
Going to keep accumulating shares in the meantime.
Read the FS before calling me a liar.
"NioCorp’s overall objective during the six months immediately following the issuance of the
project’s Feasibility Study is to complete offtake agreements for a minimum of 25% of the
projected annualized Sc2O3 production from the Project."
Did you read the FS?
"NioCorp’s overall objective during the six months immediately following the issuance of the
project’s Feasibility Study is to complete offtake agreements for a minimum of 25% of the
projected annualized Sc2O3 production from the Project."
We may see the buying pick up when we fade back to the 0.40s.
Does anybody think we'll see the Scandium offtake this month that was promised by management?
Informative article. Thanks!
This is from the FS and may give some insight.
Pg. 449
"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. However, this valuation is most
dependent upon the sale of all annual Sc2O3 production from startup as it accounts for 66% of LoM
gross revenue generated. At the extreme, at a cash cost of US$37.59/kg Nb and current US$40/kg
benchmark price and assuming no Sc2O3 revenue it is apparent that 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."
Pg. 442
"NioCorp’s overall objective during the six months immediately following the issuance of the
project’s Feasibility Study is to complete offtake agreements for a minimum of 25% of the
projected annualized Sc2O3 production from the Project."
I doubt that target will be hit with their history of missing deadlines that are too optimistic.
Pg. 449
"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. However, this valuation is most
dependent upon the sale of all annual Sc2O3 production from startup as it accounts for 66% of LoM
gross revenue generated. At the extreme, at a cash cost of US$37.59/kg Nb and current US$40/kg
benchmark price and assuming no Sc2O3 revenue it is apparent that 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."
It clearly states in the FS that without scandium the project doesn't meet investment grade.
Do we know how they expect to get financing without a Scandium offtake? Did Jim tell you information that conflicts with what is stated in the FS?
I agree TODD.
Frustrating to see NioCorp with such a small market cap when its going to be a billion dollar company.
Hopefully the market will see the "light" soon and correctly evaluate the worth.
A Friday evening news release is usually not good, lets see how the market reacts Monday morning. Might be a good chance to pick up more shares.
Now in the 100k club. Looking to pick up some more before the end of the year.
Lets hope for a prosperous 2018.
I'll listen to the webcast again. Maybe I missed something.
Management has already indicated that there is going to be debt financing and an equity portion. It has never been mentioned that ThyssenKrupp would take a stake in NioCorp and eliminate the need of financing. There is little chance of below happening, although I would be very happy if it does.
"I would not be surprised in any way, if ThyssenKrupp were to take a substantial stake in NioCorp Development. There is an undeniable synergy with the two companies - that would make for a perfect fit! Win Win symbiosis, if you will.
Potentially the search for preferable financing would be eliminated from the equation."
Wishful thinking. Not happening.
Management hasn't given that as an option as the search for financing is already underway.