Updated feasibility study confirms the Elk Creek Project’s rare earth indicated resource is second only to MP Materials’ Mountain Pass deposit in the U.S.
New Mineral Reserve and Economic Model does not yet include rare earth production but updated feasibility study shows longer expected mine life, higher expected ore grades and tonnages, and improved expected project economics from niobium, scandium, and titanium
The Project’s updated feasibility study does not take into account impacts on the costs of materials and operating expenses from inflation, pandemic-caused supply chain issues, and geopolitical unrest, given the fluid nature of these factors today
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CENTENNIAL, Colo. (May 18, 2022) – An updated feasibility study of NioCorp Developments Ltd.’s (“NioCorp” or the “Company”) (TSX: NB; OTCQX: NIOBF) Elk Creek Project (the “Project”) shows that the Project is the second-largest indicated-or-better rare earth resource in the U.S., second only to MP Materials’ Mountain Pass rare earth deposit.
The Company has completed an updated feasibility study (the “2022 Feasibility Study”) in collaboration with Understood Mineral Resources Ltd., Optimize Group Inc., and Dahrouge Geological Consulting Ltd. Rare earth elements (“REEs”) were evaluated as a potential by-product to the mining of niobium, titanium, and scandium; thus the estimated values of the REEs are reported using the previously determined diluted Net Smelter Return (“NSR”) as derived from the Nb2O5, TiO2, and scandium Mineral Resources. According to the 2022 Feasibility Study, the Elk Creek Project contains an estimated 632.9 kilotonnes (“kt”) of contained total rare earth oxides (“TREO”) in the indicated mineral resource category.[1] According to U.S. Geological Survey data,[2] this places the Elk Creek Mineral Resource behind MP Materials’ Mountain Pass deposit in the U.S. but ahead of all other current rare earth projects in terms of contained TREO from a NI 43-101 rare earth resource of indicated or higher classification.
According to the 2022 Feasibility Study, in addition to relatively high grades of niobium, scandium, and titanium, the Elk Creek Mineral Resource contains various amounts of all REEs. 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. Depending upon the outcome of metallurgical testing on REE recovery rates from Elk Creek ore, now being conducted at a demonstration plant in Quebec, and whether necessary Project financing is secured, NioCorp could produce separated rare earths as a byproduct, placing it at a competitive advantage vis-à-vis other rare earth projects.
A new technical report on the Elk Creek Project summarizing the results of the 2022 Feasibility Study will be prepared by Dahrouge Geological Consulting Ltd. and Optimize Group Inc. in accordance with NI 43-101. The technical report will include details regarding the updated Mineral Resource and Mineral Reserve estimates presented herein, which are derived from the 2022 Feasibility Study, and will be filed on SEDAR (www.sedar.com) within 45 days of this news release.
Next Steps in NioCorp’s Plans to Add Rare Earths to the Project
Given the NioCorp team’s decades of collective experience in commercial-scale separation and purification of REEs, and with global demand and pricing of REEs continuing to rise, the Company launched geological, metallurgical, engineering, and other analyses in 2021 to assess the feasibility of adding REE production to its plans. NioCorp plans to issue a further updated NI 43-101 technical report which incorporates the results of this work following the completion of the demonstration plant and the follow-on engineering and costing to determine the net impact of integrating rare earth operations into the Company’s current production plans.
Of the REEs shown by the 2022 Feasibility Study to be contained in the Elk Creek Mineral Resource, NioCorp is presently focusing on the magnetic REE products neodymium-praseodymium oxide, dysprosium oxide, and terbium oxide at a purity level that meets current commercial requirements. There currently is no commercial-scale production in North America of these separated rare earth products from ore mined in the U.S.
Elk Creek Mineral Resource Update Results
According to the 2022 Feasibility Study, the Elk Creek Indicated Mineral Resource includes the following tonnages of contained metals, using a ≥US$180/tonne NSR cut-off that was calculated using solely the contained niobium, scandium, and titanium in the Mineral Resource:
- 632.9 kt of TREO, including these individual rare earth oxides:
- 26.9 kt of praseodymium
- 98.9 kt of neodymium
- 2.3 kt of terbium
- 9.1 kt of dysprosium
- 970.3 kt of niobium oxide
- 11,337 tonnes (“t”) of scandium oxide
- 4,221 kt of titanium oxide
In order to update the Project’s Mineral Resource to include REE data, the Company and its consultants were required to complete additional assays of historical drill core to fill data gaps in the existing resource database and re-model the Mineral Resource. The mine plan and Mineral Reserve were also updated, independent of the REE data collection and REE by-product Mineral Resource.
Improvements to the Mineral Resource to allow the incorporation of rare earth grades and tonnages required additional time and effort to update the Mineral Reserve to ensure that the Mineral Reserve and associated mine plan reflected the Mineral Resource. The new Mineral Reserve does not include rare earth production. Detailed tables showing estimates of ore grades and tonnages of the pay metals in the orebody, in addition to rare earth elements, based on the 2022 Feasibility Study, are shown in the Appendix of this news release.
A Unique Critical Mineral Project
NioCorp CEO and Executive Chairman Mark A. Smith
“The results of this updated feasibility study are very good news, and they validate our belief that the Elk Creek ore body represents one of America’s largest indicated rare earth resources,” said Mark A. Smith, CEO and Executive Chairman of NioCorp. “With the addition of the magnetic rare earths, the Elk Creek Project will stand out from virtually every other greenfield project in the U.S. in terms of its potential ability to produce multiple critical minerals that are essential to electrified transportation, renewable energy production, green mega-infrastructure projects, and many other applications that are in increasing demand around the world. 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.”
