Niocorp Is Very Welcome In Nebraska
Monday, 7 September, 2015
“Market conditions are not ideal”, says Mark Smith, the chief executive of Niocorp. “It’s the worst I’ve seen in 34 years I’ve been in the business. But a robust economic project that people believe in will find the financing.”
In some circles, talking about “robust economics” is becoming a hackneyed old phrase.
Here though, the context is different. The operative part of the phrase isn’t the robustness, but that people believe in the project in question.
One of the hallmarks of Niocorp, the way Mark tells it, is its good relations with the local community in Nebraska, a US state with precious little mining to its name, but which is keen in the name of “robust economics” to get more.
This is not a state that romanticises its land to the point where it becomes economically sterile.
On the contrary, it wants entrepreneurial companies to come along with ideas for sensible and sustainable economic exploitation.
When they do they are positively embraced. To the point where opposition to Niocorp’s plans to develop a 27,000 tonnes per day niobium and scandium mine in the south-eastern corner of the state at Elk Creek has not merely met minimal resistance, but has actually met with no resistance at all.
“As far as we’re concerned we’re not aware of any opposition to the project”, says Mark.
“We’ve never been in any conflict with anyone there. We’ve built a very good reputation in the community for being honest. For not spinning or hyping. We tell them facts.”
The candour looks set to pay off, because not only is opposition non-existent, but permitting is non-existent too.
Or at least, that’s one way of looking at it.
“We believe a permit is not required”, says Mark. (The officiating body is the US Army Corps of Engineers.)
“We’ve filed an application to get their concurrence that we don’t need a permit, and they are finishing writing their report. We used two environmental consultants, but nothing is required. However, Niocorp as a company and me personally feel strongly that community and social relations is very important. So we hold regular town hall meetings and we meet with town hall officials.”
That the project is virtually without precedent in Nebraska seems to be working in the company’s favour, which wouldn’t necessarily be the case in other parts of the world.
But, says Mark, “the state of Nebraska is very conservative”. And, on reflection, you could hardly call the mining industry progressive.
The fit is good, now it’s up to Niocorp to get the project up and running and to repay the community’s faith by delivering the economic benefits that seem to be on offer.
The final pieces are falling into place now.
First off, there’s the leases.
“We’ve secured almost all the leases we need”, says Mark. “We have all the mineral leases. And we’re pretty proud in terms of how we got that done. We did not pressure anyone. We made very reasonable offers. Both parties were happy. Treating people honestly and fairly – that’s how we’re going to get this mine built.”
Capital markets, though, can be pretty amoral places, and it will be interesting to see how readily they respond to Mark’s faith that robust projects that people believe in can get financed.
“It’s an important moment for the company and for the community”, he says.
There’s a new economic model on the table which looks pretty attractive, albeit that it plugs in certain assumptions about future demand for niobium and scandium that will require the uptake of certain types of fuel cell technology to be strong.
In any event, the numbers will be tightened up before the end of the year, such that Mark is confident that he’ll be able to get the financing done in the first quarter of 2016.
The money will be sourced both from the USA and internationally, and the benefits will be spread around too.
Shareholders will get theirs of course.
But there’ll be something for the good folk of Elk Creek too.
http://www.csr21.org/content/niocorp-very-welcome-nebraska
Mfg Norbert |
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