NioCorp Announces Closing of Private Placement for Gross Proceeds of Approximately $3.5 Million

Rhea-AI Summary

NioCorp has completed a private placement raising approximately $3.5 million through the issuance of 2,199,602 units at $1.57 per unit. The units include common shares, Series A warrants exercisable at $1.75 until November 2026, and Series B warrants exercisable at $2.07 until November 2029. Company officers and directors participated, subscribing for 239,999 units at $1.7675 per unit, contributing approximately $0.42 million. The proceeds will be used for working capital, advancing the Elk Creek Project in Nebraska, and repaying a $2.0 million credit facility from CEO Mark Smith.

Positive

• Successfully raised $3.5 million through private placement
• Insider participation demonstrates management confidence with $0.42 million investment
• Credit facility from CEO remains available after loan repayment

Negative

• Dilution of existing shareholders through new share issuance
• Higher unit price for insider investors indicates potential pricing concerns
• Need for additional funding suggests cash flow challenges

Insights

Financial Analyst

The $3.5 million private placement, while providing immediate working capital, represents a relatively modest capital raise for NioCorp's ambitious Elk Creek Project. The insider participation of $0.42 million demonstrates management confidence but also highlights potential funding challenges. The warrant structure, with exercise prices of $1.75 and $2.07, suggests optimistic price targets but could lead to future dilution if exercised.

The immediate repayment of the Smith Loan improves the balance sheet, though maintaining the credit facility indicates potential ongoing capital needs. The 25% premium paid by insiders aligns with Nasdaq requirements but creates multiple share price entry points. For a company with a market cap of $56.9 million, this raise represents about 6.2% dilution, a significant consideration for current shareholders.

Subscribers in the Private Placement Include Certain NioCorp Officers and Directors for Gross Proceeds of Approximately $0.42 Million

CENTENNIAL, CO / ACCESSWIRE / November 13, 2024 / NioCorp Developments Ltd. ("NioCorp" or the "Company") (Nasdaq:NB), is pleased to announce that the Company has closed its previously announced non-brokered private placement (the "Private Placement") of an aggregate amount of 2,199,602 units of the Company (each, a "Unit") at a price of $1.57 per Unit, for aggregate gross proceeds of approximately $3.5 million. Certain officers and directors of the Company (the "Insider Investors") subscribed for a total of 239,999 Units for aggregate gross proceeds of approximately $0.42 Million, at a price of $1.7675 per Unit, which price includes $0.125 per Private Warrant (as defined below) underlying each Unit purchased by the Insider Investors and allowed the Insider Investors to participate in the Private Placement in accordance with the rules of The Nasdaq Stock Market LLC ("Nasdaq").

Each Unit issued under the Private Placement consisted of one common share in the capital of the Company (a "Common Share"), one Series A warrant (a "Series A Private Warrant") and one-half of one Series B warrant (a "Series B Private Warrant," together with the Series A Private Warrants, the "Private Warrants" and together with the Common Shares included as part of the Units and the Series A Private Warrants, the "Securities"). Each Series A Private Warrant is exercisable into one Common Share (a "Series A Warrant Share") at an exercise price of $1.75 per Series A Warrant Share at any time on or after the date of issuance until November 13, 2026. Each Series B Private Warrant is exercisable into one Common Share (a "Series B Warrant Share") at an exercise price of $2.07 per Series B Warrant Share at any time beginning six months and one day from the date of issuance until November 13, 2029. All of the Securities issued pursuant to the Private Placement are subject to a four month and one day hold period in accordance with applicable Canadian securities laws.

The Insider Investors are each considered a "related party" of the Company and, accordingly, their participation in the Private Placement constitutes a "related party transaction" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Shareholder Approval ("MI 61-101"). The Company relied on exemptions from the formal valuation and minority shareholder approval requirements under MI 61-101 as neither the fair market value of the Units issued to the Insider Investors, nor the consideration received for those Units, exceeds 25% of the Company's market capitalization.