Mr. Smith added: “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 updated feasibility study shows that the Elk Creek deposit contains an abundance of critical minerals, including rare earths, and we are working very hard to ensure America can benefit from the full range of the critical minerals our deposit could economically deliver.”
Scott Honan, Chief Operating Officer of NioCorp and President of Elk Creek Resources Corp.
Scott Honan, NioCorp Chief Operating Officer, said: “These results are in line with our previous assessments of rare earth grades and tonnages. The updated feasibility study shows the rare earths are distributed fairly uniformly within the Mineral Resource, which makes them well suited for by-product production.”
“This updated feasibility study ensures the quality of our Mineral Resource data is the same for both our planned products and for prospective rare earth products,” Mr. Honan added. “These results will help to accelerate our work to finalize the metallurgical, engineering, and economic feasibility of expanding the commercial critical mineral products we plan to make in Nebraska to include rare earths once financing is secured.”
Updated Feasibility Study Shows Longer Mine Life and Improved Project Economics
The Mineral Reserve estimates included in the 2022 Feasibility Study, which were completed by the Optimize Group Inc. and summarized below in Table 1, provide updated measurements of ore grades, tonnages, and rates of production for niobium, scandium, and titanium. Additional information on the Mineral Reserve estimates included in the 2022 Feasibility Study, and accompanying footnotes, are contained in the Appendix to this news release.
Table 1: Highlights of the 2022 Elk Creek Project Mineral Reserve
Effective date of May 10, 2022
| 2022 Elk Creek Project Mineral Reserve | ||||||||||
| Classification | Tonnage (x1000 t) |
Nb2O5 Grade (%) | Contained Nb2O5 (t) | Payable Nb (t) | TiO2 Grade (%) | Contained TiO2 (t) | Payable TiO2 (t) | Sc Grade (ppm) | Contained Sc (t) | Payable Sc2O3 (t) |
| Proven | – | – | – | – | – | – | – | – | – | |
| Probable | 36,656 | 0.811 | 297,278 | 170,409 | 2.92 | 1,071,182 | 431,793 | 70.2 | 2,573 | 3,677 |
| Total | 36,656 | 0.811 | 297,278 | 170,409 | 2.92 | 1,071,182 | 431,793 | 70.2 | 2,573 | 3,677 |
See accompanying notes to this table in the Appendix of this news release
As a result of the Project’s new mine plan and Mineral Reserve update, the 2022 Feasibility Study also updates the Project’s expected economic results. While the Project’s expected economics are improved in nearly all aspects (see Table 2 below), these results do not yet include projections of possible rare earth production or any of the expected benefits of process optimization efforts currently being tested by NioCorp. This information can only be incorporated into project economics once NioCorp completes its ongoing metallurgical testing and engineering analyses necessary to issue a further updated NI 43-101 technical report.
The Project’s economic results from the 2022 Feasibility Study do not account for impacts on the costs of materials and operating expenses from inflation, pandemic-caused supply chain issues, and geopolitical unrest, given the fluid nature of these factors today, and so was conducted on the same basis as the Company’s 2019 Feasibility Study, using 2019 costs and product pricing. These factors, including a change in the price of niobium and scandium which are thinly traded without an established publicly available price discovery mechanism, could have significant effects on the Company’s results of operations and its ability to execute on its business plan. The Company will continue to examine these factors.
The sensitivity analysis conducted as part of this NI 43-101 feasibility study determines the effect of key variables at a plus-or-minus 30% on the Project’s base case of pre-tax Net Present Value (“NPV”) of $2.82 billion and Internal Rate of Return (“IRR”) of 29.2% and a base case of after-tax NPV of $2.35 billion and IRR of 27.6%. The results of this analysis are shown below in Figures 1-4 below. Tables showing detailed values for each of these analyses are shown in the Appendix of this news release.
Figures 1-2: Pre-Tax NPV and IRR Sensitivity Analysis ($B)
Figures 3-4: After-Tax NPV and IRR Sensitivity Analysis ($B)
Elk Creek Project’s Updated Economics from the 2022 Feasibility Study
As shown in Table 2 below, the 2022 Feasibility Study shows that expected Pre-Tax and After-Tax NPV both increased, the mine’s expected life has been extended from 36 to 38 years, and expected Life of Mine[1] gross revenue for all three currently planned products (niobium, scandium, and titanium) have increased. The economic analysis was conducted on the same basis as the Company’s 2019 Feasibility Study, using 2019 costs and product pricing.
