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

Hello, this is Craig Brelsford with RedChip Companies. Thank you for joining today's event with NioCorp, which trades on the NASDAQ under the ticker NB. With us today, we have Mark Smith, Chairman, President and CEO; Scott Honan, Chief Operating Officer and President of Elk Creek Resources; Jim Sims, Chief Communications Officer; and Alex Guthrie, the Director of IR. We will begin with a brief presentation in a moment, and then we'll open this event to your questions. I will keep everyone's lines muted throughout the presentation. Users may reach the NioCorp team at any time by clicking the Q&A button at the bottom of the Zoom window and typing in their question. Before we begin, please allow me to read the safe harbor statement. This call may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements pertaining to future financial and/or operating results, along with other statements about the future expectations, beliefs, goals, plans or prospects expressed by management constitute forward-looking statements. Any statements that are not historical facts should also be considered forward-looking statements. Of course, forward-looking statements involve risks and uncertainties. I now turn this webinar over to the NioCorp team. Gentlemen, please go ahead.

Thank you, Craig, and thank you all for joining us today. It's been a pretty exciting few months here at NioCorp, and we're pretty anxious to provide yet another update for our shareholders and interested investors. Let me start out with this NioCorp at a glance slide. First of all, we'll start in the upper left-hand corner. We are a Colorado-based company, pursuing financing to start construction of a fully permitted underground and aboveground surface processing facility in the state of Nebraska, near Elk Creek, Nebraska. And as part of our production, we will be producing the designated critical minerals, niobium, titanium, scandium and the magnetic rare earth oxides including neodymium-praseodymium, dysprosium and terbium. If we take a quick look at the lower left-hand side here, you can see that we are traded on the NASDAQ, ticker symbol NB. We have a market capitalization of about $526 million, a little bit more than that today. And I'd like to point out specifically the very last item here, we have zero debt and zero outstanding convertible notes on our balance sheet as of today, and it's a really good feeling. Another couple of highlights I'll point out here just because it doesn't come out in the detailed slides we have later. But again, we are fully permitted to start construction for a 3-year construction project. All of our permits are in hand. There is no permitting risk associated with this project. Second, we have very, very strong state and local support and no known NGO opposition. When we hold town halls on site, we will have 500, 600 people there. There isn't one naysayer, there are no protesters. The people come in, they're very excited. They want to know what we've done since we were there last and what our plans are for the next few months. So we feel very welcome there. We very much appreciate that. We respect the honor that they give us to be in that position, and we will work very hard to keep that position. So let's go into some of the more detailed slides, which will cover these highlights. First of all, here's just a slide to show you what the products actually look like that we'll be producing. A lot of times, people don't really have any idea what they look like. Well, this is what they look like. And I'd ask you to pay particular attention to the bright red stripe in the middle of that slide. As you can see, there is no niobium production in the United States today. And in fact, NioCorp is the only niobium production facility under development in the United States. Again, no production of niobium in the United States, most if not all of the niobium comes from Brazil today. Scandium oxide, no production in the United States today. We import 100% of what we need, and most of that mineral comes from China. Titanium tetrachloride or titanium dioxide, a very, very high import reliance. We import almost 85% of what we need in the United States today, and we'll be very proud to start supplying the titanium producers here in the United States with American-made titanium. When it comes to the magnetic rare earths, there's very minimal production in the United States today. There is the MP Materials mine out of California that is working very hard to increase their [ neo-praseo ] oxide production, and we wish them the best of luck. We need every pound that they can produce. But NioCorp will also be producing neodymium-praseodymium oxide. And very importantly, we'll be producing dysprosium oxide and terbium oxide which MP Materials does not have any plans to produce. These are what are called the heavy rare earths. And in the magnetic world, you need dysprosium and/or terbium to add to the recipe for the magnet so you can have a higher temperature magnet and if you don't add these heavy rare earths, the regular, as we would call it, permanent rare earth magnet will lose all of its magnetic capabilities at higher temperatures. So these heavy rare earths are very important. And as we all know, China stopped the export of all of their heavy rare earths outside of China about the first week in April of 2025. So this has become a critical issue, and we're now hearing about manufacturing facilities shutting down in Europe. They were -- some facilities were considering it in the United States in July, but we're actually hearing of more shutdowns occurring because the high temperature rare earth permanent magnets are simply not available. In terms of the importance of these minerals, the