NioCorp Files NI 43-101 Technical Report on its 2022 Elk Creek Critical Minerals Project Feasibility Study
NioCorp Developments Ltd. has filed a Technical Report for its Elk Creek Project, confirming it has the second largest indicated rare earth resource in the U.S. The study indicates 632.9 kt of contained total rare earth oxides and emphasizes the potential for producing rare earth byproducts along with niobium, scandium, and titanium. The project’s expected life has increased to 38 years, with a pre-tax NPV rising to $2,819 million. NioCorp aims to capitalize on the growing demand in sectors like electrified transportation and renewable energy.
- Elk Creek Project confirmed as second largest indicated rare earth resource in the U.S.
- Total Rare Earth Oxides estimated at 632.9 kt.
- Expected project life extended to 38 years.
- Pre-tax NPV increased by 9.9% to $2,819 million.
- Potential to produce rare earths may provide competitive advantage.
- None.
Previously announced updated feasibility study confirms that the Elk Creek Project has the second largest indicated-or-better rare earth resource in the U.S., second only to MP Materials' Mountain Pass deposit
CENTENNIAL, Colo., June 29, 2022 /PRNewswire/ -- NioCorp Developments Ltd. ("NioCorp" or the "Company") (TSX: NB; OTCQX: NIOBF) is pleased to announce that it has filed a Technical Report (the "Report") prepared in accordance with National Instrument 43-101 ("NI 43-101") regarding its previously announced 2022 Feasibility Study ("2022 FS") completed for the Company's Elk Creek Critical Minerals Project (the "Project").
According to the 2022 FS, in addition to niobium, scandium, and titanium, the Elk Creek Mineral Resource contains various amounts of all rare earth elements ("REEs"). There is potential for NioCorp's REEs to be mined, crushed, and placed into solution as part of the process NioCorp plans to use to produce its primary niobium, scandium, and titanium products, once Project financing is secured.
Depending upon the outcome of metallurgical testing on REE recovery rates from Elk Creek ore, soon to be launched at a demonstration plant in Quebec, and on whether necessary Project financing is secured, NioCorp could produce separated rare earths as a byproduct, placing it at a competitive advantage vis-à-vis other rare earth projects.
The 2022 FS was done in collaboration with Understood Mineral Resources Ltd., Optimize Group Inc., and Dahrouge Geological Consulting Ltd. It includes an updated Mineral Resource that shows that the Project has the second largest indicated-or-better rare earth resource in the U.S., second only to MP Materials' Mountain Pass deposit in California. REEs were evaluated as a potential by-product to the mining of niobium, titanium, and scandium; thus the estimated values of the REEs are reported using the previously determined diluted Net Smelter Return as derived from the Nb2O5, TiO2, and scandium Mineral Resources.
"If our testing continues to show the positive results we have seen to date, and we decide to add magnetic rare earths to our potential product line, the Elk Creek Project will represent a unique critical minerals project after project financing is obtained and the Project is put into commercial operation," said Mark A. Smith, CEO and Executive Chairman of NioCorp. "We believe the minerals we intend to produce in America's heartland are essential to the world's accelerating energy transition and to the many technologies that will make it possible, including those in electrified transportation, renewable energy, infrastructure projects, and many others."
"I want to thank the members of our technical team and the group of independent experts who helped to make this feasibility study possible," said Scott Honan.
The 659 page Report supports the Company's May 19, 2022 news release that provided results of the 2022 FS. The Report can be seen on SEDAR and on the Company's website at https://www.niocorp.com/wp-content/uploads/NioCorp_June-2022_NI_43-101_Technical_Report.pdf.
Rare Earths in the Elk Creek Mineral Resource
The 2022 FS shows that the Elk Creek Project contains an estimated 632.9 kilotonnes ("kt") of contained total rare earth oxides ("TREO") in the indicated mineral resource category.1 According to U.S. Geological Survey data,2 this places the Elk Creek Mineral Resource behind MP Materials' Mountain Pass deposit but ahead of all other current rare earth projects in the U.S. in terms of contained TREO from a NI 43-101 rare earth resource of indicated or higher classification.