Table 2: 2022 Elk Creek Project Feasibility Study Economic Results
Effective date of May 18, 2022
|
2022 Elk Creek Feasibility Study Economic Results |
|||
| 2019 FS | 2022 FS | Change | |
| Pre-Tax Net Present Value (NPV) (8% discount) | $2,564 | $2,819 | 9.9% |
| Pre-Tax Internal Rate of Return (IRR) | 27.3% | 29.2% | 6.9% |
| After-Tax NPV | $2,098 | $2,350 | 12.0% |
| After-Tax IRR | 25.8% | 27.6% | 6.9% |
| After-Tax Payback Period from Production Onset (years) | 2.86 | 2.69 | -5.8% |
| Total Upfront CAPEX | $1,143 | $1,141 | -0.2% |
| Mine Life (Years) | 36 | 38 | 5.6% |
| Life of Mine (“LoM”) Gross Revenue ($M) | $20,807 | $21,900 | 5.3% |
| Niobium | $7,860 | $7,968 | 1.4% |
| Scandium | $12,532 | $13,504 | 7.8% |
| Titanium | $414 | $427 | 3.1% |
| Averaged Annual EBITDA over LoM | $369.6 | $397.5 | 7.5% |
| Averaged EBITDA Margin over LoM (EBITDA as % of total revenue) | 67% | 69% | 2.2% |
| Averaged Annual Operating Cash Flow over LoM | $307 | $337 | 9.7% |
| Average Annual Operating Cost, LoM (OPEX) (US$/t) | ($196.4) | ($195.9) | -0.2% |
| Averaged Annual EBITDA over Run of Mine (“RoM”)[2] | $379 | $403 | 6.2% |
| Averaged EBITDA Margin over RoM (EBITDA as % of total revenue) | 67% | 68% | 2.2% |
| Averaged Annual Operating Cash Flow over RoM | $314 | $340 | 8.4% |
| Effective Tax Rate | 17.5% | 16.4% | -6.2% |
[1] “Life of Mine,” or LoM, encompasses the entire expected operational life of the mine, including ramp-up and ramp-down production periods.
[2] “Run of Mine,” or RoM, is defined as the period of time during which the mine is fully operational and excludes the periods of time when the mine is conducting its initial production ramp or is ramping down to closure.
The graphic below shows the layout of the Elk Creek underground mine design. Major elements of the design are unchanged and support the 2022 Mineral Reserve and mine plan included in the 2022 Feasibility Study.
Figure 5: Elk Creek Project Underground Mine Design
2022 Elk Creek Mine Plan Production Schedule
The following chart illustrates the Elk Creek Project’s ore production profile over the 38 years of its expected mine life based on the 2022 Feasibility Study:
Figure 6: 2022 Elk Creek Project Production Profile
This video illustrates the underground mining operations of the Elk Creek Project over its expected 38-year mine life based on the 2022 Feasibility Study.
Figure 7: 38 Years of Mining the Elk Creek Deposit
The Important Role of the University of Nebraska’s Conservation and Survey Division
Mr. Honan said: “NioCorp is extremely grateful to the staff and leadership of the University of Nebraska’s Conservation and Survey Division, without which we would not have been able to complete this important step forward towards realizing the rare earth potential of the Elk Creek Project.”
The University of Nebraska’s UNL’s Conservation and Survey Division (“CSD”), is a unique, multi-disciplinary research, service and data-resource organization that originated in 1893. As Nebraska’s geological survey, its mission is to investigate and record information about the state’s geologic history, its rock and mineral resources, the quantity and quality of its water resources, land cover, and other aspects of its geography, as well as the nature, distribution, and uses of its soils. CSD was actively involved in the discovery of the Elk Creek carbonatite more than five decades ago. CSD continues to curate samples and data from the deposit, among its many other collections, for the benefit of stakeholders and in the public interest. CSD has been an invaluable source of data and expertise for minerals development and other Earth-science issues in Nebraska since its founding.
Qualified Persons
The following 12 independent experts, each a Qualified Person as defined by National Instrument 43-101, have reviewed, and approved the technical information and verified the data contained in this news release, which are derived from the 2022 Feasibility Study:
- Eric Larochelle, B.Eng., Co-Owner, L3 Process Development
- Matthew Batty, P.Geo, Owner, Understood Mineral Resources Ltd.
- Richard Jundis, P. EngDirector of Mining, Optimize Group
- Ian McKenzie, CPEng, Vice President, Optimize Group
- David Winters, SE, PE, MBA, Senior Principal Engineer, Tetra Tech
- Joshua Sames, P.E., Principal Consultant, SRK Consulting (U.S.), Inc.
- Mark Willow, M.Sc., NV-CEM, SME-RM, Principal Environmental Consultant, SRK Consulting (U.S.), Inc.
- John Tinucci, PhD, PE, ISRM, Principal Geotechnical Mining Engineer, SRK Consulting (U.S.), Inc.
- John Gorham, Geol., Senior Geologist, Dahrouge Geological Consulting Ltd.
- Georgi Doundarov, M.Sc., P. Eng., PMP, CCP, CEO, Magemi Mining Inc.
- Sylvain Harton, P.Eng., President, Metallurgy Concept Solutions
- Adrian Brown, P.E., President, Adrian Brown Consultants, Inc.
The scope for the following individuals, each a Qualified Person by National Instrument 43-101 definition, includes technical review only for the following sections: Mine Infrastructure and Services. The Mineral Resource and Reserve estimates and resultant economic model for the Feasibility Report are not included within the below-listed personnel’s scope.
- Everett Bird, P.E., Engineering Manager, Cementation
- Alex Broili, P.E.,Area Manager, Cementation
- Matt Hales, P.E., Electrical Engineering Lead, Cementation
- Martin Lepage, P.Eng, Ing. Lead Technical Engineer – Hoisting, Cementation
End Notes
Non-GAAP Financial Measures
This news release includes certain forward-looking non-GAAP financial measures, including EBITDA. These non-GAAP financial measures are included in this news release because these statistics are key performance measures that management uses to monitor performance, to assess how the Company is performing, to plan and to assess the overall effectiveness and efficiency of operations. These performance measures do not have a standard meaning within GAAP and, therefore, amounts presented may not be comparable to similar data presented by other mining companies. These performance measures should not be considered in isolation as a substitute for measures of performance in accordance with GAAP. Reconciliations of these forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures are not provided because the Company is unable to provide such reconciliations without unreasonable effort, due to the uncertainty and inherent difficulty of predicting the occurrence and the financial impact of such items impacting comparability and the periods in which such items may be recognized. For the same reasons, the Company is unable to address the probable significance of the unavailable information, which could be material to future results.