USGS recently published a study that talked about how critical these critical minerals are. And niobium, dysprosium and terbium are now considered among the highest priority critical minerals by the United States government. And in fact, NioCorp's top target pay metal, niobium, is the #2 most critical mineral in the United States in terms of threats to the United States gross domestic product, or GDP, if the import of that material could not occur anymore because we produce zero here in the United States. So very good to see the recognition by our United States government, how important these products are. And in fact, all six of the minerals that we will be producing at the Elk Creek project are considered critical, but we certainly have some that are considered more critical than others. Moving on, we can get into the offtake agreement for the project. We have 75% of our niobium spoken for an enforceable offtake agreements. We have 12% or 12 tonnes per year of our planned scandium under contract, enforceable contract. That's the largest offtake agreement known for scandium. We're in discussions with multiple people concerning titanium. This is becoming a very interesting issue largely because of the Russian-Ukraine conflict, and a very large portion of the world's titanium comes out of Russia and with the trade sanctions on them, it's really tightened up the market and made the U.S. producers or users of titanium start to think twice about onshoring their procurement of these materials. On the rare earth side, continuing to work with Stellantis. They've indicated early on, they wanted all of the rare earths that we would produce, particularly in the heavy rare earths and they had also been considering a strategic investment in the company. All those discussions are ongoing, but needless to say, the attitude about rare earths and in particular, the heavy rare earths has gotten very serious. And so we are actually in discussions with multiple parties about the potential to sell these rare earths to magnet manufacturing facilities or end users of the magnets. So this is a very good time, particularly with the Chinese export restrictions to be out marketing the rare earth materials. Next slide talks about our financing plan. And this is a very, very simplified capital structure slide that we like to show. You can see the debt financing on the left. That's EXIM debt financing. We've got a slide coming up next where I'll get into more detail on that one. But let's focus on the equity box here for $420 million. And of course, the $420 million plus the $780 million equals the $1.2 billion upfront CapEx that is in our 2022 Feasibility Study. If we go down to the bottom of the green section, here, you can see what we've done so far in 2025. And we've actually raised more than $152 million, which goes to that $420 million that we need for the equity side of the financing. We continue to look at ways to raise this equity money if we could do it using equity that's probably our best and simplest way to raise the money, and we've had very good results in that category right now. In addition -- and we'll go into more detail here. We did get the DoD grant for $10 million and we've had some additional equity issuances that have brought this money in. Now in total of the $152 million, we'll need about $30 million of that to get us to FID. That will cover the -- all the technical work programs that EXIM has asked us to do. It will cover their due diligence costs where they pick the contractor to do the due diligence, we pay for the contractor, it covers our overhead and SG&A. That leaves about $120 million left, which means that we're kind of in the ballpark of needing to raise an additional $300 million now. And this is all very important as we go to the next slide, we'll talk about project advancements that are underway, then we'll get into DoD, then we'll get into EXIM. But I want to talk about what this capital raising does for EXIM's confidence in our ability to raise this money because that's very critical at this point in time. Next slide, Jim. Here's some project advancement activities that we have underway so that as we have that $120 million in our treasury, that goes towards the $420 million we need. We're not letting that money sit in the treasury. We're actually deploying that money and undertaking items that are in our CapEx estimate and reducing the amount of CapEx that ultimately is required. We're utilizing the money to get ahead of the project so that when we actually start full construction, we will have a lot of these little things that can be bothersome, troublesome or time consuming out of the way. The one we like to talk about a lot is the finalization of land purchases. We have exercised our options to purchase property such that by about the end of October, we should own a full square mile of property in Southeast Nebraska. We will then be the full owners of most of the mineral rights and all of the surface rights on that 640 acres, and that's enough surface area and underground area to handle the 38-year mine life. So that will be nice to have that out of the way. It's just a good thing to get out of the way while everybody is feeling positive about the project and you don't have any late naysayers that want to renegotiate anything. This will be behind us probably by the end of October. As everyone knows, we've been drilling out on-site. We'll have some more updates on that. We're starting to get the analytical work in right now. The drilling is -- it will be all done, I think, this week, that all of the nine holes that were used to uplift the probable reserves to proven reserves, those holes are done. And we're just waiting for the analytical work to come in. We're very excited to provide