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

Good morning, everyone. This is Jim Sims with NioCorp. Welcome to today's webinar, a technology briefing on the Railveyor technology system and how it might lead to significant reductions in both CapEx and OpEx at the Elk Creek Critical Minerals project. We will be making forward-looking statements today. And so you'll see 2 pages of our disclaimers and technical disclosures, basically says do your own due diligence and we recommend that you do as much of that as you can, and we appreciate that. Let's go to today's panelists. We have today, first, Mark Smith, who is the Chairman and CEO of NioCorp; Scott Honan, who is NioCorp's Chief Operating Officer; myself, Chief Communications Officer for NioCorp, I'll be today's host. We have Gavin Clow, who's a Mining Manager for the Optimized Group. We have Jerome Rodriguez, who is the EVP of Sales and Marketing for Railveyor; and finally, Tas Mohamed, who is Interim CEO and CFO of Railveyor. Let's go ahead and start with you, Mark. Go ahead. I think you can have some opening comments. We'll then go to Scott, and then I'll turn to the folks at Railveyor, who have a great video to show, and we'll conclude with Gavin, who will go over the analysis that Gavin and the Optimized Group did on the potential impacts to the Elk Creek project of this technology. Mark, why don't you go ahead?

All right. Thank you, Jim, and good day, everybody. This is an exciting day for us to let you know what we know about a new possibility for the Elk Creek Mine and how we can make it an even better project going forward. And we really cannot thank Optimize and Railveyor enough for all of the effort, the attention, the priority that they have placed on this and really provided us with the analysis that we needed in order to start making our decisions to improve this project. But just some of the really interesting top line figures that I would like to share is that this project could result in a CapEx savings of about $188 million. It could also result in an OpEx improvement of about 1.5%. And then very important as well, this project could also start production at the facility maybe 6 months or maybe a little more earlier than what we have in the current mine plan. Those are the types of numbers that make us happy. It makes EXIM happy. It makes our equity investors happy. It makes our strategic investors happy. And we've been really having a good time sharing this information with all of them. We look forward to sharing this with you now. So welcome to today. And I think we can hand it off to Scott at this point. Thanks, Scott.

I wanted to start off just giving folks a little bit of a history of the mine design considerations at Elk Creek and how we think about mine access. So I want to picture -- for you to picture in your heads, the ore body at Elk Creek, it's sitting about 600 feet underground and it's nearly vertical in extent. And when you have that kind of geometry, there's different ways you can access that particular ore body. So if you were an American mining engineer, you might say, "Well, we'll just put in a great big open pit." And that's certainly feasible. You might have to relocate a couple of creeks and move to state highway, but it could be done. Obviously, some big considerations there. An Australian mining engineer might look at the same thing and say, "Well, we would access this with a couple of ramps from surface, and we just hull everything out with trucks, and that would work just fine." And that's certainly a possibility. And a Canadian mine engineer might take a look again at the same thing and say, "Well, we would access this with a couple of shafts." So we have these competing ways of accessing the resource access in the ore body. And to resolve this and set a path forward, we did a high level of valuation very early on in the project. And in that high level of valuation, it looked like that there might be a slight schedule advantage with shaft access over ramp access. And at the time, this was a few years ago now, the Railveyor, as we can see it today, was a relatively untested technology. And our design philosophy has always been that we want to develop a project here or design a project here that uses proven technology. That's important to derisk the project. It's also important from a finance perspective. The people that we speak to frequently in the finance world, they don't like technology that hasn't been proven, that hasn't been used somewhere else and demonstrated that increases risk in their mind. So we've taken a fairly conservative approach when it comes to deploying technology at Elk Creek. So let's fast forward now to today, to the present day. And we recently had our friends at Optimize, Gavin and crew, approach us for a desktop evaluation, looking at this idea of putting in the Railveyor and using twin ramps as our means of access, along with electrifying the mine. And the study did for us was a great piece of work, very encouraging results. But I think the thing that struck us is that we shouldn't just make a decision here and look at it a different way of accessing the mine without seeing one of these things in real life. And I'm really grateful for Gavin and our friends at Railveyor for arranging for Neal Shah, our CFO, and myself, to go to see an operating system at an underground mine in Missouri. Now I think it's important to note that when we went to see this recently, this system had been in operation for 5 years and it did run very successfully. And really, in my mind, that moves it into the category of proven technology. And going into this underground mine and seeing the system operate, I was really struck by the simplicity of the equipment as well as its robust nature. This is something that performed well in a challenging underground environment. And you can see that the system, which you'll see in a minute, is based on a rail system, think of a little train. And those rails are set on just blasted rock with just a little bit of rail ballast, and it's in an area of this particular mine where the ground is not level, it goes up and down, and there's certainly curves and twists and turns to get from point of origin to point of delivery. Yet despite this, we've got a system that operated very well, and the crew that was running it was a pretty small crew with just basic mining skills and they're able to easily operate and maintain the system. In fact, in talking to that crew, I was amazed to learn that they claim they could change a wheel on one of the Railveyor cars in just about 5 minutes. So that's a really good sign. So, clearly, we've got a system here that could have some real advantages if we were to put it into the Elk Creek mine. And I want to stress that we're at a point in our project where we can consider this kind of change without impacting our overall execution schedule. And in fact, as Mark said, shortening the time from project start to full production. So at the end of the day, this is something that got me very excited as a possibility. And what we'll hear from next is we'll hear from the folks from Railveyor and they'll talk about this system and how it works.

