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A number of key permits and environmental management requirements have been identified for the Elk Creek Project, some of which need to be implemented as soon as practicable in order to maintain the proposed Elk Creek Project schedule.
? While not necessarily complex, the timing generally required to complete permitting through any federal regulatory agency requires that NioCorp engage key agencies (in this case the USACE and possibly the EPA) early on in Elk Creek Project development and consider the siting and orientation of facilities carefully to minimize the risk of a protracted National Environmental Policy Act analysis of the Elk Creek Project.
Perhaps one of the most critical approvals likely to be needed by the operation will be a radioactive materials license from the Nebraska Department of Health and Human Services (“NDHHS”), Office of Radiological Health. Because of their limited experience with hard rock mining in the State of Nebraska, much less mining that includes Naturally Occurring Radioactive Material, the NDHHS may require additional information and more time to approve the Elk Creek Project under a Broad Scope License. Early and frequent engagement is a necessity with respect to this regulatory agency.
Documentation of existing baseline environmental conditions at the Elk Creek Project site was initiated in 2014 and should continue throughout the permitting process. Additional studies will need to be added once regulatory authorities have been given an opportunity to review the current mine plan presented in the Revised Elk Creek Feasibility Study and assess their particular data needs for approval of the Elk Creek Project.
Surface water monitoring should continue throughout the permitting process and extend into construction and operations as part of the Environmental Management System. The NDEQ Water Quality Division has been engaged in order to discuss the Elk Creek Project and potential data needs for a National Pollutant Discharge Elimination System discharge permit. This would include both local discharges (if needed) as well as discharges to the Missouri River.
A wetland delineation and potential jurisdictional waters assessment was conducted in late 2014 to identify wetland and drainage features within the proposed Elk Creek Project boundary which resulted in a formal JD being issued by the USACE on September 6, 2016. The entire project has been authorized under the non-notifying provisions of Nationwide Permit 12.
Ground water contamination will be taken very seriously in this day of over irrigation for agriculture, the depletion of the ogallala just a few miles west, and unrecouped freshwater from fracking to the south.
Nebraska is a lawful state and there may be legitimate environmental concerns over mining the deposit. Don’t mistake “mining friendly” for crony capitalism.
According to the critical minerals list and the USGS, China is the principal source for US imports of Scandium. So yes, China does export scandium. Their production potential and current stockpiles are entirely unknown. What is known is that scandium in low densities is common throughout the world. It should not be assumed that China can not manipulate the scandium market should it grow as forecast.
https://minerals.usgs.gov/minerals/pubs/commodity/scandium/mcs-2018-scand.pdf
When has MS done this before?
There is no real percent chance as we don’t have any relevant statistics to analyze. I’ve said before that my opinion is 50/50. Traxys vote of confidence puts me at 55/45 in favor of it being built.
The likelihood of either hitting that price is so small that I don’t bother to consider it. If either were to hit that price it would almost certainly be due to the same type of speculation that drove Molycorp to $79. If timing a trade based on speculation is your goal, then you would need to ask yourself if alloy materials or electric vehicle batteries are more likely to drive such speculation.
I’ve stated before, I think there is a strategic value to niobium that cannot be priced into a feasibility study. The titatinium is relatively insignificant to the project. It is found in abundance in Canada, Australia, and other ally countries.
The future of scandium is unknown. If it takes off as some project then there are again mines in Canada and Australia that claim to be able to produce it at much lower prices than Niocorp and have much lower price projections. If your bet is on the critical minerals side, then you must ask yourself if you believe the US is going to go it completely alone in that regard. Ti and Sc can be produced in large enough amounts by our allies to serve our allies.
The Canadian supply of Nb is not sufficient to supply North America, Europe, and Australia. The only other supply is Brazil. I consider that and unstable supply politically. In a world of peace the Brazilians would otherwise control niobium.
I invest on facts, not hope. Let’s stick to the former. Hope isn’t much of a strategy. I just ask you make your comparisons based on these facts.
Same as they’ve been since the FS release, but slightly less in magnitude. Having a scandium offtake with a reputable company is certainly better than not having the offtake, but the Sc pricing and growth concerns remain the same and are the top risks. The contract details with Traxys are almost certainly subject to an NDA, so from the investors standpoint all we really know is that someone else in the industry believes the Sc industry can double in short time. That’s still a long ways off from the 100 tpa in the FS, and without knowing pricing details it is impossible to say how much the banks view the offtake’s potential to add to the bottom line.