some press releases along the way as that work comes in, so we can let our shareholders and let the market know that this work is coming along well and the results are looking very gratifying. As is always the case with an underground mine, you want to do as much geotechnical field work as possible. Scott and his team are going that extra mile to make sure that we know exactly what we're doing in that underground mine. This would include grouting. This would include bolting. This will include all of the geotechnical work that we need to do to have a safe underground mine for our employees. A lot of the other things here, you can see site prep is another one where we actually have people on-site going through some of the site prep work right now, where they're removing shrubs, removing trees. Again, these are little things that you can get out of the way early, and they don't cause you scheduling problems later on down the -- down the road. I would like to point out our owners team build out as most people know, we've had about seven employees in our company for a very long time. We purposefully did that to keep our overhead rate as low as possible, and we utilize contractors then to do the work. So we may have 200 people working for the company, but only seven of them are employees but we have made offers that have been accepted by about six new employees right now. That will put us up to 13, and my desire is to try to get our owners team build out upwards of about 20 people before the end of the year. We are getting that close now to moving this project from financing into construction. We need to make sure we're ready from a human resource standpoint to move. It's an exciting time in NioCorp. Next slide, Jim. Just a little more detail on the $10 million DoD funding that we received. There were four components to that. I think everybody is aware of the Mineral Reserve uplift drilling that we have conducted. That's part of what's covered by that $10 million. The additional engineering that we needed to do to take our new process flow diagram up to feasibility study level engineering, that's all being done as well. That started the last week in April. It's coming along just fine. And at the end of that effort, we will have not only the feasibility study level engineering for the process flow diagram, but we will have a new capital estimate. And we'll be able to update our economic model to include the magnetic rare earths to include 6x the amount of titanium that we can produce with the new process flow diagram versus the previous one, and a slight uptick in recovery on niobium as well, which goes right to the bottom line. So we're really excited to get the engineering work to the point where we can get the capital estimate and update that economic analysis and get that out to the public. The two items on the right here are very interesting because it really tells you how excited the Department of Defense is to have scandium production here in the United States. So they've asked us as part of this $10 million effort to figure out how to make metal out of our scandium oxide. We are moving along on that project exceptionally well and we hope to have the first metal produced as early as November of this year, subject to a few things that may be beyond our control, but that would be an excellent start on this capability that the DoD would like us to demonstrate. The project on the right here, number four, this one really kind of gets all of us excited. I guess as little boys, you always like to see those military jets and the fighter jets out there like we had on our opening slide. Well, this new technology that's being developed by a DoD aerospace prime contractor involves aluminum scandium alloy and it's a technology that will be put into certain fighter jets that exist already. It will take those fighter jets from what's called Gen 5 up to Gen 6 technology. This Gen 6 technology will double the radius of the threat detection system on these fighter jets, making the pilot safer because he can see what's coming in from further away. And it also gives him a 360-degree view of what's going on within that threat detection envelope. So this is really going to enhance the safety of our pilots in those fighter jets. We're working with the prime right now on finalizing our development contract with them and hope to have a good news release on that very soon. Next slide gets into the U.S. Export-Import Bank. Things are progressing well there. We hope to have an announcement concerning the environmental and social due diligence contractor that has been retained for the efforts by EXIM. We are in full onslaught of due diligence with one thing that we have to keep in mind. And that is they're reviewing everything that we have available on the project right now. But as we update the drilling reserves, their technical folks will have to review that material. As we update the feasibility study engineering and economic models, they will have to review those as well. So there's some work that can't occur by EXIM until we're done with our work, but we're getting everything done possible that we can. Part of the effort to raise the additional equity that we have recently goes to one of three items that we're laser-focused on for the EXIM process. First of all, they want the technical work done. You've already heard that's ongoing. It's really developing well, and we hope to have that information available on or before the end of this calendar year. They want us to continue to work on offtake agreements because that's what they use to calculate debt capacity and the ability to pay back the debt. We understand that. We're working very hard on offtake. And again, hope to have some news here in the future, near future, concerning