SEC Standards Regarding Mineral Resources and Reserves
Estimates of mineralization and other technical information included or referenced in this news release have been prepared in accordance with NI 43-101. The definitions of proven and probable mineral reserves used in NI 43-101 differ from the definitions in U.S. Securities and Exchange Commission (“SEC”) Industry Guide 7. Under SEC Industry Guide 7 standards, a “final” or “bankable” feasibility study is required to report reserves, the three-year historical average price is used in any reserve or cash flow analysis to designate reserves and the primary environmental analysis or report must be filed with the appropriate governmental authority. As a result, the reserves reported by the Company in accordance with NI 43-101 may not qualify as “reserves” under SEC Industry Guide 7 standards. In addition, the terms “mineral resource,” “measured mineral resource,” “indicated mineral resource,” and “inferred mineral resource” are defined in and required to be disclosed by NI 43-101; however, these terms are not defined terms under SEC Industry Guide 7 and normally are not permitted to be used in reports and registration statements filed with the SEC. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Investors are cautioned not to assume that any part or all of the mineral deposits in these categories will ever be converted into reserves. “Inferred mineral resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian securities laws, estimates of inferred mineral resources may not form the basis of feasibility or pre-feasibility studies, except in rare cases. Additionally, the disclosure of “contained pounds” in a resource is permitted disclosure under Canadian securities laws; however, the SEC normally only permits issuers to report mineralization that does not constitute “reserves” by SEC standards as in place tonnage and grade without reference to unit measurements. Accordingly, information contained or referenced in this news release containing descriptions of the Company’s mineral deposits may not be comparable to similar information made public by U.S. companies subject to the reporting and disclosure requirements of United States federal securities laws and the rules and regulations thereunder.
Additionally, in October 2018, the SEC approved final rules requiring comprehensive and detailed disclosure requirements for issuers with material mining operations. The provisions in Industry Guide 7 and Item 102 of Regulation S-K have been replaced with a new subpart 1300 of Regulation S-K (“S-K 1300”)under the Securities Act of 1933. The Company will be required to comply with these new rules in its disclosures for the fiscal year ending June 30, 2022, and thereafter. The requirements and standards under S-K 1300 differ from those under Canadian securities laws. The terms “mineral resource,” “inferred mineral resource,” “indicated mineral resource,” “mineral reserve,” “probable mineral reserve,” and “proven mineral reserve” used in this news release are mining terms as defined in accordance with NI 43-101 under guidelines set out in the Definition Standards for Mineral Resources and Mineral Reserves adopted by the Canadian Institute of Mining, Metallurgy and Petroleum Council. While the terms are substantially similar to the same terms defined under S-K 1300 there are differences in the definitions. Accordingly, there is no assurance any mineral resources or mineral reserves that the Company may report under NI 43-101 will be the same as resource or reserve estimates prepared under the standards adopted under S-K 1300.
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@NioCorp $NB.TO $NIOBF #Niobium #Scandium #ElkCreek #rareearth #neodymium #terbium #dysprosium
For More Information
Contact Jim Sims, VP of External Affairs, NioCorp Developments Ltd., +1 (303) 503-6203, [email protected]
About NioCorp
NioCorp is developing a superalloy materials project in Southeast Nebraska that will produce niobium, scandium, and itanium. The Company also is evaluating the potential to produce several rare earths from the Project. Niobium is used to produce superalloys as well as High Strength, Low Alloy (“HSLA“) steel, which is a lighter, stronger steel used in automotive, structural, and pipeline applications. Scandium is a superalloy material that can be combined with Aluminum to make alloys with increased strength and improved corrosion resistance. Scandium is also a critical component of advanced solid oxide fuel cells. Titanium is used in various superalloys and is a key component of pigments used in paper, paint and plastics and is also used for aerospace applications, armor, and medical implants. Magnetic rare earths, such as neodymium, praseodymium, terbium, and dysprosium are critical to the making of Neodymium-Iron-Boron (“NdFeB”) magnets, which are used across a wide variety of defense and civilian applications.
About Optimize Group Inc.
Optimize Group is an international project engineering company with offices in Canada, Australia, and Brazil. From geology to mineral processing, we provide project development and delivery, operational excellence, and due diligence. Integrated at the core we deliver ‘Optimized Mine Plans’ and ‘Just Right Plants’ with a commitment to help build a sustainable future. Our experienced team works collaboratively, draws on practical and innovative thinking, and, most of all, truly cares.
About Understood Mineral Resources Ltd.
Understood Mineral Resources Ltd. is a small, well-trained team with experience in numerous commodities and geologic environments, specializing in project development, geological modeling, deterministic and probabilistic mineral resource estimation, production reconciliation, grade control, and mine planning. Understood’s primary objective is to bring high-quality, reliable, auditable resource models to the junior and intermediate mining companies using the latest geostatistical techniques and strategies.
About Dahrouge Geological Consulting Ltd.