Thank you for that introduction, Scott, and thanks, Jim. Jerome, will you share the screen for us? Okay, thank you. So before we begin, I'm Tas Mohamed. I'd like to thank, on behalf of Railveyor Technologies, I'd like to extend our sincere thanks to NioCorp for inviting us to participate in this briefing webcast and also to thank all the attendees that are joining us today. We are excited to discuss the potential of a Railveyor system that will enhance efficiency and reduce some of the costs at the Elk Creek Mine. At Railveyor, we are committed to providing solutions that not only optimizes mining operations, but also offers significant environmental benefits. Our system has been designed to meet the highest standards of sustainability and operational excellence. Next slide. While our head office is based in Sudbury, Canada, we also have a dedicated team in the United States. This ensures that we have a comprehensive support and expertise across North America and globally. Joining me today, as was previously introduced, is Jerome Rodriguez, our Executive VP of Sales and Marketing. I'll now go ahead and introduce the next -- or just share with you our management team. Our VP of Procurement & Logistics has a career of senior roles in material management and procurement in the manufacturing industry. His deep experience allows him to manage the global supply of goods and services for installations as well as aftermarket requirements. He has an emphasis on finding cost-effective solutions. Then we have our VP of Product Development. He's a mechanical engineer with 22 years of expertise in machine design and manufacturing. Our Vice President of Project Engineering is also a mechanical engineer with 27 years of experience, and he has a diverse background, which spans between automotive, medical tooling as well as defense industries. Last but not least is our VP of Operations. He has an education in electrical engineering technology, and he brings an expertise in automation and project management. He also played a key role in developing and installing as well as commissioning numerous railway systems globally. Next slide. Railveyor is a fully autonomous material hearted system. This means it operates without the need for manual intervention. This significantly increases efficiency and reduces the potential for human error. As Scott had mentioned, it utilizes the robust components in a state-of-the-art 21st century technology. These components ensure the system's durability and reliability, making it capable of handling the demanding conditions typically found in mining environments. Our system is designed to make operations safer. By automating material transport, we reduce the risk of accidents and injuries associated with traditional haulage methods. Safety is our top priority, and Railveyor's technology plays a crucial role in enhancing the overall safety of mining operations. Additionally, the Railveyor system makes operations more productive. The efficiency gains from automation and the reliability of the robust components means that material can be transported more quickly and consistently, leading to higher productivity levels and lower operational costs. Move over to the next slide. In this slide, I would like to highlight another critical benefit of the Railveyor system as a fully electric solution. This means it operates using electric power, which is not only sustainable, but also reduces reliance on fossil fuels. One of the standout features of our system is its efficiency in moving ore. The system moves ore using less energy per ton kilometer than any other solution on the market. This translates into significant cost savings and a lower environmental footprint for mining operations. By adopting Railveyor's fully electric system, mining companies can enhance their operational efficiency, while also contributing to the environmental sustainability. We will now play a video showing our system at do run operation in Missouri. And then I will hand over to Jerome who will provide additional detailed insights into the railway system. [Presentation]

