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'While I wanted to see 2023 be the year in which we formally launched construction of this historic and much-needed critical minerals project in Nebraska, I have never been more confident of success in securing the project financing we need to move the Elk Creek Project forward. As I see it, the stars are increasingly aligning behind our Elk Creek Project, and 2024 promises to be a momentous year for NioCorp.[/I]'
I patiently wait as I do expect the same
Patiently waiting is not easy and this all takes longer than expected, however IF you think that the off-take with and investment from Stellantis will materialise, an off-take for Al-Sc in cooperation with Nanoscale Powders will materialise, EXIM will provide the debt financing package and the Niocorp team will finally connect the dots to start building the mine and the processing installations, THEN we will be better of than EVER. So I bought more because I do think this all will happen in the first half of 2024.
At this stage of negotiation on final T&C’s with Stellantis, any statement on profitability of REE could back-fire. So I do understand the ‘vagueness’ at this stage.
Thanks Jeunke, 60m shares is also my napkin calculation in combination with 800m debt of course. The EXIM loan will be the big game changer going forward. This is THE event making or braking the share price development. With the EXIM loan in place, current share-rice is an absolute joke and will parachute upwards. Without the EXIM loan in place, it will be a very rough ride until an alternative financing solution will be found. However, for the EXIM executive having to approve the loan, the arguments in favour are numerous as this project is largely de-risked. The arguments against approval, loudly presented by some Ihub members we all know, turn out to be based on quicksand like wrong assumptions, lack of subject matter knowledge and simply mistrust.
...and regarding the spammers, just block them, you will not loose anything of their noise.
....this time it will be Stellantis who will co-define the speed, and even might help in financing if that is a bottle neck. Don't misinterpret this move by Stellantis, a very strategic one which they can not afford to end up in a disaster. They know that Niocorp needs financing, they know the current situation and still do sign such a strategic agreement. OK, it's not set in stone yet, but this will soon follow imho. Speed is everything now.
...and this is the reason car manufacturers can't afford losing time any longer:
https://www.bloomberg.com/news/articles/2023-07-08/renault-chairman-says-china-raw-material-risk-wakes-him-at-night
“China — and no one can blame them for that — is putting its hand on mines and especially on the transformation of metals used to build batteries,” Senard said during a panel in Aix. “The war of the future will be a war of metals.”
This is REALLY great and very significant. Don't understand why SP didn't explode, but that will come one day without doubt. It's like the ball pushed under water, deeper and deeper,.....and then let it go.
In these type of contracts it is feasible that the customer pre-finances the supplier, due to the heavy investments needed upfront and the big cash which will be moving through the books once the rare earths based products start feeding production lines. 10 year's off-take with a huge car manufacturer!!
I do understand and interpret Mark's statement very positively. This could even beat EXIM T&C's, be the defined plan B when EXIM doesn't work or serve as a very big anchor investor. These companies don't want to wait, don't have time to wait, can't wait, so they will speed up everything.
This could really turbocharge our project financing and help to accelerate moving the project to construction and eventual commercial operation,” NioCorp CEO Mark Smith said.
Thank you Jeunke and Walter. A trusted network is everything in project financing. Dilution might be much less than some are thinking. The value, EPS and dividends, will be big. Current SP is a real bargain for LT investors.
The outcome of the SPAC deal is disappointing as only a fraction of the desired 285m of equity was finally coming in and the related costs extremely high. However, the good thing was the still limited dilution and that the Exim possibility came ‘suddenly’ on our horizon. Was GXII playing a role in this?
Nb needs 1,1B, if 800m could come from Exim, then Nb still needs 300m in equity (or additional debt). Of course not all at once, but in tranches within the 3-4 year construction period based on cash flow planning. You need however signed agreements for the whole package. In project financing one can be pretty creative regarding amount, timeline, pre-requisites, what happens when milestones are not kept etc. Whatever you want to agree upon you can put into it. The bank could for instance request that only debt packages will be released in a combination of 70/30. So for instance 200m debt needs firm commitment from equity provider(s) of 60m. Doing it like this, risk is shared and financing follows the progress of construction. More progress, less risks. So equity can later be issued for higher share prices as risk for equity providers will go down as well. This will trigger release of a next debt package, etc.
If all goes wrong, then debt providers will have priority above equity providers. This could mean that the mine will have to be sold and the proceeds will be used to pay back Exim first. Only what is left over will go to us share holders.
Hypothetically Exim could finance the whole thing without asking for additional equity and assume the complete risk. This would be the wet dream for us shareholders (no further dilution) of course, but isn’t likely to happen imho.
Obvious, equity needs debt and vice versa to build the complete needed financing package. Mark will have to show firm equity commitments to Exim stating that equity steps in once debt has been approved. Exim will only release the debt package based on enforceable equity commitments and not all at once of course. This is quite normal and dissolution clauses are part of any financing agreement. Still think that new GXII board member will be instrumental here.
