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Whoever is wanting to sell ... I have a 3500 share buy offer, all or none, @ $.92 USD, that you may not see on your screen.
I might as well accumulate some more.
Figures below in USD.
As of June 30, they had about $7 million. For Q2 2017 (ending June 30, 2017), they burned about $4 million. Their quarterly burn rate fluctuates (in Q1, it was $1.9 million, and in prior quarter before that, about $7.6 million).
No doubt they'll need cash infusion soon. Have seen estimates that Excelsior will seek about $34 million through equity sale (share dilution), and seek about $51 or 52 million in debt financing. But this was not a secret and, I think, well known to potential Excelsior common stock investors.
Maybe the share price drop is the sudden realization by a couple of shareholders that Excelsior will be selling more shares very soon for the equity financing? I thought that factor was already baked into the current share price.
Not sure why the sp is plummeting today, albeit at low volume. Could be the nearly one month extension for the comment period. My guess is that the extension is due to the holiday season (EPA employee leave) and potential for a federal government shutdown in the second week of December.
Thus far, no public comments have been posted by EPA on the website. EPA's website indicates it will post public comments as they receive them.
After the public comment period on the draft permit/aquifer exemption proposal ends and assuming no vociferous objections or comments, EPA will post its decision on issuing a final permit, and allow a 30-day period in which any persons or entities who submitted comments in opposition to the permit can file a petition to the Environmental Appeals Board (EAB -- admin law judge-like forum) to overturn or modify EPA's permit/aquifer exemption decisions.
After that 30-day period expires and there is no petition to the EAB, the permit is pretty much final and unchallengeable, unless Excelsior fails to comply with the permit terms and conditions.
EPA Region 9 extended the public comment period for the draft UIC permit and proposed aquifer exemption as an underground source of drinking water under the Safe Drinking Water Act through January 8, 2018. Prior date was November 24, 2017.
[url]https://www.epa.gov/sites/production/files/2017-11/documents/r9uic-az3-fy16-1-excelsior_public_notice-2017-11.pdf
Busy capital raising agenda. Excelsior doing presentations or attending Florida Capital Conf (Nov 16-18); 121 Mining Investment Conf (London, Nov 27-28); and Proactive Investor Mining Capital Conf (London, Nov 30). Keeping on schedule - good show.
Another extract from the Conference Report.
In the Conference Report, there is a snippet that says:
"Authority to dispose of certain materials from and to acquire
additional materials for the National Defense Stockpile (sec.
1414)
The Senate amendment contained a provision (sec. 1411)(now sec. 1414 of the NDAA FY 2018 bill) that would authorize the National Defense Stockpile Manager to dispose of up to $9.0 million of excess materials in order to acquire two new materials and rare earth elements that have been identified by the Department of Defense as essential to meet
military requirements.
The House bill contained no similar provision.
The House recedes."
This means the Senate proposal (see section 1414 of the proposed NDAA FY 2018) was adopted, and DoD would be authorized to use up to $9 million to acquire 2 new rare earth materials (electrolytic manganese metal, and antimony) from FY 2018 thru 2027 that have been identified by DoD as essential to meet military requirements.
The House and Senate Conference Report on the NDAA for FY 2018 has been published (they haven't yet assigned a Report No. to it).
Of note, the conferees agreed to authorize an additional $5 million, as a line item increase to Research, Development, Test and Evaluation fund authorizations for "END ITEM INDUSTRIAL PREPAREDNESS ACTIVITIES" for:
"Development of improved manufacturing technology for separation,
extraction, smelter, sintering, leaching, processing, beneficiation,
or production of specialty metals such as lanthanide elements, yttrium
or scandium."
No other mention of "scandium" in the report, fyi.
If you want to review the report, you can download it at the following link: [url]http://docs.house.gov/billsthisweek/20171113/HRPT-115-HR2810.pdf
Putz - when you say Mark & co. will get a "substantial debt package" (e.g., $100 million), I have a question or two.
