NioCorp Developments Ltd. (NB) Earnings Call Transcript & Summary

Hi. I'm Jim Sims, Vice President of External Affairs at NioCorp Developments Limited. Welcome to this in-depth briefing on NioCorp's Elk Creek Superalloy Materials Project located in Southeast Nebraska. Joining us today will be Mark Smith, NioCorp's Chief Executive Officer and Executive Chairman; and Scott Honan, our Chief Operating Officer. In today's briefing, Mark and Scott will provide a deep dive review of the Elk Creek project and why it is so unique among other mineral projects in the world. They also will discuss an update to NioCorp's management business plan, which envisions adding several highly sought-after rare earth products to our currently planned product suite of niobium, scandium and titanium. NioCorp is currently conducting intensive mineral resource and metallurgical analyses to make a final determination on the technical feasibility and the economic benefits of adding rare earth products to the Elk Creek project. Those results will be announced publicly in an updated technical report to our existing NI-43-101 feasibility study for the project when this work is completed. After today's presentation, you'll be provided with a link to download a print-ready copy of the slides used in this video. Now let's get on with the briefing.

Good day, everybody. I'm Mark Smith, I'm the Executive Chairman, the CEO and President of NioCorp Developments Limited traded on the TSX under NB. I'm here today to walk you through some high level points concerning our project that's known as the Elk Creek Superalloy and Rare Earth Project. It's located in the Southeast corridor of the State of Nebraska in the United States. I'll start out the presentation with some high level points concerning the project and some high level points concerning the supply and demand of this new set of elements that are really being driven demand-wise by this new green economy, which is being driven by society. So I'll have the pleasure of doing that. And then Scott Honan will come on after me and provide a lot more detail concerning the project itself. So with that, as is always the case, a publicly traded company needs to have its cautionary notes, technical disclosures and cautions about forward-looking statements. Now we get to move to the summary of the Elk Creek Project itself. And again, I'll just stay at a high level and we'll have Scott provide multiple details for you later. First of all, this project is a pure-play critical minerals project. And what we mean by that is that the niobium, the scandium, the titanium and the rare earths are all considered to be critical and strategic minerals by the United States. And to our knowledge, we are the only mine that is producing only critical and strategic minerals and we take great pride in that. I'll cover a lot more detail on that critical strategic issue as we get into the presentation further. We've been working for about 8 years now really focused on derisking this project so as it could be financed, built and start producing. And in an effort to derisk that project, what we've done is completed what's known as an NI-43-101 technical report at the feasibility study level. Now this is a major undertaking. This has been in excess of $50 million that the company has spent to achieve that level of technical report. But it defines the resource itself, what we're going to actually be mining? It defines the metallurgy, how do we pull those minerals out of that ore that we bring up from the underground mine? How do we handle permitting? How do we handle social issues? It covers everything possible concerning the project, including that economic model, and I'll go over some of the results of that economic model as we get into the presentation further. Now I'm happy to report that after completing that technical work, we have discovered that we have a very large resource. Indeed this resource, just based on the drilling that we've done to date, is going to provide a 36-year mine life. Now if you take a look at the drilling and notice that we are open to the Northwest, open to the Southeast and open at depth in terms of additional ore that's available for mining; I think we'll be there for much longer than the 36-year mine life that we currently have designed into the feasibility study. We also have great pleasure of having just a fabulous management team. I can't speak highly enough of our team at NioCorp and our Board of Directors at NioCorp. In both instances, these are groups of people that have been working together for a very long time. We work everything on a highly consensus basis. We use real simple things like honesty, truth, integrity to guide our business at all times. What we end up at the end of the day because of the values or the set of values that we abide by, we end up discussing and vetting things very thoroughly and we end up with a very aligned team that's ready to execute and that's really what we like best is execution. Our project because of our values, both our company values and our personal values, is highly guided by ESG principles. Indeed we're adopting the equator principles as a method to systematically go about these ESG principles and make sure that we're living up to our personal values and our cultural values at all times. Very happy to report, again as part of the derisking effort, that we have all of the permits in hand that we need to start construction. This is a huge derisking factor. As oftentimes in the mining world, these permitting efforts could go on for 10 or 15 years. We have all of our permits in hand that we need to start construction. And finally, and this certainly isn't meant to be the least important point. Matter of fact to me personally, it's one of the most important points is that the unbelievable community support that we have out at the project site. This includes the local people, the county government, the state government. I've never been associated with a project like this in my 40 -- almost 41 years now where we've had this level of community support. It's really gratifying. We know how important it is, we know how valuable it is and we will treat it accordingly. So as we are developing into this new thinking, it's been going on for quite some time. But again in my career, I haven't seen it move this fast like it has in the last 2 or 3 years and that's this thing called the green