The Elk Creek Indicated Mineral Resource includes the following tonnages of contained metals, using a ≥US
- 632.9 kt of TREO, including these individual rare earth oxides:
- 26.9 kt of praseodymium
- 98.9 kt of neodymium
- 2.3 kt of terbium
- 9.1 kt of dysprosium
- 970.3 kt of niobium oxide
- 11,337 tonnes ("t") of scandium oxide
- 4,221 kt of titanium oxide
As shown in Table 1 below, the 2022 FS shows that expected Pre-Tax and After-Tax Net Present Value ("NPV") of the Project both increased, the mine's expected life has been extended from 36 to 38 years, and expected Life of Mine ("LOM")3 gross revenue for all three currently planned products (niobium, scandium, and titanium) have increased. The economic analysis was conducted on the same basis as the Company's 2019 Feasibility Study, using 2019 costs and product pricing.
Table 1: 2022 Elk Creek Project Feasibility Study Economic Results
Effective date of May 18, 2022
2022 Elk Creek Feasibility Study Economic Results (does not include the addition of rare earth products) | |||
2019 FS | 2022 FS | Change | |
Pre-Tax Net Present Value (NPV) ( | 9.9 % | ||
Pre-Tax Internal Rate of Return (IRR) | 27.3 % | 29.2 % | 6.9 % |
After-Tax NPV | 12.0 % | ||
After-Tax IRR | 25.8 % | 27.6 % | 6.9 % |
After-Tax Payback Period from Production Onset (years) | 2.86 | 2.69 | -5.8 % |
Total Upfront CAPEX | -0.2 % | ||
Mine Life (Years) | 36 | 38 | 5.6 % |
Life of Mine ("LoM") Gross Revenue ($M) | 5.3 % | ||
Niobium | 1.4 % | ||
Scandium | 7.8 % | ||
Titanium | 3.1 % | ||
Averaged Annual EBITDA over LoM | 7.5 % | ||
Averaged EBITDA Margin over LoM (EBITDA as % of total revenue) | 67 % | 69 % | 2.2 % |
Averaged Annual Operating Cash Flow over LoM | 9.7 % | ||
Average Annual Operating Cost, LoM (OPEX) (US$/t) | ( | ( | -0.2 % |
Averaged Annual EBITDA over Run of Mine ("RoM")4 | 6.2 % | ||
Averaged EBITDA Margin over RoM (EBITDA as % of total revenue) | 67 % | 68 % | 2.2 % |
Averaged Annual Operating Cash Flow over RoM | 8.4 % | ||
Effective Tax Rate | 17.5 % | 16.4 % | -6.2 % |
Next Steps in NioCorp's Plans to Add Rare Earths to the Project
Of the REEs shown by the 2022 FS to be contained in the Elk Creek Mineral Resource, NioCorp is presently focusing on the magnetic REE products neodymium-praseodymium oxide, dysprosium oxide, and terbium oxide at purity levels that meet current commercial requirements. There currently is no commercial-scale production in North America of these separated rare earth products from ore mined in the U.S.
NioCorp plans to issue a further updated NI 43-101 technical report that will detail the Company's plans for possibly producing rare earth products and will determine the net impact of integrating rare earth operations into the Project.
Qualified Persons
The following 19 independent experts, each a Qualified Person as defined by National Instrument 43-101, have reviewed, and approved the technical information and verified the data contained in this news release, which are derived from the 2022 FS:
- Matthew Batty, P.Geo, Owner, Understood Mineral Resources Ltd.
- Everett Bird, P.E., Engineering Manager, Cementation
- Alex Broili, P.E.,Area Manager, Cementation
- Adrian Brown, P.E., President, Adrian Brown Consultants, Inc.
- Georgi Doundarov, M.Sc., P. Eng., PMP, CCP, CEO, Magemi Mining Inc.
- John Gorham, P.Geol., Senior Geologist, Dahrouge Geological Consulting Ltd.