Is Mark willing to subordinate his debt to the new debtor? In other words, is he willing to let the new lender have senior creditor rights over his personal creditor rights (his personal loan to Niocorp) to the company's assets? If not, what creditor in their right minds would provide a substantial debt package?
I know some of you will say that Mark knows that such a subordination, if needed to get a substantial debt package, will elevate the price share so much that it would outweigh the risk that Mark might face by subordinating his security interest in the company's assets. But getting only 10% of the needed capital doesn't de-risk the potential personal loss he may face if the remaining capital investment doesn't happen.
Just about perfect timing. Near end of the draft EPA 30-day public review/comment period. Thanks Masslanding.
To prove your point about DoD's contractors looking to strengthen ways to use aluminum, Boeing Horizon X just invested quite a bit in Gamma Alloys, which specializes in combining nanoparticle alumina with aluminum to reinforce its strength.
https://seekingalpha.com/article/4119279-boeing-horizonx-invests-gamma-alloys-advanced-materials
For National Defense Stockpile purposes, for fiscal year 2019, DoD will only be asking Congress to authorize DLA to purchase:
- Aerospace-grade rayon.
- Low alpha tin.
- Pitch-based carbon fiber.
- Rare earth permanent magnet feedstock.
For a grand total $ amount of 15.5 million of DLA's National Defense Stockpile Transaction Fund.
Very insightful post, Landmark. Thanks.
Ditto on what Stark said. Many thanks.
Monocle
Great question. Congressional committee reports may specify deadlines that the committee members think will be after the legislation is passed. I'm sure the Senate Armed Services Committee, when it specified the December 1st deadline, assumed the NDAA would have been enacted well before December 1st.
In this year's NDAA, the legislation may very well be delayed for a bit (I still anticipate the NDAA being agreed upon between the House and Senate conference committees sometime in November and sent to the President in mid to late November). I think DoD will delay submitting reports with short-horizon deadlines that occur shortly after the NDAA is passed -- in other words, DoD may ask for or just assume a delay is warranted.
Jeunke - if MS hadn't protected his investment (loans) in the manner he has, then I would think all of you were fools to invest in a company with a CEO who didn't have the financial savvy to make such arrangements. The fact that he did at least shows he has the financial where-with-all to protect his (and hopefully, your) investments.
I'm interested in seeing if MS can bring investors to the table to fund a billion dollar CAPEX. In fact, I'm hoping he can (I'm not long, but I think MS and his staff are legit and working hard). If and when he does, I'll be one of the first to come on this board to congratulate you all.
Moscato, not Chianti.
Very noble of MS. But keep in mind he gets 10% loan interest on whatever he provides under the credit facility, and is essentially first in lender's line for NioCorp's assets if NioCorp goes belly up (while common shareholders get nada unless there are some assets left after the lenders are paid off from the assets).
Always Optimistic
There's "optimism" and then there's sheer fantasy. Please tell Jon Snow and Daenerys T. we said "hi".
Pretty slick presentation. Someone definitely earned their PowerPoint merit badge on that one. Really, it does look good and presents well. No sarcasm to be inferred in this post.
Hi Stark.
I read it, interesting info, for sure.
The FS states: "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."
That pretty much sums it up -- bet, raise, and all in -- next card has to be a "scandium" (or at least the investors have to think the card is a "scandium"). Otherwise, game's pretty much over, so says SRK.
Without the potential of scandium recovery, the project was not economically feasible. Just saying ....
Some posters were wondering who might be selling. I just pointed to a list of numerous names, published by NIOBF, of those who were willing to let go a portion of their shares as of April 12, 2017. If I'm not mistaken, the share price was about 54 cents (US) that day. I don't know if their willingness to sell at that price equates to a similar desire to sell at today's price.
To satisfy that willingness to sell, you are correct -- it would average to about 145 to 150 thousand shares sold per day, to alleviate that sales demand. Not so sure that the sell demand has been satiated.
