Executive Summary / Key Takeaways

• Strategic National Importance: NioCorp is developing the Elk Creek Project, a polymetallic critical minerals asset in Nebraska, poised to produce niobium, scandium, titanium, and potentially rare earth elements. These minerals are vital for U.S. national and economic security, with niobium, dysprosium, and terbium recently elevated to higher urgency status by the U.S. government, underscoring the project's strategic significance amidst global supply chain vulnerabilities.
• Technological and Operational Progress: The company has made significant strides in de-risking the Elk Creek Project through ongoing drilling campaigns to upgrade mineral resources and reserves, and successful bench-scale testwork demonstrating the ability to extract rare earth oxides from its ore and recycle rare earth permanent magnets.
• Strengthening Financial Position and Funding Momentum: NioCorp has substantially improved its liquidity, with cash increasing to $25.60 million in fiscal year 2025 from $2.00 million in fiscal year 2024, driven by recent equity offerings totaling over $60 million. The company is actively pursuing significant debt financing, including up to $800 million from EXIM Bank and a potential $200 million debt guarantee from UK Export Finance, further bolstered by a $10 million DoD award for scandium supply chain development.
• Long-Term Economic Potential: The 2022 Elk Creek Feasibility Study projects a 38-year mine life with robust economics, including an estimated total upfront capital expenditure of $1,141 million and an average life-of-mine (LoM) operating cost of $195.94 per tonne of ore. The project's strong pre-tax Internal Rate of Return (IRR) of 29.2% suggests compelling potential returns.
• High-Risk, High-Reward Profile: Despite significant progress and strategic alignment with U.S. critical minerals policy, NioCorp remains a development-stage company with no current revenue. It faces substantial risks related to securing the remaining project financing, commodity price volatility, and operational execution, making it a high-risk, high-reward investment.

The Critical Minerals Imperative and NioCorp's Vision

NioCorp Developments Ltd. ($NB) is at the forefront of establishing a domestic supply chain for critical minerals in the United States, a strategic imperative gaining increasing urgency in the current geopolitical landscape. The company's flagship Elk Creek Project in southeast Nebraska is designed to produce niobium, scandium, titanium, and potentially rare earth elements (REEs), all of which are essential for advanced technologies, defense systems, and the transition to a decarbonized economy. The U.S. government has recognized the profound importance of these materials, elevating niobium, dysprosium, and terbium to a higher urgency status on its Critical Minerals List in September 2025. Niobium, in particular, presents the second-highest threat to U.S. GDP if foreign access is limited, highlighting the Elk Creek Project's role as one of the most strategic critical mineral assets in the nation.

The global demand for critical minerals is surging, driven by the rapid expansion of artificial intelligence, data centers, electric vehicles, and renewable energy infrastructure. This demand is set against a backdrop of significant supply chain vulnerabilities, notably China's dominance in rare earth production, which accounts for approximately 80% of the global supply. China's recent restrictions on rare earth exports have underscored the dire implications for U.S. national security and manufacturing, with reports suggesting potential production halts in the automotive sector due to shortages of high-performance rare earth magnets. NioCorp's strategy directly addresses these vulnerabilities by aiming to provide a secure, domestic source of these vital materials, positioning the company as a key player in fortifying the U.S. supply chain.

Technological Edge: Unlocking Polymetallic Value and Recycling Potential

NioCorp's core strategy is underpinned by its innovative metallurgical process designed to efficiently extract multiple critical minerals from the Elk Creek carbonatite deposit. The company's process aims to produce ferroniobium (a niobium-iron alloy), scandium trioxide, and titanium dioxide, with ongoing evaluation for the addition of magnetic rare earth oxides (neodymium, praseodymium, dysprosium, and terbium). This polymetallic approach offers a diversified product suite, enhancing the project's economic resilience and strategic value.

A significant technological differentiator for NioCorp is its demonstrated capability in rare earth recycling. Bench-scale testwork completed in October 2024 at a demonstration-scale processing plant in Quebec successfully showed that the process developed for extracting rare earth oxides from Elk Creek ore can also be used to recycle the rare earth content in permanent magnets. This innovation opens the possibility of the planned Elk Creek plant accepting mixed rare earth concentrate from other mines, supplementing its own ore production. This capability could provide a competitive advantage by offering a circular economy solution and further diversifying revenue streams.

The company's R&D initiatives are focused on de-risking the project and optimizing future operations. In April 2025, NioCorp initiated a drilling campaign at the Elk Creek Project, successfully completing Phase I by August 2025. This campaign, involving nine HQ diamond drillholes totaling 6,817 meters, was designed to convert a portion of the current Indicated Resources into Measured Resources and subsequently upgrade Probable Mineral Reserves to Proven Mineral Reserves. The favorable outcomes in terms of schedule and budget led to the launch of Phase II, which includes up to six additional drillholes (approximately 3,930 meters) to further support resource and reserve upgrades, and to gather hydrogeologic and geomechanical data for underground mine design de-risking. These efforts are crucial for the updated feasibility study, a key requirement for securing significant project financing.

