ELK CREEK PROJECT

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The Elk Creek Project’s Projected Economics

According to a positive CIM-compliant National Instrument 43-101 Feasibility Study, completed in 2017, the Elk Creek Superalloy Materials Facility is forecast to deliver robust economic returns. You can review the full text of the Revised Technical Report in regard to the Project Feasibility Study here.  Highlights of the findings of the Feasibility Study are shown below.

 

Highlights of the Elk Creek Feasibility Study

(All currency figures are in US $ unless otherwise noted)

  • Financial Returns:  Pre-tax net present value (“NPV”) of $2.3 billion, at an 8% discount rate, with an internal rate of return (“IRR”) of 24.3%, and after-tax NPV of $1.7 billion, at an 8% discount rate, with an IRR of 21.7%, and an effective tax rate of 24.1%.
  • Revenue:  Gross Life Of Mine (“LOM”) revenue of $17.6 billion, with operating margin of $12.2 billion.
  • CAPEX:  Up-front direct capital costs of $705 million, in addition to indirect costs of $189 million, pre-production capital costs of $85 million, contingency of $109 million, and pre-production net revenue credit of $79 million.
  • EBITDA:  Averaged Earnings Before Interest, Taxes, Depreciation, and Interest (“EBITDA”) is $389.6 million per year over LOM.  The averaged EBITDA margin (EBITDA as a percent of total revenue) for the project over LOM is 69.5%.
  • Pre-Tax Payback Period Production Onset:  3.4 years (3.7 years after-tax).
  • Production:  On an annual averaged basis, estimated production and revenues are as follows:
    • Ferroniobium (“FeNb”):  annualized production rate of 7,055 tonnes at an averaged realized price of $39.60 per kilogram (“kg”) for contained niobium (65%), yielding annual gross revenue of $183.4 million.
    • Scandium Trioxide (“Sc2O3”):  annualized production rate of 103 tonnes at an averaged realized price of $3,675/kg of Sc2O3, yielding annual gross revenue of $378.3 million.
    • Titanium Dioxide (“TiO2”): annualized production rate of 11,445 tonnes per year at an averaged realized price of $0.88/kg TiO2, yielding annual gross revenue of $10.1 million.
  • Production Costs (net of TiO2 byproduct credit):
    • $12.14/kg of niobium on a niobium-equivalent basis.
    • $1,127/kg of Sc2O3 on a Sc2O3-equivalent basis.
  • Mine Life:  32 years, producing over the LOM approximately 143,824 tonnes of payable niobium, 3,237 tonnes of Sc2O3, and 359,128 tonnes of TiO2.
  • Mineral Resources and Reserves:  Probable reserves of 31.7 million tonnes of ore at 0.79% niobium (Nb2O5), 71.6 grams per tonne (g/t) scandium (Sc), and 2.81% TiO2. Total indicated mineral resources are 90.9 million tonnes at 0.66% Nb2O5, 70 g/t Sc, and 2.59% TiO2, with inferred resources of 133.6 million tonnes at 0.48% Nb2O5, 59 g/t Sc, and 2.23% TiO2.  Mineral Resources are reported inclusive of Mineral Reserves.  Mineral Resources and Mineral Reserves have an effective date of May 15, 2017.

 

Other Highlights of the Feasibility Study Findings
 

DescriptionValue
Ore Mined (kt)31,661
Waste Mined (kt)1,484
Total Material Mined (kt)33,145
Mining Rate (t/d)2,762
Nb2O5 Grade0.79%
TiO2 Grade2.81%
Scandium Grade (g/t)71.6
Contained Nb2O5 (kt)250
Contained TiO2 (kt)891
Contained Sc (kt)2,266
Total Ore Processed (kt)31,661
Processing Rate (kt/y)1,009
Average Recovery, Nb2O582.4%
Average Recovery TiO240.3%
Average Recovery Sc93.1%
Recovered Nb2O5 (kt)214
Recovered TiO2 (kt)359
Recovered Sc (t)2,111
Realized Product Prices 
Nb$39.60
TiO2$0.88
Sc2O3$3,675
Payable Metal 
Nb (t)143,824
TiO2 (t)359,128
Sc2O3 (t)3,237
Total Gross Revenue$17.9 billion

 

 

Production Plan

The FS assumes that the facility will produce 7,055 tonnes per year of ferroniobium, 103 tonnes of Sc2O3, and 11,445 tonnes of TiO2, all on an annualized basis.  The following graphs show estimated annual production by commercial product.

 

 

Operations and Financial Profile

The following table summarizes assumptions and estimated results from the FS economic model:

Table Production Pricing EBITDA Net Income

 

The following shows the cumulative LOM pre-tax free cash flow:

 

 

Economic Sensitivity Analysis

The following pre-tax economic sensitivity analyses show potential impacts to NPV and IRR from changes in the pricing of niobium, scandium, and titanium, as well as changes in CAPEX and OPEX. 

 

Superalloy Production

The Project is planned as a high-grade underground mining operation using a long-hole stoping mining method and paste backfill.  The Elk Creek mine is planned to operate with a processing rate of 2,762 tonnes per day, for a total of 31.7 million tonnes of ore processed over 32 years of mine life, producing in that period 143,824 tonnes of payable niobium, 3,237 tonnes of scandium (Sc2O3), and 359,128 tonnes of titanium (TiO2). The process flow sheet below illustrates a high-level summary of how the facility will convert ore to finished product.

Bloomberg Story:  "First-Ever U.S. Mining of Rare Metals Could Come From Nebraska"

Read this article from Bloomberg's BNS News Service, written by environment and energy reporter Stephen Lee, about NioCorp's proposed Elk Creek Superalloy Materials Project and its potential to initiate production in the U.S. of niobium and scandium.

See NioCorp's Latest Corporate Presentation

 

See this latest corporate presentation from NioCorp about the company and its unique Elk Creek Superalloy Materials Project.  Included in this presentation are links to interesting and informative videos about the Elk Creek Project.

Recent Videos

NioCorp CEO and Executive Chair Mark Smith explains the significance of NioCorp's recent Scandium sales contract with Traxys.

Scandium Sale to Traxys

NioCorp CEO and Executive Chair Mark Smith explains the significance of NioCorp's recent Scandium sales contract with Traxys.

Elk Creek Virtual Tour

See a video that explains the power of superalloys and how NioCorp intends to produce three superalloy metals its its Elk Creek Project.

Critical Minerals

NioCorp's planned products have all been designated as "Critical Minerals" by the U.S. Government.  Mark Smith explains the significance.

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