Lots of names. Maybe you (or other NIOBF posters) recognize a name or two? I wouldn't be surprised that several of them are active posters on the NIOBF I-Hub thread.
You all should lighten up on GM5. GM5 is asking healthy questions, and not drinking the Kool-Aid unquestioningly.
Who sellers of NioCorp stock may be:
See pages 20 thru 22 of the document at the following link:
[url]https://content.edgar-online.com/ExternalLink/EDGAR/0001615774-17-001651.html?hash=3114b21f427f51ae50ef61d0b1411a9d27f975df449b198feebb3500a01648c2&dest=S105842_S1_HTM#S105842_S1_HTM
As of April 12, 2017, they (selling shareholders) were willing to sell up to 18,019,377 common shares, including shares acquirable upon exercise of their outstanding warrants and options.
Not sure when the draft permit will be issued with notice to the public for review, comment, and process to request a hearing. CEO said in July that he thought late Q3, which jives with sometime in October. At that time, Excelsior staff were working with EPA Reg 9 on technical review and writing for the draft permit.
Once the notice of the availability of the draft permit for review, comment, and public request for a public hearing (I doubt there will be public requests for a hearing) is announced, the draft permit and a statement of basis (brief explanation of why EPA thinks it's okay to issue the permit) are available for review/comment for 30 days, unless EPA thinks more extensive public outreach is necessary (unlikely). If you want to research the process more thoroughly, see 40 CFR Part 124. Link below:
[url]https://www.ecfr.gov/cgi-bin/text-idx?tpl=/ecfrbrowse/Title40/40cfr124_main_02.tpl
If CEO's prediction is accurate about the late Q3 timeframe for the draft permit, and assuming there is no public clamor for a hearing or significant comment, the permit will likely go final in late November or possibly early December.
I expect Excelsior to issue a PR about the permit and details about a financing partner or creditor(s) (Excelsior has been working the beat to get financiers/creditors for the upfront capital investment) and possibly financing a portion with equity (shares with warrants). Just my speculation, though.
Optimally, Excelsior gets the final UIC Class III permit and financing completed by year's end, and starts construction immediately thereafter.
Environmental Appeals Board upheld EPA Region 9's issuance of the Class III UIC permit to Taseko Mines Ltd for its Florence Copper project in AZ. Shot down petitioners' challenge to EPA's issuance of the permit.
I personally think that helps clear the way for EPA Region 9 to expedite the Class III UIC permit to Excelsior, especially since there is no local community opposition like Taseko faced with the Florence project.
The EPA Region 9 permitting office may have been waiting for the outcome of the Environmental Appeals Board (EAB) decision, to ensure they could address any potential defects in the Excelsior permit application in the event EAB found a problems with EPA's issuance of the Florence UIC permit.
Link below to Taseko Mines Ltd press release, dated today.
[url]http://www.minenportal.de/artikel.php?sid=212948&lang=en
Also not sure if the MJG Capital Limited Partners analysis (old - Aug 1, 2016), copy can be obtained at link below, has ever been posted.
Lots have changed (positively for Excelsior) since this analysis was done, but interesting to see how MJG valued Excelsior at various stages, with some very conservative discount factors. Additionally, looks like Taseko Mines finally achieved the litigious ADEQ issuance of its amended APP permit, and are heading towards easy street on the EPA Reg 9 UIC permit, despite the stiff local community resistance to those permit issuances. I think that makes it nearly a foregone conclusion that Excelsior Mining will get its Class III permit from EPA.
[url]http://mjgcapital.com/wp-content/uploads/2017/02/July_2016.pdf
Not sure whether this has been posted before. Apologize if it has been linked before. An informative manuscript on Copper Mining by Solution Mining Methods, published in the Arizona Geological Survey. Informative, and includes some data regarding the Florence Copper project as well as Excelsior Mining's Gunnison project.
Link to .pdf copy of the report below.
[/url]http://repository.azgs.az.gov/sites/default/files/dlio/files/nid1641/cr-15-a_in_situ_copper.pdf
Not the first time I've seen this, but just bought 1900 more shares on OTCBB @ .9856 but buy volume not showing up on streamer for EXMGF.