Excellent. Thank you. Apologies for the technical glitch there, and thank you, Tas, for the handoff. So what I'd like to do now is give you an overview of our system. Taking you through some of the major components that we find in a typical Railveyor operation. So starting with the train, the train is made up of a series of cars that are connected in sequence, one after the other. And in terms of the operations, so the train and the cars actually start off with the load area, one train length in advance of the load area because we start with the first car in the train system that is fed and then each subsequent car after that is fed in a continuous process, such that we get a balanced feed throughout the system and throughout an individual train. The train itself is empowered. The train is actually powered by drive stations that are positioned in fixed locations along the length of the track. So the drive stations are actually made up of 2 electric motors operating at 75 kilowatts, or 100-horsepower, 2 planetary gearboxes and 2 tires that are used to actually exert a squeeze force onto the train to move it forward. The drive stations can be positioned as far apart as the entire length of the train in a flat surface application. As we do cross gradients in a ramp, we will have drive stations particularly closer together. The drive stations themselves are automated to turn on as the train is approaching the drive station and turn off as a train pass the drive station. Those drive stations are only powered and electrified while in operation. The track itself is made up of 30 or 40-pound rail, which enables for ease of installation around complex haul routes and spiral ramp designs that may require some intricate design, so to speak. Now looking from the feed and turning towards the discharge, you'll see that we have a circular discharge loop here. And essentially, how the material is expelled from the train is it actually goes around one car at a time together as part of a train, but one car at a time, discharging material as the train goes around that discharge loop. As the material is expelled, the cars and the train actually track back towards the feed area for a short tail section about the length of a train until the last car has discharged material, and then the train actually comes back and reinverts itself, right side up and heads back towards the feed area. In a typical system, we have multiple trains running. So you have the full trains coming from load or the feed area towards the discharge and then the empty trains going back from the discharge area to the feed. So the way that we navigate that system is through track switching, very similar to conventional railroad systems where we actually have bypass tracks such that the trains can avoid one another and can of wait as they pass each other. The entire system, as Tas talked about, is fully automated and electrified. So everything from the feed to the discharge and the bypasses and the controls in between that make systems safe and effective are all completely automated. Just getting one step deeper into the [indiscernible] level. The cars themselves are made up of a fairly simple design. It's a car frame with steel wheels, a trough that houses the material, and a rubber trough flap that's used to prevent any spillage during operation. The wheels themselves are in contact with steel tracks that are greased. So there's minimal friction and minimal wear or losses in that part of the process as the train is tramming through the system. The other thing I wanted to talk about as it relates to the cars are the cars are actually very light, so when you look at the overall payload-to-weight ratio, we can get payload-to-weight ratios as high as 4:1 as opposed to in a conventional trucking system where that would be closer to 1:1. And the last thing I want to talk about in terms of the operation of the cars and the Railveyor system is we can operate as high as 30% grade. Typically, 20% to 30% is not ideal for long stretches, and that's mainly due to the ability for personnel to be able to perform maintenance on this system. We have systems that operate as high, currently, as 20%. You've kind of gotten a good flavor, I believe, for the value and the benefits. I mean, Tas walked through a lot of the advantages of the system. So I'll just touch on the 3 main pillars of our system and the benefits that we speak of here. So from a clean perspective, the system, of course, does not -- it's completely electrified, so there are no exhaust carbon emissions. From an economic perspective, there's very strong value in terms of the operational benefits with minimal maintenance expenses as well as the reduced energy consumption. As a result, you're also relying on a stable -- or a much more stable source of energy as opposed to fossil fuels from a cost perspective, not subjected to the volatility it may come in into play using direct fossil fuels to the power haulage system. And lastly, I want to focus a little bit on the safety side of things. So as Tas talked about, with the system being fully automated and not requiring personnel in and around the system, you alleviate the safety risk of having folks around the system that you then need to mitigate or mitigate around for safety purposes. As well from a ventilation perspective, with no fumes or no exhaust, you don't need the same type of ventilation you would need in a typical mine hauling system. And at the same time, there's a greatly reduced risk of fire. So you can also avoid major fire suppression systems that you would typically have in a system. This is a study that was completed by [ Canon ], which is an independent Canadian government organization, and they actually looked at our installation at Agnico Eagle Goldex. And what they looked at was the actual energy consumption per payload of a Railveyor system. So the study was actually completed over the span of 243 days. And in that time, what they looked at was the average payload energy consumption going from the feed to the discharge end. And you'll note here what was estimated in terms of what our team calculated and what was actually measured was within a 6% deviation. So pretty close to our expectations in terms of how we expected the system to perform. And the last thing I want to highlight here are some of our key installs. You can see we have a pretty global footprint in various applications. A couple that I would just like to highlight here are the Goldex operation that I just talked about. The Goldex operation actually operates in a fairly complex ramp system as much as 17.5% grade. The system was actually designed such that they could operate close to the ore body. And as a result, we've actually been able, since install, been able to expand the life of the mine by about 7 years. The video that you saw earlier was actually from [indiscernible] in the same facility that the NioCorp folks were able to visit with us. And at that [indiscernible] facility, the main benefit of the Railveyor system was being able to alleviate 200 one-way truck calls in a given day and overall reducing the OpEx of the operation by 92%. The last one I'll talk about is in Latin America, that's at Maroil. And this is a heavier application, so to speak, hauling 700 ton per hour, and it's a surface application, actually hauling petroleum coke from the processing plant and discharging to a barge. So I just wanted to give you a flavor for some of the various applications where we've installed Railveyor systems throughout the world. I'd like to thank you all for your time and your attention, and thank you to the NioCorp folks for giving us the opportunity to talk to you today, and we look forward to the potential opportunity to bring the economic and sustainable benefit of Railveyor to the Elk Creek project.