Exactly, additional financing might still be necessary after Exim bank debt package approval, however the dilution will be limited if equity will follow debt package and not vice versa. Share price will skyrocket after Exim approval, followed by share emission.
Incredible numbers Chico, thanks. Calculating with a financing package of 800m debt and 300m additional equity (30m additional shares at a share price around 10 usd), we’ll end up with a total of 60m-70m shares if I’m not wrong. Given your calculated profitability, recurring, we end up with eps of about 8usd/share. Everyone can do their own math to calculate potential share price. Dilution or not, Yorkville or not and despite SPAC failure, LT believers will be rewarded.
Niocorp knew all the positive data since some ago, not only since last week of course. They will also have updated their Excel files with these new facts as well have made fair estimates for revised CAPEX. Therefor I am expecting several new deals/partnerships going forward, published well before new FS will be formally released. Like me, I hope everyone bought the dip and if not you should consider it. Risk/reward vs current SP has seldomly been more attractive.
Disappointing last quarter, but Catsa seems even better than thought and some cost saving measures in place. Buy the dip?
Yes, I did so last Friday.
Management of Niocorp has shown the typical ‘overpromise, underdeliver’ behaviour lately. The CFO doesn’t seem to be in control anylonger, not with the financing, not with closing the books in time. Since years the many, many boardmembers don’t seem to add any value. Still more boardmembers than employees. Mark collected too many non-critical ‘friends’ as overhead around him. This need to change before becoming a joke. The filing delay as such is not a big deal, but adds up to the series of questionable acts lately. Not good.
If this new institutional investor would have invested in september last year, we would have seen a serious share price increase. As we were waiting for such a party to join the investor base. Now with the apparent SPAC failure, everything regarding financing seems suspicious. Nb don’t need the money now, but they wanted a professional investment party onboard. I am happy with this, I also think that these new financial initiatives (EXIM, Kingdon, Yorkville) are linked one way or another to GX2 management. Despite all the noise in this board, Niocorp still goes for the home run. When Exim finances 80% and equity will do the remaining 20%, it will be an optimal scenario.
Sit and wait a little more or step out, that’s all you can do, however I sit down and relax. I’m very confident, the pieces of the puzzle are going to fit together, maybe not as fast as many of us wanted, me included, but they will.
...and Buffett only invests in companies with excellent proven management. Also here Niocorp qualifies with flying colours.
However he also likes companies with rich cash generating possibilities, based on their competitive advantage. Here is why I think he is not investing in Niocorp at this stage, it's too early. However we all know that Niocorp will generate abundant cash going down the road. So don't be surprised when he steps in in about 5 years or so.
I believe it was after executing the land purchasing options that REE possibilities came into discussion. Would have been driving land prices much higher having known this as a serious option before. Coincidence or smart?
I believe it was after executing the land purchasing options that REE possibilities came into discussion. Would have been driving land prices much higher having known this as a serious option before. Coincidence or smart?
If you can’t differentiate between a company like ‘Celularity Inc. (“Celularity”) (Nasdaq: CELU), a clinical-stage cellular medicine company’ and Niocorp with proven reserves of precious metals in the ground, I can’ t understand you invest at all. The risk profile is completely different. CELU has currently pipeline products in Phase 1 at best. Nothing proven, nothing tested.
Applying the same financing vehicle on completely different companies with completely different perspectives, might of course lead to different outcomes.
Looking at the potential fully diluted number of shares after the GXII deal (thanks Scooter), adding the possible Yorkville reversible, adding outstanding Niocorp warrants and adding other stock options, etc., I think it's a realistic guess that the final number of outstanding shares will be around 1.000.000.000 before eventual r/s. This represents an amount of approx. 600m usd financing. Let's assume debt will bring in another 600m usd.
1.2b usd should be sufficient to build the mine and processing plants, so debt/equity will be around 50/50. This is not ideal, but it is as it is and the most important is that Niocorp will be able to start operations. That is taking away a big risk. Unrealistic short term share price projections should be set aside, however a very decent share price development in the coming years is very well possible. NPV calculations can be made according to many, many scenarios, but only time will tell us which one will be the most realistic one. Once operating cash flows of several hundreds of millions will come in year after year as a reality and current price risks, operational risks, financial risks and other risks will have disappeared, then share-price will flourish. Investors who cannot wait that long have to ask themselves if their expectations to become rich overnight were realistic enough. After having seen Mark in Mechelen, I fully trust him, being the main shareholder, that he will turn Niocorp into a hugh success for all shareholders. One of his statements was that he expects that the children of his children and their children will still take advantage of the mine. Some decisions (e.g. timing of GXII deal, level of dilution) don't have a clear answer now, but I trust it was the best deal possible and we might not have seen all there is.
Exactly, exercising warrants is not for free, the exercise price is even mentioned. It will increase the average, not decrease
Thanks for transparency Scooter. Don’t forget that if it works the way you paint it, exercised warrants will also bring in financing. So over 175m in this case. Don’t highlight the dilution only, also see the additional incoming financing to execute the project.
