Ideally, Niocorp is able to secure $200MM in financing through a lender as soon as Germany approves the guarantee. With that guarantee I would like to think MS can negotiate a deal with a lender that does not include equity, but this may be wishful thinking.
Phase 1 of this project is the pipeline, followed by dewatering the mine before major construction takes place. The dewatering alone will take months. The best case scenario would be the pipeline starts in the fall, as winter is not the best time to be running 30 miles of pipe in Nebraska. Even in the best case scenario, you are in spring of 2018 before significant work starts, with summer or fall being more likely. The point being that over the next year your major expenses are tied up in the pipeline, pumping system, and likely some early progress payments with the EPC firm that Niocorp contracts to build this thing. Money will burn fast once major construction starts, but that initial $200MM would go a long ways.
I think there is a lot of confusion around the mechanics of a large equity offering at the point construction starts. This will be nothing like the private placements. It will not be an offer to buy x shares at y price. It will be a packaged deal to a lender, without necessarily a price attached to the equity. In other words, and I'm just throwing numbers out, a debt/equity offering at this point would be more along the lines of a $1B loan with 5-7 year maturity, amortized over 20 years, and 8-10% interest. To close the loan, Niocorp offers 80 million shares, or approximately 40% of the company.
It's unlikely it would all happen with a single investor in one deal like this, but this an example.
The other thing at play here is the agreement with Northcott and RPM. This could certainly be about advertising the company to potential buyout suitors, and definitely has the intent to bring in private investment, but I suspect they are also putting together a bond market report. When we are far enough along in constuction that cash flow is imminent and coupons could be paid a bond offering may be the best way to finance the final construction phases.
This is all my unsubstantiated theory and should not be construed as investment advice.
