Niocorp Developments Ltd (NB)

[douginil]

Why I like the NioCorp’ Elk Creek Project

In My Opinion everything seems to be much more positive than negative.

POSITIVE FACTORS

The May 18, 2022 Press Release (PR) announcing the revised 2022 Feasibility Study (FS 2022) was entitled “NioCorp’s Elk Creek Project Confirmed as the Second Largest Indicated-Or-Better Rare Earth Resource in the U.S.”

https://www.niocorp.com/niocorps-elk-creek-project-confirmed-as-the-second-largest-indicated-or-better-rare-earth-resource-in-the-u-s/

- The FS 2022 does not include rare earth (REE) production

- The FS 2022 shows, without REEs, an improvement over FS 2019.
- - 12.0% Improvement in the After-tax NPV to $2.35 billion
- - 6.9% Improvement in the After-Tax IRR to 27.6%
- - 5.8% Reduction in the After-Tax Payback Period to 2.69 years
- - 9.7% Improvement in the Annual Operating Cash Flow to $0.337 billion

- The FS 2022 produces positive values for all of the normal economic variables .

- The FS 2022, without REEs, is a valid project as presented.

- - 50% of Niobium is covered by an off-take with ThyssenKrupp Metallurgical Products, a major metal industry trading entity.
- - 25% of Niobium is covered by an off-take with Commercial Metals Company, a major metal industry trading entity.
- - 25% of Niobium is covered by a memo of understanding with a major US Based steel producer.
- - - - Essentially 100% of Niobium first 10 years of production is covered by off-takes.

- - 10% of Scandium is covered by an off-take with Traxys North America a major metal industry trading entity. This entity has expressed interest in receiving a larger percentage.

- - - - That 10% represents approximately 10 percent of NioCorp’s planned annual production of Scandium, and is about one years equivalent of current world consumption of Scandium.

- - - The off-take agreements, which include information about quantity and pricing have been in place for a number of years and throughout the preparation and release of three Feasibility Study documents. The agreements are still in place and apparently the quantity and pricing levels are acceptable.


- The FS 2022 is based on:
- - Tried and industry proven mine construction, ore extraction and processing technology.
- - Tried and industry proven solvent extraction technology for our Nb-Sc-Ti products.

- The project is fully permitted, construction can start immediately after financing is committed.
- The mine will produce elements that are in the top 10 element list of “US Critical Minerals”
- The project is:
- - The second largest source, by far, of Niobium in the world.
- - The largest source of Scandium in the world, producing about 10 times the
current world annual supply.
- The mine is underground, minimal if any environmental and air problems.
- The mine is on private land
- The volume of ore that is included in the FS 2022 is a low percentage of the total carbonatite ore mass that has been detected.
- NioCorp has options to purchase the land above the total ore mass.
- The potential ore body is open in two directions and at depth, no one really knows how much Nb-Sc-Ti-REEs is down there.
- There are no radioactive elements in the ore.

CONDITIONAL POSITIVE FACTORS
- A decision to extract and separate key Rare Earth Elements (the high strength permanent magnet elements) into elemental metals has not yet been made.
- - When such a decision is made NioCorp will release a further revised Feasibility Study.

- If a decision is made to include the key Rare Earth Elements
- - The REE separation facilities may be the only such facility in the United States, making the project a REE source that is totally independent of China.
- - REEs will be produced as by-products of the Nb-Sc-Ti processing. As such their pricing will be less susceptible to REE price volatility and manipulation.

- Demonstration of changes in certain of the ore processing activities are being done by L3 that, if they prove out, may require changes to the processing of the ore specifically to produce the REEs and would:
- - allow NioCorp to produce some Nb-Sc-Ti-REEs products to a purity level and in a form that would put some of the products in the “specialty chemicals” category which carry higher prices than commodity chemicals.
- - change the OPEX values
- - change the CAPEX values
- - change the REVENUE values

- - - No decision to include REEs into the project will be made unless the changes generate a positive return on investment (ROI) evaluation.


NEGATIVE FACTORS
- The improvement in the economic values from FS 2019 to the current FS 2022 may not be considered significant by the financing entities and the project is not financed.
- A decision to not include REE in the project IS NOT a “kiss of death” negative factor.

CONCLUSION IMO
- The FS 2022, without REEs or changes developed by L3, is a valid project as presented.