NioCorp chief knows about skeptics; predicts watershed year.

Jan. 22, 2024, 9 a.m. ·

NioCorp executives meet
NioCorp executives meet at the company's Colorado headquarters. (Photo: Bill Kelly/NPM)

NioCorp CEO Mark Smith told Nebraska Public Media this "could be a watershed year" for the company.

He was reminded he's made such optimistic predictions in the past.

"It's just a different feeling," he said.

Smith sat for an interview with reporter Bill Kelly following the company's annual shareholder's meeting in Centennial, Colorado.

NioCorp Shareholders meeting
A shareholder addresses NioCorp executives during the company's 2024 annual meeting. (Photo: Bill Kelly/NPM)
NioCorp CEO and CFO
NioCorp Chief Financial Officer Neal Shah and CEO Mark Smith convene the company's annual meeting.

It’s been an especially tough year for the company intending to develop a niobium and scandium mine in Southeast Nebraska.

In 2023, management touted NioCorp’s merger with the investment company GX II Acquisition in the hopes it would result in millions of additional dollars to begin construction of its proposed niobium mine near Elk Creek, Nebraska. The money didn’t come.

The tech-heavy Nasdaq Stock Exchange listed NioCorp shares for the first time in March. The stock tanked in April and has yet to recover. Share prices dropped 60%.

Some investors, including some of the 5300 living in Nebraska, express impatience with assurances that major funding is on its way 15 years after the first land was acquired in Johnson County.

At its annual Speaking to shareholders meeting last Friday, CEO Mark Smith spoke of a new financing strategy which he calls the “cornerstone” for attracting the billion-dollar investment needed to construct the mine and on-site mineral processing facilities.

NioCorp’s strategy in the coming year relies on obtaining federal government loans from EXIM, the U.S. government’s Export-Import Bank. The agency traditionally promotes and finances U.S. businesses abroad. Recently, EXIM expanded its financing options to include projects inside the United States, including support for “critical minerals projects.” The Elk Creek would produce niobium, scandium, and a range of rare earth elements. There is concern those elements are primarily produced by other nations.

Bill Kelly with Nebraska Public Media spoke with Chairman Mark Smith after the annual meeting adjourned. (This interview has been edited for length and clarity of content.)

Bill Kelly (Nebraska Public Media): What is the amount of financing you're seeking, after this last discussion, to make both the mine and the processing facilities viable?

Mark Smith (CEO, NioCorp): The capital estimate that we're using today is $1.2 billion. That's what we're seeking in terms of total financing. Our ideal situation would be about $800 million in debt and $400 million in equity. It'll be some combination of those things or maybe some hybrid financing to bridge the final number. But we know what the target is, and it's $1.2 billion.

Kelly: Within the past six months, the discussion has kind of shifted, not just from finding investors but to the importance of getting the federal loans as well. To what degree is that new over the past couple of years?

Smith: Very good question in terms of timing because we've actually been speaking with EXIM Bank, US EXIM Bank, for well over a year, actually, almost two years now. Take that back almost two years. So, we've been introducing ourselves introducing the project, not just to XM, we we've talked to DOD (Department of Defense), we've talked to DOD as well, we take the position of critical strategic minerals very seriously.

This group of four in our management team has been advocating the importance of having us supply chains for critical strategic minerals for a long, long time. We're committed to making that happen. And and we want the federal government to understand how important it is. I think they understand now.

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)

Kelly: Can you give me a range as to how large a loan you might be seeking?

Smith: Yeah, I mean, we're looking to have upwards of $800 million in debt for this project. And the letter of interest that we received from EXIM Bank last year indicated the interest in funding $800 million. So, all of that is nice. And again, in the ideal world. That's what we seek. At the end of the day, we have to demonstrate and the economics and the and the technical capability producing these minerals to support $800 million of loans because it will be done on a very commercial basis. I mean, just because it's a US government doesn't mean they take any higher levels of risk or anything else you have to beat normal commercial banking requirements.

Kelly: You've mentioned also the (European auto company) Stellantis is still interested in having an investment role as well?

Smith: Correct.

Kelly: How large?

Smith: That is something I cannot disclose, because we have not publicly stated what that is. And that would be selective disclosure. So, I apologize.

Kelly: You said there's a lot of interest once, as you refer to it, this cornerstone (of loans and the Stellantis deal) is in place. When you say lots of interest in the finance world, is that? Five? Is that a couple of dozen? Is that a couple 100?

