danieldeubank
5 시간 전
You can’t always get what you want….but if you try sometimes, you might find, you get what you need…
You’ve asked me to redo the analysis of why an updated Feasibility Study (FS) for NioCorp’s Elk Creek Critical Minerals Project takes so long and is so expensive, with the clarification that this updated FS will not include the “mine to magnet” piece—meaning it excludes the downstream processing of rare earth elements (REE) into magnets (e.g., neodymium or dysprosium for industrial use). This shifts the scope from the previous assumption, where I included REE integration as a factor. The updated FS will focus on the core mining and primary processing of niobium, scandium, and titanium, as per the 2017/2019 FS, with necessary updates to reflect 2025 conditions. Let’s reanalyze why this still takes significant time and money, aligning with your earlier note that a detailed FS requires formal engineering, achieves 10-15% accuracy, and costs ½-1½% of the total project cost.
Revised Background
The 2017 FS (updated April 2019) for Elk Creek estimated a $1.007 billion capex (now ~$1.2 billion with inflation), a pre-tax NPV of $2.57 billion, and an IRR of 25.8%, focusing on underground mining and processing of niobium (ferroalloys), scandium (aluminum alloys), and titanium (pigments). Excluding “mine to magnet” means no downstream REE magnet production (a post-2019 exploration), but the FS might still extract REE as byproducts for sale as oxides or concentrates—consistent with NioCorp’s 2023 Stellantis deal intent—without adding complex magnet-making facilities. An updated FS is likely driven by the Critical Minerals EO (April 9, 2025, priority status) and EXIM’s $800 million financing needs. Here’s why it’s still lengthy and costly:
1. Core Project Complexity
* Scope: Elk Creek remains a $1.2 billion underground mine, 500+ feet deep, extracting three critical minerals across a 38-year life. Even without magnet processing, it involves:
* Mining: A 3,500-foot shaft, tunnels, and ore extraction systems.
* Processing: Hydrometallurgical plants for niobium, scandium, and titanium separation, plus tailings management.
* Infrastructure: Power, water, roads, and waste storage for a remote Nebraska site.
* Engineering Effort: Updating the 2019 FS requires:
* Re-assessing geotechnical stability with six years of new data.
* Revising plant designs for efficiency or 2025 tech (e.g., energy-saving equipment).
* Confirming byproduct REE extraction (e.g., as oxides) without downstream magnet steps.
* Time: Detailed engineering—hundreds of drawings, simulations, and specs—takes 12-15 months for a multi-metal mine, even without REE magnets. Teams of geologists, engineers, and metallurgists work in parallel but need sequential validation.
* Cost: At ½-1½% of $1.2 billion, the FS costs $6-18 million. Engineering alone (e.g., Ausenco, past NioCorp partner) runs $3-6 million, plus $1-3 million for site studies—less than with magnets, but still substantial.
2. Economic and Regulatory Updates
* Cost Inflation: Since 2019, mining costs have risen 20-30% (S&P Global). Steel (up 25% since 2020), labor (union rates in 2025), and equipment (tariff-impacted) push the $1.007 billion baseline to $1.2 billion. Updating requires:
* New vendor bids for 2025 pricing.
* Revised opex (e.g., $15/kg niobium vs. $12/kg in 2019).
* Regulatory Shifts: Permits are secured, but 2025 standards (e.g., EPA tailings rules, Nebraska water regs) demand re-verification of environmental plans—especially tailings, a big cost driver.
* Time: Economic modeling (NPV, IRR) with 2025 commodity prices (niobium ~$50/kg, scandium ~$1,500/kg) and regulatory checks take 3-6 months, overlapping with engineering.
* Cost: Consultants for economics ($1-2 million) and environmental compliance ($1-3 million) add up, though skipping magnet facilities trims some process design costs.
3. Financing-Driven Precision
* Lender Needs: EXIM ($800 million) and private investors ($400 million) require a “bankable” FS with 10-15% accuracy. The 2019 FS is outdated—costs, prices, and tech have shifted. Without magnet production, the focus stays on:
* Validating reserves: Niobium (36,000 tonnes), scandium (943 tonnes), titanium (266,000 tonnes) via recent drilling (e.g., 2021 assays).
* De-risking capex/opex for primary processing.
* Resource Work: Updating reserves involves core sampling, lab assays, and NI 43-101 reporting—6-9 months of fieldwork, less complex without REE magnet flowsheets but still rigorous.
* Time: Drilling and analysis (6-9 months) plus financial integration (3-6 months) push the timeline to 12-15 months, even streamlined.
* Cost: Drilling ($2-3 million), assays ($0.5-1 million), and compliance ($1-2 million) total $3-6 million—lower than with REE magnets, but not cheap.
