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$180/tonne NSR cut-off
that was calculated using solely the contained niobium, scandium,
and titanium in the Mineral Resource:
- 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)
(US $millions)
|
|
2019
FS
|
2022
FS
|
Change
|
Pre-Tax Net Present
Value (NPV) (8% discount)
|
$2,564
|
$2,819
|
9.9 %
|
Pre-Tax Internal Rate
of Return (IRR)
|
27.3 %
|
29.2 %
|
6.9 %
|
After-Tax
NPV
|
$2,098
|
$2,350
|
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
|
$1,143
|
$1,141
|
-0.2 %
|
Mine Life
(Years)
|
36
|
38
|
5.6 %
|
Life of Mine
("LoM") Gross Revenue ($M)
|
$20,807
|
$21,900
|
5.3 %
|
Niobium
|
$7,860
|
$7,968
|
1.4 %
|
Scandium
|
$12,532
|
$13,504
|
7.8 %
|
Titanium
|
$414
|
$427
|
3.1 %
|
Averaged Annual EBITDA
over LoM
|
$369.6
|
$397.5
|
7.5 %
|
Averaged EBITDA Margin
over LoM (EBITDA as % of total revenue)
|
67 %
|
69 %
|
2.2 %
|
Averaged Annual
Operating Cash Flow over LoM
|
$307
|
$337
|
9.7 %
|
Average Annual
Operating Cost, LoM (OPEX) (US$/t)
|
($196.4)
|
($195.9)
|
-0.2 %
|
Averaged Annual EBITDA
over Run of Mine ("RoM")4
|
$379
|
$403
|
6.2 %
|
Averaged EBITDA Margin
over RoM (EBITDA as % of total revenue)
|
67 %
|
68 %
|
2.2 %
|
Averaged Annual
Operating Cash Flow over RoM
|
$314
|
$340
|
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.
2 "Critical Mineral Resources of the United
States—Economic and Environmental Geology and Prospects for Future
Supply," U.S. Geological Survey, 2017,
https://pubs.er.usgs.gov/publication/pp1802O
3 "Life of Mine," or LOM, encompasses the entire
expected operational life of the mine, including ramp-up and
ramp-down production periods.
4 "Run of Mine," or RoM, is defined as the period
of time during which the mine is fully operational and excludes the
periods of time when the mine is conducting its initial production
ramp or is ramping down to closure.
|
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SOURCE NioCorp Developments Ltd.