Heck. Houston, Beaumont, Port Arthur, SE Florida .. they're going to need a lot of copper. Lots of homes and infrastructure to rebuild.
US EPA webpage on Class III Injection Wells.
https://www.epa.gov/uic/class-iii-injection-wells-solution-mining#add_info
I couldn't find any status on EPA's website about Excelsior's application.
From a macro level, this ought to help Excelsior.
https://www.bloomberg.com/news/articles/2017-09-04/world-s-richest-mines-slipping-out-of-hands-of-multinationals
For what it's worth, I'm in as a long (starter position).
I was looking for a junior mining co. to speculate in, and EXMGF appeared to be much more attractive than NIOBF, primarily due to capital cost needs, schedule, and IRR. Plus with Greenstone backing/support, increase in copper demand for elec vehicle trend, infrastructure upgrades/repairs, and probably big Hurricane Harvey/SE Texas need for copper to repair its infrastructure - don't see copper prices dropping too precipitously in the near and interim future.
If NIOBF gets into the 30+ cent range/share, I may nibble at it.
I had hoped for a minor pullback on EXMGF, but that didn't appear to be happening anytime soon. I'll buy more in the just-under-a-dollar range.
Monocle
Reason I initially became interested in NioCorp was due to the Senate Report extract you cited. I had never been aware of Scandium as a rare earth mineral for industrial application purposes. I wanted to know more, especially to see if there was a domestic producer -- ergo, checked out NioCorp (hardly anything posted on NBIOF at Investor Village) on IHUB. Saw that there were some long-term investors and thought I'd learn more about Scandium and NioCorp.
Market cap valuation is always a key factor I consider. Still reading and learning.
Previous GAO Reports to Congress on Rare Earth Materials, including Scandium
GAO Report No. 16-161.
GAO issued a report in February 2016 to the Armed Services Committees, titled "Rare Earth Materials: Developing a Comprehensive Approach Could Help DoD Better Manage National Security Risks in the Supply Chain". In that report, GAO canvassed several offices within DoD on what they identified as "critical" of the 17 rare earth materials. The Defense Logistics Agency (DLA) identified Scandium as critical in 2013, but not in 2011 or 2015. The Undersecretary of Defense for Acquisitions, Technology and Logistics (USD(AT&L)) and Manufacturing and Industrial Base Policy Report did not designate Scandium as a critical rare earth for DoD's needs.
Link: http://www.gao.gov/assets/680/675165.pdf
GAO Report No. 16-699.
GAO issued a report in September 2016 to the Senate Committee on Energy and Natural Resources, titled "Advanced Technologies: Strengthened Federal Approach Needed to Help Identify and Mitigate Supply Risks for Critical Raw Materials." In that report (see Table 5, Results of Selected Critical Materials Assessments for U.S. Economic and National Security Interests), only one agency (National Academy of Sciences, Engineering and Medicine) designated Scandium as "critical", and that was in 2008. The other polled agencies, Department of Energy (in 2010 and 2011), DoD (in 2015), and National Science and Technology Council Subcommittee on Critical and Strategic Mineral Supply Chains (in 2016), did not find/designate Scandium as "critical". Note that the latter (National Science and Technology Council) found 16 of the 17 rare earth materials as "critical" -- the lone exception (not critical) was Scandium.
Link: http://www.gao.gov/assets/680/679577.pdf
Somewhat older -- Section 843 of the National Defense Authorization Act for Fiscal Year 2010 stated:
Public Law 111-84, NDAA FY 2010
https://www.gpo.gov/fdsys/pkg/PLAW-111publ84/pdf/PLAW-111publ84.pdf
SEC. 843. REPORT ON RARE EARTH MATERIALS IN THE DEFENSE SUPPLY CHAIN. (a) REPORT REQUIRED.—Not later than April 1, 2010, the Comptroller General shall submit to the Committees on Armed Services of the Senate and House of Representatives a report on rare earth materials in the supply chain of the Department of Defense.