offtake agreements. And then finally, they need to have enough confidence in the company's ability to raise that $420 million so that, that money is available when -- actually before we can spend any of the EXIM money. And so that's why we've been working pretty hard on the equity raising process and that's going well. And we know their confidence level has risen substantially just in the last 4 to 5 months. So we'll continue to work on that. And with the help of JPMorgan, as our advisers on this project, we feel very confident that we're going to get to the end of the line and close out this deal with EXIM. And with the terms that they will have, this is really good for the company, it's good for our shareholders. This will, in all likelihood, be something around a 10-year loan with anywhere from 4.2% to 7.2% interest rates. I can't get anything but double that 7.2 number at a commercial bank. So this is the lowest cost capital, and we plan to take full advantage of it. EXIM is very supportive. I want to assure everyone we are on their radar. They want this project funded, but there are due diligence processes that we have to go through to make sure that everything is understood from a risk standpoint and we're doing everything in our power to get all the information they need to make their final decision. Next slide talks about some additional country financing that has been made available or can be made available to us. The United Kingdom Export Finance, they gave us a letter in May, indicating an interest of up to $200 million in debt guarantees, and that's a 100% guarantee, by the way. The German United Loan Program or the UFK program, we've been eligible for that for probably 8 or 9 years now. We are still eligible for that. That really revolves around the niobium that we'll be selling to ThyssenKrupp. And again, that's upwards of $200 million loan guarantees that they've indicated a willingness to provide. The $200 million in each of these categories would go towards the $780 million. So $780 million is the top level of debt that we'd be able to secure. But if each of these agencies comes in at $200 million, then the EXIM amount would be $380 million. I will personally say I was a little concerned about having three government agencies involved in a debt process and thinking about all the paperwork that would be involved there. These three agencies have worked together on multiple projects, sometimes all three of them, sometimes just two of them. They know how to work together very well. They already have intercreditor agreements that they basically fill the blanks in on. So this will not slow down the process or hurt the process in any way. And if anything, I think it could ultimately help the process because each of the three governments would be assuming a certain level of risk with a loan like this, whereas if EXIM did it all by themselves, that would be entirely at their risk. So I think we're headed in the right direction there, and we're listening to our advisers very closely on that. Next slide talks about the very robust economics that we have with this Elk Creek project. And these are the highlights that are still out of our 2022 Feasibility Study. So the point that we need to keep in mind is that on the right upper side, where we talk about $403 million in EBITDA over the 38-year mine life, that did not include the magnetic rare earths oxides, it did not include 6x the amount of titanium, and it did not include the extra niobium that we'll be recovering. So we expect that number to improve. We also expect the NPV number on the left upper side to improve as a result of a higher NPV -- I'm sorry, as a result of a higher EBITDA. The other thing that I think will help our NPV is the total upfront CapEx we talk about here on the bottom second from the right circle, $1.14 billion. There are three major points I'd like to make when we talk about that number. First one is a negative. We will have to update the 2022 numbers to be 2025 numbers, because there are impacts from inflation. However, because of the new process flow diagram that Scott and his team have developed, we will not need to construct a sulfuric acid plant as part of our aboveground processing facilities. That saves $100 million by itself. The second item is, as everyone knows, we're going from a twin shaft underground mine plan design to a twin ramp that is expected to save us about $188 million. So we're kind of upwards of almost $300 million in savings just from those two items, and we know there's multiple little items as well. So I feel very confident that we will not go above this number and with a little bit of help from good engineering and Scott's very smart capabilities in this category, maybe we'll end up a little bit lower at the end of the day, which, of course, goes to a higher NPV as well. Last slide is just a picture of our management team. Everybody knows Scott Honan, our COO; Neal Shah, our CFO; and Jim Sims, our Chief Communications Officer. We have a new member of our senior management team, Ernest Cleave, now he's the Senior Vice President of Business Development. Ernest and I go long ways back. He is just a phenomenal individual, extremely smart, deep thinking, very logical, and he's just a welcome addition to our team. And then of course, we have Alex Guthrie as well who just joined very recently, I think Monday, and Alex is our new Director of Investor Relations. And he had the pleasure of having his face on the NASDAQ screen right outside of the NASDAQ building this week, which was quite a thrill to everybody at NioCorp and gave us good reason to celebrate. So we want to welcome Ernest and Alex to the team. And I think with that, Craig, we would welcome any questions that the group may have.

