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TSX: NB; OTCQX: NIOBF & FSE: BR3
2nd Quarter Update 2015April 22, 2015
Strengthening our World
Disclaimer
This presentation contains forward looking statements. These statements include, but are not limited to, statements with respect to the completion of an updated resource estimate, the commencement of a preliminary economic assessment study and management’s expectation that the results of these studies will confirm the potential of the Elk Creek Project. Specifically, any statements regarding the potential increase of the Company’s inferred resource at the Elk Creek Project and the goals and objectives of the Company are by their nature forward looking information. Resource estimates, unless specifically noted, are considered speculative. The Company has filed a National Instrument 43‐101 report on the Elk Creek Project. Any and all other resource or reserve estimates are historical in nature, and should not be relied upon. By their nature, forward looking statements involve known and unknown risks and uncertainties because they relate to events and depend on factors that will or may occur in the future. Actual results may vary depending upon exploration activities, industry production, commodity demand and pricing, currency exchange rates, and, including but not limited to, general economic factors. Other factors may cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements
Specific risk factors include risks associated with the ability to obtain any necessary approvals, waivers, consents and other requirements necessary or desirable to permit or facilitate the development of the Company’s properties, risks associated with project development; the need for additional financing; operational risks associated with exploration activities and results, mining and mineral processing; environmental liability claims and insurance; reliance on key personnel; tax consequences; and other risks and uncertainties.
The business of exploring for minerals involves a high degree of risk.
Cautionary Note to US investors: The U.S. Securities and Exchange Commission specifically prohibits the use of certain terms, such as "reserves" unless such figures are based upon actual production or formation tests and can be shown to be economically and legally producible under existing economic and operating conditions.
Agenda
2
Executive Summary
Resource Overview
Resource Development
Path for Growth
Investment Thesis
Agenda
3
Executive Summary
Resource Overview
Resource Development
Path for Growth
Investment Thesis
NioCorp at a Glance
5
TSX mineral exploration and development company
Focused on the Elk Creek Nb/Sc/Ti project (“Elk Creek”) in southeastern Nebraska
In August 2015 NioCorp announced the completion of a Second Preliminary Economic Assessment (“PEA2”):
- 2,700 tonne per day mine production rate
- 32-year operating life
- Grades of 0.80% Nb2O5 , 73ppm Sc and 2.84% TiO2
- Pre-tax NPV of US$3.07 billion
Share Performance in 2014:
- #1 for overall market cap growth among all TSX.V mining firms (>$5M market cap) – 547% increase
- #1 in share price performance among TSX.V mining firms (>$30M market cap at year end) – 420% increase
- #1 in stock performance post transaction for all brokered TSX.V mining transactions – 42% increase
(< $100M market cap, excludes transactions under $2.5M)
Company Description Enterprise Value Calculation
One Year Share Price Performance
Elk Creek is the highest grade Niobium resource in North Americaand would prospectively be the largest Scandium producer in the world
(CAD$, figures in 000’s, except per share data)
Share Price as of 14‐Aug‐2015 $0.82
Basic Shares Outstanding 157,920
Equity Value $129,494
Cash and Equivalents(1) $939
Total Debt(1) $1,846
Enterprise Value(2) $130, 401
(1) Pro forma for loan from Mark Smith on 17-Jun-2015(2) Enterprise Value refers to equity value less cash plus total debt
We’ve Assembled a Strong Management Team
6
Mark A. Smith – Executive Chairman, President and Chief Executive Officer Former President and CEO of Molycorp and Chevron Mining Inc. Served on the board of Companhia Brasileira de Metalurgia e Mineracao Ltda. (“CBMM”), the largest niobium producer in
the world Currently serves as President and Chief Executive Officer of Largo Resources Ltd., along with his role at NioCorp 34 years of experience as a mining executive
Neal Shah – Interim Chief Financial Officer 20 years of experience with Molycorp, Intel, Boeing and IBM Previously served as Senior Manager of Corporate Development and M&A and Director of Strategy and Business Planning
at Molycorp
John F. Ashburn, Jr. – Vice President, General Counsel and Corporate Secretary Former Executive Vice President and General Counsel of Molycorp with prior senior legal positions at Chevron and
Unocal 35 years of legal experience (25 years for companies in extractive industries)
Scott Honan – Vice President of Business Development 22 years of experience in base metals, gold, niobium, and rare earth mining projects 13 years with Molycorp as General Manager and Environmental Manager at the Mountain Pass, CA facility, as well as Vice
President of Health, Environment, Safety and Sustainability
We Have a Compelling Investment Thesis
7
Elk Creek is the
Premier
Niobium Project
Elk Creek is the highest grade primary niobium resource in North America, one of the largest in the world, and the only niobium deposit under development in the U.S.
