Replies to post #368 on Niocorp Developments Ltd (NB)

[walterc]

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JH: The other mineral that I'm really interested in right now is niobium.

TCMR: Why is that?

JH: The driving force for niobium is the automotive industry, especially fuel-efficient models like the Prius. Niobium is added to the steel in new car designs that are looking to increase fuel efficiency. Nine dollars worth of niobium per car leads to a 100-kilogram (kg) weight reduction.

TCMR: It essentially acts as a lightweight steel strengthener.

JH: Exactly. It saves on fuel and carbon dioxide per vehicle, while at the same time strengthening the steel for passenger safety.

Most niobium right now is coming from Companhia Brasileira de Metalurgia e Mineração (CBMM), Anglo American Plc. (AAUK:NASDAQ) in Brazil and Canadian producer IAMGOLD Corp. (IMG:TSX; IAG:NYSE), which just announced that it is going to do a $950 million (M) expansion of its Niobec mine in Quebec, where it's producing niobium very profitably.

There are concerns of rising resource nationalism in Brazil and the issue of taxes from province to province. The Koreans, Japanese and Chinese did an offtake agreement with Brazil's Companhia Brasileira de Metalurgia e Mineração (CBMM) [state-owned] in 2011. It's critical for the U.S. to have its own strategic supply and not to be reliant on one country. Brazil or Companhia Brasileira de Metalurgia e Mineração could close off at any time or be sold.

Quantum Rare Earth has one of the few projects worldwide and the only one in the U.S. that has niobium. The Elk Creek deposit in Nebraska was once a Molycorp mine. Even the USGS has designated Elk Creek as one of the largest sources of niobium. It's very similar to an early-stage Niobec. It announced a resource estimate showing a higher-grade resource, 19.3 Mt, grading 0.67% niobium. Yet, the company's stock is trading extremely low for a potential mine that could be a huge asset to the U.S.

JH: I think there will be a joint venture with one of the big U.S. steel companies, or possibly a potential takeout by a company like IAMGOLD. Instead of spending $950M to expand its Niobec mine, it could joint venture or control that company for a fraction of that cost. There's going to be a strategic investment.

TCMR: We'll keep an eye out for that