NioCorp stock rallies on US$800M financing interest for

Elk Creek

RARE EARTHS | Shareholders also approve merger bid with SPAC that will bring US$285M in funding

BY JACKSON CHEN AND BLAIR MCBRIDE

NioCorp Developments (TSX: NB; US-OTC: NIOBF) shares rallied on Mar. 6 after it said it received interest from the Export-Import Bank of the United States (EXIM) for potential financing of up to US$800 million for the company’s proposed Elk Creek critical minerals project in Nebraska.

The funding, should it be granted, will be provided through EXIM’s “Make More In America” initiative. As noted on EXIM’s website, in February 2021, U.S. President Joe Biden signed Executive Order 14017 directing an all-of-government approach to assessing vulnerabilities in — and strengthening the resilience of — the country’s critical supply chains.

NioCorp is currently developing what would be North America’s only advanced materials manufacturing facility for producing niobium, scandium and titanium, all considered critical minerals by the U.S. government.

NioCorp’s facility will be co-located with an underground mine that features the highest-grade primary niobium resource in North America and one of the largest scandium resources in the world. A June 2022 feasibility study estimates that it will produce around 7,300 tonnes of ferroniobium as the primary product plus 102 tonnes of scandium trioxide and 12,000 tonnes of titanium dioxide annually over its 38-year operating life.

In a letter expressing its interest in funding the Elk Creek project costs, projected to be US$1.1 billion in the feasibility report, EXIM stated: “Based on the preliminary information submitted on expected exports and jobs supported, EXIM may be able to consider potential financing of up to US$800 million of the project’s costs.”

The bank then noted that the project finance letter of interest represents “only a preliminary step” in the formal EXIM application process, and the communication “does not represent a financing commitment” and “is not an explicit indication of the financial or commercial viability of a transaction.”

NioCorp said it expects to submit an application to EXIM to begin the first phase of the under- writing process as soon as possible. In the letter addressed to the company, EXIM stated that “upon receipt of NioCorp’s application for financing, EXIM will conduct all requisite due diligence necessary to determine if a final commitment may be issued for this transaction.”

The process from submission of a Phase I application to a final com- mitment of financing by EXIM, if any, is expected to take about six to nine months, and is subject to a number of risks and uncertainties, EXIM said.

As explained in the letter, any final commitment will be “dependent on meeting EXIM’s underwriting criteria, authorization process and finalization and satisfaction of terms and conditions.”

Merger approval

Later that week, NioCorp announced that its shareholders have approved a merger with GX Acquisition Corp. II and up to $81 million in financing deals to advance Elk Creek.

Under the deal with GXII, NioCorp will acquire the U.S.-based special purpose acquisition company, creating a combined entity with a value of US$313.5 million, NioCorp said in a news release last September.

Once the deal closes, the company could have access to as much as US$285 million in net cash from the GX trust account to advance Elk Creek.

GXII shareholders will receive approximately 11.18 NioCorp common shares for each GXII Class A common share held.

NioCorp expects to complete a share consolidation (at a yet-to-bedetermined ratio) and be listed on the Nasdaq Stock Exchange shortly after the deal closes. Its shares will continue to be traded on the Toronto Stock Exchange. The two financings are with YA II PN, an investment fund managed by New Jersey-based Yorkville Advisors Global. One financing involves up to $65 million in equity and another $16 million in convertible debt financing.

Both the merger and the financings are still subject to approval of the Toronto Stock Exchange and by a majority of GX stockholders.

“This business combination with GXII, and the two additional financing packages, have the potential to significantly accelerate our efforts to obtain the required project financing and to ultimately bring the Elk Creek project to construction and eventual commercial operation,” said NioCorp CEO and executive chairman Mark A. Smith, in the September release.

NioCorp shares closed the Mar. 6 session 7% higher at $1.37 a share.

The stock traded at $1.26 at press time in Toronto within a 52-week window of 76¢ and $1.71. The company’s market value is $355.8 million. TNM