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Niobium

The end of a drill's core barrel is shown outside a Niocorp Developments Ltd. event in June 2014 to discuss the prospects of mining for niobium near Elk Creek.

Lincoln Journal Star file photo

NioCorp Executive Chairman Mark Smith says 2016 will an exciting year for the upstart mining company.

The Canadian business, which moved its headquarters to Denver last year, has been working since 2009 to develop a mine at Elk Creek in south central Nebraska for the production of niobium, and it recently added scandium and titanium to its list of marketable elements.

Financing has been one of the company’s biggest hurdles. NioCorp recently finished two fundraising drives that garnered more than $11.5 million Canadian dollars, about $8 million in U.S. currency. A little over half of that financing came from The Lind Partners, a New York-based asset management firm. The rest came from a non-brokered equity deal that closed Friday.

“We’re very well situated right now to finish up the technical work necessary to finalize the feasibility study,” Smith said during a recent interview from the Denver International Airport.

After the feasibility study, which is expected to take four to six months, NioCorp will be back to fundraising, this time to get the $979 million it will need in upfront capital costs. That figure includes about $280 million for contingency and to keep the company operating until the mine begins producing.

If fundraising proceeds well, Niocorp could break ground on the mine this year, he said.

Smith declined to cite a specific dollar number that will trigger construction, saying, “It’s not a precise formula; it’s more of a gut feeling” of board members and shareholders who will determine when finances will be ready.

NioCorp has spent about $26 million on the project to date, said Scott Honan, president of Elk Creek Resources Corporation, the operating subsidiary of NioCorp that is developing the Elk Creek project.

Honan said building the mine and associated facilities would take about two years. The project will create a peak of 1,000 construction jobs and about 300 permanent jobs.

NioCorp in September announced an offtake agreement in which German company ThyssenKrupp said it would buy about half the niobium the Elk Creek facility would produce annually.

Smith said NioCorp executives currently are focusing on developing additional such agreements for niobium and titanium.

Niobium is used to create high-strength steel as well as super-alloys for use in applications like building jet engines and rockets. Brazilian company Cia Brasileira de Mealuria & Mineracao currently produces about 85 percent of the world's niobium.

The Elk Creek site is the U.S.'s only known niobium deposit under development.

NioCorp stock is traded on the Toronto Stock Exchange. It was trading at $0.59 Wednesday, about a third of its March 2015 peak of $1.76.

Reach the writer at 402-473-7304 or nbergin@journalstar.com. Follow him on Twitter at @ljsbergin.

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