Thank you, Tas and Jerome. We appreciate that. Let's turn now to Gavin Clow, who is the author of the Optimize Group's study, which took kind of a high-level overview and analysis of what this system might look like if it were integrated into our mine and what are the potential impacts. Gavin, it's all yours.

Thanks, Jim. So my name is Gavin Clow, I'm the Mining Manager for Optimize Group, underground mining engineer by training, and we've been working with NioCorp for about 3 or 4 years now, I think. We've done a couple of reserve studies and everything. So this is definitely an interesting application that we were looking at here. So when we first had this conversation with Scott, we were looking at the current designs and just had a bit of a thought. And we wanted to achieve a couple of goals with the scoping study. And that was basically, first, is to determine whether or not the removal of the shaft was even a viable design alternative. It's a fundamental redesign of the entire mine design philosophy. One of the reasons that you would want to remove shafting is that it is a simplification of construction. Ramps, very, very simply, you point a jumbo and you go whereas shaft it's vertical construction, much more difficult. Also, we were looking at if there would be a reduction of CapEx, time and cost. While we were doing this, we took this opportunity to review the total electrification of this project, we would still require some underground equipment to do initial development, jumbos, a couple of scoops, et cetera, et cetera. And we wanted -- and then the main thing is that we compared the Railveyor haulage for the entire mine haulage with the traditional shaft production. So that was the main thrust of this. The summary that we found is that, yes, the shaft removal is viable. This is -- right now, this is a viable alternative. The twin ramp with the Railveyor allows for a fairly significant reduction in CapEx cost and a reduction in that initial time frame as well. So from the time you start foot on the property to the time that you start doing full production, we've reduced that time. One of the unforeseen circumstances that we found was that, because we were able to access via ramp, it actually allowed us a greater schedule variability for stope extraction as well. So that was a nice secondary outcome. The electrical equipment fleet is a viable alternative to a traditional diesel that was going to be used to maneuver material around underground to the shaft. The other part that was nice to kind of see is when we talk to the Railveyor team, they gave us some initial estimates and we interface with them. the production haulage and waste haulage, it's an extremely efficient system. And we were also, as another piece of this puzzle, the original design had an underground crusher as part of the material handling system. We were able to move that from underground up to surface. So we were able to move a fairly significant complex piece of equipment to surface, which is ease of construction, ease of maintenance, ease of -- it makes life a lot easier, both in the short term and in the long term. So this is the initial design that we were working with here. And there was a twin shaft, so there's a vent shaft and a production shaft, along with an internal ramp system. And that ramp system is used for initial movement of material from one level to another, moving up materials, personnel, equipment, et cetera, et cetera. The material handling system, which is this little guy down here, that included underground crushing system integrated with the shaft loading system. So you have a lot of moving parts in a very small concentrated area. There was about 13 months of surface predevelopment activity. So before you start sinking any shaft, you've got 13 months of work to get your hoist all set up, your shaft sinking set up, looking at a shaft-freezing setup, doing geotechnical studies, all that jazz. In order to get everything ready to go, there was a 13-month predevelopment time. And the production rate of this was 2,750 tons of ore per day at full production. So this is what we were comparing to. As you can see here, just quickly, there's a little bit of overburden, that overburden is glacial till, dirt, gravel, stuff that you can't easily mine through, moves into a limestone, which is just waste rock really, fairly easy to mine. And then you move it down to the carbon type, which is where the main ore body is located. This is what we kind of came up with. Again, it's total redesign of everything. So we looked at twin ramps. Ramp 1 would be for personnel, equipment movements, access and that puts everything on one. And then the Railveyor, which is your main haulage and it removes personnel, everything on to Ramp 2. There's a couple of nice pieces about this. Number 1 is the ramp and everything, it moves your traffic, it keeps it all in one area. With the Railveyor, you're able to keep it all on that site. It allows for a fairly simplified flow-through ventilation as you push down the personnel ramp, moves over exhaust up the Railveyor, and then you can use a couple of doors and just ventilate each level as required. The final piece is that the main personnel ramp was run at a 15% gradient, which is a fairly standard access ramp. The rail