economy. The green economy is really being driven by not just government regulators and politicians, it's being driven by society itself. And that to me is the signal that this is here and it's here to stay and we better get adjusted to it. But in order to have that green economy, we also have to have a variety of minerals and elements; strategic minerals, critical minerals, technology minerals; that have not been in as high in demand before like they are now. So we have to actually prepare ourselves and our economies to make sure we have the appropriate supply of these minerals in order to meet these green economy standards. And the niobium, scandium and the rare earths that we'll be producing from the Elk Creek project; they'll be used in things like automobiles, they'll be used in things like airplanes, they'll be used in infrastructure, they'll be used in an effort to reduce greenhouse gas emissions even further, they're used in the defense sector and they're used in electric vehicles in particular both batteries and in the lightweighting revolution that we're also going through as part of this green economy. So you could see is that these 3 elements are very, very important to the sustainability and the actual realization of the green economy. So as we think about these minerals and the need for these minerals in order to achieve that green economy, it kind of dawns on us that we have a few issues, a few problems that we need to deal with. And the largest problem is that we have very constrained supply situations for these minerals. To a large extent, these minerals are actually extracted and processed in politically sensitive areas and because they're in those politically sensitive areas, they tend to not follow the strongest environmental standards. And in order to address those issues, we need to bring new projects on. But as you can see here in the map on the right hand side, you can see it in the blue coloring the niobium. There are 3 production facilities for niobium in the world today, 2 of those are located in Brazil. Brazil now produces well over 90% of the world's niobium supply. So again, you have a very constrained geographic supply of these minerals. Now if you take a look at scandium on the right hand side in the orange, you could see that there's about 5 different places that produce the minerals, but they're very small quantities that are being produced. And what we need to do is to make sure that we have an adequate supply to be just a huge latent demand for this mineral. And you'll also notice that it's constrained geographically again in a way that all of the locations that are being -- that are producing scandium today tend to be in more politically sensitive regions and maybe not undertaking the best environmental standards. Finally, rare earths. This is a subject that's near and dear to my heart and I have multiple decades of experience in the area of rare earth. And this has been a problem for multiple countries for a long time because of the very concentrated processing that occurs in China. There's multiple areas of the world that may mine the actual rare earths, but there's very few places that could actually process the rare earth into the high purity oxides that you need to get further and further downstream in the supply chain. So again very similar problem with all 3 of these; the niobium, the scandium and the rare earth. Very concentrated supply, not a reliable supply, they tend to be in politically sensitive areas and they don't necessarily meet the strongest environmental standards. So then we start thinking about well, what's the right way to solve that issue? And it doesn't take long to think about diversity of supply. As a business owner and operator for several decades now, one of the easiest things to do to mitigate risk in your business is to have diversity of supply, don't have just one supplier of anything. So by opening up the Elk Creek Project in Nebraska, we can diversify the supply chain for niobium, for scandium, for titanium and for the purified oxides of neodymium, praseodymium, terbium and dysprosium. This will go a long ways toward helping that diversification of supply. So not only does it diversify the supply, but now you have an additional geography that these materials are being produced from. It's in a very reliable known jurisdiction that's not politically sensitive and you end up with enough supply of these materials to make a difference in the world. We will also be subject to of course the environmental standards that the United States requires of any mining operation or manufacturing operation, which we think are some of the best in the world. So by undertaking the Elk Creek feasibility NioCorp project, we mentioned earlier that we have a feasibility study report that meets the technical standards required under National Instrument 43-101. As part of that effort, we put together an economic play or an economic model that models the actual mine plan that we've designed for the facility and the operation of the facilities, the construction of the facilities and put that all together. Let me point out that the numbers you see here on this slide, first of all, do not include the rare earth sector that we're talking about, the addition of rare elements to our products. That's because we're working on developing the NI-43-101 level of technical information needed to include it in this economic model. So these highlights that we'll talk about here do not include rare earth, but they eventually will. Second of all, I'd like to point out that the entire feasibility study report that we have made public and have published in 2019 was done by qualified persons who are arm's length independent contractors to NioCorp. These are not individuals that are employed by NioCorp. We do that as part of our cultural values of integrity and we want to make sure that we have the highest standards that we're putting forth before we publish technical information on our project. So the entire economic model likewise was done by independent third-party qualified persons. You can see the numbers listed here and these are just the highlights. The upper left hand circle provides the pretax NPV numbers of $2.56 billion. The upper right hand circle in the green shows what the average EBITDA or basically cash flow generation would be for the project over its 36-year mine life, $370 million per