- Matt Hales, P.E., Electrical Engineering Lead, Cementation
- Sylvain Harton, P.Eng., President, Metallurgy Concept Solutions
- Richard Jundis, P. Eng, Director of Mining, Optimize Group
- Mahmood Khwaja, P.E., National Discipline Leader Tunnels & Underground Engineering, CDM Smith
- Eric Larochelle, B.Eng., Co-Owner, L3 Process Development
- Martin Lepage, P.Eng, Ing. Lead Technical Engineer – Hoisting, Cementation
- Wynand Marx, Chief Executive Officer, BBE Consulting
- Ian McKenzie, C.P.Eng, Vice President, Optimize Group
- Joshua Sames, P.E., Principal Consultant, SRK Consulting (U.S.), Inc.
- Darren Smith, M.Sc., P.Geo, Senior Geologist, Dahrouge Geological Consulting Ltd.
- John Tinucci, PhD, P.E., ISRM, Principal Geotechnical Mining Engineer, SRK Consulting (U.S.), Inc.
- Mark Willow, M.Sc., NV-CEM, SME-RM, Principal Environmental Consultant, SRK Consulting (U.S.), Inc.
- David Winters, S.E., P.E., MBA, Senior Principal Engineer, Tetra Tech
End Notes
Non-GAAP Financial Measures
This news release includes certain forward-looking non-GAAP financial measures, including EBITDA. These non-GAAP financial measures are included in this news release because these statistics are key performance measures that management uses to monitor performance, to assess how the Company is performing, to plan and to assess the overall effectiveness and efficiency of operations. These performance measures do not have a standard meaning within GAAP and, therefore, amounts presented may not be comparable to similar data presented by other mining companies. These performance measures should not be considered in isolation as a substitute for measures of performance in accordance with GAAP. Reconciliations of these forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures are not provided because the Company is unable to provide such reconciliations without unreasonable effort, due to the uncertainty and inherent difficulty of predicting the occurrence and the financial impact of such items impacting comparability and the periods in which such items may be recognized. For the same reasons, the Company is unable to address the probable significance of the unavailable information, which could be material to future results.
SEC Standards Regarding Mineral Resources and Reserves
Estimates of mineralization and other technical information included or referenced in this news release have been prepared in accordance with NI 43-101. The definitions of proven and probable mineral reserves used in NI 43-101 differ from the definitions in U.S. Securities and Exchange Commission ("SEC") Industry Guide 7. Under SEC Industry Guide 7 standards, a "final" or "bankable" feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority. As a result, the reserves reported by the Company in accordance with NI 43-101 may not qualify as "reserves" under SEC Industry Guide 7 standards. In addition, the terms "mineral resource," "measured mineral resource," "indicated mineral resource," and "inferred mineral resource" are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and normally are not permitted to be used in reports and registration statements filed with the SEC. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves. "Inferred mineral resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian securities laws, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Additionally, the disclosure of "contained pounds" in a resource is permitted disclosure under Canadian securities laws; however, the SEC normally only permits issuers to report mineralization that does not constitute "reserves" by SEC standards as in place tonnage and grade without reference to unit measurements. Accordingly, information contained or referenced in this news release containing descriptions of the Company's mineral deposits may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements of United States federal securities laws and the rules and regulations thereunder.
Additionally, in October 2018, the SEC approved final rules requiring comprehensive and detailed disclosure requirements for issuers with material mining operations. The provisions in Industry Guide 7 and Item 102 of Regulation S-K have been replaced with a new subpart 1300 of Regulation S-K ("S-K 1300")under the Securities Act of 1933. The Company will be required to comply with these new rules in its disclosures for the fiscal year ending June 30, 2022, and thereafter. The requirements and standards under S-K 1300 differ from those under Canadian securities laws. The terms "mineral resource," "inferred mineral resource," "indicated mineral resource," "mineral reserve," "probable mineral reserve," and "proven mineral reserve" used in this news release are mining terms as defined in accordance with NI 43-101 under guidelines set out in the Definition Standards for Mineral Resources and Mineral Reserves adopted by the Canadian Institute of Mining, Metallurgy and Petroleum Council. While the terms are substantially similar to the same terms defined under S-K 1300 there are differences in the definitions. Accordingly, there is no assurance any mineral resources or mineral reserves that the Company may report under NI 43-101 will be the same as resource or reserve estimates prepared under the standards adopted under S-K 1300.