there, we were able to run it at an 18% gradient. So that's right around that maximum edge. Steepening it up allows for removal of development. So we were able to move a little faster. We were able to split the mine into 3 different mining horizons, up from 2. And we had 3 different Railveyor loading stations per level. So you would get down to your first level here, install your rail there installation, get it all going. And then you can be producing from level 1 while you were doing your capital development for the second lift and then so on and so forth. This allows for modularity and design as well. So if the ore body is open at depth, you can push it forward, add another level on. It's got some nice pieces to it. The other piece is that this took our time frame on predevelopment from about 13 months down to approximately 3. That is essentially for the box excavation and the portal. The portal that we were looking at, this is a bit of a proof-of-concept order of magnitude design that we looked at here. So this would require further study going forward. But we will go through about 25 meters of overburden glacial till stuff using a 15% gradient for access on one side and then the rest of it, assuming about a 40-degree angle for your side walls. It's going to be a big hole. It's about 285 meters long. That's about -- sorry, 800, 900 feet and 87 meters at maximum width. So approximately 280, 300 feet across at its maximum width there. We're going to have to move 230,000 cubic meters of till, approximately, and then another 11,000 cubic meters of bedrock. So you get down to your bedrock here. You break up the bedrock and then you can put your -- start your -- call to your portals and then you could start your development in earnest. This is the cost scenarios that we evaluated. The initial CapEx for the 2022 shaft scenario was about $356 million. That's just for mining. So this is just strictly looking at the mining pieces. With the ramp scenario, we got that initial CapEx down to about $167.1 million, which is a 53.1% difference. What we had -- we're able to do is we were able to move capital from -- we moved capital from initial into sustaining because you were able to hit commercial production, then there is more capital to do. So there is a slight increase in sustaining CapEx, but that would be after commercial production is completed. But overall, we have about a 31% reduction in total CapEx for this project. As Mark mentioned, our OpEx as well went down and that is from a shaft with minimal haulage as well. So even hauling everything to surface the Railveyor is still more efficient than a shaft. A couple of notes about this cost is that the 2022 feasibility study was conducted utilizing 2019 dollars. There had been no inflationary costs between the 2022 and now, so these are, as stated in the 2022 feasibility study they have not been accounted for inflation. So that comparison is fairly -- is about -- that caveat is for the comparison. Now for the scheduled milestones that we're looking at. So with the shaft, we've got the start of work between the shaft and the ramp, month 1, you start work on surface, started development with the ramp, we start at month 4, with the shaft, you start development month 14. We started development ore with the shaft at month 36. And the 2024, we start ore development. So we have hit -- we're starting to develop ore, not production, but just hitting ore at month 26 versus month 36, our first stope is at month 39, full production for the twin ramp is about 5 months sooner. So this is the month before you would start doing any production on -- between the 2 different scenarios. You can see that there has been some development happening here. But one of the reasons that it takes so long for a shaft to get going is you get down, but then you have all of this extra lateral development, very complex, slow production -- slow development for your material handling system, your ore bins, et cetera, et cetera, whereas month 40, we are going to be hitting -- we should be starting to hit commercial production. And you can see here that over on the shaft, we're fairly limited in where we can move because you have to move up in your mine, whereas with the twin ramps, we are able to kind of pick and choose a little bit more because we have more accessibility. Again, so just to wrap this up, so I'm not talking forever. The Railveyor is a very viable alternative and it's shown to be efficient, shown that we can make this work. We have the scoping study, and again, this is a scoping study, has had a very positive outlook based on some very conservative assumptions. We have a reduction in CapEx, reduction in project schedule, greater flexibility for stoping tons and an overall OpEx reduction. Kind of next steps to go forward with this would be interfacing with my colleagues over at Railveyor and [ Sandvik ] for electrical equipment to really delve into some of the details and get a -- and dial in the estimates and the engineering here. On top of that, there has to be a geotechnical and hydrogeological analysis done for the tunneling through the limestone. And that would -- that's kind of the next level of engineering study. That's pretty much all I've got right now. So, Jim, I'm going to pass this back over to you.