year. And then another note that I think is important to take a quick look at, as an investor I look at these things for companies, and in the lower left hand circle you can see what the average EBITDA margin is for this project, it's 67%. Now this is a phenomenal average EBITDA margin over the life of the mine and I think it's fairly safe to say that this is more in line with high tech ventures or technical projects as opposed to mining projects. So we're very proud of what this economic model is demonstrating. It shows that this is a very robust economic project. And I could also report that we've done enough management analysis on the rare earth addition to these product streams that we know that these numbers will be further enhanced as we move forward. So with that economic potential, that supply-demand dynamic that we just outlined, let's talk about these minerals in a little more depth in terms of what their market potential is. Here we're showing all 4 of the product streams. Niobium is listed on the left. This is about a $5 billion per year market. It's expected to grow at about an average 6% compounded annual growth rate. I would suggest that it will be a much higher growth rate than what most of the forecasters have suggested and that's because niobium is now being used in combination with lithium-ion batteries and when you add niobium, it's called a niobium lithium-ion battery. When you put those elements together, you end up with a battery that provides much greater distance for driving so much greater range for the automobile to drive on a battery charge and these batteries require much less time to charge themselves. Reports are coming out that it may take as little as 6 minutes to charge that battery. When you get longer ranges and shorter charging times, that's the Holy Grail in the electric vehicle battery sector and I think that we'll see tremendous growth in the demand for niobium as a result of it being used in the electric vehicle industry. Scandium is the next element we'll talk about here. It's about a $50 million per year business today and that's largely because it's under such a constrained supply situation. There's only 20 tonnes, 22 tonnes of this material produced annually so it's a very small market right now. But there's multiple projects that are talking about coming online that would increase that market significantly and take care of the extreme latent demand for this mineral that we're all seeing. Now you can see here that there are compounded annual growth rates that are being forecast in the double-digit range and again that's all going to be subject to this additional supply coming on. Without the additional supply, this market will go nowhere. I think another important point about scandium before we move on is the fact that Rio Tinto, the second largest mining company in the world, is now producing and selling scandium into the world markets. I think that's a tremendous expression of confidence about a mineral that not a whole lot is known about yet. We certainly studied it. We're very confident at NioCorp that we've got a place to sell these minerals, scandium in particular, and that they will be adopted into the marketplace quite readily once there is a reliable and sustainable supply. We think Rio Tinto's step again provides a further expression of confidence in that regard. Moving on to titanium. This is about $11.4 billion per year market. It's a very well-established market. It's a very old market. And it's also anticipated that it will see a compounded annual growth rate of about 6% per year. Next we have magnetic rare earth. We're very focused on the magnetic rare earth because that's what we would ultimately produce at the Elk Creek Project. First of all, we would be producing purified oxides of these materials. These would probably be in the neighborhood of about a 99.9% purity level. We would produce neodymium and praseodymium together, otherwise known as [ diodanium ] and that would be produced in a purified oxide form. We would also produce dysprosium in its oxide form and we would produce terbium in its oxide form. And what's important about that is that that really puts NioCorp in a unique position because we actually know how -- based on experience and having done it before, we know how to produce rare earth oxides as opposed to rare earth concentrates. That's a significant differentiator between us and almost every other greenfield or new rare earth operation coming online or suggesting that they will come online. This optimizes or maximizes our ability to capture the value of those rare earth elements as we sell the bit to the marketplace. The expected growth rate in the demand for these minerals is just phenomenal. I'll cover that in much more detail later. But we're talking about a 9.7% compounded annual growth rate on an average basis in terms of these magnetic rare earth elements. And again I think that when I've done presenting some additional data here, you might agree with me that that might be a pretty low estimate compared to what's possible here. So the United States government has deemed 36 different minerals to be critical and strategic to the United States. There's a think tank out of Washington D.C. by the name of the U.S. Business Executives for National Defense that took those 36 elements and they categorized them and ranked them in terms of criticality and you could see here what the results were. The #1, #2 and #3 most critical of the critical minerals that the United States government has identified are rare earth, scandium and niobium; all 3 of which will be produced from the Elk Creek project. And then you certainly don't want to leave titanium alone, it is ranked as the 24th most critical element of the 36 critical elements. So it certainly isn't without concern as well, but I think it's very interesting to note that the Top 3 most critical elements will be mined from the Elk Creek resource. So as I mentioned just moments ago, the United States has deemed 36 different minerals to be critical and strategic. I've got our 4 product streams listed here on this slide. And the reason why ferroniobium or niobium is considered to be a critical and strategic element is simply because we are currently importing 100% of that mineral into the country that we use today. Likewise with scandium. Scandium to the extent that it's used in the United States, 100% of that