NioCorp raised the economic assessment of the Elk Creek project: the stock price target increased to $12

The updated feasibility study for NioCorp Developments’ (NB) Elk Creek project showed a significant improvement in its economic metrics. Elk Creek is a critical-minerals deposit under development in the U.S. state of Nebraska, including niobium, scandium, titanium, and rare earth elements. The project’s after-tax net present value (NPV) increased by 47%, and the number of potential products rose from three to eight after adding rare earth oxides (REO). 

NioCorp is a U.S. mining company advancing the Elk Creek project in southeastern Nebraska. The company plans to mine and produce niobium, scandium, titanium, and rare earth elements, which are classified as critical minerals in the United States.

Following publication of the updated analysis, NioCorp’s price target was raised from $9.50 to $12. The “Buy” rating was maintained. At a price of $4.29 at the time of the report, the new target implies upside potential of about 180%.

Economics of NioCorp’s Elk Creek project improved

One of the main changes was an expansion of Elk Creek’s product portfolio from three to eight items. In addition, reserves converted into comparable metric units increased by 13.7% to 41.67 million tonnes. For the first time, part of the reserves—16.5% of the total—was classified as Proven, i.e., the highest level of reserve confidence.

The improvement is not only due to a larger resource base. The broader range of end products made it possible to include in reserves some feedstock that was previously considered uneconomic to develop. Rare earth elements provide additional upside to the project alongside the already planned production of niobium, scandium, and titanium.

The changes also affected the plant’s process flowsheet. In particular, the new configuration makes it possible to forgo construction of an in-house acid plant and to cut by about half the volume of material sent to downstream processing stages.

Updated analysis brings NioCorp closer to EXIM financing

The updated Feasibility Study (FS)—a technical and economic assessment confirming a project’s technical viability and economic feasibility—is also important from a financing perspective. Its preparation was one of the key conditions of the preliminary project letter from the Export-Import Bank of the United States (EXIM), issued in April 2024. The bank is considering financing the development of the Elk Creek deposit and the creation of the required production infrastructure. For this, EXIM required an updated mine plan and a near-final estimate of capital expenditures.

Now, one of the next important milestones for NioCorp will be further advancing its application for EXIM financing. Other potential events over the next 12 months include converting the agreement with Traxys and the memorandum with Lockheed into definitive contracts, determining the parameters of the EXIM credit facility, and raising equity to complete the full financing package.

Rising capital costs remain NioCorp’s key risk

The improvement in Elk Creek’s economics is accompanied by a notable increase in the project’s implementation cost. Initial capital expenditures rose by 62% to $1.85 billion, while the plant’s design throughput essentially did not change. A significant portion of the additional investment is related to expanding the process flowsheet required to produce eight products.

The size of potential EXIM financing has not yet been finally determined. The documents cite an amount of up to $800 million. If it does not increase, the share of debt financing would be about 43% of the project cost versus roughly 65% previously assumed. Taking the additional expenses into account, NioCorp’s equity requirement could approach $1 billion.

This is not an individual investment recommendation.