Mark, thank you very much for that. We already have many submitted questions. [Operator Instructions] We already have this one, Mark and the team. Many of us see the updated geologic model as a derisking catalyst how will the revised model and resource statement strengthen the mine plan and feed the next feasibility study as well as the Export-Import Bank of the United States due diligence?

I'll start out answering that at a very high level, and then I will ask Scott to provide any additional detail that he'd like. But the bottom line is that this takes the probable reserve category that we're in now up to proven reserve. And when you go up to a proven reserve category, it means that the risk for a lender, the risk for an investor just decreases that much more. So this is all about risk mitigation. We're very, very comfortable with our ore body, but when you're a government agency, and you're going to be spending tax dollars to fund a $780 million debt or loan with a company, you want to make sure that you minimize risk to the maximum extent possible. And that's exactly what this extra drilling does for the company. Scott, do you want to add anything else on that?

Sure, Mark. We talk about the uplift of our reserve from the probable category to proven. And really, what that means is tightening up drill spacing. It means drilling holes in between holes that we already have to reduce the distance between points in our geologic model. And I'm really proud of the team that did this work in the field because they designed an iterative program. So we didn't just design all of the drill holes at once. We picked the first one, we drilled it. We evaluated the drill core as it was coming out of the ground, and that helped us inform the location of hole 2 and hole 3 and hole 4 and so on. So I think this kind of iterative design was a clever way to go about conducting the field work. And we set a target for the team to deliver at least 10 years of proven reserves. And I'm feeling very good at this point that we'll certainly be able to exceed that number. And perhaps with the drilling we were able to do this year, even increase the size of the resource somewhat as well.

Thank you, gentlemen. Next question. Long-term shareholder here. Can you explain in plain terms, what improvements you expect in the feasibility study, refresh like process flow, capital, operating costs and how the inclusion of rare earth elements could enhance project value?

Yes, I'll start out at a high level. And then Scott, you add whatever you'd like. But I think that the question is a good leading question because those are the things that we're going to improve as a result of all the work that we're doing. We do have a new process flow diagram that Scott and his team worked very hard on and achieved outstanding results. I really can't believe the recovery levels that they were able to demonstrate in the demonstration plant. These are some of the best recovery levels that I've seen for these minerals anywhere in the world and that takes a lot of hard work and determination to get there. So all of that will be part of the feasibility study update. As part of the engineering effort, we've said earlier, we'll have a new CapEx estimate, we'll have new OpEx estimate, all of those parameters will go into the economic model, and we will demonstrate to the market once again how robust this project is from an economic standpoint. But let's not forget that we're going to be producing things that are not produced in the United States today, things like dysprosium and terbium that makes this a very high-profile project in the eyes of people in Washington, D.C., the people in the state of Nebraska and certainly the people in our company, including our shareholders. So these are all things that are going to continue to make this project even better than what we had portrayed earlier, and I, for one, am super excited to get this information out to the public so that we can talk about it. Scott and I have a pretty good feel for what's going to happen with a lot of this data as it comes in. And if you can't tell how excited we are, then we need to smile more, we need to raise our eyebrows more. This project is going to go to a whole different level when we get this final technical information in. Scott, do you want to add anything to that?

Yes, Mark, I think you've hit upon any number of hard benefits to the work that we've done. I think there's some other benefits as well you might consider them as somewhat soft benefits. But as an example, we ran a demonstration plant. So we built the plant at a small scale, and we ran it continuously. And there are things that you learn when you run any kind of production process continuously that you don't learn doing a test in a beaker on a bench. And so we've made a lot of strides in not only optimizing our production process, but understanding how it will work at commercial scale. And I think I'm particularly proud of the fact that the team has come up with a production process here that's really fully integrated. It's not like one production of a particular thing like the niobium or the rare earths is just bolted on. Everything is integrated together and works together as a unit. So I think at the end of the day, we've got something that's going to deliver good results but also will be operable and successful once we build it.

Thank you, gentlemen. On the Department of Defense supported drilling, which technical objectives did you prioritize to upgrade confidence in the ore body? And what are the next visible steps, assays, geotechnical work, model integration, for example, that investors should be watching for?

Scott, I'll start out with a very quick comment, then you can talk to those items and especially the geotechnical work because I think that's an important point that we need to make sure people know about as well. But the bottom line is the drilling is done on the nine holes that we had planned to upgrade this reserve from probable to proven. We're now collecting the analytical data. And as the analytical data comes in, we will report out on a frequent basis as we gather that information, it all has to be QA, QC, and so we have to go through the right process and procedures to ensure the accuracy of this information. But we have every intention in the world of publishing literally a hole-by-hole press release to let people know what we found there. And what we want to focus on as a shareholder because remember, what we're trying to do is we're trying to take the probable reserves, raise that level of assurance up to proven reserves. What you want to make sure is that the data that we show is either equivalent to what we've prepared with prior holes or better than what we had done with the prior holes. And certainly, to date, we haven't seen anything different than that. So Scott, do you want to maybe talk about some of the other details there, like the grouting would be a big one, I think.

Yes. Certainly, Mark, I think, obviously, the primary objective of our field program has been to get to that proven reserve benchmark and I'm feeling really good about that. But along the way, we collected a bunch of other very important information as well that the kind of thing that perhaps doesn't lead to a press release per se, but it's important for a successful project. So as an example, we collected many, many samples and tested them for various geomechanical parameters. And all of that leads to a mine design that will be safe and stable for the people that will be working underground. That's pretty important. I think the other thing that Mark alluded to is we had some great success in testing various types of grouting while we were out in the field drilling. And that grouting is going to be very important for us as we've moved from a design based around shaft access to a design based on ramp access. Ground freezing is less practical in a ramp development situation. So our ability to control water coming into the mine will rely on grouting techniques, and we are able to test and deploy a number of those in the field very successfully, and we demonstrated that we can grow this resource and control the groundwater inflow to something very reasonable for an underground mine.