Dahrouge Geological Consulting Ltd. (DGC Canada), and its subsidiary, Dahrouge Geological Consulting USA Ltd. (DGC USA), advise and assist clients in identifying, exploring, and developing mineral projects. DGC manages projects of all scopes from grassroots exploration and resource delineation to pre-feasibility and feasibility level studies. Experienced project teams plan mineral projects based upon client needs, provide a detailed review of approach, and execute programs following industry-standard best practices.
Cautionary Note Regarding Forward-Looking Statements
Certain statements contained in this document may constitute forward-looking statements, including but not limited to statements regarding the Company’s ability to secure sufficient project financing to complete construction and commence operation of the Project; the Company’s expectation and ability to produce niobium, scandium, titanium and rare earth products at the Project; the outcome of current recovery process improvement testing, and the Company’s expectation that such process improvements could lead to greater efficiencies and cost savings in the Project; the Company’s expectation to emerge as a producer of magnetic rare earth metals; the potential for the Company’s REEs to be mined; the Company’s expectation to produce a fuller technical report assessing the feasibility of REE production; the Elk Creek Project’s ability to produce multiple critical metals; the Elk Creek Project’s projected ore production and mining operations over its expected mine life; and the Company’s ongoing evaluation of the impact of inflation, supply chain issues and geopolitical unrest on the Elk Creek Project’s economic model. Such forward-looking statements are based on estimates and assumptions made by the Company in light of its experience and its perception of historical trends, current conditions and expected future developments, as well as other factors that the Company believes are appropriate in the circumstances. Readers are cautioned that such forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause a change in such forward-looking statements and the actual outcomes and estimates to be materially different from those estimated or anticipated future results, achievements, or position expressed or implied by those forward-looking statements. Risks, uncertainties, and other factors that could cause NioCorp’s plans or prospects to change include risks related to NioCorp’s ability to operate as a going concern; risks related to NioCorp’s requirement of significant additional capital; risks related to feasibility study results; changes in demand for and price of commodities (such as fuel and electricity) and currencies; changes or disruptions in the securities markets; legislative, political or economic developments; the need to obtain permits and comply with laws and regulations and other regulatory requirements; the possibility that actual results of work may differ from projections/expectations or may not realize the perceived potential of NioCorp’s projects; risks of accidents, equipment breakdowns, and labor disputes or other unanticipated difficulties or interruptions; the possibility of cost overruns or unanticipated expenses in development programs; operating or technical difficulties in connection with exploration, mining, or development activities; the speculative nature of mineral exploration and development, including the risks of diminishing quantities of grades of reserves and resources; the risks involved in the exploration, development, and mining business, and the risks set forth in the Company’s filings with Canadian securities regulators at www.sedar.com and the SEC at www.sec.gov. NioCorp disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
APPENDIX: Mineral Resource and Mineral Reserve Data Tables
The following data tables and accompanying notes are derived from the 2022 Feasibility Study for the Elk Creek Project, and are subject to all of the assumptions, qualifications, and limitations thereof:
Table 3: 2022 Niobium, Scandium, and Titanium Content in the New Elk Creek Indicated Mineral Resources
(Effective date of December 8, 2021)
| Elk Creek Project Mineral Resource | ||||
| Classification | NSR Cutoff (US$/tonne) | Tonnage (Mt) |
Grades | Tonnages |
| Indicated | 180 | 188.8 | Nb2O5 (%) | Nb2O5 (kt) |
| 0.51 | 970.3 | |||
| TiO2 (%) | TiO2 (kt) | |||
| 2.24 | 4,221 | |||
| Sc (ppm) | Sc (t) | |||
| 60.06 | 11,337 | |||
| Inferred | 180 | 108.3 | Nb2O5 (%) | Nb2O5 (kt) |
| 0.39 | 426.6 | |||
| TiO2 (%) | TiO2 (kt) | |||
| 1.92 | 2,082 | |||
| Sc (ppm) | Sc (t) | |||
| 52.28 | 5,660.2 | |||
Table 4: 2022 Rare Earth Content in the New Elk Creek Indicated Mineral Resources
(Effective date of December 8, 2021)
| Elk Creek Project Mineral Resource | ||||||
