NioCorp Developments Ltd. (NB) Earnings Call Transcript
October 3, 2022
Earnings Call Speaker Segments
Well, the stock chart disaster do jour, it is Tesla. We've got it down at the moment by 6.8%. That's not even the worst levels of this session here. The EV leader is getting punished for -- get this -- hitting a new delivery record for the quarter. Here's the problem. Tesla's news, it delivered 343,830 cars. Actually missed the Street's 359,162 expectation. Tesla says it's facing difficulty. The issue is really that it can't secure enough trucks to transport the cars from the end of the assembly line to the people who want them. But vehicle transportation capacity is not the only problem facing not just Tesla, but all automakers trying to ramp up EV production. Rare earth minerals used to make the batteries are mainly sourced from China. We've talked a lot about this on this show. Well, now a U.S.-based mineral miner, NioCorp, is angling to remove China from the equation by purchasing an entire SPAC, GX Acquisition Corp. II, then take over GX's Nasdaq listing. With this new listing, NioCorp plans to fund its $1 billion Elk Creek project in Nebraska to mine the second largest source in the U.S. of critical minerals for electric vehicle manufacturing. Joining me now on a Fox Business exclusive, NioCorp Executive Chair, President and CEO -- you got all the titles, Mark -- Mark Smith.
Thank you, Liz.
Well, tell us about this. And when I say this, we've got 2 issues here. We've got Elk Corp. (sic) [ Elk Creek ], where you're going to break ground in Nebraska. You got to tell us what minerals are in there. And secondly, the merger/not-a-merger absorption of a SPAC because SPACs are touchy at the moment. Let's start with Elk Corp. (sic) [ Elk Creek ].
Well, let's start with the Elk Creek mine. We have 4 product lines that we plan to produce. Niobium is our primary product. We also have scandium. We have titanium.
What are those used for?
And we have rare earths. So niobium is primarily used as an additive in steel manufacturing. It makes the steel stronger and lighter. So it goes to the lightweighting revolution, which is part of our EVs and even lightweighting the internal combustion engine vehicles. So lightweighting is what it's all about. Scandium, much like niobium does for steel, scandium, when alloyed with aluminum, makes that metal stronger, but it also makes it much lighter. So if we take that into the aerospace or the airline, commercial airline manufacturing, they can go a lot farther with a tank of fuel than they could with just an aluminum body. So this is a huge potential lightweighting revolution there. Titanium is a very well-known metal. We don't need to probably talk about that one much. But then rare earths are very, very important. Nearly 100% of the rare earths in the world today come out of China. Well, that's fine, except China is making a whole bunch of EVs now. We want to make EVs. And there isn't going to be enough rare earths coming out of China to feed all of those EVs that we want. And there does seem to be a very, very strong momentum for this green world that everybody wants.
Okay. How did you find this great source underneath soybean fields in Nebraska?
Soybeans and corn fields and some of the finest people you'll ever meet in the world down there.
And they're okay with you digging down there?
They love this project. And every time we go down there, they greet us with open arms. They're warm, they're welcoming. I can't think of a better place to have a mine. To be quite honest, they're just fabulous people. We found it because there's an anomaly in the area that was noticed with some -- they flew over with some magnetic resonance, and then they found this anomaly. It's a carbonatite. Drilling was done on the carbonatite. You have no idea what's going to be in the carbonatite, but you start drilling. You do chemical analysis. And we found that we have the highest-grade niobium resource in the United States.
I should have paid attention in geology. No, seriously. This is fascinating to me. And you're not a newbie here. You've worked at Chevron Mining. You ran Moly Corp., which is now MP Materials. So let's talk about how you get enough money to build out Elk Creek. And you're doing this through kind of an interesting financial engineering effort here. Are you not?
That's correct. And it's something that we're actually really proud of. It's interesting because in today's SPAC world, it's almost a 4-letter word, right? There's been so many that have not gone well. But we've got a very different situation here. First of all, we are acquiring the SPAC. Normally, the SPAC is looking to acquire a company.
Yes, you're the target normally.
Yes. And what's happened in a lot of these SPACs is that this SPAC goes out and they overvalue a privately held company. So they're starting with these huge, huge price levels for stock, and they really have no place to go other than down. In our situation, we have 2 publicly traded companies. The value of our company is -- during the trading day, you know what the value of our company is every single second. So we have very well-known values, and we're putting together a deal that's a very fair valuation of the 2 entities. So it's very simple. Plus we're both SEC compliant companies. We're under the jurisdiction of the SEC. So very different than most SPAC companies.
But this is a shortcut way to list on the Nasdaq, correct? This way you flip and you were able to take on the SPAC's identity as, certainly, that's position in that space. So my question now becomes, for investors who are looking toward what you plan to extract, forget investors, how about customers, who's approaching you right now? Who wants these minerals? Is the word out?
The word is out. You've seen the reports about the automobile companies, the steel companies. They're going out and searching for these minerals. They can't find enough of these minerals. So we are in discussions with some of the top automotive companies, the top steel companies in the world because they want to put their procurement programs together. So they're 10, 15, 20 years out. We're happy to talk to them.
I would imagine you are. You wouldn't sign an exclusivity deal. Would you?
It depends on who it is and what they actually want. We would...
Well, as Buffett would say, "Well, let's see the terms."
Exactly.
Mark, please come back. When you strike it rich, we want to see this. And when you go public early next year, as I understand it. Thank you so much.
Yes, that's correct. First quarter. All right. Thank you, Liz.
Mark Smith, and the company is NioCorp. Not neo. That's a different company.
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