NioCorp Developments Ltd.: Shareholder Report, 2014
January 18, 2015 (Source: NioCorp Developments) — NioCorp Developments Ltd. (“NioCorp” or the “Company“) is pleased to provide the following report to shareholders on 2014 corporate developments:
In January of 2014, the Company provided guidance for the goals we were looking to achieve in the year ahead. Commencing in early 2014, we embarked on an aggressive plan to meet those goals. The plan included continuing to bolster the management team, and raising capital to enable re-start significant field operations and engineering studies to advance the technical knowledge of the Elk Creek Niobium project.
Many of the specific aspects of this work are highlighted below, but in summarizing what we have achieved through increased technical knowledge of the project and the addition of key personnel, we are proud to recap the positive market response for the year. In terms of rankings:
– NioCorp was ranked first overall on the TSX Venture Exchange for Market Cap return with an increase of 547% to $97.5 Million at year end (1)
– NioCorp was ranked fourth overall for stock price increase with a 420% increase at year end (2)
– NioCorp was ranked first overall for stock performance following a brokered financing, with a 42% return at year end (3)
TSX.V Mining Firm Returns 2014 – Market Cap, Source: S&P Capital IQ – Excludes firms with a Market Cap of <$65 million at 12/31/2013
TSX.V Mining Firm Returns 2014 – Stock Price, Source: S&P Capital IQ – Excludes returns below 100%
TSX.V Mining Company Financings – Sorted by Stock Performance, Source: FP Infomart; All brokered financings completed in 2014, Market Cap under $100 Million, excludes transactions under $2.5 million.
These gains in share price and market cap were in stark contrast to the 24.5% drop in the overall TSX Venture Exchange Index during 2014.
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In particular, the Company completed the following accomplishments:
– The Company successfully raised in excess of $3.7 million allowing for a complete review of the historic work on the Elk Creek Niobium project resulting in recommendations for development of this world-class asset. In pursuit of the recommendations, the Company contracted with SRK Consulting (“SRK”) of Lakewood, Colorado, a leading engineering firm, metallurgical firms SGS Canada Inc., of Lakefield, Ontario, and Hazen Research Inc., of Golden, Colorado to advance the project under an aggressive timeline.
– Metallurgical studies were well underway with two leading metallurgical testing organizations, and drilling operations commenced with West-Core Drilling of Elko, NV as part of a three phase, in-fill drill program designed to enhance the resource category for use in an updated NI43-101 report. In addition, the drilling program was designed to provide data to support a range of engineering and metallurgical studies of the resource and the project area.
– NioCorp welcomed Scott Honan to the position of Vice President, Business Development to oversee field operations and the technical development of the resource.
– Drilling results were announced from initial drill-holes, increasing confidence in the niobium content of the central portion of the resource.
– Baseline environmental, geotechnical and hydrological studies commenced, in anticipation of future permitting needs.
– NioCorp was added to the S&P/TSX Venture Select Index.
– The Company added Mr. Michael Morris, Chairman of the Board of Heritage Oaks Bankcorp and formerly the only independent director of Molycorp, to NioCorp’s Board.
– Mr. Neal Shah, graduate of the University of Colorado’s Mechanical Engineering program (BSME) and Purdue University’s Krannert School of Management (MBA), with nearly 20 years of experience in various industries, is named to the position of Vice President, Finance.
– Drilling operations continue with West Core, joined by Envirotech Drilling LLC of Winnemucca, NV and Idea Drilling of Virginia, MN, resulting in numerous significant results highlighted as follows:
o NEC14-008 – (NR Aug 11, 2014)
o 12 m (760 – 772 m) at 2.12 % Nb2O5
3 m (768-771 m) at 3.23% Nb2O5
o NEC14-010 Final Results – (NR Aug 25, 2014)
o 311 m interval between 311 – 722 m at 0.64 % Nb2O5
24 m (678– 700 m) at 1.42 % Nb2O5
6 m (716.5 – 722.5 m) at 2.47 % Nb2O5
• 3.5 m (716.5 – 720 m) at 3.09 % Nb2O5 (including individual assay samples in excess of 4.06%)
– September release of an updated NI43-101 resource estimate from the first of three phases of drilling, (Drill Holes NEC14-006 through NEC14-010), reporting an Indicated resource of 28.2 Million Tonnes grading 0.63% Nb2O5, containing 177 Million Kg’s of Nb2O5, and an Inferred resource of 132.8 Million Tonnes grading 0.55% Nb2O5, containing 733.7 Million Kg’s of Nb2O5, (at a 0.3% Nb2O5 cutoff grade – see NR Sept 22, 2014 for full details). – Mineralogical studies were completed at both Hazen and SGS which demonstrated that 75% to 80% of the Niobium is hosted in the mineral pyrochlore, similar to other producing niobium mines.