The project includes valuable co‐product scandium trioxide and by‐product titanium dioxide
Stable Niobium
Pricing
Approximately 85% of global supply is produced by one company leading to stable pricing at an attractive level
Prices are negotiated between buyers and sellers (no spot pricing or speculation)
Strong Global
Demand
for Niobium
Niobium has a US$2‐US$3 billion per year market, growing at a 4%‐6% compound annual growth rate
Demand from a diverse array of end‐users reduces exposure to downturns in any specific sector Chinese demand continues to grow
Favorable Competitive
Dynamics
Currently only three producers of niobium worldwide
No new producers since 1976
Strong Infrastructure
and Local Support
Elk Creek is located on privately owned lands with extensive nearby infrastructure (roads, rail, water supply, electricity and natural gas)
The project has strong community support as well as state and local government support
Proven
Management Team
and Board
CEO Mark Smith led the development of a US$1.6 billion rare earths company in a difficult jurisdiction and volatile market.
NioCorp is led by an experienced group of individuals from the mining and resources sectors as well as those with local Nebraska connections
Agenda
8
Executive Summary
Resource Overview
Resource Development
Path for Growth
Investment Thesis
Niobium Makes Steel Stronger & Lighter
9
HSLA steel is stronger than traditionally manufactured steel, resulting in the same strength for a lower weight
Ferro‐vanadium is the closest potential substitute, but requires double the amount for the same strength performance and does not provide the other positive properties that ferro‐niobium does.
Stronger and lighter – improved fuel efficiency due to weight reductions and improved safety for passengers
High Strength Low Alloy Steel (“HSLA”)
Construction and Steel Mega Projects: 45%
Automotive Industry: 23%
HSLA for lightweight structures that require additional strength and corrosion resistance
High strength reinforcing bars require high yield strength and weldability
Significant weight savings in volume of steel needed for megaprojects. Reduced weight means reduced shipping and related costs
The Millau Viaduct in France was built usingsteel with .025% niobium. This reduced theweight of the steel and concrete by 60%
Source: CBMM.
Niobium Makes Steel Stronger & Lighter
10
Superior ability to withstand increased pressure and volumes over greater distances
Oil and Gas Pipelines: 16%
Shipbuilding: 6%
HSLA allows for lighter ships with lower fuel consumption
Adds strength and weldability
Superalloys and High Strength Q&T plate: 3%
Niobium containing alloys make up 35% of the weight of typical jet engine
MRI machines contain superconducting niobium‐titanium magnets
Stainless Steel: 3%
Niobium reduces corrosion and improves high temperature behavior
NioCorp Will Increase the Diversity ofGlobal Niobium Supply
11
85%
8%
6%
CBMM
Niobec
Anglo Brazil
70% privately held company / 30% owned by various investors via purchases in 2012
US$13.3 billion implied enterprise value in 2012
CBMM
Niobec Inc. (“Niobec”)
Reported mine production of 5,200 tonnes in 2013
Acquired by private equity‐backed Magris in early‐2015 for US$530 million
Anglo American Brasil Ltda (“Anglo Brazil”)
Six years of production remaining at current deposit
Capital committed to expand production to new deposit
Niobium Market Share by Producer
Ferroniobium Product Pricing is Stable
12
In early 2012, 30% Interest in CBMM sold in 2 transactions to Japanese/South Korean and Chinese consortiums for a combined sale price of USD $3.95 billion. Market prices for FeNb have been stable since that time.
Scandium: Enables High Reliability Solid Oxide Fuel Cells
13
The electrolyte is the key to fuel cell performance
Scandium‐doped zirconia electrolyte operates at c. 700C versus yttrium doped zirconia at 1000C• Simplifies materials of construction• Better matching of thermal stresses• Means much longer life (decade+ for scandium versus
1‐2 years for yttrium fuel cells)
Scandium‐doped zirconia has greater oxygen transport• Higher cell efficiencies• High levels of power output
Upshot: scandium based solid oxide fuel cells offer highest efficiency, and near‐perfect (4N+) uptime
Source: Bloom Energy
Scandium based fuel cells offer unmatched reliability in mission-critical power supply markets
Scandium Alloys Can Reduce Passenger Jet Weights 20%
14
Scandium Allows Welding And Eliminates Need For Rivets
Scandium acts as a powerful grain refiner in aluminum (pure metal on left with scandium alloy on right)• Fine grain size increases strength of aluminum
alloys• Fine grain size increases flexibility of aluminum
alloys
Scandium stabilizes grain size and permits aluminum to be welded• Fine grain size means welds are strong• Eliminate rivets in aerospace markets
Source: Metallica Minerals
Aluminum alloys with < 1% scandium can eliminate the need for rivets, for a welded air frame and simpler, lower cost manufacturing.