And that, by the way, we'll remove about $12 million of CapEx in terms of the groundwater freezing that we were otherwise going to have to do. So again, very positive news.

Gentlemen, can you frame the remaining milestones with EXIM. Again, that's the Export-Import Bank of the United States, EXIM and how potential support from the United Kingdom Export Finance, or UKEF and Germany's Federal Guarantee Program, UFK could slot into the overall project finance structure that JPMorgan is advising on.

Yes, I'll start out by just repeating what I said earlier in terms of to the extent that UKEF or UFK come into the overall loan effort. It just takes the $780 million amount, reduces it to a lower level that EXIM would be financing. So it's all looked at as one pot, so to speak. And in terms of the remaining milestones with EXIM, you've heard three of those already. We need to finish this technical work, we need to increase the amount of offtake we have, and we need to continue to gain their confidence in our ability to raise $420 million in equity. But -- those three things are very important. We have to get through their due diligence process as well. And it's a very time-consuming, very detailed process. They're well into it at this point in time. But we've got to keep guiding and directing that and making sure that we are absolutely responsive to anything that they ask. So we are front and center in front of EXIM every day. They have a new President and Chairman of the Board, CEO, President and Chairman of the Board at EXIM. We look forward to getting acquainted with. We certainly know all the people below him, and we're trying to set up some meetings to get to know the new CEO as soon as possible. But we have a word from other folks who have had some discussions with him that he certainly knows about NioCorp, supports the NioCorp project, and we just want to make sure he knows who we are as we continue to get to know him better and better, but we still feel extremely positive about EXIM. We just have to understand that any type of a loan of this size takes a lot of time to get through and get to the finish line. But we're laser focused on it, Craig.

This leads nicely into the next question. Once financing is in place, what gives you confidence that the project can move quickly? How are detailed engineering, grid interconnection and other long-lead items being sequenced to keep the critical path tight.

I'll let Scott answer this in as much detail as you want, Scott. But bottom line is we're undertaking most of these efforts right now even before we have complete project financing in hand. And that's because we've been there and we've done this before. We know the things that can cause hiccups in your schedule or problems with your project budget. So we're getting these things out of the way. And all of the things that you talk here and -- talk about here in this question, Craig, are actions that we're undertaking. Scott, do you want to add some more to that?

Right. I'd point to the fact also, Mark, that we have experienced a very capable firms helping us with this design work in Zachry and Dumas, they've built big projects before they understand sequencing and critical path and what the long lead time items are that will drive overall schedule. And so as we go through and finish the study, we're getting pretty focused on some of those things. So one thing we talked about at the top here was just land acquisition, making sure we have enough land in hand to build the project. It seems pretty self-evident. But along with that, we're looking at some early works projects that we can use the cash that we've raised this year and deploy it effectively in advance of full construction. So things like getting the site clearing and grading done, getting the excavation started that will form the basis of the twin ramp system that will go underground, getting power and water utilities going -- the sooner we can get those to the site, the sooner we can start saving money during the construction time period. And then focusing our efforts and our available cash on some of the big long lead time items that can really -- they can really drive schedule, things like the big power transformers and the big calciners that we use in the plant.

Gentlemen, Elk Creek is positioned to supply multiple U.S. designated critical minerals, of course. How are you communicating that strategic relevance to original equipment manufacturers and government stakeholders? And what public milestones should we track over the next 12 months to gauge steady progress toward construction?

Yes, I think, first of all, the DoD grant that we received really strongly supports our contention that the current administration, the current White House is fully supportive of this project and they understand how important it is to the country and to onshoring our efforts relative to these minerals, which, again, as we spoke to early on, we are largely dependent on foreign resources for. So I think that we've got great support out of the federal government already, I think that those discussions have to continue. They have a lot of different minerals that they have to work on right now because we are so -- just bear where our coverages are bare in terms of the ability to produce a lot of these critical strategic minerals in the United States today. So they're working on a lot of things. But our project is certainly front and center. We provide the capability to onshore the niobium, the scandium, the titanium and the magnetic rare earths, including those two very important heavy rare earths. So it's almost by definition, we are front and center in front of the U.S. government right now that places us in front and center, in front of multiple off-takers and their desires. But with all that in mind, and let me back up for just a minute in terms of the offtakers. This becomes -- almost by definition, they want to talk to us because they're having to talk about shutting down production lines now because they can't secure these critical minerals from the outside sources that we have historically obtained them from. So they are very concerned and you're seeing large companies and their procurement programs really dig in deep and trying to find the real projects that can support their efforts and allow them to continue to produce. So I think what you're going to see over the next few months in terms of news flow, again, we've covered a lot of this already, but drilling news, offtake news, continued fundraising news. You're going to have more and more information, although pretty much kind of at the end of the engineering process. There isn't much to report in the interim. But at the end of the engineering process, you'll start to see CapEx numbers, new economic models and all of that positive news that we just can't wait to get out. So Scott, I don't know if you wanted to add anything else that is on your mind that we'll be reporting.