– Metallurgical testwork on the resource advanced to the point where a preliminary process flow-sheet was established (NR Aug 5, 2014).
– Highlights of the results from the bench scale Metallurgical tests at SGS in Lakefield, Ontario (see NR September 30, 2014) include:
o Flotation test F55, which demonstrated a niobium recovery of 61% to the flotation concentrate;
o Hydrometallurgical tests (PL13, PL15, PL16, AB13, AB15) of pre-leaching and acid baking process steps that follow flotation demonstrated a combined extraction of nearly 98% of the niobium contained in the flotation concentrate;
o Additional hydrometallurgical tests (Test NbP25) demonstrating the recovery of 98% of the niobium contained in the pre-leach / acid bake products into a precipitate containing 21% Nb by weight.
– A mini-pilot scale flotation test was initiated at SGS Lakefield to scale up the promising bench scale testwork and conduct a long-term continuous test on the performance of the flotation scheme. The mini-pilot also generated a large quantity of flotation concentrate that was used to support larger scale hydrometallurgical testwork.
– NioCorp began work on a substantial financing effort with a leading Toronto based finance firm, Mackie Research Capital Corp.
– Drilling operations concluded, resulting in 15, 381 meters of drilling in 18 holes.
– Phase two results are published, showing the largest intercepts of niobium mineralization to date
o NEC14-011 Final Results – (NR Oct 2, 2014)
• 678 m interval between 222 – 900 m (open at depth) at 0.71% Nb2O5
o NEC14-012 Final Results – (NR Oct 2, 2014)
• 592 m interval between 251 – 843.23 m (open at depth) at 0.69% Nb2O5, including
o NEC14-013 Final Results – (NR Nov 12, 2014)
• 685.04 m interval between 195.22 – 880.26 m (open at depth) at 0.74% Nb2O5
o NEC14-015 Final Results – (NR Nov 12, 2014)
291.64 m interval between 536.20 – 827.84 m (open at depth) at 0.72% Nb2O5
o NEC14-014 Final Results – (NR Nov 21, 2014)
390 m interval between 511 – 901 m (open at depth) at 0.68% Nb2O5
126 m (649 -775 m) at 1.06 % Nb2O5
o NEC14-016 Final Results – (NR Dec 12, 2014)
276 m interval between 638 – 914 m (open at depth) at 0.95% Nb2O5
o NEC14-MET-03 Final Results – (NR Dec 12, 2014)
716 m interval between 197 – 913 m (open at depth) at 0.85% Nb2O5
– NioCorp closes a Special Warrant financing, despite very tough market conditions, with gross proceeds in excess of $10.5 million raised, one of the largest capital raises on the TSX.V in the quarter.
– Early Warning report issued indicating additional share purchases by Mark Smith, CEO of NioCorp, which, if fully exercised, will result in Mr. Smith holding in excess of 12% of NioCorp’s estimated outstanding shares (full details contained in Nov 13, 2014 NR)
– The Company welcomed Mr. Joe Cecil, former Vice President and Comptroller of Unocal Corporation, and Mr. Tony Fulton, former Nebraska Senator, to the Board of Directors, in addition to naming Mr. Lavon Heidemann, former Nebraska Senator and Nebraska Lieutenant Governor, to the advisory board (NR Nov 14, 2014).
– A long term advisory agreement and sponsorship agreements were signed with Mackie Research Capital Corporation, a leading Toronto based financial firm. – Individual confidentiality agreements announced with Credit Suisse Securities (USA) LLC and Morgan Stanley & Co. LLC. (NR Nov 24, 2014) for the purpose of commencing the review of non-public information and to provide counselling on the Company’s long-term financial planning strategy.
