ELK CREEK PROJECT

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Overview of the Elk Creek Project

NioCorp is developing North America’s only niobium / scandium / titanium advanced materials manufacturing facility co-located with an underground mine.  Located near Elk Creek, Nebraska, this will be the highest grade niobium project in North America, as well as one of the largest prospective producers of scandium in the world.

Niobium is a relatively scarce metal and there are only three primary Niobium mines in the world today.  But growing demand has created a global market value of >$2 billion, according to Roskill.  Niobium is considered so critical by the U.S. that it is one of a small handful of metals that the National Defense Stockpile purchases, according to DoD Strategic and Critical Materials reports.

 

What We Intend to Produce

According to NioCorp’s April 2019 Feasibility Study, the Elk Creek Project is expected to produce the following over its 36-year operating life.

Ferroniobium (FeNb):  An average of 7,220 tonnes per annum (tpa) of ferroniobium, a crucial component in high strength, low-alloy (HSLA) steel that is increasingly used in bridges and other large infrastructure projects, as well as in high pressure oil and gas pipelines, steel-chassis vehicles, commercial aviation, aerospace, defense systems, and in many other applications.  Niobium also is a component of superalloys used in nearly all jet engines and power generation turbines.

Scandium Trioxide (Sc2O3):  An average of 95 tpa of scandium trioxide. Scandium has important uses in environmentally preferred Solid Oxide Fuel Cells, as well as in ultra-high-performance aluminum alloys.  Scandium greatly strengthens aluminum alloys and allows them to be reliably welded, which presents revolutionary potential for the commercial airline industry.  For example, between $1.0-$1.5 million of scandium oxide in a single airliner offers $10-15 million in net present value fuel savings.

Titanium Dioxide (TiO2): An average of 11,642 tpa of titanium dioxide. Titanium has the highest strength-to-density ratio of any metallic element, and it is used in wide variety of sectors, including aerospace, national defense, chemical processing, desalination, automotive, health care, communications, sporting goods, and many others. Titanium in its oxide form also is used in the manufacture of pigments in paints, plastics and paper, and is a photocatalyst.

 

Robust Estimated Financial Returns

 

In comparison to the previous Feasibility Study completed in 2017, the April 2019 Feasibility Study projects robust economics and returns for the Project:

  • Pre-tax NPV (8% discount rate) increases by 12.0% to $2.56 billion, and after-tax Internal Rate of Return (“IRR”) improves to 25.8%, which is an 18.9% increase.
  • Gross revenue over Life of Mine (“LoM”) of $20.8 billion is 16.2% higher.
  • Cumulative revenue of $2.9 billion over the first 5 years of operation is 17.0% higher, and cumulative 10-year revenue of $5.8 billion is 9.2% higher.
  • Cumulative operating cash flow1 over the first 5 years of operation of $1.83 billion is higher by 23.6% and increases over the first 10 years of operation to $3.46 billion, a 12.9% increase.
  • Cumulative EBITDA1 over the first 5 years of operation of $1.9 billion is 16.5% higher, and cumulative EBITDA over 10 years of $3.8 billion is 6.4% higher.
  • Tonnage in the Project’s Probable Mineral Reserve has increased by 14.7%.  Tonnage in Indicated Mineral Resources has increased by 101.5%.
  • Contained Niobium, Scandium, and Titanium in the Project’s Indicated Mineral Resource have increased by 63.9%, 67.4%, and 67.6%, respectively.
  • Mine life has increased from 32 years to 36 years, and the after-tax payback period from the onset of production has been reduced to 2.86 years.
  • Environmental impacts and associated permitting risks are reduced further from the previous 2017 FS, including the utilization of artificial ground freezing technologies for mine shaft sinking, onsite water treatment that eliminates process water discharge, and the elimination of previous plans to discharge excess water into the Missouri River.

 

2019 Elk Creek Feasibility Study Highlights

 

A Minimized Environmental Footprint

The Elk Creek Project has been designed to minimize the environmental footprint of niobium, scandium and titanium production.  For example, the project will recycle a significant portion of its planned waste streams into usable materials, thus reducing both costs and environmental impacts.

See the short video below on the project and the remarkable superalloy metals it expects to produce here:

 

A Highly De-Risked Project

The Elk Creek Project is highly de-risked on multiple levels:

  • It features the highest-grade primary Niobium resource in North America, and the only such resource under development in the U.S.
  • It offers unique value in that it is expected to emerge as one of the world’s largest Scandium producers.
  • The Project has a positive Revised Feasibility Study completed.
  • All major federal permits have now been obtained.
  • The Project enjoys strong local support in Nebraska.
  • 75% of the Project’s primary product – Ferroniobium — is already under contract over the first 10 years of production.
  • Approximately 10% of the Project’s expected production of Scandium over the first 10 years of production has been placed under a commercial sales contract.
  • In-principle eligibility from the German Government loan guarantee program has been secured.

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1 This summary includes certain forward-looking non-GAAP financial measures, including EBITDA and Operating Cash Flow.  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.

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