NIOBF Niocorp Developments Ltd (QX)

Niobium is a dull-looking, bluish grey mineral. What this rare commodity lacks in appearance it more than makes up for in performance. It enhances the fuel-efficiency of automobiles and makes high-rise buildings stronger and safer, but the average driver or the office worker on the fifty-fourth floor would never know it.

That's because steel-makers around the world add miniscule amounts of niobium to the steel they produce in their foundries--as little as 60 grams per tonne in China and other developing countries and 90 grams per tonne in the U.S., Canada, Japan and the European Union.

After taking Molycorp public, raising $2.5 billion and restarting the Mountain Pass REE mine in California, Mark A. Smith took a very short break. Now, as CEO of NioCorp (TSX-V:NB) (OTCQX:NIOBF) (FSE:BR3) -- a resource company that is developing the only Niobium project in America-- Mark is confident that he will bring Niobium production to a nation that has never produced the critically important element. Globally, Niobium is almost entirely supplied from one mine in Brazil (CBMM) and is listed as a strategic metal by the US government.  

"It's amazing what a little bit of niobium does in terms of strengthening steel," stated industry veteran Smith. "In our automobiles, it makes the steel in the bodies much stronger and lighter. Lower body weight means less fuel, which is good for the environment."

Smith has more than a passing interest in this unusual mineral. NioCorp's prized asset is its niobium deposit in Elk Creek, Nebraska, a one-hour drive southeast of Lincoln. The property could prove to be the third largest of its kind in the world. In the 80's, Molycorp completed most of the development work when Unocal owned it. At current international prices, that resource could be worth as much as $26 billion and prices are expected to rise in coming years due to increasing demand and potential scarcity.

There are, at present, only three niobium mines in the world. Niobec Inc., a subsidiary of Toronto-based Iamgold, produces about eight per cent of the world supply from its operation in the Saguenay-Lac St. Jean region of Quebec. It is much lower grade than NioCorp's Elk Creek but it still made $90 million in 2013. AngloAmerican's mine in the Brazilian state of Goias turns out six per cent and the privately owned CBMM, Companhia Brasileira de Metalurgia e Mineração, produces the rest.      

Demand is expected to rise because China--the world's largest steel producer--is contemplating new regulations that would require its steelmakers to increase the concentration of niobium to North American, Japanese and E.U. levels.

"When they have an earthquake in China, buildings fall down," says Smith. "When you have earthquakes in the U.S., Japan and Europe, most buildings are still standing. China wants to adopt the same standards so they're changing the specifications for the steel used in bridges, buildings and other structures. That means the market for niobium is going to grow faster than the four to six per cent annual growth the element has seen for the last 40 years."

NioCorp is well positioned to help meet that growing demand thanks to its Elk Creek property. Some 53,000 metres of core samples have been drilled on the property since the early 1970s, mainly by previous owners, as well as by NioCorp. Those exploration programs have identified a resource in the neighborhood of 100 million tonnes of ore, which could potentially yield six to seven million tonnes of niobium.

NioCorp recently raised $5.5 million through two private share offerings and intends to spend the money this year on further drilling and metallurgical studies. As Smith explains, the company will undertake some 8,000 metres of in-fill drilling, commencing in May, to prove the continuity of the deposit and the estimated size of the resource. Previous metallurgical work has shown that a little over 50 per cent of the niobium can be recovered, but additional studies are necessary to boost the estimate to world-class levels of 56 to 58 per cent.    

The drilling should be complete in six to eight weeks and metallurgical studies by end of summer --provided the results are satisfactory—and Niocorp will then go to work on a feasibility study. "If everything goes really well, we anticipate having a completed and bankable feasibility study by the end of the year," adds Smith, who has bet big on this project, having invested nearly $2 million of his own money acquiring NioCorp shares. "We're very confident. There's no question in our minds that this is a real resource."

And that has Smith thinking mine. The company will have to develop an underground mine since the ore body begins at a depth of 200 metres. But there is nothing unusually complicated about the deposit. Standard mining techniques and existing technology for processing the ore can be used. Furthermore, the deposit is open at depth on three sides, meaning that there may be a lot more of this dull-looking, but rather extraordinary mineral down there.

"It's a very important time in the company's history," says Smith. "We're putting together the type of information intended to increase the value of the company and to take us further down the path to development." 

Niocorp trades at $0.38 with a market cap of $44 million.

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CONTACT: NioCorp (TSX-V: NB, OTCQX: NIOBF, FSE: BR3)
         Suite 1510 - 1050 West Pender St.
         Vancouver, British Columbia Canada V6E 3S7
         Telephone: (604) 568-7365
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