– Offtake Agreement with ThyssenKrupp Metallurgical Products GmbH is announced, whereby ThyssenKrupp Metallurgical Products will purchase approximately 3,750 metric tons or roughly fifty percent (50%) of NioCorp’s planned Ferro-Niobium production from its Elk Creek deposit for an initial ten year term (NR Dec 15, 2014). The agreement provides for the purchase of up 3,750 metric tonnes of ferro-niobium, and also provides a warrant giving the ability to ThyssenKrupp to invest $5 million into NioCorp during a 12 month period.
– Mr. Joe Carrabba, former Chairman, President and CEO of Cliffs Natural Resources, former President and CEO of Rio Tinto’s Diavik Diamond Mines, and current director of Newmont Mining Corporation and TimkenSteel Corporation, is welcomed to the board of directors (NR Dec 16, 2014).
– Together with advisory firm, NioCorp began exploring opportunities to elevate to a more senior listing exchange.
– Results from the flotation mini-pilot were received, which demonstrated performance consistent with bench scale testwork. Additional flotation bench testing continued, to fine tune performance and reduce prospective operating costs at a commercial scale.
– A hydrometallurgical mini-pilot was initiated at SGS, in order to scale up the promising bench testwork and to evaluate the performance of the bench unit operations under continuous operating conditions.
All summary technical information above is qualified by reference to the news release in which the more detailed information was contained, and the qualified person named in such news release is responsible for the preparation of the technical information noted herein.
Looking forward to 2015, NioCorp has positive capital available for corporate development, to continuation of metallurgical studies, and continuation of the work necessary to take the Elk Creek niobium project to feasibility.
“We are extremely proud of the hard work our team of professionals put in throughout the year, which has provided us results which would normally take several years to accumulate,” stated Mark Smith, CEO of the Company. “We are looking forward to another very busy and productive year as we advance this project towards production. Our goal for 2015 is to continue the aggressive advancement of technical work programs which create long-term value for all our shareholders.”
About the Company: NioCorp is developing the only primary niobium deposit known to be under development in the U.S., and the highest grade undeveloped niobium deposit in North America, located near Elk Creek, Nebraska. The Company has filed an NI43-101 compliant resource report, available on SEDAR, reporting an Indicated resource of 28.2 Million Tonnes grading 0.63% Nb2O5, containing 177 Million Kg’s of Nb2O5, and an Inferred resource of 132.8 Million Tonnes grading 0.55% Nb2O5, containing 733.7 Million Kg’s of Nb2O5, (at a 0.3% Nb2O5 cutoff grade). Niobium is mainly used in the form of Ferro-Niobium to produce HSLA (High Strength, Low Alloy) steel, to produce lighter, stronger steel for use in automotive, structural and pipeline industries. The U.S. imports 100% of its niobium needs.
ON BEHALF OF THE BOARD
|“Mark Smith”||“Peter Dickie”|
|Director, CEO and Executive Chairman||Director, President and Corporate Secretary|
Certain statements contained in this shareholder letter may constitute forward-looking statements. Such forward-looking statements are based upon NioCorp’s reasonable expectations and business plan at the date hereof, which are subject to change depending on economic, political and competitive circumstances and contingencies. Readers are cautioned that such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause a change in such assumptions and the actual outcomes and estimates to be materially different from those estimated or anticipated future results, achievements or position expressed or implied by those forward-looking statements. Risks, uncertainties and other factors that could cause NioCorp’s plans or prospects to change include changes in demand for and price of commodities (such as fuel and electricity) and currencies; changes or disruptions in the securities markets; legislative, political or economic developments; the need to obtain permits and comply with laws and regulations and other regulatory requirements; the possibility that actual results of work may differ from projections/expectations or may not realize the perceived potential of NioCorp’s projects; risks of accidents, equipment breakdowns and labour disputes or other unanticipated difficulties or interruptions; the possibility of cost overruns or unanticipated expenses in development programs; operating or technical difficulties in connection with exploration, mining or development activities; the speculative nature of mineral exploration and development, including the risks of diminishing quantities of grades of reserves and resources; and the risks involved in the exploration, development and mining business. NioCorp disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Raj Shah has professional experience working for over a half a dozen years at financial firms such as Merrill Lynch and First Allied Securities Inc., ... <Read more about Raj Shah>