NioCorp (TSX:NB - OTCQX:NIOBF - FSE:BR3) is developing North America's only Niobium / Scandium / Titanium project located near Elk Creek, Nebraska. It is the highest grade Niobium project in North America and the largest prospective producer of Scandium in the world. NioCorp has completed resource definition, geohydrology, geotechnical, meteorological, environmental and metallurgical work programs necessary to complete a feasibility study for the project and expects to complete a feasibility study for the project.
NioCorp recently completed a second Preliminary Economic Assessment, which was originally announced on August 4, 2015, issued on September 4, 2015 and amended on October 16, 2015. The Amended PEA2 significantly improved project economics as a result of better metallurgical performance and an optimized mine plan when compared to the Company’s original PEA report that was announced in April 2015. The Amended PEA2 production rates over a 32 year operating life would be 7,490 tonnes per annum (tpa) Ferroniobium, 97 tpa Scandium Trioxide and 23,960 tpa Titanium Dioxide. Scandium production increased 661% versus the original PEA.
NioCorp aims to be part of the solution for the world's strategic and critical Niobium and Scandium needs. Niobium is a crucial component in high strength, low-alloy steels for bridges and buildings, high pressure oil and gas pipelines, lightweight and fuel efficient cars and is also used in the manufacture of stainless steel, MRI machines, wind turbines and jet engines. Scandium is used as an alloy with aluminum, dramatically increasing strength and weldability while improving corrosion resistance. Its properties are useful in the aerospace and transportation industries, and are critical in advanced fuel cell technologies.
NioCorp’s PEA2 economics were announced on August 4, 2015 and the PEA2 technical report was filed on September 4, 2015 and amended on October 16, 2015. The Amended PEA2 projects a pre-tax NPV of US$3.07 billion (US$2.30 billion after-tax), a pre-tax IRR of 31.7% (27.6% after-tax), and average pre-tax cash flow of US$438 million per year after upfront capital costs of US$979 million. Amended PEA2 economics were calculated using an 8% discount rate.
Since 2009, Niobium prices have ranged between US$37 and US$43/kg, reflecting its steady growth and stability in the marketplace. Scandium prices are expected to range between US$3,000 - US$4,000/kg through 2023, according to a third party marketing study produced by OnG Commodities LLC. Demand for both Niobium and Scandium is expected to increase over time.
Cautionary Statement: The Amended PEA2 is preliminary in nature and it includes a level of engineering precision and assumptions which are currently considered too speculative to have the economic considerations applied to them that would enable Mineral Resources to be categorized as Mineral Reserves. Inferred Mineral Resources are not included in the mine plan for the Amended PEA2. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability. The Amended PEA2 includes price and market assumptions concerning an expanded demand in the scandium market. There is no certainty that the Amended PEA2 will be realized.