NioCorp Developments Ltd
CEO: Mark Smith
WSA: Good day from Wall Street. This is Juan Costello, Senior Analyst with the Wall Street Analyzer. Joining us today is Mark Smith, CEO of NioCorp Developments Limited. The company trade here on the US on the OTCQX, ticker symbol NIOBF, as well as on the TSX Venture, ticker symbol NB, and on the Frankfurt Exchange, BR3. Thanks for joining us today again there, Mark.
Mark Smith: My pleasure Juan. It’s a pleasure to be here for the third time, and we welcome the opportunity every time we get it.
WSA: Certainly and so for some of our investors that are new to the story, perhaps you can give us a quick overview of the company.
Mark Smith: I would love too. We have several assets in our portfolio, but the largest and most prominent asset by far is the Elk Creek Nebraska Niobium Resource that we have put an awful lot of work in, in the last year. It’s located in the Southeast corner of Nebraska, and currently is considered to be the third richest Niobium deposit in the world and the only Niobium deposit known in the United States. And given the fact that the United States currently imports 100% of the Niobium that it uses to make special steels, we’re pretty excited about where we are geographically and look forward to becoming the fourth major Niobium-producing company in the world today.
WSA: And so, in terms of the Elk Creek Project there, can you talk about the exciting assay results there from the third round of drilling?
Mark Smith: Yes, with pleasure, I might add. We have now finished a three-phase drilling program, which consisted of 18 drill holes and over 15,000 meters of drilling. We did all of that starting in mid-May 2014, and we just finished in December. And now, all of the assay results have come in. We have reported all those assay results in press releases. We did update our resource estimate in September but that was only based on the first six holes that we’re put in the ground. And those holes, although they did serve assay purposes, were actually primarily designed to provide geotechnical and hydrogeologic information for a feasibility study.
So, I think our resource estimate that we put out in September of 2014 was good, and it confirmed that we have a world-class asset out there. However, we will be issuing a new resource update in the very near future, probably in the next two weeks, that will contain all of the assay data from phases one, two, and three; so, all 18 holes. And if the trends that I’ve seen the geologists working on continue as they are, I think everyone will consider this to be a “Wow” resource report when they see it. We will have a significantly larger resource with a lot more contained Niobium metal in it, and probably slightly higher grades as well. So, everything is looking very rosy on the resource side right now.
WSA: Well, certainly. Look forward to that. And so, in terms of Niobium can you talk about some of the trends there? It’s usually known as an import material. What are some of the uses and the significance of being able to produce it in the States?
Mark Smith: Clearly, the trend in the specialty metals business is that specialty steels, high strength low alloy or HSLA steels, are becoming more and more popular. The primary use of Niobium is in the form of Ferroniobium. It’s introduced in the steel making process. And then the Niobium, when it’s added, creates a specialty steel that actually has the highest corrosion resistance, the highest temperature resistance, and the highest strength level of any specialty steel out there. So, when you think about things like the largest use of Niobium in HSLA steels today is infrastructure, and if you use a niobium-based specialty steel in your infrastructure like bridges or roads, because of the very, very high corrosion resistance, those pieces of infrastructure can now be designed to last for hundreds of years rather than 30 years.
Hence, you can see what that can do for the entire infrastructure across the world in terms of longevity in getting a very good product, a very good bridge, and a long lasting bridge compared to what we have in the world today. So, I think it helps us all, you know, as a human race that has much better infrastructure out there.
Other uses would be every car or truck in the world today that uses steel in the body or the chassis is using a Niobium-based steel, and that does a couple of things for us. One, the steel is much stronger. And so you and I as consumers end up with a safer automobile to be inside of should there be an accident or something, but at the same time while it’s making it stronger it’s also making it lighter. And the lighter vehicle uses less gasoline to go from point A to point B. And so, it’s a real win-win situation when we can get a better environmental performance out of a vehicle but it’s also stronger and it increases our safety.
So, those are just two uses that I have talked about. They’re extremely important and extremely valuable to us. And that’s a great, strong reason why the use of Niobium is forecasted to continue to grow at 4% to 6% per year. It demonstrates its value every time it’s used in a different application.
WSA: Certainly. And so, what are some of the key factors that you feel make NioCorp unique from some of the other players in the sector?