4. Technical Refinement
* Processing Updates: Without “mine to magnet,” the FS skips REE magnet separation (e.g., sintering, alloying), but still refines niobium/scandium/titanium flowsheets. Post-2019 tech advances (e.g., cleaner hydromet processes) or byproduct REE oxide extraction (per Stellantis interest) need testing.
* Market Inputs: Prices and demand (e.g., niobium for steel, scandium for aerospace) require 2025 forecasts, simpler without magnet-grade REE but still detailed for a 38-year horizon.
* Time: Metallurgical tweaks and market analysis add 3-6 months, keeping the total at 12-15 months.
* Cost: Testing ($1-2 million) and market studies ($0.5-1 million) are leaner without magnets, but still contribute to the $6-18 million range.
Why So Long and Expensive (Revised)?
* Duration (12-15 Months):
* Drilling/resource updates: 6-9 months.
* Engineering (mining, processing): 9-12 months (overlapping).
* Economic/regulatory refresh: 3-6 months.
* Coordination delays sequential steps, but skipping magnets shaves ~3 months off the 18-month max from my prior analysis.
* Cost ($6-15 Million): At ½-1½% of $1.2 billion, adjusted down slightly:
* Engineering/design: $3-6 million.
* Drilling/testing: $2-4 million.
* Consultants (economic, environmental): $1-5 million.
* Excluding REE magnet facilities drops costs from $18 million ceiling to ~$15 million max, but 10-15% accuracy keeps expenses high.
NioCorp’s 2025 Context
* EO Pressure: The April 9 priority tag and April 19 financing milestone (plus June 14 hint) push for speed, but a detailed FS can’t shortcut below 12 months without risking EXIM rejection. A PEA (~6 months, $1-2 million) might bridge the gap, but lenders want the full FS.
* Cost Savings: No “mine to magnet” reduces complexity—e.g., no $2-3 million magnet pilot plant—lowering the upper cost bound, but core mining/processing still demands rigor.
Conclusion
An updated FS for Elk Creek, sans “mine to magnet,” takes 12-15 months and costs $6-15 million due to its multi-metal scope, 2025 cost/regulatory updates, lender precision needs, and technical refinements. It’s faster and cheaper than an REE-inclusive FS (18 months, $18 million), but the scale, depth, and stakes keep it a hefty lift.
danieldeubank
2 일 전
Transcript for those in Europe that cannot use the link:
Transcript Approximation for KETV Article: "Company planning Nebraska critical minerals mine warns US can't supply own rare earth materials yet as China restricts exports"
Anchor (e.g., Julie Cornell or Rob McCartney):
Good evening, this is KETV NewsWatch 7. A company planning to build a critical minerals mine in southeast Nebraska is sounding the alarm tonight about America’s reliance on foreign rare earth materials. This comes as China escalates a trade war by restricting exports of these vital resources. Here’s reporter Aaron Hegarty with the story.
Aaron Hegarty (Reporter):
The U.S. is facing a growing problem, and it’s buried deep underground. Rare earth materials—crucial for everything from fighter jets to smartphones—are overwhelmingly controlled by China, which processes about 90% of the world’s supply. Right now, the U.S. has just one operational rare earth mine. But here in Nebraska, NioCorp Developments is hoping to change that with its $1.2 billion Elk Creek project in Johnson County.
Last week, China upped the ante, not only raising tariffs on U.S. imports but also tightening restrictions on rare earth exports. NioCorp has been warning about this for years, calling China’s dominance a national security threat. I spoke with the company’s President and CEO, Mark Smith.
Mark Smith (NioCorp CEO):
"This basically shuts down the United States Department of Defense in terms of manufacturing any additional fighter jets, guided missiles, and virtually any high-tech defense device."
Aaron Hegarty:
Smith says the U.S. can’t yet supply its own needs for these materials, leaving us vulnerable. The Elk Creek project aims to extract critical minerals like niobium, scandium, titanium, and potentially rare earths—over 500 feet beneath the surface. NioCorp has secured permits, but financing remains a hurdle. Construction could still be years away.
Mark Smith:
"We need the government’s help to push this process and make it go faster."
Aaron Hegarty:
If all goes well, the company says construction could start within a year and take about three years to complete. NioCorp is currently drilling to provide samples to the U.S. Export-Import Bank, hoping to secure $800 million in debt financing, plus another $400 million from investors. Local leaders, like Pawnee County Commissioner Lavon Heidemann, see potential.
Lavon Heidemann (Pawnee County Commissioner):
"Most in the area are supportive of the project and the massive impact it will have."
Aaron Hegarty:
For now, the U.S. remains dependent on foreign supplies as China flexes its market power. NioCorp hopes its Nebraska mine can help shift that balance—but time, and money, will tell. Aaron Hegarty, KETV NewsWatch 7.
Anchor:
Thanks, Aaron. A critical issue indeed as trade tensions continue to rise. We’ll keep you updated as this story develops.
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