Gavin, thank you. Fascinating. Lots of questions. And before we get to questions, just a couple of notes, we are recording today's webcast, and that recording will be made available for a review and replay on our website later today. So those of you -- those who weren't able to tune in will be able to see today's webcast. Let's go to Q&A now, and we got a number of folks who kindly sent their questions in advance. That's always very helpful. Thank you for that. [Operator Instructions] Let me start with this question. Mark, this is actually for you. A lot of our other questions are technical. This one goes as follows, is this system something EXIM, the export/import bank of the U.S., suggested to NioCorp or would welcome?

They did not suggest it, but they will welcome it because it is proven technology, as all of our speakers today have noted. So that's a very positive sign to us and we look forward to presenting that to them. In fact, I'm actually headed to D.C. this afternoon, and we'll be at the EXIM Conference, Thursday and Friday, and meeting with EXIM to discuss all of these very positive developments for the project.

Excellent. Thank you. We appreciate that. Look forward to hearing how those conversations go. The second question came in. And Scott, I think you answered it. It was why didn't NioCorp look at this option earlier. I think you kind of went over that before, unless you want to add anything to what you said earlier.

Thanks, Jim. I think the fact of the matter is the Railveyor folks have done a good job of developing and improving this technology. So now that I think, when we look at it, we feel we're in a good place to deploy it at the Elk Creek project.

Excellent. Okay. Here's a question. Will -- if you choose to do the Railveyor system, will that be included in the upcoming feasibility study update. Scott, to you.

Yes, certainly. When we do a feasibility study, we certainly want to put our best foot forward, and from everything we've seen in the study so far, this looks like our best option for access and material movement. And I think the other thing to emphasize there is that we're at a point in the project where we can incorporate and design in an idea like Railveyor without holding up schedule.

Excellent. Okay. Thank you. That was another question people had, will this actually slow down the FS process. It sounds like it will not. A number of questions along this line. How does this system actually save CapEx and OpEx. We did go over that a little bit, but Scott or the Railveyor folks or Gavin, if you want to add to that, that would be helpful.