mineral is imported from foreign sources. Titanium dioxide not quite 100%, it's about 91% of the titanium mineral concentrates that we use in the United States today are actually imported from foreign sources. And then again the rare earth materials and these are the separated magnetic rare earth materials. Yes, there are mines that produce these minerals in concentrate forms, but they are of no value to anyone until they can be separated into their purified oxide forms and that to a large extent almost 100%, but not quite, occurs in China. And so again anything that we ship back into the United States to use in the oxide form or to further convert it into metal or magnetic alloys, that is all done by foreign sources. As we take a deeper dive into the issue of rare earth, you can see multiple applications listed here on this slide. Electric vehicles, the appliances in your home, the renewable energy systems, wind energy or wind turbines in particular, the energy saving pumps and motors, the little motor devices that are used in the electric vehicles themselves, mission control catalysts. These are the things that rare earths help to make as good as they are and help us achieve this green economy that we all expect and are demanding right now. As we dive deeper into the magnetic rare earths, you could see here what will be driving the growth rate in demand for the magnetic rare earths. And you could see that one of the largest drivers by far is the EV traction motors, 25.6% compounded annual growth rate. That is a phenomenal growth rate that we as a mining industry need to be prepared for and make sure that we provide the supply necessary to meet that demand. We move on to some more detailed information. You can see the 2 charts on the left here show what the demand growth will be for electric vehicles and for the wind energy. Now I've been in business for a long time and I've seen a lot of hockey stick graphs in my life, but this electric vehicle growth rate chart is one of the steepest hockey stick charts that I think I've ever seen. Unfortunately, this one is probably going to come true. Why do I have that level of confidence about a hockey stick like that? It's because every major automobile manufacturer in the world has suggested that they're moving their entire production platform to electric vehicles. And when you move that level of manufacturing into this new technology, I can easily see where the demand for these rare earth elements will achieve the rates that are shown in this forecast. Right below that chart is the wind energy growth chart. Now not quite what the electric vehicle growth rate will be, but it's certainly a very respectable growth rate being at about 8% on a compounded annual growth rate basis. With that type of demand in mind, then we take a look at what we have for rare earth supplies today. And here we show as the middle section of this graph what the supply shortages are going to be or what the increased demand growth is going to be. That increased demand for neodymium and praseodymium together is going to be about 150% based on that supply or the demand growth that we show to the left there. For dysprosium and terbium, those levels grow to 186%. And ultimately over on the right hand side, you can see what that means in terms of total magnetic rare earth oxides and the shortages that will be created here. 48,000 tonnes of rare earth alloys for magnets short once we hit the 25 million to 30 million EV traction motors that are going to be required to meet the demand shown in the left chart. So this is a major issue that we need to address as a mining industry. And again NioCorp is very proud of the fact that although we can't take care of 100% of that deficit, we certainly could add significantly to helping the cause and making sure that we have the minerals we need to achieve that green economy. Next slide is just a very short summary of some about NioCorp points that we think are important for shareholders and investors. I'll start out with the shares outstanding being almost 265 million shares. We've got about 31 million, 32 million options and warrants outstanding. We currently have about $6.46 million in convertible debt outstanding. And then the other point that I think is very important is down at the bottom, the average daily volume being traded on the TSX and the OTC. This is very critical to investors today. We understand that and that's why we work so hard as a company to make sure that we get our story out and that we maximize or optimize the amount of liquidity with our shares because investors tell us constantly how important that is. Moving on, I'd like to provide a little bit of a summary about our independent Board members. So these 5 members, including myself then as the sixth member, make up our Board of Directors. Very, very proud of this group of people because of the diversity that we have. Not only do we have diversity, but we also have competency. So we take a look at all the competency areas that we need as a Board; mineral processing, exploration for resources, running a business, the auditing capabilities, legal capabilities, investor relations, government relations capabilities. And this Board really captures all of those competencies that are required. And together, I think we really make a strong team that gets to make the strategic decisions on behalf of the company and make sure that the shareholders are being served in the best way possible. Next slide here is the management team itself and I do take a great deal of pride in this group of people. This is a group of people that has been working together for anywhere from probably a minimum of 10 years to over 30 years together. This is a group of people that trust each other. We work everything on a fully vetted consensus, aligned basis and then we really pursue execution of projects with the utmost. This is a group of people that get things done. They don't talk. They're all about the action. And so it's a proud moment for me to show this management team. They take care of their assets very well and they execute extremely well. So with that high level summary of the project and kind of the markets that are driving the need for the minerals that we'll be producing from our Elk Creek project, I'd like to turn the presentation over to Scott Honan now, who will provide a much more in-depth review of the project itself. Thank you.