Smith: I think there’s a list of people that we keep very warm, so to speak, who if there's any updates (with the project), we call them and make sure they got that update. That's probably 20 or less. But the number of people that that we have been in discussions with has been in the hundreds.

Kelly: On that list of 20, are they individual investors? Investment entities?

Smith: They tend to be institutional investors.

Kelly: You had talked about a couple of investors that were very close (to reaching a deal in the past few years). What happened? Why didn't they decide to move forward?

Smith: They didn't ‘not decide’ to move forward. Let me make that very clear. And with one of them in particular, we're still talking to (them). They had to go through a process of taking some very eclectic assets, turning those into collateral, and then creating a private equity fund, basically. They are still going through the process of setting that up. It's a highly, highly regulated area. They have been working very hard to make this happen. They have probably spent over $100 million to get where they are today and they're not quite there yet. But we stay in touch with that entity.

Kelly: Nonetheless, those well-known names have yet to step up over an extended period of time. What has been holding them back? Well, you make a very good case about the mind and its viability and the product availability. But they aren't actually writing the check yet.

Smith: No, I can't argue the point. You're right. We don't have big financing lined up yet. I think where we're headed is a really appropriate strategy.

If you get an entity like EXIM Bank to come in and provide a term sheet for something around $800 million, that attracts the attention of all these other players, because they (EXIM) do a level of due diligence before they give you that term sheet for 800 million. It's a risk evaluation is what it is.

The entire time I've been here is we're trying to mitigate the risks of (the Elk Creek niobium) project. That's why we do the drilling that we do. That's why we do the metallurgy we do. There's no question we can recover the minerals. There's no question the minerals are out there. Now we have to get the financing in place to extract them. But we've eliminated a lot of risk.

Kelly: In the coming couple of years, if the financing does not come through, and the loans are still not through, where does NioCorp stand in being able to maintain itself operationally and continue to pay people like the landowners in Nebraska for those mineral rights?

Smith: You know, it's a difficult question. Because anytime you go out to raise money, you don't know if you're going to be able to raise money or not. That's, that's one of the beauties of being a CEO is that I get to go to bed every night, and wonder if that's going to work or not. But you know, what, in the last 10 years, we've done really well with that.

We are advancing the project, we need to do a lot better on the financing, VLA. I clearly recognize that and I put my hand up for that I've got to, I've got to do better than what I've done, that I will tell you that I am absolutely committed to this, I have put a lot of personal money into this, I have loaned the company money, I will continue to keep this company alive, if that's what is necessary, at least within my capabilities.

Kelly: How would you characterize NioCorp’s past year since it chose to join the NASDAQ exchange?

Smith: Again, we will reiterate, as was in the shareholder letter, we were all very disappointed in the SPAC deal. It just did not pan out the way that we wanted to or the way we thought it would. And the one thing I think I can say safely on behalf of all for the management team members in here today. It wasn't because of a lack of effort. We put our hearts into that thing.

Kelly: Are you surprised that it remained as flat as it has that stock price over the past year?

Smith: You know, if I were able to predict what the stock price was going to do, maybe I wouldn't be in mining. We can't predict what it's going to do.

I'm not trying to be defensive about this. I'm trying to be very factual about this. Take a look at almost all of the mining stocks right now. Everybody has experienced a significant reduction in their share price. It’s not just NioCorp (and) project development type mining companies. These are the big mining companies as well.

Kelly: What's the main message you wanted to convey to your shareholders coming out at today's event?

Smith: I think 2024 could be a watershed year for us.

Kelly: You've said that before.

Smith: I have. I have and I have a whole different feeling about it right now. Because we're not dealing with a fund that has to set up a fund anymore. We're dealing with the U.S. EXIM Bank. They have everything they need in their accounts to fund this project at $800 million. So, it's just a different feeling.

Kelly: You understand that there are more skeptics.

Smith: In 2025, if nothing happens, there will be umpteen zillion social media publications again talking about how I've missed the timelines. But you know, I'm the CEO. I'm the cheerleader. I have to keep pushing this thing as hard as we possibly can to get financing as fast as we can.

If I sat here today in front of you and in front of my team and said, ‘Oh, we're not worried about it if it happens in ‘27, or ‘28. I don't think you would respect that either. I'm going to push hard. We're going to get this financing in as fast as we possibly can. I see a path to get us there in 2024. I'm going to work as hard as I can to make that happen.