Maybe just a couple of high-level thoughts and certainly welcome the others' input as well. In terms of CapEx, I think Gavin did cover it pretty well, but fundamentally, we're taking out 2 shafts, which are expensive to put in. And all of the things that come with shafts, so the head frames on the surface, the hoist houses, all the motors and equipment and wire ropes that go into those things to make the conveyances work. So there's a big capital savings and all of that, and you replace that with 2 very simple ramps. And I think it's important to note that, in terms of mining expertise and costs, it's very expensive to sink shafts. There are just a few specialized contractors that do that work. They're specialized equipment, and the shafts have to be perfectly vertical when they're sunk. They can't go side to side. So there's a skill set that goes with that and the pricing for that comes at a premium. When you look at ramp access, just about any mining company and any mining contractor can drive a ramp. It's very, very common in the mining industry, so it's simple and cost-effective to put in. I think the other thing, just as we think about OpEx, I want to highlight something that the Railveyor folks covered in their presentation. When you look at the ratio of payload mass for the Railveyor versus the mass of the conveyance, it's about 4 to 1. So another way of saying that is for every ton that Railveyor moves, the weight of the thing that's moving it is about 1/4 of a ton. If we look at this in terms of a conventional approach, where we're hoisting skips of ore to surface. A 10-ton skip might itself weigh 10 tons, and it's sitting on a cable that might weigh 7 to 9 tons. So every time you're hoisting something from the bottom of the mine to the top, you're pulling all of that extra weight. So we get a real advantage there in terms of not moving deadweight when we're deploying a Railveyor system. Last point I'll make is just in terms of particularly at the lower portions of the mine. I think you saw in the cross sections that Gavin showed that we're going to have 3 levels of Railveyor loading. And in particular, in the shaft approach, when we access the lower levels of the mine, we have to put all of the ore on trucks. We have to drive those up an internal ramp to the conveyance level, get that material to the crusher and then hoist it to surface. With the Railveyor system, we don't have to do that. There'll be a Railveyor station at the lowest level of the mine, so at no point are we going to be fighting gravity in terms of moving material underground. And that, I think, just hits on the high points on CapEx and OpEx savings.

Thank you, Scott. That's helpful. There are several questions, I'm going to combine them, regarding water. How is water -- underground water going to be managed under this type of system, and a related question, and Scott, I'm going to give this to you, would ground freezing still be required for this type of system?

Yes, certainly, just because we're thinking of changing conveyance systems here, the hydrogeologic issues associated with the underground environment at Elk Creek are the same. And so the strategy we had in our prior study was to do some ground freezing around the shaft areas, just to help us manage the water until we got down and we're able to access the ore body. Now that works very well for shafts because a shaft is a fairly compact area. The shafts are about 20 feet in diameter and you just drill a ring of holes around that 20-foot diameter hole to freeze the ground and allow for shaft sinking. The approach will necessarily be different with the ramp development. The ramp goes down in a big spiral. It's probably not feasible to freeze the ground all around the perimeter of that big spiral. And the spiral doesn't go down perfectly vertically, it moves a bit, as you saw in the figures that Gavin showed. I think the thing is that we need to take a slightly different approach to water control when we go with the Railveyor system. And certainly, the first thing that springs to mind is that we would do the same thing that we would do in the underground mine development under the shaft scenario. We would drill out ahead of us, we would [indiscernible] the ground as needed. And then any water that did come in to the ramps as they're being driven will need to be pumped to surface. These are not new or radical ideas in terms of ramp drives or mine development. We do need to investigate it thoroughly and make sure that our execution plan is robust in terms of dealing with the water that we might encounter with ramp access.

That's helpful. Thank you, Scott. Is there a backup plan in the event of an electrical power outage?

Yes. It's a good question in terms of electrical power. The grid in Southeast Nebraska is very reliable. I think the last time I looked at grid reliability numbers for that part of the world, it's something like 99.94%. But just as we would have an emergency backup generator for the hoist in the shaft and ventilation fans and the shaft access scenario, we would have backup power generation probably in the form of diesel generators, which can come on very quickly for the rail there and the ventilation that goes with an electrified mine.

Okay. That's helpful. Thanks, Scott. Here's a question. Would Railveyor eliminate the need for underground haul trucks powered by diesel? And would this -- is this what contributes to a potential reduction in the mine's carbon footprint?

Certainly, part of the evaluation that Optimize did for us involves the replacement of all the diesel equipment that we had in our current mine plan with electrified equipment. And Gavin, I might ask you just to say a few words about what happens to the size and composition of the fleet, with the Railveyor twin ramp access option.

Yes. No problem there. So we are removing the trucks for the most part. You'll always need a couple of trucks just for initial movement between like the first level to get to a Railveyor system, especially for initial development. I think we have a grand total of 2 or 3 haul trucks for the entire life of mine, just for initial movement while development is happening. Once development is done, we don't need the trucks anymore. The trucks go away. Whereas the previous design, those 3 trucks were there for the entire length of mine, especially it was back ended -- back loaded because, as Scott mentioned, I think we needed to haul material from the lowest levels up to the haulage area. So yes, we will always need a couple of trucks at the outset at the very beginning while the Railveyor is getting set up to move material to where the Railveyor is. But once that development is completed, trucks go away. Also, this analysis, we were looking at strictly electric trucks. So no diesel equipment is going to be -- was thought for this entire process.