| Classification | NSR Cutoff (US$/tonne) | Tonnage (Mt) | (Grades shown as %; tonnages are shown in kilotonnes) | |||
| Indicated | 180 | 188.8 | Light Rare Earths (LREO) | |||
| Lanthanum (La2O3) |
Cerium (Ce2O3) |
Praseodymium (Pr2O3) |
Neodymium (Nd2O3) |
|||
| 0.0773% 145.8 kt |
0.1335% 251.9 kt |
0.0143% 26.9 kt |
0.0524% 98.9 kt |
|||
| Heavy Rare Earths (HREO) | ||||||
| Samarium (Sm2O3) |
Europium (Eu2O3) |
Gadolinium (Gd2O3) |
||||
| 0.0129% 24.3 kt |
0.0046% 8.6 kt |
0.0110 20.8 kt |
||||
| Terbium (Tb2O3) |
Dysprosium (Dy2O3) |
Holmium (Ho2O3) |
Erbium (Er2O3) |
|||
| 0.0012% 2.3 kt |
0.0048% 9.1 kt |
0.0007% 1.3 kt |
0.0015% 2.9 kt |
|||
| Thulium (Tm2O3) |
Ytterbium (Yb2O3) |
Lutetium (Lu2O3) |
Yttrium (Y2O3) |
|||
| 0.0002% 0.3 kt |
0.0010% 1.9 kt |
0.0001% 0.3 kt |
0.0199% 37.6 kt |
|||
| TOTALS BY CATEGORY | ||||||
| LREO | HREO | TREO | ||||
| 0.2774% 523.6 kt |
0.0579% 109.3 kt |
0.3353% 632.9 kt |
||||
| Inferred | 180 | 108.3 | Light Rare Earths (LREO) | |||
| Lanthanum (La2O3) |
Cerium (Ce2O3) |
Praseodymium (Pr2O3) |
Neodymium (Nd2O3) |
|||
| 0.0943% 102.1 kt |
0.1576% 170.6 kt |
0.0163% 17.7 kt |
0.0575% 62.2 kt |
|||
| Heavy Rare Earths (HREO) | ||||||
| Samarium (Sm2O3) |
Europium (Eu2O3) |
Gadolinium (Gd2O3) |
||||
| 0.0116% 12.6 kt |
0.0038% 4.1 kt |
0.0090 9.8 kt |
||||
| Terbium (Tb2O3) |
Dysprosium (Dy2O3) |
Holmium (Ho2O3) |
Erbium (Er2O3) |
|||
| 0.0010% 1.1 kt |
0.0042% 4.6 kt |
0.0006% 0.7 kt |
0.0014% 1.5 kt |
|||
| Thulium (Tm2O3) |
Ytterbium (Yb2O3) |
Lutetium (Lu2O3) |
Yttrium (Y2O3) |
|||
| 0.0002% 0.2 kt |
0.0010% 1.1 kt |
0.0001% 0.1 kt |
0.0182% 19.7 kt |
|||
| TOTALS BY CATEGORY | ||||||
| LREO | HREO | TREO | ||||
| 0.3257% 352.6 kt |
0.0512% 55.5 kt |
0.3769% 408.1 kt |
||||
Notes:
- The Qualified Person for the Mineral Resource estimate is Matthew Batty, P.Geo, Owner, Understood Mineral Resources Ltd.
- The reporting standard for the Mineral Resource Estimate uses the terminology, definitions, and guidelines given in the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) Standards on Mineral Resources and Mineral Reserves (May 10, 2014) as required by NI 43-101.
- Mineral Resources are inclusive of Mineral Reserves. Mineral Resources that are not Mineral Reserves do not have demonstrated economic viability.
- The Mineral Resources are reported at a Diluted Net Smelter Return (NSR) Cut-off of US $180/tonne.
- The diluted NSR is defined as:
- The diluted revenue from Nb2O5, TiO2, and Sc per block used the following factors:
- Nb2O5 Revenue: a 94% grade recovery, a 0.696 factor to convert Nb2O5 to Nb, 82.36% assumption for plant recovery, and a US$ 39.60 kg selling price per kg of ferroniobium.
- TiO2 Revenue: a 94% grade recovery, a 40.31% assumption for plant recovery, and an US$ 0.88 kg selling price per kg of titanium oxide.
- The diluted revenue from Nb2O5, TiO2, and Sc per block used the following factors:
- Sc Revenue: a 94% grade recovery, a 1.534 factor to convert Sc to Sc2O3, 93.14% assumption for plant recovery, and a US$ 3,675 kg is selling price per kg of scandium oxide.
- The diluted tonnes are a 6% increase in the total tonnes of the block.
- Price assumptions for FeNb, Sc2O3, and TiO2 are based upon independent market analyses for each product.
- Numbers may not sum due to rounding. The rounding is not considered to be material.
- Rare Earth Oxides (REO) were evaluated as a potential by-product to the mining of niobium, titanium, and scandium; thus, the estimated values of the REOs are reported using the previously determined diluted NSR as derived from the Nb2O5, TiO2, and Sc Mineral Resources.
- The stated Light Rare Earth Oxides (LREO) grade (%) is the summation of La2O3 (%), Ce2O3 (%), Pr2O3 (%), and Nd2O3 (%) estimates.
- The stated Heavy Rare Earth Oxides (HREO) grade (%) is the summation of Sm2O3 (%), Eu2O3 (%), Gd2O3 (%), Tb2O3 (%), Dy2O3 (%), Ho2O3 (%), Er2O3 (%), Tm2O3 (%), Yb2O3 (%), Lu2O3 (%), and Y2O3 (%)
- The stated Total Rare Earth Oxide (TREO) grade (%) is the summation of LREO (%) and HREO (%).
- The effective date of the Mineral Resource, including by-products, is December 8th, 2021 (date of last assay received).
Table 5: 2022 Elk Creek Project Mineral Reserves
Effective date of May 10, 2022
| 2022 Elk Creek Project Mineral Reserve | ||||||||||
| Classification | Tonnage (x1000 t) |
Nb2O5 Grade (%) | Contained Nb2O5 (t) | Payable Nb (t) | TiO2 Grade (%) | Contained TiO2 (t) | Payable TiO2 (t) | Sc Grade (ppm) | Contained Sc (t) | Payable Sc2O3 (t) |
| Proven | – | – | – | – | – | – | – | – | – | |
| Probable | 36,656 | 0.811 | 297,278 | 170,409 | 2.92 | 1,071,182 | 431,793 | 70.2 | 2,573 | 3,677 |
| Total | 36,656 | 0.811 | 297,278 | 170,409 | 2.92 | 1,071,182 | 431,793 | 70.2 | 2,573 | 3,677 |
- The Qualified Person for the Mineral Reserve estimate is Richard Jundis, P.Eng., of Optimize Group Inc. The estimate has an effective date of May 10th, 2022.