Beyond extraction, NioCorp's mine design incorporates advanced environmental performance strategies. These include a "Zero Process Liquid Discharge" facility, treating all naturally occurring brackish water and process water on-site. "Artificial Ground Freezing" will be used during shaft sinking to protect groundwater resources. The project design also emphasizes "Avoidance of Permanent Impacts to Federally Jurisdictional Waters," "Recycling of Reagents Used in Mineral Processing," and "Utilizing Tailings as Underground Mine Backfill," significantly reducing the environmental footprint and potential long-term liabilities. These technological and environmental considerations are not merely compliance measures but strategic elements that enhance the project's long-term viability and appeal to environmentally conscious investors and partners.

Elk Creek Project: A Strategic North American Asset

The Elk Creek Project, NioCorp's principal mineral property, is a carbonatite deposit located in Johnson County, southeast Nebraska. Its strategic location offers year-round accessibility via paved roads, proximity to rail access in Elk Creek, and readily available water and electricity from local utilities. The project is planned as an underground mining operation utilizing a long-hole stoping method with paste backfill, designed for a nominal processing rate of 2,764 tonnes per day over an expected 38-year mine life.

As of June 30, 2025, the project boasts significant mineral reserves and resources. Probable Mineral Reserves are estimated at 36,656 kilotonnes (kt) of ore, with an average grade of 0.81% Nb2O5, 2.92% TiO2, and 70.20 parts per million (ppm) Sc. This translates to contained payable metals of 170,409 tonnes of niobium, 431,793 tonnes of titanium dioxide, and 3,677 tonnes of scandium trioxide. Indicated Mineral Resources (exclusive of reserves) stand at 151.70 million tonnes (Mt) of ore, and Inferred Mineral Resources (exclusive of reserves) at 108.30 Mt, further underscoring the project's substantial potential. The 2022 Elk Creek Feasibility Study, based on Q1 2019 U.S. constant dollars, outlines an estimated total upfront capital expenditure of approximately $1,141 million, including a 10% contingency. The study projects total gross revenue of $21.90 million, operating costs of $7.18 million, and an operating margin (EBITDA) of $14.72 million. The average life-of-mine unit operating costs are estimated at $195.94 per tonne of ore.

The processing operations are planned to include mineral processing, hydrometallurgical processing, and pyrometallurgical processing. The hydrometallurgical plant will separate the three primary products (TiO2 and Sc2O3 as saleable oxides, and Nb2O5 for further processing) using two separate acid leaches. The pyrometallurgical plant will then convert Nb2O5 into saleable ferroniobium metal. This integrated approach aims to maximize value recovery from the polymetallic ore.

Financial Performance and Liquidity: A Development Stage Narrative

As a development-stage issuer, NioCorp currently generates no revenue from mining operations, and its financial performance reflects the significant investment required to advance the Elk Creek Project. For the fiscal year ended June 30, 2025, the net loss attributable to the company increased to $17.40 million, compared to $11.40 million in fiscal year 2024. This increase was primarily driven by non-cash losses related to the valuation of Earnout Share and Warrant liabilities, partially offset by lower interest expense and operating expenses. Operating expenses decreased to $11.96 million in fiscal year 2025 from $13.76 million in fiscal year 2024, mainly due to reductions in employee-related costs and professional fees. However, exploration expenditures increased in fiscal year 2025 due to the drilling program initiated in April 2025.

NioCorp has demonstrated a significant improvement in its liquidity position. As of June 30, 2025, the company held $25.60 million in cash and cash equivalents, a substantial increase from $2.00 million on June 30, 2024. Working capital also improved dramatically, moving from a deficit of $9.00 million in fiscal year 2024 to a positive $24.80 million in fiscal year 2025. This enhanced liquidity is a direct result of successful fundraising efforts, including a July 2025 public offering that generated approximately $41.80 million in net proceeds, and an additional $10.40 million from warrant and option exercises between July 1 and September 11, 2025.

The company's planned cash needs for the next twelve months are estimated at $40 million to $50 million. Management anticipates funding the estimated $1,141 million upfront capital expenditure for the Elk Creek Project through a combination of debt and equity financing, with approximately two-thirds expected from debt, including potential EXIM financing. The company also has access to up to $46.90 million in net proceeds from the Yorkville Equity Facility Financing Agreement, which expires in April 2026.

Competitive Landscape: Niche Player in a Global Market

NioCorp operates within an intensely competitive global mining industry, vying for capital, project financing, resources, equipment, and skilled personnel. While larger, diversified mining giants such as Rio Tinto (RIO), BHP Group (BHP), and Vale S.A. (VALE) possess significant economies of scale, broader portfolios, and established cash flow generation, NioCorp distinguishes itself through its focused approach on a unique polymetallic deposit in North America.

