$NIOBF : NioCorp — Independent Economic Analysis

Standard Model10-Year Contracted Sales Model
Long-Term Price Case$3,676/kg Sc2O3 | $0.99/kg TiO2 | $46.55/kg NbLong-Term Price Case $3,676/kg Sc2O3 | $46.55/kg Nb
ProjectElk CreekProjectElk Creek
Payable Primary Product (Nb)168,861 tonnes (168,861,000 kg)Payable Primary Product (Nb) 35,180 tonnes (35,180,000 kg)
Payable Byproduct Metal (TiO2)418,841 tonnes (418,841,000 kg)Payable Byproduct Metal (TiO2) 418,841 tonnes (418,841,000 kg)
Payable Co-Product Metal (Sc2O3)3,410 tonnes (3,410,000 kg)Payable Co-Product Metal (Sc2O3) 947 tonnes (947,000 kg)
Shares Outstanding226,666,534Shares Outstanding226,666,534
Market Cap$95,993,277Market Cap $95,993,277
Average Annual Production7,220 tonnes FeNb (7,220,000 kg)Average Annual Production10,923,113 kg NbEq
Recovery93.14% Sc2O3 | 40.31% TiO2 | Nb 82.36%Recovery93.14% Sc2O3 | Nb 82.36%
LoM36 YearsContracted Sales Model Term10 Years
Payable Product (NbEq)447,052,463 kg NbEq Payable Product (NbEq) 109,231,128 kg NbEq
True All-in Cost (TAIC) $24.15/kgTrue All-in Cost (TAIC)$33.78/kg
Gross Revenue$20,810,292,140Gross Revenue$5,084,709,008
Total Operating Cost($6,717,578,000)Operating Cost($1,865,993,888)
Operating Margin (EBITDA)$14,092,714,140Operating Margin (EBITDA)$3,218,715,120
Income Taxes($2,467,634,246)Income Taxes($563,597,018)
Total Capital Cost($1,609,397,000)Capital Cost($1,260,504,167)
Cumulative Net Income$10,015,682,894Cumulative Net Income$1,394,613,935
Net Profit Margin48%Net Profit Margin 27%
Absolute Cost Structure (ACS)52%Absolute Cost Structure (ACS) 72%
MTQ Score0.9MTQ Score0.4
True Value$44.19/sh.True Value$6.15/sh.
True Value Discount (TVD)99%True Value Discount (TVD)93%
Cash Flow Multiple10xCash Flow Multiple 7.3x
Net Annual Cash Flow$161,728,000Net Annual Cash Flow $139,488,153
Future Market Cap$1,617,280,000Future Market Cap $1,018,263,517
Future Market Cap Growth1,585%Future Market Cap Growth 961%
Target$7.14/sh.Target$4.49/sh.

Notes: All Values in U.S. Dollars

NioCorp has signed a commercial sales agreement with Traxys North America. Under the agreement, Traxys is obligated to purchase 12 tonnes of Sc over the course of Elk Creek’s first 10 years of production. Additionally, 75% of the Elk Creek Project’s primary product, Ferroniobium (FeNb), is under contract over the first 10 years of production: thyssenkrupp (OTC: TYEKF), 50%; Commercial Metals Company, 25%

Fahy Capital Management is not an investor in NioCorp. We may, however, initiate a position in thyssenkrupp this quarter.

$TMRC : Texas Mineral Resources — Updated Economic Analysis

Flagship ProjectRound Top
Mineral Resources (M&I)307,260,007 kg REOs
Shares Outstanding46,686,252
Market Cap$14,005,876
Average Annual Production10,754,100 kg
LoM20 Years
Payable REOs215,082,005 kg
True All-in Cost (TAIC) $21.43/kg.
Gross Revenue$7,764,424,000
Texas State Royalty($487,476,000)
Gross Income$7,276,947,000
Total Operating Costs($2,213,683,000)
Operating Profit$5,063,264,000
Total Capital Costs($845,000,000)
Income Taxes($1,063,285,440)
Net Income$3,154,978,560
Net Profit Margin41%
Absolute Cost Structure (ACS)39%
True Value (TMRC, 30%)$20.27/sh.
Cash Flow Multiple5x
Annual Cash Flow (TMRC, 30%)$47,324,678
Future Market Cap$236,623,392
Market Cap Growth1,589%
Target$5.07/sh.

Notes: All Values in U.S. Dollars

Update, 9 September 2019

Gustavson’s August 2019 revisions to the Round Top PEA had a negligible impact on Fahy Capital Management’s independent analysis. In fact, the updated PEA is more in line with our own assumptions. Consequently, we don’t feel compelled to revise our expectations.

$TMRC : Round Top Designated High Priority Infrastructure Project by the White House Council on Environmental Quality

Once approved by the Federal Permitting Improvement Steering Council (FPISC), Texas Mineral Resources’ Round Top Project will be fast-tracked into construction. The Round Top Project has been classified as “high priority to the nation” and will be granted preference in the licensing process under Executive Order 13766.

The heap-leachable Round Top Project, which has a low CapEx and OpEx, contains a high percentage of REOs strategically critical to the U.S. defense, clean energy, aerospace, supercomputing, and transportation sectors.

Flagship ProjectRound Top
Mineral Resources (M&I)307,260,007 kg REOs
Shares Outstanding46,686,252
Market Cap$14,005,876
Average Annual Production10,754,100 kg
LoM20 Years
Payable REOs215,082,005 kg
True All-in Cost (TAIC) $21.43/kg.
Gross Revenue$7,764,424,000
Texas State Royalty($487,476,000)
Gross Income$7,276,947,000
Total Operating Costs($2,213,683,000)
Operating Profit$5,063,264,000
Total Capital Costs($845,000,000)
Income Taxes($1,063,285,440)
Net Income$3,154,978,560
Net Profit Margin41%
True Value (TMRC, 30%)$20.27/sh.
Cash Flow Multiple5x
Annual Cash Flow (TMRC, 30%)$47,324,678
Future Market Cap$236,623,392
Market Cap Growth1,589%
Target$5.07/sh.

Press Release: TEXAS MINERAL RESOURCES AND JV PARTNER USA RARE EARTH ADVANCE ROUND TOP RARE EARTH PROJECT