The Company expects the net proceeds of the Private Placement will be used for working capital and general corporate purposes, including to (i) advance its efforts to launch construction of a critical minerals project in Southeast Nebraska (the "Elk Creek Project") and move it to commercial operation and (ii) repay the amount outstanding under the Company's $2.0 million non-revolving multiple draw credit facility (the "Smith Loan") available pursuant to the Loan Agreement, dated September 11, 2024, by and between the Company and its Chief Executive Officer, President and Executive Chairman, Mark Smith. The Smith Loan will continue to be available to the Company following the close of the Private Placement.

This news release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any of the Securities in any jurisdiction in which such offer, solicitation or sale would be unlawful, including any of the Securities in the United States of America. The Securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "1933 Act") or any state securities laws and may not be offered or sold within the United States or to, or for account or benefit of, U.S. Persons (as defined in Regulation S under the 1933 Act) unless registered under the 1933 Act and applicable state securities laws, or an exemption from such registration requirements is available.

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FOR MORE INFORMATION:

Jim Sims, Corporate Communications Officer, NioCorp Developments Ltd., +1 (720) 334-7066, jim.sims@niocorp.com

ABOUT NIOCORP

NioCorp is developing the Elk Creek Project that is expected to produce niobium, scandium, and titanium. The Company also is evaluating the potential to produce several rare earths from the Elk Creek Project. Niobium is used to produce specialty alloys as well as High Strength, Low Alloy steel, which is a lighter, stronger steel used in automotive, structural, and pipeline applications. Scandium is a specialty metal that can be combined with Aluminum to make alloys with increased strength and improved corrosion resistance. Scandium is also a critical component of advanced solid oxide fuel cells. Titanium is used in various lightweight alloys and is a key component of pigments used in paper, paint and plastics and is also used for aerospace applications, armor, and medical implants. Magnetic rare earths, such as neodymium, praseodymium, terbium, and dysprosium are critical to the making of neodymium-iron-boron magnets, which are used across a wide variety of defense and civilian applications.