- The Mineral Reserve is based on the mine design and mine plan, utilizing an average cut-off grade of 0.68% Nb2O5 with an NSR cut-off of US$ 180/mt.
- The estimate of Mineral Reserves may be materially affected by metal prices, environmental, permitting, legal, title, taxation, socio-political, marketing, infrastructure development, or other relevant issues.
- The economic assumptions used to define Mineral Reserve cut-off grade are as follows:
| Parameter | Value | Unit |
| Mining Cost | 43.55 | US$/t mined |
| Processing | 108.16 | US$/t mined |
| Water Management and Infrastructure | 13.71 | US$/t mined |
| Tailings Management | 1.35 | US$/t mined |
| Other Infrastructure | 6.96 | US$/t mined |
| General and Administrative | 8.65 | US$/t mined |
| Royalties/Annual Bond Premium | 7.53 | US$/t mined |
| Total Cost | 189.91 | US$/t mined |
| Nb2O5 to Niobium conversion | 69.60 | % |
| Niobium Process Recovery | 82.36 | % |
| Niobium Price | 39.60 | US$/kg |
| TiO2 Process Recovery | 40.31 | % |
| TiO2 Price | 0.88 | US$/kg |
| Sc Process Recovery | 93.14 | % |
| Sc to Sc2O3 conversion | 1.53 | % |
| Sc Price | 3,675.00 | US$/kg |
-
- Annual life of mine (LOM) average production rate of ~7,450 tonnes of FeNb/annum during the years of full production.
- Mining dilution of ~6% was applied to all stopes and development, based on 3% for the primary stopes, 9% for the secondary stopes, and 5% for ore development.
- Mining recoveries of 95% were applied in longhole stopes and 62.5% in sill pillar stopes.
- Price assumptions for FeNb, Sc2O3, and TiO2 are based upon independent market analyses for each product.
- Price and cost assumptions are based on the pricing of products at the “mine-gate,” with no additional downstream costs required. The assumed products are a ferroniobium product (metallic alloy shots consisting of 65%Nb and 35% Fe), a titanium dioxide product in powder form, and scandium trioxide in powder form.
- The Mineral Reserve has an average LOM NSR of US$ 563 /tonne.
Table 6: Pre-Tax NPV and IRR Sensitivity Analysis ($B)
| Pre-Tax Graphing Data | |||||||||||||
| NPV | -30% | -25% | -20% | -15% | -10% | -5% | Base | 5% | 10% | 15% | 20% | 25% | 30% |
| Nb Price | $2,165 | $2,269 | $2,374 | $2,479 | $2,583 | $2,688 | $2,793 | $2,897 | $3,002 | $3,106 | $3,211 | $3,316 | $3,420 |
| Sc2O3 Price | $1,716 | $1,896 | $2,075 | $2,254 | $2,434 | $2,613 | $2,793 | $2,972 | $3,151 | $3,331 | $3,510 | $3,689 | $3,869 |
| TiO2 Price | $2,758 | $2,764 | $2,770 | $2,775 | $2,781 | $2,787 | $2,793 | $2,798 | $2,804 | $2,810 | $2,815 | $2,821 | $2,827 |
| Operating Costs | $3,331 | $3,241 | $3,151 | $3,062 | $2,972 | $2,882 | $2,793 | $2,703 | $2,613 | $2,523 | $2,434 | $2,344 | $2,254 |
| Capital Costs | $3,139 | $3,081 | $3,024 | $2,966 | $2,908 | $2,850 | $2,793 | $2,735 | $2,677 | $2,619 | $2,562 | $2,504 | $2,446 |
| Nb Grade & Recovery | $2,168 | $2,272 | $2,376 | $2,480 | $2,584 | $2,688 | $2,793 | $2,897 | $3,001 | $3,105 | $3,209 | $3,313 | $3,417 |
| Sc2O3 Grade & Recovery | $1,700 | $1,894 | $2,073 | $2,253 | $2,433 | $2,613 | $2,793 | $2,972 | $3,152 | $3,332 | $3,512 | $3,691 | $3,871 |
| TiO2 Grade & Recovery | $2,758 | $2,764 | $2,770 | $2,775 | $2,781 | $2,787 | $2,793 | $2,798 | $2,804 | $2,810 | $2,815 | $2,821 | $2,827 |
| IRR | -30% | -25% | -20% | -15% | -10% | -5% | Base | 5% | 10% | 15% | 20% | 25% | 30% |
| Nb Price | 24.5% | 25.2% | 25.9% | 26.6% | 27.2% | 27.9% | 28.6% | 29.3% | 29.9% | 30.6% | 31.3% | 31.9% | 32.5% |
| Sc2O3 Price | 21.2% | 22.5% | 23.7% | 25.0% | 26.2% | 27.4% | 28.6% | 29.8% | 30.9% | 32.1% | 33.2% | 34.4% | 35.5% |
| TiO2 Price | 28.4% | 28.4% | 28.5% | 28.5% | 28.5% | 28.6% | 28.6% | 28.6% | 28.7% | 28.7% | 28.8% | 28.8% | 28.8% |
