Niocorp’s presentation says the scandium market today is 22 tonnes per year. If Elk Creek gets into production – in 3 years – scandium supply will go up from say 30 to 130 tonnes per year. A highly relevant question here: Can the market absorb this huge supply shock?
Niocorp needs a scandium price of USD 3,600 per kilogram. A supply shock would put a lot of pressure on that price. Almost 60% of Niocorp’s revenue comes from scandium sales. Project CapEx > 1B USD.
IMO, a supply shock is what’s holding potentially interested CapEx investors back from stepping in. ‘Build it, and they will come’ is just too risky. And why would anyone want to be the first and sole investor putting in USD 25M (< 2,5% of the 1B required)? It doesn’t make those supply concerns go away!
Now all of these issues would completely disappear if Niocorp were to secure at least another 60 tonnes of scandium offtakes (@ USD 3,600 p/kg). And that's a huge challenge!