Niocorp Developments Ltd (NB)

[tedro84]

I don't really disagree with this. I would imagine buyers are looking for similar agreements as to the Nb offtakes, that is pricing set to a benchmark with a discount applied for the agreement. Of course MS would sign if someone agreed to the annual prices in the FS, but getting someone to commit to those prices is a pipe dream. (And for all the naysayers out there, this doesn't mean the pricing forecasts are inaccurate, just that nobody is going to commit to them in an offtake.)

My thought is that MS is waiting for institutional input on a minimum return they would accept, and that is largely dependent on the Sc sale price. With the high production cost, uncertainty and new birth of the market, and dependence on Sc sales, it would be wreckless for the company to commit to a benchmark price without a minimum. Nb has strong price support and we are not significantly changing global supply. You increase global supply of Sc 5x in your first year of production and the price could fall a lot more than the 20% assumed in the FS. Thus a floor needs to be set in the agreement. There is also a distinct possibility that the Sc offtake gets tied into a much larger deal involving debt and equity. In that regard the lack of an offtake increases leverage.