The Elements of Innovation Discovered
The Elements of Innovation Discovered
Metal Tech News - May 8, 2024
After completing its initial due diligence, the Export-Import Bank of the United States provided NioCorp with a preliminary term sheet for an $800 million loan for the development of a mine at Elk Creek.
A feasibility study that includes the economics of recovering rare earths at Elk Creek is slated for completion later this year.
The Export-Import Bank of the United States (EXIM) has extended an offer to loan NioCorp Developments Ltd. $800 million to help fund the development of Elk Creek, a critical minerals project in Nebraska that would provide a domestic source of niobium, titanium, scandium, and rare earths.
"Our goal is to make North America less dependent on foreign suppliers for the critical minerals we need to transition to a clean energy and less carbon-centric economy," says NioCorp Developments Chairman and CEO Mark Smith.
To achieve this mission, the company plans to produce niobium and titanium, key ingredients in an emerging rapid-charging solid-state battery; scandium used in lightweight and durable alloys for automotive, aerospace, and defense applications; and the rare earths to make powerful magnets for electric vehicle motors, wind turbine generators, and an array of other high-tech and everyday applications.
According to a 2022 calculation, Elk Creek hosts 632,900 metric tons of total rare earth oxides, 970,300 metric tons of niobium oxide, along with 11,337 metric tons of scandium oxide and 4.2 million metric tons of titanium oxides in the indicated resource category.
This resource supports a mine estimated to produce 7,450 metric tons of ferroniobium (a niobium-iron master alloy), 12,063 metric tons of titanium dioxide, and 104 metric tons of scandium trioxide annually for over 38 years.
NioCorp already has buyers lining up to buy metals produced over the first decade of operations at Elk Creek. This includes offtake agreements for 75% of the ferroniobium and 12% of the scandium scheduled to be produced over the first 10 years.
While the quantities of rare earths to be produced at Elk Creek have not yet been quantified, global automaker Stellantis has entered into terms with NioCorp to offtake future neodymium, praseodymium, dysprosium, and terbium from the Nebraska operation. These four elements are key ingredients in the powerful rare earth magnets that go into the motors driving EVs, including electrified versions of the automaker's Jeep, Dodge, and Ram brands that are popular in North America.
A feasibility study that includes the economics of recovering rare earths at Elk Creek is slated for completion later this year.
Given the industry and government interest in Elk Creek – along with the fact that it has already secured the key federal, state, and local permits to begin construction – NioCorp is a bit frustrated at the time it is taking to pull together the financing to get project development underway.
"While I wanted to see 2023 be the year in which we formally launched construction of this historic and much-needed critical minerals project in Nebraska, I have never been more confident of success in securing the project financing we need to move the Elk Creek project forward," Smith penned in a January letter to shareholders. "As I see it, the stars are increasingly aligning behind our Elk Creek project, and 2024 promises to be a momentous year for NioCorp."
One of the stars coming into alignment is that EXIM has provided NioCorp with a preliminary, non-binding indicative financing term sheet for $800 million in debt financing.
This loan would cover about two-thirds of the $1.2 billion currently estimated cost to develop Elk Creek. The total costs, however, will likely be higher with the completion of an updated feasibility study for Elk Creek that includes the recovery of rare earths, which is expected later this year.
While not a final loan agreement, the preliminary term sheet demonstrates that the Elk Creek project has advanced past the U.S. government credit agency's initial due diligence.
"While it is not possible to estimate how long the application process will take, I remain very pleased and appreciative of the very focused engagement and constructive feedback that EXIM is providing to us in order to continue advancing our application for financing from the bank," said Smith.
NioCorp is now working with EXIM to continue to advance the project through the next stages of EXIM's due diligence and loan application process.
With more than 16 years of covering mining, Shane is renowned for his insights and and in-depth analysis of mining, mineral exploration and technology metals.
Reader Comments(0)