NioCorp Developments Ltd (TSX: NB; OTCQX: NIOBF) has signed a non-binding letter of intent with a large, integrated U.S.-based steel producer outlining the steel producer’s interest in purchasing up to 25% of NioCorp’s production of ferroniobium over the first 10 years of production from the Company’s Elk Creek Superalloy Materials Project in southeast Nebraska.
If a binding sales offtake agreement is reached it would effectively sell out NioCorp’s Elk Creek Project for its ferroniobium production over the first decade of its estimated 36-year mine life.
NioCorp previously entered into an offtake agreement with ThyssenKrupp Metallurgical Products GmbH for roughly 50% of its planned ferroniobium production over 10 years, and a separate offtake agreement with New Jersey-based CMC Cometals for roughly 25% of the Project’s ferroniobium production over 10 years.
Both the Thyssen and CMC Cometals contracts provide an option to extend ferroniobium purchases beyond the 10-year periods in each contract upon mutual agreement of the parties.
The offtake agreements with Thyssen and CMC Cometals, as well as any offtake agreement with the U.S.-based steel producer referenced above, will be subject to achieving planned production levels at the Project once NioCorp is able to secure project financing necessary to move the Project to construction and operation.
“We are very pleased to have reached this non-binding letter of intent with a very large U.S.-based steel producer, whom we cannot name because of our confidentiality agreement with them. But we much look forward to executing a commercial sales offtake agreement at the right time and to supplying this steel producer with Nebraska-produced ferroniobium,” said Mark A. Smith, CEO and Executive Chairman of NioCorp.
The entry into a binding agreement is subject to the satisfactory completion of due diligence, the negotiation and settlement of final terms, and the negotiation of definitive documentation. There can be no assurance that an offtake will be completed on the terms as described above or at all.