NioCorp Developments Ltd.
CEO: Mark Smith
WSA: Good day, from Wall Street. This is Juan Costello, Senior Analyst for the Wall Street Analyzer. Joining us today is Mark Smith, CEO of NioCorp Developments Ltd. The company trades on the TSX Venture, Ticker Symbol is NB and on the OTQX-NIOBF. Thanks for joining us today, Mark.
Mark Smith: My pleasure Juan, we are excited to get our story out.
WSA: Definitely so yeah starting off can you give us a history and overview of NioCorp, for listeners new to your story?
Mark Smith: NioCorp has been around for about 5 or 6 years in its current form, but the major project we have is our Elk Creek Niobium Project that’s located in the Southeast corner of the State of Nebraska. Actually it is a resource that has been known since the late 60s and early 1970s and it’s really through some good fortune that NioCorp has been able to get control of this project; now we are working quite feverously to move this project into full development phase and we have got an awful lot of parallel technical programs that we are undertaking right now to achieve productions as early as 2017.
WSA: Good and so in terms of your Elk Creek Project there in Nebraska can you talk about some of the recent High Grade Assays Results?
Mark Smith: Yeah, we are pretty excited about that of course before we even started the drilling program in May of this year, we had resource drilling results from the early 70s and there has been well over a 100 holes put into the property, since that timeframe. The average ore grade prior to this year’s drilling results suggest that we have the 3rd richest niobium ore resource in the world and the only niobium resource located in the United States. The drilling results that we have been recording as they come in have actually been very exciting for those of us who work in this industry. We found in our first set of drill results when we put a hole into an area that we didn’t really necessarily expect to find resource, but we wanted to see what the extent of the resource was, and lo and behold, not only did we find the niobium mineralization in that area but it was actually above the average ore grade that we had recorded for the entire resource before.
So that was very exciting to start with, now we have completed 4 holes and we are just about ready to complete our 5th hole, probably in the next day or two we will complete hole #5. And one of the things that we knew about this ore deposit was that we have increasing ore grades as we go deeper into the ore zone and sure enough that’s what we are finding. And a lot of the results from holes 2, 3 and 4 will be coming out probably in the next, I don’t know, probably 5 to 7 days and from what we have seen so far we are certainly pleased with the results and they are right in line with our expectations. Our sincere hope is that we will be moving a tremendous amount of the inferred material that we had under our previous NI 43-101 study into the measured and indicated category and I think that purpose is going to be realized in a very short period of time here. But the drilling is going well and everything seems to be on time and we hope to have a new 43-101 report issued sometime in September of this year, so it’s right around the corner.
WSA: Good that’s great. And so what are some of the current trends that you have been seeing right now in the sector, and how are you positioning the company to capitalize?
Mark Smith: Well niobium is a wonderful element that a lot of people don’t know about. There are only 3 producers of this element in the world today. And of those 3 producers, one of them in fact is a very large producer; they produce about 85% of the world’s supply right now. And they are a privately held company and so they don’t have reporting obligations like publicly traded companies do. And so this element called niobium doesn’t really get a lot of press or a lot of attention but it’s actually about a $3.5 to $4 billion a year market and it’s one that if you talk to any of the steel companies that utilize niobium to make their niobium based steels which ultimately end up with a much stronger, much lighter weight steel used in automobiles, architectural steels, infrastructure type steels for bridges and roads, that type of thing and oil & gas pipelines. If you take a look at how that market has been going and growing it’s a good one to be in. And if you do talk to the steel company customers one of the things that you will find that they want is more diversity of supply. So we think that with the third richest niobium ore body known in the world and the only one known in the United States, that we can create just a little bit more diversity in the world of niobium suppliers and take care of an issue that the steel companies consider to be fairly significant right now. So we are excited about the opportunity and really moving the project forward on the technical basis to create technical information, which in my own opinion, is the best way to create value and like I said, we have got parallel fronts on the metallurgy and the drilling side, and all the results are really starting to come in now and we expect an awful lot of good news in the near future.
WSA: Good and so what are some of the other factors that you feel make the company unique from some of the other players in your sector?
Mark Smith: You know one of the things that I think is really starting to differentiate our company is it’s people. We are bringing on people, you know, as we can and obviously there is always tension there between what your budget allows and what you would like to do, but we are trying to be smart about this and bring in some really highly skilled technically competent people to bring us through this technical work phase that we are going through and yet they also have a skill set that allows us to do some of the detailed engineering and get us started in the construction phase of bringing this mine online along with the processing facility. So I think people are differentiating us in a big way right now. We are adding not only members to the management team but we have had some recent changes in our board level and that’s all intended to bring on better, more solid, decision making with that long term strategy being aligned amongst all the parties.