Thanks, Mark. I'd like to start by talking about the project and its location in the State of Nebraska. The figure on the map here shows the project's location in the Southeast corner of Nebraska. It's just a little over an hour from the major cities of Lincoln and Omaha in Nebraska, located near a couple of small towns about 3 miles west of Elk Creek and 6 miles south of the town of Tecumseh. The blowup on this figure shows the project layout and I think the most important thing here is that we've carefully considered how to lay out this project given the constraints that -- or in an area that has a whole series of county roads that the local folks use to get around. And what we've been able to do is to fit the footprint of our operation within one 640-acre section of land, that's 1 square mile, bounded on the east side by a state Highway 50 and bounded on the other 3 sides by county roads. So we've got everything within this footprint and in doing so, we're not going to disrupt any of the local traffic. That's very important for the local community. If you look at the figure that shows the layout on this slide, you can see that kind of in the center right of the figure we have the production and ventilation shafts. Those are going to be the access points into the mine. That's where the people and materials will go into the mine and that's where the ore will come out. From the production shaft, the ore will get conveyed up to our mineral processing area where it will be reduced in size. From there it will go into the hydromet plant and in the hydromet plant, we'll have unit operations that will break down the ore, produce our titanium, scandium and potential rare earth products and produce a niobium intermediary which will in turn go to the pyromet plant. In the pyromet plant, we'll take that niobium and turn it into ferroniobium in an electric arc furnace and that is really the commercial form of niobium that steelmakers use. Supporting all of these important unit operations will be units that recycle acid that we use in the plants, that recycle and treat water and also just all the other things that we'll need to support an industrial operation so offices, labs, electrical substations, et cetera. The processes and the unit operations that produce our products will also produce some waste streams. For the most part, those waste streams will be recycled, mixed with cement and fly ash and pumped back in the underground mine. But there's a certain excess that has to be stored on surface and those will be put into the tailing impoundments shown here. These are engineered lined impoundment designed for the long-term storage of those materials. Also on the slide, you can see some areas where we're going to have some temporary stockpiles of ore and waste rock. These are materials that are going to be generated in the mine, particularly as it's being commissioned and built, and they'll eventually be consumed in the process or disposed off in the tailings facilities. We've been very careful with the design here to avoid sensitive environmental features. So on the south side of the property there is the actual Elk Creek, which is a creek that flows through this part of Nebraska. We just located all of our facilities away from Elk Creek so as to not disturb that feature. And you can see some other features here on the figure that show basically streams and wetlands, again we've just designed around those and that's an important part of environmental protection. It also has some benefits to us on the environmental and permitting side. I get very excited when I talk about the mineral reserves and the mineral resources for this project and I get excited because there's potential here to have a really great and long-lived operation. If you look at this figure, there's an orange boundary that's shown on the map and that's the outline of what we call the carbonatite and the carbonatite is just the particular geologic formation underground that hosts the mineralization we're interested in: the niobium, the scandium, the titanium and the rare earths. You can see on this figure that that carbonatite is about 4 miles in diameter. If you were to measure its aerial extent, it's something like 7,800 acres. Now within this boundary, we've done a lot of work on a very small part of it. And right in the center of the figure you can see a green outline, which actually is a representation or a projection of our mineral resources and new reserves. If you look at the size of that, it's only about 60 acres in size. So to look at this mineral resource and this mineral reserve, we're only really looking at a very small portion less than 1% of the prospective mineralization. The mineral resources is fairly large in my view. If we look at the indicated and inferred categories, we have something like 286 million tonnes of material. And we know from our drilling that we've done so far that the mineralization extends to the Northwest, it extends to the Southeast, it extends at depth. And there's a portion in the mill that has probably not been adequately drilled to this point. So there's a lot of potential here to expand the mineralization to perhaps make the resource larger than it is today and I really look forward to establishing the mines so we can get underground and do some very cost effective drilling to make that resource even bigger than it is today. Within that indicated and inferred resource, we've developed a mine plan around about 36 million tonnes of material. It's higher grade material and that forms the basis of our mineral reserve. So that is material that we'll actually mine and we've done enough technical work to know that we can process that and make products in our surface plant. That's enough to sustain a 36-year operation and that's plenty good to get started with this project. However, I would expect that as we again get underground and we do drilling, we will start converting mineral resources into mineral reserves and extend this mine life well beyond the 36 years we're talking about today. It's important to understand that in this particular resource, we have this complex figure on the right hand side of the slide, which shows an interpretation of the resource and areas that are higher grade in niobium are shown in orange, areas that are higher grade in scandium are shown in red. And so we have some ability here to pick and choose which parts of the resource we're going to mine. And in fact we've done that in our mining plan so that in the first few years, we're mining slightly higher grades than the balance of the mine life. But that helps to make the project more financially attractive and generate better returns and an easier ability to repay debt in the early years of the operation. I'm really proud of the team that we put together to execute on this project. And we've listed a lot of the names that we've worked with to this point here on this slide. These are firms that have helped us with the engineering, with the test work, laboratories that have done analysis for us and metallurgical work. We're looking at some of our offtake partners and various other firms that have helped in the numerous areas of the project it takes to get to this point in the development of the Elk Creek Project. I want to highlight 2 