Certainly, Mark, I think in addition to the things we will report, there'll be things to see. We will continue after the drilling program is over to do work at the site. I alluded to some of the early construction works we hope to get into shortly. And that will send a message as well. And the question was framed around equipment manufacturers and folks of that nature. I can just guarantee that the equipment manufacturers are very focused on our progress just by the number of e-mails I get every day. And they keep an eye on the site because there'll be press releases and there'll be activity. And I think it's all going to be very good.

You already have strong commercial visibility in niobium and scandium. How are you thinking about layering in titanium and potential rare earth element products to broaden the revenue mix and reduce single product risk at first production.

Yes. And that's one of the unique things about our project, Craig, is that we have an ore body that has multiple potential products that we can produce from it. And this is a risk mitigation device all by itself because most mines in the world have one product, possibly a small byproduct. And if that one product -- if the market for that one product deteriorates or goes down for a while, it can really cause some economic hardships for them. In our case, we have multiple products that have very different markets associated with them. They have broad scoping markets associated with them, including everything from reducing CO2 emissions to Department of Defense, EVs, robotics, I mean, you name it, it gets involved in all of these different market areas. It really provides a risk-mitigated revenue approach for our company. And in terms of the titanium and rare earths, I think that, first of all, I'll say that, Scott, as he mentioned earlier, and I can't congratulate he and his team enough they have properly integrated the full production of all of these elements, these products into our process flow diagram. So there isn't anything bolted on or kind of an easy way to do it. We've done it correctly. And as a result of putting the engineering and metallurgy together correctly, we end up with some of the highest recoveries that I've seen in the industry in my career. All of those things allow us then to -- if we put ore into the front of the system, we will produce all of these products. It's not like we just produce one and send the other out to tailings. We produce all of these products. That gives our customers a lot of satisfaction and a lot of confidence. For instance, a scandium customer, if they're trying to buy scandium from a primary scandium mine, we have to look at that operation and really calculate the risk associated with that operation shutting down. Whereas in our case, if we're producing niobium, we're producing scandium. If we're producing niobium, we're producing the magnetic rare earths. And if we're producing niobium, we're producing titanium. And it just really moderates all of the risks associated with single products. And again, with the very large market scope that we have for all of our products, we know there are places to move these products one way or the other, once they are produced. So we're very happy with our polymetallic resource and think that it provides a really high-level risk mitigation approach and strategy for us.

Now without getting into specific numbers, we're timing directionally, which levers have the most potential to improve on that 2022 economic case. Is it process optimization, rare earth coproducts, titanium [ route ] selection or mine plan refinements?

Scott, why don't I have you start with that, and then I'm going to add a few words.

Certainly, I think the thing that is going to make the biggest difference is the production of rare earth products and what distinguishes us from other developing projects is that when we make those rare earths, we'll make fully separated high-purity products that command a lot of value in the marketplace. And we're able to do that in a way, again, that is integrated with the production of the other things we're going to make. So the incremental impact to CapEx and OpEx is minimal. So I think that's the thing -- that strikes me is the thing that's going to give us the biggest bang for our buck.

And I concur with Scott on that, but I would also say, Craig, that each and every one of those is important to the company because it improves shareholder return. And so we aren't going to focus on one thing or the other. We're focused on all of those things because they do improve shareholder return at the end of the day.

That Title III award from the DoD or maybe we should say DoW now supports several work streams from reserve uplift drilling to rare earth process engineering and scandium metal demonstration, which of these should shareholders view as the nearest-term value unlocks and why?

I would have to say the drilling and the engineering because those are going to be key technical work programs that get us farther down the road for EXIM approval and EXIM approval is absolutely critical to this project. So in my mind, those are the two most important things near term. But I've got to say, without hesitation, by the way, that the work that we're doing in the scandium arena right now is exceptionally exciting. The DoD, DoW are starting to realize the importance of scandium to our military, and we're certainly seeing a rising interest level by OEMs and other potential users of scandium as well. So this kind of forgotten element that is such an opaque market, nobody wants to talk about. It has an awful lot of excitement associated with it and the things that scandium can do and make improvements to don't go unnoticed when we go and talk to all the potential users here. So I think near term is more the engineering and the geology work we're doing right now. But in the long term, the metal production and the efforts with the DoD prime contractor are going to be well received by our shareholders and by the market. Scott, do you want to add anything to that?