Thanks Grunt! That Niocorp will be able to price REE in a competitive way is a clear advantage, as costs to mine and process will be low compared to competition, if any. As automotive is normally using long term contracts and secure availability of these REE is very low, this together with logistic advantages, I can imagine that Pricing of Niocorp’s REE will differentiate from normal price lists. But first things first, does the new separation process work as expected, Scott/L3 please let us know.
Looking at the current (10/7/2022) quoted prices for the three REE elements you mentioned, one can observe a strong decrease compared to earlier prices (2/18/2022, Terbium 2383, Dysp. 495 and NdPr 173). As Niobium is characterised by quite stable market prices, these REE candidates are much more volatile. Curious to see how the economic feasibility will be calculated.
All true and agree. Remains the question of timing closing the GXII deal. Why now? Why doing this before release of L3 REE process results and updated FS? This would have most probably increased our shareprice and as a result the exhange ratio, so less dilution. I think this can only mean that more favorable news is to be expected as Mark will optimize the price for his shares as well.
Scandium deal, but buyer wanted more security that the mine will be built? Debt partners waiting at the side line, but needed to see Equity commitment first? Exciting times ahead!
if Niocorp share will be at 5usd then this is also thanks to the current proposed GXII deal. That's why the exchange ratio is fixed. The agreement between Niocorp and GXII is a definitive agreement (the “Business Combination Agreement”). So the only way to eventually renegotiate is that Niocorp shareholders won't approve the deal. Same is true for GX II shareholders as they can use their redemption rights and go for the 10USD.
'At the closing of the Transaction, GXII shareholders will receive NioCorp common shares based on a fixed exchange ratio of 11.1829212 (the “Exchange Ratio”) NioCorp common shares for each GXII Class A common share held and not redeemed'.
So I'm afraid the Exchange ratio has been set in stone, see page 3 Q&A.
However the ratio of the reverse stock split is yet to be determined (page 4 Q&A).
The 0,89 USD share equity roll-over value from GXII provides also a kind of floor as support for the Niocorp share. I mean GX II shares do have redemption rights at a value of 10USD. Given the fixed exchange ration of 11,2 Nb shares for one GX II at closing date, the USD 0,89/CAD 1,22 could be seen as a relatively solid floor for the time being and going forward. As Geopolitics are still unpredictable and exchanges could decrease much further during next months, it's good to know that the proposed business combination will most probably serve as support for the Nb share at 0,89 USD.
I considered it Can$ being it a Canadian company with Canadian listing.
Next months might offer opportunities to buy cheaper, but midterm and longer term should show positive and strong share price development.
Yes a little unfortunate as the company was, is and will be extremely interesting. Sean Krakiwsky made a very interesting presentation in Mechelen lately. Illustrated revenue for FY23 between 48 and 77 million as CATSA (Security Service). CATSA (security services) will start generating solid and significant revenue with attractive EBITDA. Keep this share the next 5 years and you won't be disappointed. At least I will do.
Understood, however remaining question for me is still the timing of this deal. Why now signing a deal knowing that REE and process improvements might improve the Niocorp business case dramatically, which could have attracted other financing partners. Why now? There must be something around the corner which we don't know. US Government backed debt financing related to Scandium and REE, both vital for development of US EV market?
You are right Jeunke, the 315m enterprise value is difficult to understand as todays enterprise value of both companies is closer to 450m already.
Couldn't agree more, both need each other and the combined value should be higher than both companies value stand alone. This also means that any eventual Niocorp share price increase between now and 1st quarter 2023 will be in favour of shareholders of both companies. For Niocorp shareholders the reverse split (necessary for NASDAQ listing) will be more favourable, for GXII shareholders the value of their share in the combined sandbox will also be higher. So both companies have a combined and shared interest in a further increasing Niocorp share price. As GXII management is playing in the haute finance champions League, I don't have any doubt that communication efforts will increase and be more effective targeting an higher share price. National television 'here we come again', might just be one example once positive news regarding confirmed REE additions, improved processes and therefor improved FS will be published.
According to page 36, new SPAC related shareholders will own 50%+7%, so 57% of Newco. This means us, existing Nb shareholders will own 43% of Newco. Market cap at transaction date and number of shares issued (also eventually with Yorkville which is non-binding) will show what this means for us individual shareholders.
At first sight this seems not so positive. However, Newco is something different than Niocorp. Newco will be a NASDAQ listed company without debt and a cash balance of max. 285m usd. which is equity. This equity means another big de-risking event for debt providers. Debt will be collected going down the road and only when finally needed. The pressure to get it now is gone. This means a much better negotiation position towards potential off-take customers for especially scandium and RER. I expect that future customers will have to bring finance with them which will then be paid back /offset once the mine production and deliveries start to flow. Or is it a coincidence that project financing will be completed just after Additional Off-take agreements (page 28)?
So, imho, a very positive news event today, most probably followed by more positive press releases of L3 testing and updated FS.
Thanks for this update Walter, I couldn't agree more.
Haha, no still prefer 'Reading' over 'Writing', but thanks!