Traxys commitment to make Niocorp their sole supplier is why I say the risk today is less than it was last week. That is a significant event, but again with a commitment at only 12 tpa and no pricing details the Sc concerns mostly remain, along with concerns that banks view this as a worthy investment.
I rather hear from those that disagree with me based on an educated opinion supported by facts than to simply have others tell me they agree. Speaking with the same side on any issue does nothing to further ones education, but it is all too common in stocks, politics, and just about any other controversial issue. Conformational bias is so great today that it has caused respectful debate to be replaced with accusations and insults.
Nothing wrong with a little dreaming by the way, but I do fear that there are many inexperienced investors here that have fallen into the trap that they have found a once in a lifetime opportunity that somehow all of the institutions have missed. I feel it is the responsibility of more seasoned investors to divulge the risks as well.
I know I replied to your post, but that was intended more to the board in general. If this was a sure thing, it would already be priced as such. I’d hate to see someone lose their life’s savings on a dream.
It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so. – Mark Twain
I’m certainly wondering, but it is unlikely we will see scandium on a major metals exchange anytime soon, if ever, and it’s even more unlikely that Niocorp or Traxys will release those details of this agreement.
MS has long stated that his goal is to sell scandium based on the value to the end user. With that plan it is not smart to publish your sales price, provided you can do so within anti-trust regulations as you don’t want customer A to know what customer B is paying. This gives Niocorp more leverage in other negotiations.
It’s also possible, if not likely, that the agreement is for a percentage of Traxys sell price and not a flat rate, or at least a combination of the two so that Niocorp gets a cut. I’m sure Traxys sells metal to aerospace with a higher premium than the sporting good sector so it is important for both companies to maximize profits in both spaces. You can’t do that with even margins across the board.
No, it was not true that I was the first to post about Clean Teq. My posts mentioning CLQ have been limited to scandium projections, just like my comparisons to scandium international and Australian mines, of which we are still waiting their BFS. Any other comparisons have been ancillary. Feel free to join me on the CTEQF board if you’d like to compare the companies from the other angle.
That’s not true, but if your profitable swing trade was because of something I said then I am happy for you.
The Aussie board isn’t entirely unlike this one, but maybe not as skewed. There are plenty CLQ investors over there looking through rose colored glasses. There are also many intelligent investors that have done a great deal of research, have experience in mining, and view Niocorp as a blip on the radar in the junior mining sector.
Of course they haven’t dropped a dime into it. Neither has Beijing Easpring into Clean Teq or any other company for the remaining 80% of nickel and cobalt that does not have offtake agreements. What they do have is the negotiations and commitment to purchase. That is not worthless.
Suggesting that “T and T” will suck up profits suggests that there will be a mine to produce profits. Mining investors make their money on the front end, so that sounds like a nice prediction for my purposes.
Are you more interested in Clean Teq’s share price or Niocorp’s? One of these companies can exclude scandium from NPV and still have a viable mine. Niocorp cannot. There was some positive news on that front which should benefit all of the legitimate potential scandium producers. None of this negates the massive daily swings of penny stocks by manipulation or other means.
A max prediction of zero is a little silly. We dont know what revenue they will actually receive from this and that is unlikely to be publicly disclosed until you see it it a financial statement. It could be a Hail Mary for financing, but ultimately I look at it as the same as the thyssenkrup and othe Traxys deal for niobium. The counter party isn’t going to go through the negotiations and sign the deal on a ruse. Niocorp needs a lot more than 10% of the scandium to be committed in offtakes to be a viable business, but this was likely a step in the right direction.
Yes, $5-ish is my max prediction, excluding a short term speculative spike like Molycorp saw.
No, simply a “commercial sales contract”, but that’s not really a surprise. MS has long stated that his goal is to sell scandium based on the value to the end user. With that plan it is not smart to publish your sales price, provided you can do so within anti-trust regulations as you don’t want customer A to know what customer B is paying. This gives Niocorp more leverage in other negotiations.
It’s also possible that the agreement is for a percentage of Traxys sell price and not a flat rate, or at least a combination of the two so that Niocorp gets a cut. I’m sure Traxys sells metal to aerospace with a higher premium than the sporting good sector.
Somebody with more time that me this week should try to figure out who Traxys’ aerospace customers are. Under the agreement Traxys is now Niocorp’s only acccess to the market. This is a concession that Traxys likely requested to gain a competitive advantage themselves and I’m curious of any downside. I googled Boeing and Spirit real quick and did not find a connection, but that’s not a surprise in 30 seconds of research. Airbus is already working with foreign suppliers so they were not a likely customer anyways.
