With recent moves in the USA towards supporting key critical mining projects, will NioCorp Developments make the list?
Critical metals scandium, titanium, and niobium are all doing well as global demand for metals remains robust in 2021. In May 2018, the U.S Interior Department moved to include niobium, scandium, and titanium onto its list of critical minerals. These three critical metals have targeted applications in clean energy, aerospace/commercial aviation, defense, and automotive. Generally speaking, they are used to lighten and strengthen alloys. For example, scandium is a key lightweighting metal used in aluminum alloys as well as in fuel cells. Niobium is used to strengthen stainless steel. Titanium is very well known for its strength-to-weight ratio, as it is as strong as steel but weighs about half as much.
As we move to a world of electric vehicles (EVs), lightweighting is a key component to improve performance and range. For example, $9 of niobium added to a mid-sized car reduces weight by 100kg, increasing fuel efficiency by 5%. $1-1.5 million of scandium in a single airliner offers >$9 million of net present value in fuel savings. (source)
Niobium and scandium uses
Today we take a look at a USA based junior miner that has all three of these valuable critical elements.
NioCorp Developments Ltd (TSX: NB | OTCQX: NIOBF) (“NioCorp”) is developing North America’s only niobium, scandium, titanium, rare earths elements project, located near Elk Creek, Nebraska, USA. The Elk Creek Superalloy Materials Project is the highest grade niobium project in North America, as well as the largest prospective producer of scandium in the world. The Project is a large underground hard-rock deposit containing an estimated 250,000 tons of niobium pentoxide, 2,300 tons of scandium, and 891,000 tons of titanium dioxide. There are also some rare earths, as discussed later.
Some reasons why NioCorp’s Elk Creek Superalloy Materials Project is unique:
- A pure-play critical minerals and rare earths element company.
- All of NioCorp’s planned products have been designated as “critical minerals” by the U.S. government.
- Tier one project location in Nebraska, USA.
- The Project enjoys strong community, as well as state and local government support.
- Strong focus on sustainability and ESG principles.
- Large resource with a 36-year long mine life.
- Feasibility Study – Post-tax NPV of US$1.7 billion, post-tax IRR of 21.7%, initial CapEx US$1 billion.
- Much of the planned production in the first 10 years is pre-sold.
- 100% of the Project’s projected FeNb production in the first 10 years is under sales contract or Letter of Intent, and 12% of its projected scandium is under sales contract.
- All permits needed to start construction have been secured.
- The NioCorp Board and management team have more than 200 years of collective experience in minerals development.
All that is left to do is for NioCorp to raise the project funding. Given the recent moves in the USA towards supporting key critical mining projects, it is hoped that soon NioCorp can be a beneficiary.
NioCorp recently raised C$6.2 million, extended their land at Elk Creek, and works on recovering rare earths
Regarding the C$6.2 million raise, NioCorp stated: “Proceeds of the private placement will be used for continued advancement of the Company’s Elk Creek Superalloy Materials Project, including ongoing detailed engineering efforts, conducting technical assessments of potentially adding rare earth products to the planned product offering, and for working capital and general corporate purposes.”
NioCorp now owns the surface land on which the Elk Creek Project’s mine infrastructure and support operations will be located. Ownership of the land also gives NioCorp ownership of the mineral rights to more than 90% of the Project’s Mineral Resource and Mineral Reserve. The purchase price was approximately $6.2 million.
In other recent news, NioCorp is working on enhancing their metallurgical processes to potentially also recover rare earth oxides. NoCorp stated: “The Company is currently evaluating next steps in its overall metallurgical test work program, which will focus on optimizing and streamlining the existing processing flowsheet as well as establishing process routes for the potential recovery of rare earth products. The rare earth products that are of most interest to the Company at present are Neodymium-Praseodymium (“NdPr”) oxide, Terbium oxide and Dysprosium oxide.”
The niobium, scandium, and titanium markets summary
Source: NioCorp company presentation
NioCorp is now an advanced stage critical metals developer, located in Nebraska USA. Their Elk Creek Superalloy Materials Project contains economically viable niobium, scandium, titanium, and potentially some rare earths.
A strong Feasibility Study has been produced, all permits to construction are in place, and the project now awaits funding. As a sign of support for the project, Nebraska Governor Pete Ricketts nominated the Project as a “National High-Priority Infrastructure” Project to the White House.
NioCorp Developments trades on a market cap of C$333 million (US$269 million) and is well worth following.
Matthew Bohlsen is a Senior Editor for InvestorIntel.com. With a Graduate Diploma in Applied Finance and Investment, and a Graduate Diploma in Financial Planning. He ... <Read more about Matthew Bohlsen>