NioCorp reveals large rare earth resource at Elk Creek project in US    

Shares of NioCorp Developments (TSX: NB) rose 50% this morning as the company’s updated feasibility study for its Elk Creek niobium, titanium and scandium project in Nebraska reported the presence of about 632,900 tonnes of rare earth oxides (REO), which the firm said is the second largest indicated rare earth resource in the U.S.  

The rare earth resource totals 188.8 million tonnes grading 0.0524% neodymium, 0.0143% praseodymium, 0.0012% terbium and 0.0048% dysprosium for contained metal of 98,900 tonnes of neodymium, 26,900 tonnes of praseodymium, 2,300 tonnes of terbium and 9,100 tonnes of dysprosium. The deposit includes other rare earth elements (REE) as well.   

Inferred resources add 108.3 million tonnes grading 0.37% total REO for contained metal of 408,100 tonnes.   

“Given recent geopolitical events and the world’s ongoing global energy transition, we feel a strong imperative to produce more of the critical minerals that America and the Western world need to meet these challenges,” the company’s CEO Mark Smith said in a press release.    

“If we elect to add rare earths to our product offering, the Elk Creek project will represent a unique critical minerals project once financing is obtained,” he added.   

Elk Creek is located about 105 km southeast of Lincoln, Neb. and was acquired by NioCorp in 2010. The project has a probable reserve of 36.6 million tonnes grading 0.81% niobium, 2.92% titanium and 70.2 parts per million (ppm) scandium for contained metal of 297,278 tonnes of niobium, 1.1 million tonnes of titanium and 2,573 tonnes of scandium.   

Based on an increase in reserves, the study added two years to the project’s mine life for a total of 38 years, compared to the previous feasibility published in 2019. At an 8% discount, the new post-tax net present value was pegged at US$2.8 billion up from US$2,6 billion, while the internal rate of return went up to 29.2% from 27.3%. 

The project’s upfront capital expenditure remained the same at US$1.1 million.   

However, the updated feasibility study did not take into account the impacts on the costs of materials and operating expenses from inflation, pandemic-caused supply chain issues, and geopolitical unrest. Neither does it include the feasibility of adding REE production.  

The company’s next steps include determining the net impact of integrating rare earth operations into its current production plans.  

“There is potential for NioCorp’s REEs to be mined, crushed, and placed into solution as part of the process NioCorp plans to use to produce its primary niobium, scandium, and titanium products once project financing is secured,” the company said.    

“Depending upon the outcome of metallurgical testing on REE recovery rates from Elk Creek ore, now being conducted at a demonstration plant in Quebec… NioCorp could produce separated rare earths as a byproduct,” it added.    

China is the world’s biggest producer of rare earths, a group of 17 minerals employed in a range of applications including permanent magnets used in electric vehicles, renewable energy devices and military equipment. The Asian juggernaut controls about 85% to 90% of the world’s rare earths processing.   

In the morning, shares of NioCorp Developments were trading at $1.47 after opening at $1.04 before falling to $1.18, up 23¢ or 24.2% for the day, on the Toronto Stock Exchange within a 52-week trading range of 76¢ and $1.84.