Up to 20% weight reduction with comparable benefit in reduced fuel burnHuge value for air frame manufacturers
Scandium Alloys Eliminate CorrosionIn Harsh Environments
15
Conventional aluminum alloys suffer surface pitting, inter‐granular corrosion, and failure in salt‐rich conditions• Limits application of aluminum• Key safety issue in range of markets• Factor in Aloha Airlines accident 1988
Scandium aluminum alloy is inert under saline corrosion conditions that would attack conventional alloys• Opens door to deployment in naval markets• Opens door to deployment in corrosive aerospace
markets• Opens door to replace titanium in corrosive
environments such as desalination plants
Images: Airbus 2008
15
Scandium substantially broadens range of markets for aluminum
Scandium Trioxide Pricing Models
16
Chart Courtesy of OnG Commodities LLC Estimates and Analysis
Scandium Trioxide Pricing Outlook (US$/kg) 2015 - 2023
Our Products are Strategic & Critically Important
17
Niobium is an essential element for the steel industry and used in super alloys for military and aerospace applications
- U.S. import dependency for niobium is 100%
USGS reports niobium as one of four metals in the top supply risk tier (manganese, tantalum and tin)
- National Defense Stockpile Report to Congress (2009)
- Of 53 materials studied, niobium is included in 13 materials recommended by the Department of Defense for Reserves
Numerous sources of niobium demand growth
- Growth in overall steel market
- Shift toward higher grade alloys
- Development of specialty steels containing niobium
- Increased intensity of niobium in existing steel production
Global demand for our products implies an Nb market of US$2B–US$3B
Ferroniobium
Scandium could be an essential element for the aluminum industry and used in aluminum alloys and aerospace applications
- Potential aerospace demand for Sc2O3is 300 tonnes per year
- Potential transportation demand for Sc2O3could be as high as 2,400 tonnes per year
Current sources for scandium are few, unreliable, and insufficient to meet current and future demand
- Once new supply sources are established outside Russia and China, aerospace demand will begin to grow
Scandium Trioxide
Agenda
18
Executive Summary
Resource Overview
Resource Development
Path for Growth
Investment Thesis
Resource Development Successes
19
Integrated drilling program completed between May 2014 and July 2015:
- Resource: 12,710 meters
- Metallurgy: 2,673 meters
- Hydrogeology: 2,532 meters
- Geotechnical: 821 meters
Resource Impacts (using 0.35% Nb2O5 cutoff):
275% increase in Indicated Resource Tonnes (73,700 kt vs. 19,632 kt)
14% increase in Indicated Resource grade (0.75% vs 0.66% Nb2O5)
325% increase in Indicated Resource contained Nb2O5 (554 ktvs. 130 kt)
Addition of Sc and Ti values to the resource
Development Overview
Rail
2014/2015 Drilling: 18,736 meters
Approximate outline of deposit known to date, open to NW, SE and at depth
We’re Increasing the Value of our Resource
20
Classification
Tonnage(‘000
Tonnes)Grade
(Nb2O5%)
Contained Nb2O5
(‘000 kg)Grade
(TiO2%)
Contained TiO2
(‘000 kg)Grade
(Sc g/t)
Contained Sc2O3
(‘000 kg)
NI 43‐101Indicated
80,500 0.71 572,000 2.68 2,160,000 72 8,900
NI 43‐101Inferred
99,600 0.56 558,000 2.13 2,300,000 63 9,600
PEA 1 Mine Plan
48,400 0.82 378,000 2.90 1,339,000 68 4,900
PEA 2 Mine Plan
31,100 0.80 248,800 2.84 883,240 73 3,500
SRK Consulting (U.S.), Inc. NI 43-101 Technical Report on Resources – Elk Creek Niobium Project Source: SRK, February, 2015
• Technical report dated September 9, 2014, titled “NI 43-101 Technical Report on Resources – Elk Creek Niobium Project - Nebraska”, prepared by SRK, as required under National Instrument 43-101 Standards of Disclosure for Mineral Projects, filed on SEDAR on November 6, 2014.
• Technical report dated March 10, 2015, titled “NI 43-101 Technical Report Updated Mineral Resource Estimate – Elk Creek Niobium Project -Nebraska”, prepared by SRK, as required under National Instrument 43-101 Standards of Disclosure for Mineral Projects, filed on SEDAR on March 11, 2015.
