The commodities markets haven't been friendly to junior and development-stage companies recently, but that hasn't stopped NioCorp Developments (TSXV:NB) from charging ahead. Encouragingly, it's met with success — its stock is up 360 percent so far this year having gained roughly 150 percent over the summer. In terms of what the company's been up to, it released a string of high-grade drill results over the summer, and on Monday it put out the latest updated resource estimate for its flagship Elk Creek niobium deposit in Nebraska. Furthermore, NioCorp announced the same day that it has entered into an agreement in connection with a $16.5-million best-efforts private placement. Mainly produced in Brazil and Canada, niobium is important in the construction of high-strength, low-weight steel, and the lighter metal makes a notable difference in vehicle fuel efficiency when added to car frames. NioCorp currently holds the only known niobium deposit in the United States. Bigger and better According to Monday's release, Elk Creek now has an indicated resource of 28,200,000 tonnes and an inferred resource of 132,800,000 tonnes using a cut-off grade of 0.3-percent Nb2O5; that's a respectable increase from the company's 2012 resource estimate on the property. The company also reported higher grades of Nb2O5 and increased amounts of contained niobium for the resource, with numbers for contained Nb2O5 rising to 177,000 tonnes and 733,700 tonnes in the indicated and inferred categories, respectively. NioCorp CEO Mark A. Smith certainly seems happy with the news. "Drill results have far exceeded our expectations on this deposit," he said in a statement. "[W]e are very pleased to be able to deliver this resource update to shareholders."
Of course, the positive numbers are no surprise. As noted, NioCorp reported high-grade drill results from Elk Creek throughout the summer, including assays in excess of 3- and 4-percent Nb2O5. Smith said at the end of August that those results confirm the company's "belief that this truly is a world class deposit."More to come? This latest resource estimate undoubtedly solidifies that confidence, but NioCorp isn't done defining its resource yet. It's planning a six-hole Phase 2 drill program to follow up on the recently completed five-hole Phase 1 program, with a Phase 3 program to follow as well, "if necessary." The company stresses in today's release that the estimate is based only from the results of Phase 1 drilling operations as well as historic data, and states that it expects to complete Phase 2 drill operations in the fourth quarter, followed by another updated resource estimate including that data. Certainly, it's unusual for a company to release two updates so close together, but that could speak to NioCorp's commitment to drumming up support for the project and getting it to production quickly. Recent drilling has mainly been aimed at expanding the knowledge that NioCorp already has, as the company has already completed a preliminary economic assessment for Elk Creek and is looking to finish a feasibility study by early next year. Smith stated in an August 13 interview with Business News Network that NioCorp is hoping to reach production by 2017, and has widespread local support for the Nebraska project. Financing That's a lot of work in a short amount of time, and NioCorp isn't wasting any time securing funding. As stated above, it announced its intention to conduct a $16.5-million private placement Monday "at an issue price to be determined in the context of the market." It is to be conducted on a best-efforts basis. The company entered into an agreement regarding the placement with Mackie Research Capital, and will use the net proceeds for drilling, metallurgical studies, work at its pilot plant and engineering work ahead of its feasibility study.
Investors interested in the critical metals and rare earth element spaces will no doubt want to watch for further drill results from the company's Phase 2 drill program to see how it progresses.Securities Disclosure: I, Teresa Matich, hold no investment interest in any companies mentioned in this article. Related reading: Why NioCorp's Elk Creek Niobium Project is Worth a Look Charging Ahead: NioCorp Developments Releases Updated Resource Estimate from Rare Earth Investing News