firms in particular. One is Zachry. Zachry is going to be our surface engineering, procurement and construction firm or EPC firm. Zachry is a firm based in San Antonio, Texas. It's privately held. But if it were a public company, it would probably be a Fortune 500 company. Very big, very capable. They employ something like 20,000 people in their [indiscernible] labor pool. Those are the people that actually build projects for folks like us. And certainly we have a firm here in Cementation and in Zachry that can easily take on a project, the scale and the scope of the Elk Creek project. I mentioned Cementation as the other firm that we're very happy to have onboard as an EPC partner. Cementation is based in Salt Lake City, Utah, and their specialization is in shaft sinking, underground mine development and mine operations. So we have a very good partner there in Cementation. Again, a firm that has done many projects the type that we're about to undertake and is very capable of executing and executing very well on the project the size and the scope of the Elk Creek project. Getting the permits that we need to construct the operation has been a focus since I started working on this project in 2014 and I don't think it's any secret that permitting can be a big schedule drag on projects if it's not properly prioritized. So we've taken the time and the effort and spent the money on making sure we're well positioned to start construction and in that sense, we've got the 3 key permits that we need to get this project off the ground and start construction. The first permit that we've got listed here is our construction air permit from the State of Nebraska. This is a very large and complex permit, it's hundreds of pages and it details an excruciating amount of detail on specificity. All of the different unit operations in the underground mine and in the surface plant that we'll use to make our products. But we need to have this permit in hand before we break ground and it took in fact just about 11 months to get this. So we're very proud to have that one under our belt and as I said, it's a key one for us to get started. The major federal permit that we needed for this project was an Army Corps of Engineers permit and we started out thinking that this would be a complex and time intensive exercise. And really what this permit is designed to do, it's designed to manage, mitigate and avoid impacts to what are known as jurisdictional waters that is streams, wetlands, creeks and that kind of thing. So very early on in the project life, we did a survey to identify all those features and then as part of our direction to the engineering teams, we made sure that they understood that we could design the project and just avoid these features. By avoiding these features, we're able to really get down to a very minimal amount of impacts to things like creeks and wetlands. And as a result, we can also avoid having to obtain an individual 404 permit from the Army Corps of Engineers. Saves us a tremendous amount of time, it's better for the environment and it gets us to the point where we can get an authorization under what's known as a nationwide permit and that allows us to construct this project and not have to do a lot of additional work with the Amy Corps of Engineers. The final permit here is a special use permit from Johnson County, Nebraska. The project will be completely within the boundaries of Johnson County at least to start off and that permit really is the land use authorization that allows us to build this underground mine and surface processing plant in what is an agricultural zoned area. We got that permit on December 24, 2019. I know that date very well because I was to come to Nebraska for the hearing where that permit was approved and voted on by the County. And very glad to have that one in hand as well. So we have here a series of 3 permits that allow us to get construction started. This is not the end of the permitting story for the project. There are a number of other permits we need to operate the facilities we're going to build and those permits are easy enough to obtain during the construction period for this project. We have about 3 years of construction before we start to put material through the plant and start to operate the mine. And we've integrated the needs of these additional operating permits into our project budget and into our project schedule. As most of the remaining permits are state level permits and local level permits, the schedule for these is not an issue and we expect to see that we would have no problems in obtaining all of those permits in a very timely manner. So on a whole, we're very well positioned with the permits here and really we've reduced the permitting risk of this project as near to 0 as we could possibly do. Working in Nebraska on this project has been a great experience because Nebraska is a very pragmatic state. They're very supportive of what we're trying to do here and they've really set up systems that have allowed us to progress this project very quickly. Now the Elk Creek Project is in a rural part of the state, but it's certainly not remote. So we're right beside a paid state highway. We have access to things like rail if we need it, there's water supply, there's electric utilities in the area. We have a much easier go over here in terms of location than many of our competitors in say the scandium or the niobium spaces do. The community has been great to work with and the governor in fact has nominated our project as a national high priority infrastructure project to the White House. So you can see just some evidence here of support from all levels in the State of Nebraska. One of the things we're pretty proud of is the fact that under the statutory authority of the Nebraska Advantage Act, we were able to secure a significant tax benefit that may be as much as $200 million that would be applicable to the operation over the first 10 years of operation. And I think the reason that we have such a good relationship and such strong support in the state is we've taken the time to get to know the people. We've sat down and we've done town hall type meetings, but we've also sat down with people one-on-one and just talked about our project. And I think from those discussions, one thing that I've learned is there's a real desire I think on the part of the people who're staying in Nebraska to bring some economic diversity to the existing economic base. Perhaps to add some additional industry and some additional economics from something other than agriculture, which is really the dominant industry in the state of Nebraska. And you can see some of the benefits that we can potentially bring to the state by executing on this project. So we're going to create 436 full-time permanent jobs. Those will be very good paying jobs compared to what's available in Southeast Nebraska right now. And by bringing that number of jobs into the area, there's really a trickle-down effect. As you can imagine those people working in our operation are going to need groceries, they're going to buy cars, they're going to want to buy houses, et cetera, et cetera. And so there's a trickle-down effect where we see something like 1,000 of additional jobs created in the region just from the economic