Investors in Nebraska niobium mine: “Something must happen."

Jan. 18, 2024, 5 a.m. ·

NioCorp and 2023 Stock Performance
NioCorps Colorado office (Graphic: Nebraska Public Media News)

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As Colorado-based NioCorp prepares for its annual shareholders meeting, frustrated investors in Nebraska would like answers following what even the CEO calls a "disappointing" year.

Over the past 15 years, the company has attracted small investors after it proposed to build a Niobium mine outside of Elk Creek. The project has yet to materialize. The stock languished in 2023 after joining the Nasdaq Stock Exchange.

Photo of titanium, scandium, niobium and a drawing of a mining building with the NioCorp logo.
(Graphic by Nebraska Public Media)

Investors like Nebraskan Todd Milke will listen closely to what NioCorp's management team will say as the management team when it convenes the annual meeting on Friday.

"Something has to happen this year," said Milke in an interview. "I would think something substantial is needed."

"They can't keep, for a better term, kicking the can down the road any further. I think this is it."

In the past year, the focus of the discussion among NioCorp shareholders shifted from the buzz about the prospects for a mine toward the under-performance of its stock.

The novelty of the location of the mine in a Nebraska cornfield drew a degree of national attention.

On a farm in the state's southeast corner, core samples taken from deep below the surface confirmed rich deposits of Niobium and Scandium. When blended with other metals, the minerals create durable, lightweight, heat-resistant materials.

The raw materials are in demand by defense industries, automakers, and developers of high-capacity batteries.

NioCorp CEO Mark Smith talks with southeast Nebraska residents at a town hall meeting in 2023
NioCorp CEO Mark Smith talks with southeast Nebraska residents at a 2023 town hall meeting. (Photo: Bill Kelly, Nebraska Public Media)
NioCorp CEO Mark Smith in 2023.
NioCorp CEO Mark Smith speaks during a town hall meeting in 2023. (Photo: Bill Kelly, Nebraska Public Media)

The company touts the value of having an American-based supply for these products and relying less on China and other nations with less-than-ideal relations with the U.S.

Early investors, including Coloradan Jim Barley, began snapping up low-priced shares in 2011 when the company purchased the land rights outside Elk Creek.

"The future possibilities of these deposits are immense," he said in an interview. However, even as NioCorp managers have asked for patience, Barley said he imagines "people in the area in Nebraska are sick and tired of hearing that we don't have any money, so we cannot get started."

It was all optimism in 2019 when NioCorp chairman Mark Smith spoke about the prospects for large-scale funding purportedly on the horizon.

"We're getting very, very close at this point and time," Smith told Nebraska Public Media. "I hope everyone sees the press releases we've been issuing as a reflection of our confidence moving forward."

He was equally upbeat in 2020 when speaking directly to shareholders on a conference call, telling them, "I think we're truly ready for success in the very near future here."

Following a town hall meeting outside of Elk Creek in November 2022, Smith spoke of "an immediate bump" in major financing with the addition of corporate partners.

"This is a big fundraising effort," he said in an interview. "This could result in $285 million in our treasury to put towards this project."

The addition of those partners, G.X. Acquisitions, did not go as anticipated by NioCorp or its most loyal supporters.

No big-money investor came forward to provide the millions of dollars necessary to finance the construction of the mine.

Barley has not sold his NioCorp shares and has even added to his holdings when the stock reached its record lows. That does not mean he's happy with the decisions Smith and his corporate management team made.

Barley believes "they overestimated the potential or underestimated the difficulties" of the transaction. In his view, the situation was "totally preventable as human beings, but it happened, and we have to move forward from that."

He called the deal a "cluster," adding a word we can not print.

"I didn't know what else to call it," he said, "but that's what it was."

The partnership with G.X. coincided with NioCorp's March listing on the prestigious tech-friendly Nasdaq Stock Exchange. It didn't take long for the stock's price to drop significantly.

Shares purchased for over $10 in March were worth less than three dollars at the beginning of 2024, a drop of over 60 percent in the stock's value in one year.

Mining markets analyst Christopher Ecclestone with London-based Hallgarten & Company said, "Nasdaq should have made them a go-go tech story, and all it did was make it go-go down."

Todd Milke, one of over 5300 Nebraskans owning stock, according to NioCorp, took a huge hit.

"I'm certainly a patient person," Milke said in an interview, "but it's been ten years now."

"The fact that we're at a 10-year low is just mind-boggling."

A former worker in the aerospace industry, Milke bought NioCorp stock because he liked the idea of a Nebraska minerals mine providing raw materials for high-tech goods. He still supports the concept of mining strategic minerals and rare earth elements in Nebraska.

"Do I think it's a good project?" Wilke said, "Yeah, I think it's a great project."

The past year has tested his faith in the investment.

"When Mark proclaimed that financing was imminent, I think that's what a lot of people are a little frustrated about," he said. After "a comment made like that, you kind of expect something in the near future, not half a decade later."

Niocorp Drilling Location
Significant deposits of Niobium were discovered in souteast Nebraska in core samples during the 1970s. (Photo: Bill Kelly/NE Public Media)
Niobium Core Samples
Core samples removed during early drilling in Johnson County, NE. (Courtesy Photo)

NioCorp CEO Smith, writing in his year in review for investors report, said he "certainly shares shareholders' collective disappointment in NioCorp's share price performance in 2023," noting that as the company's single largest shareholder, he has "every reason to see NioCorp succeed."

In the next paragraph, Smith writes optimistically: "I have never been more confident of success in securing the project financing we need to move the Elk Creek Project forward."

When speaking publicly, Smith routinely notes there are limits to what he can say about the future and cautions about what he can predict to keep in line with federal regulations on "forward-looking statements."

Thousands of investors purchased shares over the years, hoping NioCorp could sink a mine shaft in a cornfield to extract Niobium, Scandium, Titanium, and a set of rare earth elements.

Some stock analysts rate NioCorp as a buy, noting the risks and slow development of the project.

Ecclestone, the analyst with Hallgarten, remains a skeptic, noting the stock is "just kind of sitting there like a lump."

His analysis shows an ample global supply of Niobium and the other elements.

In an interview, he said the "Niobium supply is in no danger whatsoever because there is a mega-producer in Brazil, and Brazil is still regarded as a friendly county by the U.S." The second largest producer is Canada, another American ally. There is "no threat there and no shortage of the product out there."

"So what the hell? Who cares?" he concludes.

At the annual meeting at NioCorp's headquarters in Centennial, Colorado, investment analysts and shareholders will be listening for indications the company can deliver a financial package from someone willing to provide funding to get the project moving.

Also, based on statements made by the management team, there may be additional information about loans from U.S. Government agencies interested in developing American supplies of critical minerals like Niobium.

NioCorp Map of Elk Creek Niobium Mine
A map of the proposed Elk Creek, Nebraska mining project from a report to investors. (Image courtesy NioCorp)