The devil is in the details, but this certainly appears to be a positive development for Niocorp and the future of scandium production.
That's debatable, but not really the point. It's irresponsible to turn a blind eye to the issues at Molycorp while singing his praises for getting the stock up to $79 for a mere moment in time, which had far more to do with rare earth speculation than any of the fundamentals of the company.
Molycorp also IPO'd at $14. The best possible return an investor could have seen would have been just under 400%, so it doesn't even fall into the 10 bagger bucket if an investor timed it perfectly, although that would have been a nice trade. It was back under $14 less than two years after the IPO. Long term investors were left with nothing.
http://fortune.com/2011/11/18/molycorps-1-billion-rare-earth-gamble/
Anyways, the whole point of this was that I don't see the path for Niocorp to follow Largo's trend for the reasons I stated in my first response to you. Those that invested a few years ago in the teens have the potential for some astronomical returns, and I think even a new investor today could see 10x in an optimistic model. Those are pretty lofty projections.
It’s easy to cherry pick ten baggers. It’s a different story to actually capitalize on them. Molycorp’s rise was short lived and ended in bankruptcy. Investors that got out at the speculation driven peak certainly did well. Niocorp has only been a ten bagger for those that also took advantage of the spike. Finding these investments in hindsight is as easy as any other google search. Actually buying and selling to achieve such a return yourself is a significant challenge. Largo was one sitting right in front of the visitors to this board, yet it appears few if any were able to capitalize on it. I considered it two years ago and have already explained why I chose not to invest.
I do not view MS’s involvement in Molycorp positively. His resignation under the SEC investigation should certainly give any prudent investor reservations, let alone the bankruptcy afterwards.
10 bagger is a relative term and simply means an investment that returns 10x, regardless of timeline. A new Largo investor from about 15 months ago or more would have already attained 10 bagger status.
10 baggers are incredibly rare and most investors will never have one. It is an incredible achievement for any company.
Best I can claim is a “nine bagger” in Ford after investing in early 2009. It was a tenner for some but I took my profits early.
The socioeconomics against DRC cobalt are quickly ramping up. Even China appears to be hesitating in supporting these producers. The only other currently viable source of the mineral is the potential Aussie mines.
Hope so. I’d much rather be wrong about the upside than the downside. I worry my projection of a potential 10 bagger at this price point is too lofty. It’s hard to imagine how such projections are considered pessimistic.
I should have corrected that. I believe the words were closer to “would likely require 40-60% in the form of equity.” The main point of the post remains unchanged.
Yes, I indicated the mineral prices were how I drew my conclusions. I do not see the same upside as Largo saw with Vanadium as I do with Niocorp’s two main products.
MS is on record saying any financing package would be composed of 40-60% equity, so dilution should be a foregone conclusion and is typical in mine financing. I’ve used conservative projections in my $3-$5 price estimates, but it could be as much as an additional billion shares or so. ($600,000,000 at today’s price).
How do you see the price of Nb and Sc as conservative? I think Nb pricing will likely increase right along projected CAGR rates, which should be a little more than inflation but nothing to get overly excited about. OnG is still the only source I have found that supports the Sc pricing in the FS. I am yet to see a reputable source suggest those are conservative numbers.
I noticed the disparity a while back and reopened my DD into Largo. A few notes, and some corrections:
1. They used a conservative estimate for Vanadium prices, their primary mineral, and excluded all byproducts. They assumed $6.34/lb LOM except $9/lb in 2018 and 2019. Vanadium is currently at $22-$25/lb. You will find the LGO price has tracked very closely to Vanadium the last 12-18 months.
2. You are using a post tax NPV for Largo and pre-tax for Niocorp. That is not an appropriate comparison. You also excluded the NPV of the satellite deposits for Largo, which had post tax NPV of $140 million in the same study for a total closer to $700 million.
3. It is a nearly undisputed fact that Niocorp will have significant share dilution in a financing deal. This needs to be taken into account in any share price comparison.