activity associated with the project. During construction, we might see as many as 1,200 construction-related jobs at the peak of the construction period. And again that's a lot of economic activity and a lot of revenue to state and local coffers. Over the course of the project life, we're going to make tremendous investments in the project and in the things that we need to run the project, which are generally operating expenses. So we're going to be buying reagents, we're going to be buying supplies, we're going to be paying people. In particular, some of the things I'd like to focus on are in fact that we're going to be a significant consumer of electricity. We're going to buy that electricity from the Omaha Public Power District, which is a local utility in that part of Nebraska. We hope to buy fly ash from a local power generating plant. That will be used in our backfill process. We hope to buy a lot of cement from the cement plant in Louisville, Nebraska, which is just to the north of the facility. So we're going to bring a lot of economic benefits from this project and a lot of that is going to be felt in the State of Nebraska. In addition to that, we're going to pay a lot of taxes, something like $0.75 billion to state and local governments over the project life. And on top of that, there will be a significant amount of royalties that are paid to the landowners that currently or previously owned the land that the project is going to be on. Basically everything we produce from the project is going to be subject to a 2% royalty that will be paid to those local folks. So certainly some benefits on both sides here, both for NioCorp and for the local community and the larger community in Nebraska and we're very excited to be doing this in a place that is as supportive of our endeavors as Nebraska has been. Sustainability is a very important part of the design of the Elk Creek Project. It's something with a greenfield project like this, you can think about right from the get-go before any spade of earth has turned on the ground. And I think it's an area where we can also say that we're really walking the talk here. And I just want to highlight some areas where I think we've done a particularly good job in terms of designing features that are truly sustainable into the project and how we're going to execute it. The first is that from the get-go, we have decided that we're going to have no process water discharge. So it's inevitable that a certain amount of water ends up in waste streams when we're producing the products we're going to produce. We take all of the water that comes out of the mine and we run it through an advanced water treatment system. That allows us to completely recycle all the water that's used in the process. But we do have to bring in some fresh water into the plant and we do that just to replace what water is lost in various streams that kind of exit the water balance. So for instance there's some water that ends up in the backfill material underground, there's water that we lose to evaporation, there's water that we lose in cooling tower discharge. So there's some areas there that water loss is inevitable. We minimize that to the extent we can. But at the end of the day, we're not discharging to any local water bodies. The groundwater systems in this area are very important, particularly the shallow groundwater system that everybody in the local community uses either as a source of drinking water or as a source of irrigation water for the agricultural crops in the area. And so part of our efforts here are to protect that groundwater resource so we don't draw on it directly. And as we develop the mine, we're going to incorporate ground freezing into the shaft syncing mine development process to make sure that none of that water ends up in the mine workings and that it's available for use by the local community at all times. As I mentioned earlier, one of the design principles here is really to avoid impacts to federally jurisdictional waters. That's good for the environment and again there's benefits there to us on the permitting side of things. Recycling is another thing that we're doing not just with water, but with also chemicals and reagents that we use in the production process. Most notably, we're going to be recycling the mineral assets that we use in the plant. This is pretty important because recycling those assets and those reagents means that we generate less waste from production operations and we need a lot fewer deliveries of these chemicals and the agents to sustain the operation. So we can sustain the operation with just a few truckloads a day of incoming reagents and chemicals and we don't need to bring in train loads or anything like that that might be a big disruption to the local community. Finally, we're utilizing tailings, which is the waste product from our production operations, and we're using that in the mine as backfill material. So we take this tailings material which you can think of as kind of a dry powder, we mix it with a little bit of water and some cement and some fly ash to form a thick and viscous paste and we use a special kind of pump to pump it into the underground workings after we're done mining. This is important not only to minimize the amount of that tailings material that we'd otherwise opt to dispose of in an aligned and engineered surface impoundment.. But in addition to minimizing waste, it allows us to make a beneficial use of that tailings material. As this material fills the voids underground, it sets up kind of like a cement or a concrete because of the cement and fly ash content. This provides structural stability to that area of the mine that the fill is put into and allows us to mine safely in the areas around that fill area. So not only is it minimizing waste and really helping us in that respect, but it also helps us make a very efficient use of that underground resource and it allows just about complete extraction of those areas of the resource that we want to target with mining. Our environmental, social and governance principles are something that we've spent a lot of time on here at NioCorp. And this is just kind of a high level overview of some key areas that we've worked on and we focus on. These principles are really our values. This is how we operate and we're taking steps now to be more formal about how we approach these ESG issues as they're known. In terms of environmental performance, we talked a lot about the sustainable features of the project at this point. And we do seek to improve environmental performance. And as I've talked about to this point, we're trying to recycle water, we're trying to minimize energy use, we're trying to improve air quality. These things are good for the environment, they're good for the local community and certainly, there can also be benefits to us on the permitting side. As we show our ability to reduce environmental impacts, we get through permitting that much more easily. In terms of sustainability, we really integrate those principles into how we operate the project. And again we're recycling water, we're trying to make a very efficient use of the resource here. One thing that I'd like to focus on here is that we operate a process in terms of making our products that has a very high