I am not selling anything . I am very confidently waiting and want to see the faces of some when this starts off.
I have other stocks which I trade ( buy and sell)- not this one not in the next 5 years.
In the mean time read the recent Wainwright report which I received from one of my friends shareholders; This report is in USD
The price target will change when financing is done.
NioCorp Developments Ltd.
NIOBF: Price: $0.60; Market Cap (M): $140
Rating: Buy; Price Target: $0.90
Heiko F. Ihle, CFA
Tyler Bisset
Certainty of Land Availability Due to Option Extension Agreements; Favorable Project Economics; Reiterate Buy
Click here for complete report and disclosures
Land extension agreements secured. On December 3, 2019, NioCorp announced that the firm had secured legal agreements with various Nebraskan landowners. These agreements provide the firm with an extension to a prior purchase option on three key parcels of land for the proposed Elk Creek project. Two of the parcels were set to expire on December 4, 2019, while the third had an expiration date in FY20. We note that the total extension agreements span 536.8 acres of land and that additional extension agreement negotiations are currently underway. In short, the firm continues to diligently negotiate with private landowners to meet its near- and long-term needs.
High-grade zones permit accelerated cash generation. The Elk Creek project sets forth a high-value opportunity with robust economics, as seen in the most recent Feasibility Study (FS) that was published in April 2019. Based on the study, Elk Creek boasts a $2.57B pre-tax NPV amid accelerated cash flow generation given the revised mine plan, which initially targets higher-grade material deeper in the deposit. We note that this revised approach should result in a $397M increase (+12.9%) of cumulative operating cash flow across the first ten years of operations over the prior (2017) FS. We further note that the 2019 FS forecasts $20.8B in gross revenue over Elk Creek's mine life, representing a 16.2% increase over the previous FS. Elk Creek ultimately maintains local and statewide government support as its 36-year mine life should provide jobs, tax income, and other non-tangible benefits to the local community.
Anticipated job creation amid payment of substantial tax revenue and royalties. Elk Creek is anticipated to create over 180 direct mining jobs, in addition to 224 jobs associated with primary metal manufacturing operations. The U.S. Department of Commerce’s Bureau of Economic Analysis has projected the generation of approximately 1,000 jobs based on heightened economic activity from Elk Creek's operations. We further highlight that the project’s peak construction period, which is expected to span more than three years, should support an estimated 1,200 construction and contract jobs. On a monetary basis, Elk Creek is projected to generate $742.4M in new tax revenue to the combined state and local governments. Finally, management expects Nebraskan landowners to receive approximately $279M in royalties over the course of mine operations.
We reiterate our Buy rating and our PT of $0.90 per share. Our valuation remains based on a DCF of operations, utilizing a 13% discount rate, amid a 0.3x NAV multiple to account for a variety of longer-term risks associated with reaching production at the Elk Creek project. While likely conservative, we believe our discount rate and NAV multiple are warranted given the large capital requirements to bring Elk Creek into production. The firm continues building support within Nebraska, and we note that NioCorp's management team has extensive experience in moving mining projects into production.
Risks. (1) Raising capital to construct Elk Creek; (2) permitting risk; and (3) operating and technical risk.
Heiko F. Ihle, CFA
212-356-0510
hihle@hcwresearch.com
Tyler Bisset
646-975-6955
tbisset@hcwresearch.com
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