EDITOR: | February 6th, 2017 | 1 Comment

Two key breakthroughs prove the magic of niobium

| February 06, 2017 | 1 Comment
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There is no name for the specific emotion one feels when a silver bullet downs eight problems at once, but no doubt there definitely should be. It is similar to that relief you feel when you’re watching an episode of The Walking Dead, and twenty-thousand decaying corpses are but a millimeter from the carotid you happen to be most fond of, which also just happens to be in a collapsing building and, oh yea, everything is on fire; until a surprise twist results in everyone you care about surveying the scene from a safe distance within 0.8 seconds. Suggestions in the comments, please.

NioCorp Developments Ltd. (TSX: NB | OTCQX:NIOBF) (“NioCorp”) have had a January to shout about. Back in 2015, they received the results of their Preliminary Economic Assessment (PEA), and aside from the incredibly favourable outcomes, it called for the construction of a seven-kilometer railroad spur line with considerable supporting infrastructure; the function of the railroad was to permit delivery of approximately 7,000 tonnes of reagents every single week that were required for the separation and purification of the three valuable superalloy metals (niobium, scandium, and titanium) that NioCorp is going for in Nebraska. Whomever said the cornhusker state was known only for football and cows was clearly rather shortsighted.

The railroad would have required NioCorp to casually throw up several bridges over the Nemaha River, Elk Creek, and various tributaries, as well as impacting an estimated 2.6 acres of wetlands and open water, and more than 1,700 feet of various water channels. Not to mention the additional land purchases, permits and, oh yea, and everything is on fire.

Terrible, right? Nope. NioCorp has utilised the admittedly oxymoronic magic of science to achieve a great deal this month. In a single announcement, they told us of two key breakthroughs that not only render the rail construction project entirely redundant, but dramatically reduce the environmental impact of the whole extraction going forward.

The first of these breakthroughs permits a large reduction in the size of a range of equipment since NioCorp discovered that it can still attain high Niobium recovery rates even while using up to an order of magnitude less water than previously planned. This breakthrough removes a zero from the costs!

The second breakthrough came when NioCorp realised they could source the essential reagents from their own waste products. The company found that it can convert significant fractions of its neutralization solids and acid regeneration solids into supplies of neutralizing agents and process reagents that are used to help produce the commercial products. The solid material is comprised mostly of calcium compounds similar to those found in household wallboard, and were originally planned either for disposal on-site or the backfilling of the mine.

With the dissipation of the anticipated impacts, the project’s permitting should be vastly smoother, and the associated environmental review process able to be conducted more efficiently. If all of these benefits are achieved, and there is no reason they shouldn’t be, NioCorp could reduce both their OPEX and CAPEX for specific portions of the project.

To top it all off, NioCorp announced a $2m private placement deal on January 27th. Not really surprising given the recent developments, and we’re sure there’ll be many more eyes cast their way before the snow melts. The PEA, without the rail demands, shows that the Elk Creek Project will deliver exceptional economic results. With anticipated production of 7,490 tonnes per annum of ferroniobium, 97 tpa of scandium trioxide, and 23,960 tpa of titanium dioxide over its 32-year life, Elk Creek is estimated to have pre-tax NPV of US$3.07 billion. Goodbye railway; hello feasibility study.


Lara Smith

Editor:

Lara has been an analyst for over ten years, starting her career as an equity analyst at Foord Asset Management and more recently as the ... <Read more about Lara Smith>


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Comments

  • A. Paul Gill

    Tara, The best way to put it is that it was a Tom Brady moment. If you watched the Superbowl, you would understand – happy to help out!

    February 7, 2017 - 12:49 PM

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