WSA: Sure. And what are some of the other goals and milestones that you and the team are hoping to accomplish over the course of the next 12 months?
Mark Smith: Goals as I noted just a minute ago, we have got a fairly significant drilling program that we are undertaking right now. So we hope to have most of that complete by late August or early September and then have a new NI 43-101 report issued in late September. We are also undertaking a very significant metallurgy program and that metallurgy program is all designed to figure out how to separate the niobium from the rest of the ore so that we can then produce a sellable material to the customers. In the metallurgy program we have two of the highest regarded labs known in the world SGS and Hazen and both of those labs are working on this issue right now.
Our goal is to have an economic process flow sheet developed by the end of August and then to start some, what we call, bench-scale testing of the process flow as it seems — So we have about two a month time period to undertake that testing. This is a very significant metallurgy program and the work is not to be taken lightly. There have been over 140 different metallurgical tests done on the ore already in the last 3 months. That work is going to continue, we are really honing in on some of the processes that will work to separate the niobium from the ore itself and to turn it into a sellable product for our customers.
Once we have the drilling results and we have the bench-scale testing or, I am sorry pilot-scale testing, on our metallurgy process that should all be ready to be placed into a bankable feasibility study which I am pushing to have done by the end of this year and certainly no later than the end of the first quarter of 2015. That will be the tell all document that allows us to then go out to the major financing institutions of the world and seek the project financing that we will need to get this project off the ground and get the construction started. So those are the timeframes we are looking at, I can assure you that the entire company and the board are very aligned on these timelines and on the work scope, and the technical work programs that we have undergoing right now. And there is an awful lot of communication internally to make sure these things stay on time and on budget.
WSA: For sure, and so when it comes to investors and the financial community, Mark do you believe that the NioCorp story and your message and the upside are completely understood and appreciated by them, and if not what you wish investors better understood either about the company or niobium?
Mark Smith: I don’t think that we are fully understood yet and a lot of that is the result of this little element called niobium which is on the Periodic Chart, Element #41; it’s a lack of understanding and lack of knowledge about this element and I am doing everything in my power to educate the public about this element and what wonderful things it does for us in our world today, how important it is for the future and how important it is to make sure that we have more diversity of supply in the world than what we have today. And every time that we go out and we talk to people with this educational process in mind, it is very, very warmly received and typically we have new investors in the company very quickly.
So I think if we can get the story out to a broader our audience then the results would speak for themselves because we have got very good technical work programs that are all going exceptionally well right now. And I firmly believe that NioCorp would be the fourth producing niobium resource in the world.
WSA: Good. And so once again joining us today is Mark Smith, CEO of NioCorp Developments Limited. The company to trades on the TSX Venture, Ticker symbol is NB as well as on the OTCQX-NIOBF, currently trading at $0.62 cents a share, market cap by north of $77 million. And before we conclude here to briefly recap some of your key points, why do you believe investor should consider NioCorp as a good investment opportunity today?
Mark Smith: When I came into this company in September of 2013, we were trading at about 9 cents a share. We have been out educating everybody that we can talk to about niobium and the outstanding resource that we have in our project called the Elk Creek Niobium Project and we are trading at about 62 cents a share today and we haven’t even really issued a lot of the technical data from the technical work programs that we are undertaking right now. I think people are going to find that these program are going to produce what we expected them to produce, we are going to do it in the timeframe we expected it to be done and I think that people are going to be quite surprised at the end of the day, how this number 3 in terms of richest ore grade in the world for niobium,may in fact take a jump up from that, given the drill results that we are seeing so far.
So I think there is very good reason to think that this particular resource will in fact be the 4th producing niobium resource in the world, which will provide very robust economics for any of its shareholders. Our goal is to create value with this resource and through this company and we are very focused on that and I think people will see that we are committed, we are passionate. I myself am a 9.5% shareholder in your company and I can’t think of a better way to express my dedication, my confidence and my belief in this resource then to put my own money into it. So I think people are going to find us to be a very exciting company in the news as we move forward in the next couple months.
WSA: Well, we certainly look forward to continuing 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.
Mark Smith: Well, its my absolute pleasure Juan, one more avenue to get our message out and we really appreciate your interest and hope to continue this dialogue as the days go by.