Yes, I think I'll echo your sentiments, Mark. I would also say that at the end of this process, the DoD is funding will have a new feasibility study. And those studies are expensive undertaking. As you can see with ours, it involved drilling, it involved engineering. At any time, we have about 20 different firms working on this thing. And it will all get compiled up into a nice report. But having that report in hand, I think, is important for us because it's not just important in an EXIM context, but in just about any financing context that we encounter whether that's an ECA like EXIM, a traditional bank, a debt provider or an equity investor, having an updated study in hand helps us out with all those folks.

I would like to add to that, Craig, because one of the things that we don't really highlight enough is the quality of the technical work that we do at NioCorp. Mean what Scott and his team are undertaking right now is an update to a feasibility study that will be S-K 1300 compliant. That means that it meets the highest standards that the SEC has put out for companies like ours before you go out and try to raise money, before you go out and try to get debt packages. This is a level of study that significantly reduces risk, and there were very few development companies that we're aware of, particularly in the United States right now that have that quality of study. In other words, they're not necessarily S-K 1300 compliant or if they're Canadian, they might not be NI 43-101 compliant. Those are the targets that we aim for because quality on that technical work is the #1 priority.

Thank you participants for your questions today. We have far too many than we could possibly address in our time frame. In fact, we've gone over time a little bit. And of course, you can reach us at any time at [email protected], we'll make sure the NioCorp team sees your question if you didn't have it answered today. Final question for today, gentlemen, Water management and waste handling feel like underappreciated strengths. How are these designs embedded in the permits and community engagement and how do they scale smoothly as you transition into construction?

Scott, I would love to answer that but you've done a great job on this. You get this under.

Appreciate it, Mark. I think those features of a project, while they may be underappreciated have always been a focus of Mark and that flows down to the rest of the team. We prioritize these things during design and we bring a strong environmental ethic to the table. So what you see reflected in our design is a system where we treat and we reuse any of the water that comes out of the mine or comes out of the production process. And really, the only water that we consume, if you will, is water that we lose to evaporation in some form or another or water that ends up in our paste backfill. And when I talk about paste backfill, that's important because what paste backfill is, it's using our waste materials to make a structural fill for underground mine. And I've really challenged the design teams here to look at waste and what we're doing with it and find other uses for these waste streams in addition to using it as backfill. Really, the stretch goal there would be to have an operation where -- we have a nice production process. Everything is run close circuit and that we take some of the waste, we put it back underground, but maybe there are other outlets for that waste material such that nothing ends up in a surface impoundment. So that's the goal at the end of the process here, and we're trying hard to get there. The other thing we're trying to do is we want to be a good neighbor to the folks in Southeast Nebraska, so we're really striving very hard to fit the project into the smallest footprint possible. And I think that will provide the least amount of disruption to the neighborhood that we're going to operate in that will make sure that we're good neighbors to the folks that we're going to be living and operating beside for a very long time.

I think I'll just close that out, Scott, by saying that all of those efforts are what allows us to say we have all of our permits in hand to start construction. And that is also a very unique claim that NioCorp gets to make compared to almost every other project that's under development in the United States. We care about the environment. Scott and I grew up in the health safety and environment field. This is just second nature to us. We believe in it. I want my kids as kids and their kids to enjoy the products of this mine, and that means we have to do it right from day one.

That's a great way to end up today, gentlemen. Thank you very much.

Thank you, Craig.

Yes. Just a few more words here. For more information about NioCorp, you can reach us at 1800 RedChip or e-mail us at that address I gave earlier, [email protected]. Please visit RedChip's Investor Information page for NioCorp. It's niocorpinfo.com. There, you can view and download the investor presentation and fact sheet and sign up for news alerts on NioCorp. Please watch small stocks, big money, RedChip's program featuring exciting small-cap companies every Saturday at 7:00 p.m. U.S. Eastern on Bloomberg USA. Join RedChip's next webinar with Enlivex Therapeutics on Tuesday, September 30 at 10:00 a.m. U.S. Eastern. Register for all RedChip webinars at redchip.com/events. Thanks again to our many participants today, and thank you very much, Mark and Scott.

Our pleasure, Craig. Thank you.

Thank you.