4. I’d challenge investors to look at the price projections of Niocorp’s minerals if they believe it will hit a market cap over NPV. I believe the scandium to already be overvalued. Niocorp’s numbers should be a best case and not a base case. Niobium may have some upside, but CBMM will ultimately control the market. Niocorp will be in a position of a price taker and not a price maker for that mineral.
http://www.largoresources.com/investors/news/press-release-details/2017/Largo-announces-results-of-Life-of-Mine-Study-for-its-Maracs-Menchen-Mine-and-resulting-significant-increase-in-NPV/default.aspx
Cool. They aren’t competitors and will succeed or fail independently. I think both companies have qualified leadership. MS’s reputation is somewhat polarized. Sims government experience may be what pulls this project through. CLQ has a a self made mining billionaire backer.
Not sure why you would think that, they have substantial cash on hand, a strong existing business in water treatment, and have already made significant investments into the construction of their Sunrise project. I would suggest reviewing some of their recent filings and news releases.
You mean when it went bankrupt? The Molycorp price spike was a dream for traders but not long term investors. Banking on something similar for Niocorp is nothing more than a gamble. Are you invested on the merits of the finances or on the possibility of not just a trade war, but an actual war where our allies cannot help support our mineral requirements?
Come on over to CTEQF and throw out $60 PPS projections. I will be happy to refute those as well on the same basis as the ones here. Crazy projections do not do anything in advancing the company to those that read this board but you don’t hear from.
Yes, they should. I would appreciate some insight and challenge on issues I may not be aware of with them. CLQ is regularly discussed on an Australian board but rarely on this NA board.
I do need to point out (again) that Clean Teq and Niocorp are not competitors at all. They have scandium in common but otherwise have completely different mineral portfolios. Both companies are in agreeance that neither can grow the Sc market alone and that they will need the support of other mines in order for that market to grow as some have forecasted. In that regard, partners would be a more accurate term than competitors.
I don’t disagree with your post, but we don’t know if the rest of the deposit is economically feasible to mine.
I do know that outlandish predictions only serve to discredit this board.
At the current share count, 80.00 equates to an 18 billion dollar company, which is greater than the total revenues over the entire life of mine, as assumed in the FS. That doesn’t even count the necessary dilution to secure financing. Please show how you arrive at such a conclusion so as not to misinform potential investors lurking this board.
Correction: I realize you may be speaking in CAD, so that would be about $60 USD and put the valuation just a bit under total revenues over LOM. The prediction is still preposterous and I ask how you arrive at such a conclusion.
Here is the DoD report that has been referenced multiple times in the news today. A google search for Department of Defense Critical Minerals will bring up quite a few articles. Note that this is NOT the report due under the critical minerals list executive order. This one was a different order from 2017. The more relevant report for Niocorp’s business will come from the Department of Commerce between now and mid November.
https://s3.amazonaws.com/static.militarytimes.com/assets/eo-13806-report-final.pdf
I don’t have a problem with him as CEO of both companies and a director for another. It’s common in this industry and others. The reality is that none of these are “full-time” jobs as most people think of them. He gets paid for what he knows as much as for what he does. You can’t just go bang on doors 40 hours per week asking for money. In this regard, I think Sims government experience is actually much more valuable than everything Smith brings to the table.
My number one complaint about management is still the lack of updates. Smith hasn’t directly addressed shareholders for about a year now and that is inexcusable. A quarterly update letter is not too much to ask for, and issues such as the 408 permit should have been communicated directly and not through the senate hearings.
What are the individual values that would lead to a sum of the parts valuation of $20-$50? How do you propose each of the three business units would achieve that value?
Every HOG farmer is Affected. No farmer exports directly. They typically work in coops so that large companies are the ones actually shipping, like Seaboard or Smithfield. Additionally, in a global economy when one producer is faced with an over supply due to a sudden decline by a major consumer, the price drop will transcend the sector, that is basic economics and not specific to pork.
Finally, China frequently is the difference between profit and just breaking even for this industry as they are consumers of parts of the animal that most Americans will not touch, which are frequently called the “variety meats”.
https://www.nationalhogfarmer.com/business/chinese-retaliation-us-pork-exports-will-harm-rural-economy
That statement jumped out at me when I read the article this morning. That is exactly how I view the company and the only reason I haven’t sold. I still think the scandium revenue forecasts are bogus and that this company will not turn enough profit in private industry alone to satisfy financiers requirements.
On the other hand, you can’t really quantify the strategic value of niobium to governments in the context of NPV in a feasibility study. I will be looking for some sort of verbiage in the report that is similar to this. This is really what the German Untied Guarantee does for Germany.
The report actually has not been delayed. The due date was always mid November. It is due 180 days after the critical minerals list came out. Some articles had erroneously listed the August date which was 180 days after the draft version.