NioCorp's competitive advantages stem from its exclusive access to the Elk Creek deposit, which is recognized as having the highest-grade niobium resource in North America and an indicated rare earth resource in the United States. This proprietary asset, combined with its specialized extraction and recycling technologies, offers the potential for superior purity outputs and diversified revenue streams, particularly in niche, high-tech applications. The company's North American operational base also provides a strategic advantage, aligning with U.S. policy priorities for domestic critical mineral supply chains and potentially offering regulatory benefits.

However, NioCorp's smaller scale and pre-revenue status present competitive vulnerabilities. The global niobium market is highly concentrated, with Companhia Brasileira de Metalurgia e Mineração (CBMM) supplying approximately 85% of the world's niobium. This market concentration poses a risk of price suppression or oversupply, which could negatively impact NioCorp's future revenues. The scandium market is also a developing one, with inherent risks of oversupply or undersupply disrupting pricing. Compared to its larger, more financially robust competitors, NioCorp's reliance on external financing and its limited operating history mean it lags in terms of established profitability, cash flow, and overall market share. The high capital requirements and extensive regulatory approvals inherent in the mining industry act as significant barriers to entry, which, while challenging for NioCorp, also protect its long-term position once the Elk Creek Project is operational.

Outlook and Strategic Imperatives

NioCorp's immediate future is centered on securing the substantial financing required to transition the Elk Creek Project from a development-stage asset to commercial production. The company is actively engaged in the Export-Import Bank of the United States (EXIM) financing process, seeking up to $800 million in debt. This process necessitates an updated mine plan and capital cost estimates, which the ongoing drilling campaigns are designed to support. Further bolstering its funding efforts, NioCorp's subsidiary, Elk Creek Resources Corp. (ECRC), secured a Project Sub-Agreement with the U.S. Department of Defense (DoD) for up to $10 million in reimbursement payments for project milestones, specifically aimed at establishing a domestic scandium mine-to-manufacture supply chain. Additionally, UK Export Finance (UKEF) has issued a preliminary, non-binding Expression of Interest for a potential debt guarantee of up to $200 million, signaling international confidence and potential for coordinated financing.

Management's guidance emphasizes accelerating pre-construction activities, including additional land acquisition, geomechanical and hydrogeological fieldwork, detailed engineering, and infrastructure development. CEO Mark Smith has articulated a responsibility to "Move Faster in Order to Support the Trump Administration's Historic Critical Minerals Initiatives," underscoring the strategic alignment with national priorities. The company also continues to evaluate the potential for rare earth production and aims to negotiate and complete offtake agreements for its uncommitted production.

Risks to the Investment Thesis

Investing in NioCorp carries inherent risks, primarily stemming from its status as a development-stage issuer. The company's ability to continue as a going concern is in doubt, as it does not currently have sufficient cash to fund planned operations and mine development for the next twelve months, necessitating significant additional capital. There is no assurance that NioCorp will secure the required debt and equity financing on acceptable terms, if at all, for the estimated $1,141 million upfront capital expenditure.

Uncertainties in mineral reserve and resource estimates could lead to lower-than-expected revenues or higher costs. The company has no history of commercial production, and there is no guarantee that metallurgical testing results will translate to successful commercial operations or that the rare earth recovery system will function as designed. Commodity price volatility for niobium, scandium, and titanium, coupled with the developing nature of the scandium market, poses a risk to projected revenues. Permitting delays in Nebraska, where regulations for mining are not clearly defined, could impact the project timeline. Furthermore, NioCorp has identified material weaknesses in its internal control over financial reporting, which have led to past financial statement restatements and could impact future financial reporting accuracy. Future equity issuances to fund the project will likely result in significant dilution for existing shareholders.

Conclusion

NioCorp Developments Ltd. stands at a pivotal juncture, uniquely positioned to address critical mineral supply chain vulnerabilities in the United States through its polymetallic Elk Creek Project. The company's strategic focus on niobium, scandium, titanium, and potential rare earth production, coupled with its advanced metallurgical processes and commitment to environmental stewardship, presents a compelling long-term investment thesis. Recent successes in fundraising, including over $60 million in equity offerings and a $10 million DoD award, have significantly bolstered its liquidity and accelerated pre-construction activities, demonstrating tangible progress toward commercialization.

While the estimated $1,141 million upfront capital expenditure and the inherent risks of a development-stage mining operation, including financing uncertainties and commodity price volatility, demand careful consideration, the project's robust economics and strategic alignment with national security interests offer substantial upside potential. NioCorp's technological leadership in polymetallic extraction and rare earth recycling, alongside its North American asset base, provides a distinct competitive edge against larger, more diversified global miners. The successful execution of its financing strategy and the transition to commercial production will be the ultimate determinants of its ability to deliver long-term value to shareholders, transforming a strategic national asset into a profitable enterprise.