Thanks, Gavin. Besides Railveyor system, are any other major update to the project that can be reported today? Of course, if we have major updates to the project, we'll put those out in the press release. But anyone want to speak to in terms of any major updates to the project? I don't think we could do that.

[indiscernible] except what we have publicized.

Yes. Exactly, exactly. Good question, though, Jim. Thank you. Mark, I'm going to give you this one, this is the last of the questions that we have, at least so far. Let's -- here it is. This current schedule for receiving financing for the Elk Creek project became somewhat fuzzy for me in recent months. What is needed to progress with the EXIM application? Number two, do we need a new FS or feasibility study in order to progress on that? And three, when can we expect the new feasibility study? So 3 questions there, Mark, why don't you start?

Okay. Scott, so you know I'm going to ask you to talk to the timing issue for the feasibility study. As we publicized, we did receive a preliminary project letter from EXIM, which is the next really important step as part of the EXIM process. So that was good news when we got that, and we did let people know about that. As part of that letter, they did ask for some additional ore reserve information that we will have to get for them. And they did ask for some more engineering on our new process flow diagram. Of course, we have feasibility study level engineering done as part of our original process flow diagram, but as part of the updated one with increased recoveries, the addition of rare earths, all the positive things that Scott and his team did relative to the process itself, we do need to get that work up to feasibility study level engineering. And so those are the 2 items really that are outstanding in terms of technical work that EXIM will want to see. The good news from my standpoint is that Scott can be working on that, and I'll have him talk to the timing issue. But while all of that timing issue is being addressed and Scott's developing that work, we are in the midst of negotiating against term sheet that we have from EXIM as well. And so we do all these things in parallel. They're not done in sequence. And so our goal, as it has been from Day 1, and I know it's a little trying at times in terms of the timing, but we're trying to get these things done as fast as possible and get this project under construction on the first day that we can. And so all of our efforts are ongoing. We're working hard. Scott and his team just continue to impress me with what they're coming up with and ways to improve the project. But we know what we have to do to get the EXIM data that they need. And in the meantime, we will be continuing to negotiate that term sheet. Hopefully, that answers those first 2. And then, Scott, if you can maybe answer the question about timing. Let me make one differentiating point, though. I don't get the impression from EXIM that they expect a feasibility study to be done before they would finalize term sheets or finalize contracts with us. What they need are those 2 technical points. which is the feasibility study level engineering for the new process flow and the additional resource work that would convert things from probable to proven reserves. They don't need to see the whole new feasibility study. We know that we want to put that together so that we can get all of the economic analysis out to the public as soon as possible. And you can see what all of the work that Scott and his team have done for the last little bit here are doing to improve what is already a very economically robust project into an even more economically robust project. So that's the differentiating point. They don't need to see an actual feasibility study. We actually want to prepare that so we can get the information to the public and to our shareholders. Scott?

Thanks, Mark. I think in terms of schedule, there's a couple of drivers to be mindful of. The first is that to get EXIM what they need in terms of our resource and reserve, there is a drilling program that has to happen. That drilling program is probably 3 months in duration in the field, and then there's some work that comes after that to get all that data together and update resources and reserves. The other thing that we need to do to get to a feasibility study level is we need to take the design that has come out of our demonstration plant and turn that into a feasibility-level cost estimate. We need to update the costs for those parts of our surface plant that are not affected by the changes to the flow sheet. And then we need to take this concept of Railveyor and twin ramp and turn that into a feasibility-level design. So all of that stuff can run in parallel. And I think Mark will challenge me to push schedule, which, of course, I will. But realistically, that's probably a 9-month process. And of course, we try and get it done quicker than that.

Okay. Thanks, Scott. That is the totality of our questions. So let's close it out with this. Let me thank everyone for taking time. And wherever you are, we have some folks overseas who are watching the webinar as well. Thank you for joining us. Again, we've recorded this, and we'll have a replay of this on our website in a couple of hours at www.niocorp.com. I don't have any other questions, but if people have follow-on questions, you can always send those to me. It's probably best to catch me via e-mail, and you can send those to me at [email protected]. Thank you to our guests for taking time. Great fantastic presentations, and thanks to everyone who joined us today. We look forward to seeing you all soon. Thanks much.