(b) MATTERS ADDRESSED.—The report required by subsection (a) shall address, at a minimum, the following:
(1) An analysis of the current and projected domestic and worldwide availability of rare earths for use in defense systems, including an analysis of projected availability of these materials in the export market.
(2) An analysis of actions or events outside the control of the Government of the United States that could restrict the access of the Department of Defense to rare earth materials, such as past procurements and attempted procurements of rare earth mines and mineral rights.
(3) A determination as to which defense systems are currently dependent on, or projected to become dependent on, rare earth materials, particularly neodymium iron boron magnets, whose supply could be restricted—
(A) by actions or events identified pursuant to paragraph (2); or
(B) by other actions or events outside the control of the Government of the United States.
(4) The risk to national security, if any, of the dependencies (current or projected) identified pursuant to paragraph (3).
(5) Any steps that the Department of Defense has taken or is planning to take to address any such risk to national security.
(6) Such recommendations for further action to address the matters covered by the report as the Comptroller General considers appropriate.
(c) DEFINITIONS.—In this section:
(1) The term ‘‘rare earth’’ means the chemical elements, all metals, beginning with lanthanum, atomic number 57, and including all of the natural chemical elements in the periodic table following lanthanum up to and including lutetium, element number 71. The term also includes the elements yttrium and scandium.
(2) The term ‘‘rare earth material’’ includes rare earth ores, semi-finished rare earth products, and components containing rare earth materials.
In response to section 843, the GAO report (on behalf of the Comptroller) provided its report to the Armed Services Committees in April 2010. It primarily consisted of slides GAO used to do an earlier briefing. You can read them at the link below. The report is titled "Rare Earth Materials in the Defense Supply Chain".
http://www.gao.gov/assets/100/96654.pdf
Good post, imho, Tedro.
Again, I agree with you, Walter. But it's not just having the offtake agreement, but at which future price?
If you were a potential future (2020 and beyond) purchaser of scandium, willing to enter into an offtake agreement in 2017, what offtake price would you lock into? Given the current spot price, potential new sources, and uncertain US political climate (e.g., if Democrats came back into power, who are not as likely to fully fund DoD's needs) in 2020, I'd think it would be at a significant discount to today's spot prices. Even if it was significantly discounted price, that would be a positive. How much that reduces the IRR (and it will reduce the IRR) is an open question on the go/no-go decision on whether lenders will finance the capital costs.
Many will label the above gloom/doom. I'm not saying that Mark Smith and gang won't be able to obtain the financing (I wish them the best and hope they succeed -- I personally would like to see that the US has a domestic source of scandium and niobium). I'm just not willing to invest in NBIOF at today's share prices. If the share price drops lower (as I described in my prior post), hell, I'll take a stab. I have some funds to speculate with.
p.s. I was intrigued with Excelsior (EXMGF) that the posters from the FRG mentioned that a former NBIOF investor sold his/her NBIOF shares and invested in Excelsior. Quickly read EXMGF's FS, and if it is to be believed, shows an IRR at 40+% with a much lower upfront capital investment cost, to extract copper at a much quicker return (potentially starting production in 2018), which has a historically established price range. They nearly have their aquifer protection permit from the state, and expecting to have their US EPA underground injection control permit in late October 2017. I'm hoping to see share price drop a little down into the mid-80 cent range.
If I can get both NBIOF and EXMGF at my preferred price, I'd be elated and go back to looking for good biotech plays with the rest of my funds.
Walter
Totally agree with your concern. Scandium issues are pivotal - future pricing and competitive production. Big risks, but perhaps investable? That's Mark Smith's uphill task - convince others to invest, in the aggregate, about $1 billion for a 24% IRR, based on a 8% discount factor (which is too low, imho). Higher the discount factor, the lower the IRR. But, perhaps he'll succeed. Speculative, but if he gets the financing, those buying at 50 cents/share, even after likely future dilution, might see 4X-6X return. Emphasize "might".