@NioCorp $NB.TO $NIOBF #Niobium #Scandium #ElkCreek #rareearth #neodymium #terbium #dysprosium
About NioCorp
NioCorp is developing a superalloy materials project in Southeast Nebraska that will produce niobium, scandium, and itanium. The Company also is evaluating the potential to produce several rare earths from the Project. Niobium is used to produce superalloys as well as High Strength, Low Alloy ("HSLA") steel, which is a lighter, stronger steel used in automotive, structural, and pipeline applications. Scandium is a superalloy material 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 superalloys 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 ("NdFeB") magnets, which are used across a wide variety of defense and civilian applications.
About Optimize Group Inc.
Optimize Group is an international project engineering company with offices in Canada, Australia, and Brazil. From geology to mineral processing, we provide project development and delivery, operational excellence, and due diligence. Integrated at the core we deliver 'Optimized Mine Plans' and 'Just Right Plants' with a commitment to help build a sustainable future. Our experienced team works collaboratively, draws on practical and innovative thinking, and, most of all, truly cares.
About Understood Mineral Resources Ltd.
Understood Mineral Resources Ltd. is a small, well-trained team with experience in numerous commodities and geologic environments, specializing in project development, geological modeling, deterministic and probabilistic mineral resource estimation, production reconciliation, grade control, and mine planning. Understood's primary objective is to bring high-quality, reliable, auditable resource models to the junior and intermediate mining companies using the latest geostatistical techniques and strategies.
About Dahrouge Geological Consulting Ltd.
Dahrouge Geological Consulting Ltd. (DGC Canada), and its subsidiary, Dahrouge Geological Consulting USA Ltd. (DGC USA), advise and assist clients in identifying, exploring, and developing mineral projects. DGC manages projects of all scopes from grassroots exploration and resource delineation to prefeasibility and feasibility level studies. Experienced project teams plan mineral projects based upon client needs, provide a detailed review of approach, and execute programs following industry standard best practices.
Cautionary Note Regarding Forward-Looking Statements
Certain statements contained in this document may constitute forward-looking statements, including but not limited to statements regarding the Company's ability to secure sufficient project financing to complete construction and commence operation of the Project; the Company's expectation and ability to produce niobium, scandium, titanium and rare earth products at the Project; the outcome of current recovery process improvement testing, and the Company's expectation that such process improvements could lead to greater efficiencies and cost savings in the Project; the Company's expectation to emerge as a producer of magnetic rare earth metals; the potential for the Company's REEs to be mined; the Company's expectation to produce a fuller technical report assessing the feasibility of REE production; the Elk Creek Project's ability to produce multiple critical metals; the Elk Creek Project's projected ore production and mining operations over its expected mine life; and the Company's ongoing evaluation of the impact of inflation, supply chain issues and geopolitical unrest on the Elk Creek Project's economic model. Such forward-looking statements are based on estimates and assumptions made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that the Company believes are appropriate in the circumstances. Readers are cautioned that such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause a change in such forward-looking statements and the actual outcomes and estimates to be materially different from those estimated or anticipated future results, achievements, or position expressed or implied by those forward-looking statements. Risks, uncertainties, and other factors that could cause NioCorp's plans or prospects to change include risks related to NioCorp's ability to operate as a going concern; risks related to NioCorp's requirement of significant additional capital; risks related to feasibility study results; changes in demand for and price of commodities (such as fuel and electricity) and currencies; changes or disruptions in the securities markets; legislative, political or economic developments; the need to obtain permits and comply with laws and regulations and other regulatory requirements; 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; the speculative nature of mineral exploration and development, including the risks of diminishing quantities of grades of reserves and resources; the risks involved in the exploration, development, and mining business, and the risks set forth in the Company's filings with Canadian securities regulators at www.sedar.com and the SEC at www.sec.gov. NioCorp disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
1 Under NI 43-101, the term "Indicated Mineral Resource" refers to that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed. |
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SOURCE NioCorp Developments Ltd.
FAQ
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