NioCorp Developments Announces PEA Results for Elk Creek

NioCorp Developments (TSX:NB) reported results of a preliminary economic assessment for its Elk Creek Niobium project in Nebraska. Highlights of the PEA include an after tax NPV of US$562 million and and IRR of 13.9 percent.

As quoted in the press release, other highlights of the PEA include:

• Pre-tax NPV of US$821 million with an IRR of 15.7%
• After-tax NPV of US$562 million with an IRR of 13.9%
• Average EBITDA of US$177 million annually
• A direct cash production cost for ferroniobium of US$6.50 per kg of niobium at an annualized production rate of 7,500 tonnes of ferroniobium per year for full production years, net of titanium dioxide and scandium trioxide credits
• Annual production of 23,000 tonnes of titanium dioxide and 12.8 tonnes of scandium trioxide
• An upfront capital cost of US$653 million, which includes US$136 million for the development of an underground mine and US$517 million for mineral processing, metallurgical and infrastructure costs
• Total upfront capital costs of US$919 million, which includes contingency and owner’s costs

The release also commented on the basis for the PEA:

The basis for the PEA is a 3,700 tonne per day production rate over a 36 year operating life with an average grade of 0.82% Nb2O5.  The NI 43-101 compliant resource supporting this production rate was disclosed in the Company’s press release of February 20, 2015.  The PEA study was completed by SRK Consulting of Lakewood, Colorado and Roche Ltd. of Quebec City, Quebec.

In addition to the underground mine, the Elk Creek PEA includes a surface crushing, grinding and mineral processing operation to produce a niobium concentrate.  The niobium concentrate would be fed to a hydrometallurgical operation that would produce a niobium precipitate as well as titanium dioxide and scandium trioxide co-products.  A final pyrometallurgical step would convert the niobium precipitate to ferroniobium using an aluminothermic reduction process.  In order to support these processing steps, a number of ancillary facilities would be constructed, including stockpile areas, water pumping and treatment facilities, reagent and fuel storage areas, warehousing, utility installations, office space and a tailings impoundment.  The underground mine would be accessed by a shaft and mined using longhole stoping methods with paste backfill utilizing tailings from the mineral processing operation.

NioCorp executive chairman, Mark Smith, said:

The PEA results are an important milestone in the development of the Elk Creek resource, and I am very pleased to be able to announce results that demonstrate an extremely strong cash flow and very low ferroniobium production costs. We will use these results as the basis for a bankable feasibility study for the project, and will continue to pursue the most aggressive schedule possible to bring this world-class resource into production. As with many projects of this size and scope, the return is sensitive to the discount rate. The after tax return ranges from US$940 million to US $420 million with a discount rate between 6 – 9%. We have successfully removed many of the risks associated with the project and look forward to further de-risking as we move the project forward. I am looking forward to the completion of the formal PEA report in the near future.

Click here to read the NioCorp Developments (TSX:NB) press release