| Operating Costs | 32.1% | 31.5% | 30.9% | 30.4% | 29.8% | 29.2% | 28.6% | 28.0% | 27.4% | 26.8% | 26.2% | 25.6% | 25.0% |
| Capital Costs | 39.1% | 36.9% | 34.9% | 33.1% | 31.4% | 30.0% | 28.6% | 27.4% | 26.2% | 25.2% | 24.2% | 23.3% | 22.4% |
| Nb Grade & Recovery | 24.5% | 25.2% | 25.9% | 26.6% | 27.3% | 27.9% | 28.6% | 29.3% | 29.9% | 30.6% | 31.2% | 31.9% | 32.5% |
| Sc2O3 Grade & Recovery | 21.0% | 22.5% | 23.7% | 25.0% | 26.2% | 27.4% | 28.6% | 29.8% | 31.0% | 32.1% | 33.3% | 34.4% | 35.5% |
| TiO2 Grade & Recovery | 28.4% | 28.4% | 28.5% | 28.5% | 28.5% | 28.6% | 28.6% | 28.6% | 28.7% | 28.7% | 28.8% | 28.8% | 28.8% |
Table 7: After-Tax NPV and IRR Sensitivity Analysis ($B)
| After-Tax Graphing Data | |||||||||||||
| NPV | -30% | -25% | -20% | -15% | -10% | -5% | Base | 5% | 10% | 15% | 20% | 25% | 30% |
| Nb Price | $1,806 | $1,893 | $1,980 | $2,067 | $2,154 | $2,240 | $2,327 | $2,414 | $2,500 | $2,587 | $2,673 | $2,758 | $2,844 |
| Sc2O3 Price | $1,450 | $1,597 | $1,743 | $1,889 | $2,035 | $2,181 | $2,327 | $2,473 | $2,618 | $2,761 | $2,903 | $3,045 | $3,188 |
| TiO2 Price | $2,299 | $2,303 | $2,308 | $2,313 | $2,317 | $2,322 | $2,327 | $2,332 | $2,336 | $2,341 | $2,346 | $2,351 | $2,355 |
| Operating Costs | $2,742 | $2,674 | $2,606 | $2,537 | $2,467 | $2,397 | $2,327 | $2,257 | $2,187 | $2,117 | $2,046 | $1,976 | $1,906 |
| Capital Costs | $2,673 | $2,616 | $2,558 | $2,500 | $2,442 | $2,385 | $2,327 | $2,269 | $2,211 | $2,154 | $2,096 | $2,038 | $1,980 |
| Nb Grade & Recovery | $1,809 | $1,895 | $1,982 | $2,068 | $2,154 | $2,241 | $2,327 | $2,413 | $2,499 | $2,586 | $2,672 | $2,756 | $2,841 |
| Sc2O3 Grade & Recovery | $1,436 | $1,595 | $1,742 | $1,888 | $2,035 | $2,181 | $2,327 | $2,473 | $2,619 | $2,762 | $2,905 | $3,047 | $3,190 |
| TiO2 Grade & Recovery | $2,299 | $2,303 | $2,308 | $2,313 | $2,317 | $2,322 | $2,327 | $2,332 | $2,336 | $2,341 | $2,346 | $2,351 | $2,355 |
| IRR | -30% | -25% | -20% | -15% | -10% | -5% | Base | 5% | 10% | 15% | 20% | 25% | 30% |
| Nb Price | 23.2% | 23.8% | 24.5% | 25.1% | 25.8% | 26.4% | 27.0% | 27.6% | 28.3% | 28.9% | 29.5% | 30.1% | 30.7% |
| Sc2O3 Price | 20.3% | 21.4% | 22.6% | 23.7% | 24.8% | 25.9% | 27.0% | 28.1% | 29.2% | 30.2% | 31.2% | 32.2% | 33.2% |
| TiO2 Price | 26.8% | 26.8% | 26.9% | 26.9% | 27.0% | 27.0% | 27.0% | 27.1% | 27.1% | 27.1% | 27.2% | 27.2% | 27.2% |
| Operating Costs | 30.1% | 29.6% | 29.1% | 28.6% | 28.1% | 27.5% | 27.0% | 26.5% | 26.0% | 25.4% | 24.9% | 24.4% | 23.8% |
| Capital Costs | 37.7% | 35.4% | 33.4% | 31.5% | 29.9% | 28.4% | 27.0% | 25.8% | 24.6% | 23.6% | 22.6% | 21.7% | 20.8% |
| Nb Grade & Recovery | 23.2% | 23.9% | 24.5% | 25.1% | 25.8% | 26.4% | 27.0% | 27.6% | 28.2% | 28.9% | 29.5% | 30.0% | 30.6% |
| Sc2O3 Grade & Recovery | 20.1% | 21.4% | 22.6% | 23.7% | 24.8% | 25.9% | 27.0% | 28.1% | 29.2% | 30.2% | 31.2% | 32.3% | 33.3% |
| TiO2 Grade & Recovery | 26.8% | 26.8% | 26.9% | 26.9% | 27.0% | 27.0% | 27.0% | 27.1% | 27.1% | 27.1% | 27.2% | 27.2% | 27.2% |
Footnotes:
[1] Under NI 43-101, the term “Indicated Mineral Resource” refers to that part of a Mineral Resource for which quantity, grade or quality, densities, shape, and physical characteristics can be estimated with a level of confidence sufficient to allow the appropriate application of technical and economic parameters, to support mine planning and evaluation of the economic viability of the deposit. The estimate is based on detailed and reliable exploration and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill holes that are spaced closely enough for geological and grade continuity to be reasonably assumed.
[2] “Critical Mineral Resources of the United States—Economic and Environmental Geology and Prospects for Future Supply,” U.S. Geological Survey, 2017, https://pubs.er.usgs.gov/publication/pp1802O