Niocorp on the path to global niobium leadership
Niobium is one of fourteen metals or groups of metals that the Council of Europe has identified as critical. The United States National Research Council considers it even more important, listing it as one of the five “most critical” metals. Niobium carries great economic importance, made all the more so by its high level of supply risk. As has been the case for rare earths, niobium is one of the metals needed to produce ‘new technology’ items. It is needed to develop a wide range of super-alloys, which have applications in aerospace, nuclear energy (associated with zirconium for their resistance to the flow of neutrons) or in powder form to make micro-capacitors. However, niobium’s demand continues to derive from ‘ferroniobium’ thanks to the former metal’s ability to improve steel’s mechanical properties. This is because alloys used in steel must add strength and reduce brittleness while also reducing weight and malleability. Just a few grams of niobium added to a ton of steel can help raise the resulting alloy’s strength by 40%. In other words, a fractional amount of niobium can add enough strength to steel, that it can help engineers reduce weight of any steel based product by as much as 10%. In automobiles, niobium enhanced steel can contribute to significant fuel consumption reductions.
NioCorp (‘Niocorp’, TSXV: NB | OTCQX: NIOBF) believes it has access to over 100,000 tons of niobium in a property about 70 miles southwest of Lincoln, Nebraska at the Elk Creek Project. Currently, there are no niobium producing mines in the United States but Niocorp’s Elk Creek deposit is rich in barium, rare earth element mineralization and especially high grade concentrations of niobium, which will be the main focus of the project. Niocorp recently announced some very favorable drilling results. The Company announced that it two holes from its latest drilling campaign at Elk Creek have yielded assays containing over 3% niobium pentoxide (Nb2O5). The new drillholes were drilled along the opposing sides of the defined Resource and they add to the success from three previously drilled holes that together constitute Phase I of NioCorp’s 2014 drilling program. Six more drillholes will be explored as part of Phase II and this process has already started. The results suggest that Niocorp is sitting on a world class deposit, which has prompted the Company to proceed quickly with metallurgy and pilot plant work.
Niocorp’s project enjoys strong local support because the eventual niobium mine could employ a few hundred people and benefit the community at a larger scale. NioCorp took over the Elk Creek project from Molycorp (NYSE: MCP), which has since abandoned the site and nobody had done any work on it since NioCorp resumed exploration drilling in 2011. The recent results have given NioCorp officials great confidence in the project given that they are committed to a full metallurgical analysis, leading up to the mine construction stage, which is approaching faster than expected given the quality of the assays to date. Moreover, NioCorp has no competition and niobium demand is only increasing. Niobium has not been produced in the United States in large quantities since 1959 but niobium imports have increased in the United States. Most of it is produced at a mine in Brazil and the total world market is in the 80,000 to 100,000 ton range. While it is crucial for the electric car industry, it is actually in demand by the automotive sector as a whole.
Niocorp can fill that need while also meeting international demand given that the Elk Creek Niobium deposit could be one of the largest sources of niobium (and other rare earth elements) in the world. Niocorp is very committed to the project and moving this project into development as fast as possible. Niocorp’s background is very interesting and shares a history with Molycorp. The Elk Creek property itself was first discovered by Molycorp in the late 1960’s and even did some work there in 2010. Mark Smith, after retiring from Molycorp, in late 2012, was asked by Niocorp to lead its management team and is now also its single largest shareholder.
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