I'll wait to see if it gets to the low 40 cent range, or even high 30 cent range, buy some, put it away in a sock drawer.
Anyone investing their IRA or retirement savings into NIOBF are real gamblers. If you're investing funds that are not important to your financial health, hey, go for it (though, I'd prefer to see a smaller market cap).
Even if they were able to negotiate a 25% offtake of their future scandium oxide production, the agreement would place a significantly reduced price on the scandium compared to today's prices (and price the FS used - $3500 per kg) to offset future scandium pricing risk.
Some key snippets:
The study includes price and market assumptions concerning an expanded demand in the scandium
market. There is no certainty that the prices used will be realized.
NioCorp should continue and expand its efforts to engage potential offtake customers for all
of its three products, in particular Sc2O3.
Project metrics include a pre-tax NPV 8% result of US$2,291 million and 24.3% IRR with
undiscounted payback from start of commercial production of 3.4 years as well as an after tax NPV
8% result of US$1,666 million and 21.7% IRR with undiscounted payback from start of commercial
production at 3.7 years. With an estimated effective income tax rate of 24.1%, the Project is
expected to generate over US$284 million in annual free cash flow over its operational life, for a
cumulative total of approximately US$7,885 million. The effective tax rate was derived utilizing
current federal, state and local tax rates along with statutory deductions for which the company
qualifies.
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 the time of the report, NioCorp has entered into two offtake agreements covering ferroniobium
production from the Project. Although 75% of Nb sales in the first 10 years are currently covered by
the offtake agreements, the revenues generated under those contracts are still sensitive to the
benchmark Nb price currently set in the technical economic model at US$40/kg for LoM. The
benchmark price is exposed to competitive pressure. No offtake agreements have been executed at
the time of the report for titanium dioxide and scandium trioxide products from the Project. The
Project IRR is most sensitive to changes in Sc2O3 and Nb prices on both a pre-tax and after-tax
basis.
In SRK’s opinion, the scandium supply/demand balance and price projections are the key risks to the
Project’s viability.
Scandium Market Development and Sales Plan
NioCorp has been working with a Scandium industry expert, Dr. Andrew Matheson of ONG
Commodities, to help expand our current target list of prospective Sc customers and distributors. Dr.
Matheson’s in-depth knowledge of Sc markets, applications, and industry contacts has been
invaluable to date as we continue to identify customers for our Sc product. He also is assisting
NioCorp in its communications about the large potential of Scandium markets with interested
investors and with U.S. government officials.
NioCorp is working with 10 potential customers at the time of writing, and discussions with these
potential customers are proceeding under the provisions of Non-Disclosure Agreements (NDAs).
These potential customers can be separated into the following categories or final end products:
1. Scandium/Aluminum alloys used in aerospace, automotive, and other applications to
increase strength and allow for reduction of weight. Interested customers are situated at
various points in the supply chains for aerospace manufacturing and operation; specialty
alloy manufacturing; and specialty minerals and metal brokers/distributors.
2. Solid Oxide Fuel Cells. Scandium is used in the electrolyte of solid oxide fuel cells to
increase the conductivity at lower temperatures, allowing for higher efficiency and longer life.
Discussions with interested customers in this industry and its supply chains are continuing.
NioCorp has produced a small quantity of 99.9% pure Scandium Trioxide during lab pilot
testing which meets or exceeds the purity needed for virtually all mainstream commercial
applications. This material has been sent, and will continue to be sent, to interested
customers for their analysis.
The U.S. Congress is currently on track to approve an initiative contained in the FY2018
National Defense Authorization Act that is aimed at raising the profile of NioCorp’s domestic Sc production with the U.S. Department of Defense (DoD) and with the many defense
contractors who supply the DoD with technologies and platforms that could incorporate Sc.
NioCorp is in talks with the DoD about how the Department can help to ensure the onset of
U.S. production of Sc.
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.