FORWARD-LOOKING STATEMENTS

This press release contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of applicable Canadian securities laws. Forward-looking statements may include, but are not limited to, statements regarding the intended use of the net proceeds of the Private Placement; NioCorp's expectation of producing niobium, scandium, and titanium, and the potential of producing rare earths, at the Elk Creek Project; and NioCorp's ability to secure sufficient project financing to complete construction of the Elk Creek Project and move it to commercial production. Forward-looking statements are typically identified by words such as "plan," "believe," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "project," "continue," "could," "may," "might," "possible," "potential," "predict," "should," "would" and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements are based on the current expectations of the management of NioCorp and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. Forward-looking statements reflect material expectations and assumptions, including, without limitation, expectations and assumptions relating to: NioCorp's ability to receive sufficient project financing for the construction of the Elk Creek Project on acceptable terms or at all; our ability to service our existing debt and meet the payment obligations thereunder; the future price of metals; the stability of the financial and capital markets; and current estimates and assumptions regarding the business combination with GX Acquisition Corp. II (the "Business Combination") and the standby equity purchase agreement (the "Yorkville Equity Facility Financing Agreement" and, together with the Business Combination, the "Transactions") with YA II PN, Ltd., an investment fund managed by Yorkville Advisors Global, LP, and their benefits. Such expectations and assumptions are inherently subject to uncertainties and contingencies regarding future events and, as such, are subject to change. Forward-looking statements involve a number of risks, uncertainties or other factors that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those discussed and identified in public filings made by NioCorp with the U.S. Securities and Exchange Commission and with the applicable Canadian securities regulatory authorities and the following: NioCorp's ability to use the net proceeds of the Private Placement in a manner that will increase the value of shareholders' investment; NioCorp's ability to operate as a going concern; NioCorp's requirement of significant additional capital; NioCorp's ability to receive sufficient project financing for the construction of the Elk Creek Project on acceptable terms or at all; NioCorp's ability to receive a final commitment of financing from the Export-Import Bank of the United States on an acceptable timeline, on acceptable terms, or at all; NioCorp's ability to recognize the anticipated benefits of the Transactions, including NioCorp's ability to access the full amount of the expected net proceeds under the Yorkville Equity Facility Financing Agreement; NioCorp's ability to continue to meet the listing standards of Nasdaq; risks relating to NioCorp's common shares, including price volatility, lack of dividend payments and dilution or the perception of the likelihood of any of the foregoing; the extent to which NioCorp's level of indebtedness and/or the terms contained in agreements governing NioCorp's indebtedness or the Yorkville Equity Facility Financing Agreement may impair NioCorp's ability to obtain additional financing; covenants contained in agreements with NioCorp's secured creditors that may affect its assets; NioCorp's limited operating history; NioCorp's history of losses; the material weaknesses in NioCorp's internal control over financial reporting, NioCorp's efforts to remediate such material weaknesses and the timing of remediation; the possibility that NioCorp may qualify as a passive foreign investment company under the U.S. Internal Revenue Code of 1986, as amended (the "Code"); the potential that the Transactions could result in NioCorp becoming subject to materially adverse U.S. federal income tax consequences as a result of the application of Section 7874 and related sections of the Code; cost increases for NioCorp's exploration and, if warranted, development projects; a disruption in, or failure of, NioCorp's information technology systems, including those related to cybersecurity; equipment and supply shortages; variations in the market demand for, and prices of, niobium, scandium, titanium and rare earth products; current and future offtake agreements, joint ventures, and partnerships; NioCorp's ability to attract qualified management; estimates of mineral resources and reserves; mineral exploration and production activities; feasibility study results; the results of metallurgical testing; the results of technological research; changes in demand for and price of commodities (such as fuel and electricity) and currencies; competition in the mining industry; changes or disruptions in the securities markets; legislative, political or economic developments, including changes in federal and/or state laws that may significantly affect the mining industry; the impacts of climate change, as well as actions taken or required by governments related to strengthening resilience in the face of potential impacts from climate change; the need to obtain permits and comply with laws and regulations and other regulatory requirements; the timing and reliability of sampling and assay data; the possibility that actual results of work may differ from projections/expectations or may not realize the perceived potential of NioCorp's projects; risks of accidents, equipment breakdowns, and labor disputes or other unanticipated difficulties or interruptions; the possibility of cost overruns or unanticipated expenses in development programs; operating or technical difficulties in connection with exploration, mining, or development activities; management of the water balance at the Elk Creek Project site; land reclamation requirements related to the Elk Creek Project; the speculative nature of mineral exploration and development, including the risks of diminishing quantities of grades of reserves and resources; claims on the title to NioCorp's properties; potential future litigation; and NioCorp's lack of insurance covering all of NioCorp's operations.

Should one or more of these risks or uncertainties materialize or should any of the assumptions made by the management of NioCorp prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

All subsequent written and oral forward-looking statements concerning the matters addressed herein and attributable to NioCorp or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to herein. Except to the extent required by applicable law or regulation, NioCorp undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events.

SOURCE: NioCorp Developments Ltd.

View the original press release on accesswire.com

FAQ

How much did NioCorp (NB) raise in its November 2024 private placement?

NioCorp raised approximately $3.5 million through a private placement of 2,199,602 units at $1.57 per unit.

What are the exercise terms for NioCorp's (NB) new warrants?

Series A warrants are exercisable at $1.75 until November 2026, and Series B warrants at $2.07 until November 2029.

How much did NioCorp (NB) insiders invest in the private placement?

Company officers and directors invested approximately $0.42 million by subscribing for 239,999 units at $1.7675 per unit.

What will NioCorp (NB) use the private placement proceeds for?

The proceeds will be used for working capital, advancing the Elk Creek Project in Nebraska, and repaying a $2.0 million credit facility.