recovery. In other words, a very large amount of the material that feeds into the plant ends up in the final products that we sell at the end of the day. And again by having a very efficient process in that regard, we have to -- we're able to produce a product and we can use as little material as possible on the front end to make that product. That to me is sustainability and that's a very important part of how we do business. In terms of governance, we obviously operate ethically and transparently in everything that we do. Governance is very important not only to the employees of the company, but also to our Board of Directors. The Board has established a safety and sustainability committee that meets frequently during the year. They discuss ESG issues and we try to make sure that we're always adhering to best practices in that regard. On the topic of risk management, that's something that we've integrated into all of our activities to this point. Every time we do a big technical study or a technical report, part of the exercise is to do a risk assessment to try and identify what areas we may have some risks in, to identify what we can do to minimize those risks. This will be an ongoing activity throughout the operations life and we'll do this periodically and we'll always identify those areas where we have high risks and we'll put programs in place to manage and mitigate them. While health and safety is table stakes for us, we want to make sure that everybody at the operation and everybody around the operation is healthy and safe. We want to make sure that the people that are coming to our operation to work, whether they be employees or contractors or visitors, they go home in the same healthy condition that they arrive at the beginning of the day. And then final piece here is engagement. We have made great strides in terms of having lots of community meetings, doing quite a bit of community outreach, talking to the local folks here in Nebraska about our project. In our town hall meetings, we go to great lengths to describe our activities, what the operation is going to look like and what the impacts to the local area are going to be. And at the same time, there are times where we will actually have face-to-face meetings with the local folks just sitting down at their kitchen tables and talking about the project and understanding their concerns and their issues. We're going to continue to do this while the project is built and while it's in operation. There will always be an open line of communication there. Underlying all this and all the good things we're doing, one of the things we recently put into place was an environmental and social management system based on the equator principles. The equator principles are a series of metrics around which projects are evaluated for environmental and social performance. I'm very proud of the fact that the team here has put this program together and we're going to take a very much more formal approach to ESG principles going forward. I think that's going to help in our communications with the community, it's going to help in our communications with financing entities and it's really going to give people a lot more information and insight and transparency into how we run our business. Here we have an outline of the schedule and spending for the construction of the Elk Creek Project. It's a big undertaking. We're spending a little over $1 billion. We're constructing a brand new underground mine, a complex surface plant with a number of buildings and structures. And it's going to take some time for all that to be constructed and to come together into operation. What you see at the top here is a representation of the 3 major activities in bringing the Elk Creek Project to fruition and that is the engineering, the procurement and the construction activities. Engineering is really the design of the different pieces that need to go into the project. Once the engineering is done, then there's a step of procurement where you purchase all the bits and pieces that are needed. And then the construction is actually taking those pieces and assembling them into a finished plant. What I hope you can take away from what we have here is that we've really tried as much as possible to optimize our activities in this regard and run as much of this work in parallel as possible. So while engineering is going on, we start procurement as early as we can and then we move into construction. If you look at the schedule at the bottom of the figure here, you can see that really for the first 12 months or so, a lot of the activity is focused on the details and final engineering. We have to take the engineering from where it is today to what we call issued for construction and that is a level of detail that's sufficient for a construction company to take a series of plans and material quantities and actually build what it is we want to build. After that first 12-month period -- during that first 12-month period, we're going to be doing some work on the site in terms of clearing and grading and site preparation. But after that first 12 months, we're going to get into the serious 24 months of heavy construction at the site. We're going to establish the underground mine. We're going to construct the surface plant and get it all ready to go. One of the things we talk about in terms of this project schedule is what the critical path is. That's the sequence of events that really drive the overall schedule. In our case, the critical path runs through the underground mine. So the longest piece of -- individual piece of the schedule here is sinking the shafts, establishing the underground workings and getting to the areas that we want to mine and starting that mining process. The rest of the schedule we fit in around that critical path of establishing the underground mine. At the end of 36 months, the plant is ready to go, the mine is ready to go. And we go through a period called commissioning for about 2 months and during that 2-month period, we activate and check and water test all of the equipment, make sure everything is operating properly. Once commissioning is complete, then we can start operations and ramping up to full production. That ramp-up takes about 6 months to go from an initial production level up to full commercial production. One of the milestones that we highlight on this slide is first metal. First metal has always been an important driver in this project because it represents the time when we first produce ferroniobium metal from our pyrometallurgical plant. That's significant because it's kind of the last step in our surface production operations. And certainly before we're making first metal and before we're making ferroniobium, we'll be making our scandium and titanium and potentially our rare earth products in our hydrometallurgical facility. So it's a good schedule. We're seeing a roll up of something very complex on the slide here, but we think it's also realistic and achievable.

Thanks, Scott, and thanks to all of our viewers watching today's briefing. To download a copy of the slides used in today's video, please go to niocorp.com/presentation to download our slides. Thank you again for your interest in NioCorp and in the Elk Creek Project. We hope to see you again soon.