Mark Smith: You know, there’re only three other players in the sector right now. And interestingly enough, none of them really differentiate each other from each other very much but I think that what differentiates NioCorp from other Niobium development projects is our high ore grade, third richest in the world, the size of the ore body, which everyone will see is very significant when we issue our new resource commitment in a couple of weeks. I think the location of our project is very important. We have virtually 100% community support for this project. The existing infrastructure in the region is second to none that I’ve ever seen. We have state highways that run right next to the resource. We have railroads, plenty of water, we have electricity that we can get in at a very low cost, about 6 cents per kilowatt hour.
And you just put all of these things together, you know, good resource, good infrastructure, good community support, and now, we’re continuing to build our company with the best people known in the industry, I think that you’re going to see something very successful here in the next few years. We’re not letting any grass grow underneath our feet Juan. We’ve been working very, very hard for about nine or ten months now. And in that nine or ten-month period, we’ve accomplished what most junior exploration mining companies accomplish in five to eight years. So, we are very aligned, we’re very laser focused on our goal which is to have this Niobium resource be the fourth major producing Niobium resource in the world by no later than the end of 2017.
WSA: And what are some of the short-term goals that you’re hoping to accomplish here over the next 6 to 12 months? I know you mentioned the updated resource here within the next month or so.
Mark Smith: Correct. We should have an updated resource report the next couple of weeks. We continue to work on the metallurgy, in other words, figuring out how to extract the Niobium from the ore body itself. So lots of chemical processing and flotation apparatus that we use for that. The metallurgy work is going extremely well. We’re seeing some of the highest recoveries in the industry with their metallurgical work. We have run over 400 metallurgical tests on this material to date. We’re starting up mini pilot plants, as we speak, to make sure that as we scale up from the bench scale metallurgy that we learn if there are any impacts from scaling up, or if there’s improvements, or things that we need to work on. Within probably two months, the mini pilot work should be done. And then, we’ll start the large-scale pilot plant test. And we hope to have all of that work done kind of mid to late summer on the metallurgy.
Once all the metallurgy work is done, we’ll take that and combine it with the new drilling information we have. Then we’ll add all of the environmental baseline monitoring data that we’ve been undertaking, and we will then issue a feasibility study for the project. And that will outline all of the technical aspects of the project including the site layout. It will have a certain level of engineering done on the project. And most importantly it will have an economic model associated with it. That economic model then will dictate the steps of the project and our ability to raise the money needed to fully construct the mine and the processing facility, and start that production sometime in 2017.
WSA: Great. And so you mentioned, you know, the higher demand for Niobium in the market. As far as the investors and the financial community, do you think that message and story on Niobium is starting to get better understood?
Mark Smith: I think it is. We’re continuing to educate the market, to educate potential investors, to educate government agencies on the importance of Niobium. And I think it is registering quite well. So, I’m pretty excited about where we’re going with this project.
You know, the beauty of Niobium, which is very contrary to a lot of the resource industry right now, is that Niobium has a very stable price associated with it. It really doesn’t fluctuate a whole lot regardless of what the economic conditions are in the world. And that very stable price for that material really does put us in a very good position in terms of our ability to finance a large construction effort to achieve production. I think we can really minimize dilution to our shareholders and maximize the debt side of the project financing equation.
So, again I think what we’re focused on is making sure our shareholders are taken care of. And with the outstanding price environment that we have for this material, we do expect to maximize debt and minimize dilution, which is always good for our shareholders.
WSA: Certainly. And once again joining as today is Mark Smith, CEO of NioCorp Developments Limited. The company trades on the OTCQX, ticker symbol NIOBF as well as on the TSX Venture, ticker symbol NB and on Frankfurt BR3. US price per share, 63 cents a share, market cap 79 million. And before we conclude here Mark, to recap your key points, why do you believe investors should consider the company as a good investment opportunity today?
Mark Smith: We have a world-class resource that we have demonstrated now and we’ll be reporting on very shortly. We have metallurgical processes that are achieving better than what is defined as world class recoveries right now, and you combine that with a very stable price environment for Niobium as a product, and I think you have everything there you need for a winning project. And I’m personally invested in this. I put my own money behind it, I do believe in it, and we’ve got great people that are supporting all the technical work programs that are creating the value for the company as we speak. So, I just see nothing but the positive for now, and we’ll continue to work hard and to create more value for our shareholders.
WSA: Well, we certainly look forward to continue to track the company’s growth, and report on your upcoming progress. And we’d like to thank you for taking the time to join us today Mark and update our investor audience on NioCorp. It’s always good to have you on.
Mark Smith: Well, thank you, Juan. It’s our pleasure and thank you for the opportunities that you present to us. I appreciate the time today and look forward to the next one.