• Technical report dated May 15, 2015, titled “NI 43-101 Technical Report Preliminary Economic Assessment – Elk Creek Niobium Project -Nebraska”, prepared by SRK, as required under National Instrument 43-101 Standards of Disclosure for Mineral Projects, filed on SEDAR on May 15, 2015.
Resource Wireframe Model
21
3D Views Looking Northeast of Selected Grade Shells
Metallurgical Development
22
Niobium Precipitation Test at SGS Lakefield, 2014
Solvent Extraction Pilot Plant at SGS Lakefield, 2015
FeNbXPS Labs
2015
6 Labs>1,000 bench tests
8 Pilot Plants
Creating Value: PEA2 Flowsheet
21
Crushing and Grinding
HClLeach
ScandiumSX (HCl)
AcidRegeneration
Acid Bake and Water Leach
IronReduction
ScandiumSX (H2SO4)
Sc2O3
Production
NiobiumPrecipitation
PhosphorousRemoval
PyrometTitaniumPrecipitation
Neutralization
Ore
Slag
Ferroniobium
Residue
TiO2
Sc2O3
HCl
Gypsum and Fe oxides
Salt andH2SO4
H2SO4
Iron
TailsLime
KEY:ProductsProcess InputsWaste Streams
NaOH
Agenda
24
Executive Summary
Resource Overview
Resource Development
Path for Growth
Investment Thesis
PEA2 Economic Model Results
25
391
177
188
57
166
979
PEA2 results were announced on August 4, 2015 and the PEA2 report was issued September 4, 2015:
- Pre‐tax NPV of US$3.07 billion
- After‐tax NPV of US$2.30 billion
- Average pre‐tax cash flow of US$438 million per year
- Total upfront capital costs of US$979 million(Economics calculated using an 8% discount rate)
PEA2 production metrics:
- 7,490 tonnes of Ferroniobium per year
- 97 tonnes of Scandium Trioxide per year
- 23,960 tonnes of Titanium Dioxide per year
Economic Results Scandium Pricing - Sensitivity Analysis
Capital Cost Estimate
(US$ in millions)
Processing
Tailings andInfrastructure
Owner’s Costs
Contingency
Sc Base Case
(US$ M)
Sc Slow Aerospace
Uptake (US$ M)
Initial Capital $979 $979
Before Tax NPV $3,073 $2,633
Before Tax IRR 31.7% 29.0%
After Tax NPV $2,302 $1,959
After Tax IRR 27.6% 25.3%
Mining
Economic Improvements: PEA2 vs. PEA1
24
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Nb Ti Sc
PEA1
PEA2
1
10
100
1,000
10,000
100,000
FeNb TiO2 Sc2O3
PEA1
PEA2
Metallurgical Recovery Annual Production
Metric PEA1 PEA2
Initial Capital $919 $979
Total Capital $1,168 $1,387
Annual Cash Flow $178 $438
Mine Production 3,700 tpd 2,700 tpd
We’re Making Good Progress Against Goals
27
Complete hydrometallurgical mini‐pilot
Complete preliminary pyrometallurgical test and produce ferroniobium
Initiate full flotation pilot
Initiate full hydrometallurgical pilot
Issue formal PEA report
Q1 – Q2 2015
Q2 – Q4 2015
Q4 2015 – Q1 2016
Complete pilot plants
Complete PEA2 Economic Model
Issue formal PEA2 Report
Complete feasibility level plant design
Complete feasibility study
Complete financing for project
Start construction of mine / processing facility
Status
In Process
Agenda
28
Executive Summary
Resource Overview
Resource Development
Path for Growth
Investment Thesis
Our Project Has Robust Economic Merit
29
Growing end use demand across diversified markets: HSLA, Aerospace, and SOFCs
Favorable competitive landscape, with only three Niobium producers and no stable Scandium production
Excellent location in Elk Creek, Nebraska, with strong local support, existing infrastructure, and close proximity to NioCorpheadquarters
Skilled, capable, and proven Management Team and Board of Directors
Excellent growth opportunity, undervalued by the financial markets
High return on investment potential of 27.6%, after tax
Annual cash flow of $438 million will allow us to pay down debt and continue to invest in growth opportunities or return cash to shareholders
Strong support from customers through FeNb off‐take agreement already in‐place
Growing Demand, Favorable Competitive Landscape, and Strong Local Support Make NioCorp Standout
Healthy Growth, High IRR Potential, and Strong Cash Flow Make NioCorp a Great Investment