NioCorp Developments Ltd. (NB) Earnings Call Transcript

Good morning, everyone. Good afternoon for our friends in Europe. Welcome to this NioCorp January 19, 2024, Management Update Webcast. I'm Jim Sims, Corporate Communications Officer for NioCorp. Before we begin today's live webcast, just a few reminders. The slides from today's presentation and the audio and video of this call are being broadcast live over the web. A video recording of the broadcast is being made, and a replay will be available on the NioCorp website later today were located at www.niocorp.com. [Operator Instructions] All right. Let's get started. In our presentation today, we will be making forward-looking statements. Viewers are cautioned not to place undue reliance on such forward-looking information statements, and investors are urged to read carefully the risks set forth in the company's public filings on SEDAR at www.sedar.com and at the U.S. Securities and Exchange Commission located at www.sec.com. We'll have 3 presenters in our webcast today. First is Mark Smith, Chairman and CEO of NioCorp Development; Scott Honan, who was the Chief Operating Officer of NioCorp and who is the President of our Elk Creek Resources Corporation operating subsidiary and our special guest, Dr. Andrew Matheson, who's President and Founder of Nanoscale Powders, LLC. Here's what we'll go over today. We'll talk about the year 2023 in review and the progress the company made during that year. We'll go over the demonstration plant results that we have achieved over the last 1.5 years. Talk about our scandium commercialization effort that we've had underway for some time. We'll give everyone an update on our 2024 feasibility study update that we're working on. We'll talk about an aluminum-scandium master alloy initiative. We'll give a little update for what we see coming in 2024, and then we'll turn to Q&A from our viewers. So let's start this morning with Mark Smith, our CEO and Executive Chairman. Mark, you have the floor.

All right. Thank you, Jim, and good day, everybody. We'll follow -- what I'll present today will basically follow the shareholder letter that we set out. But again, happy to answer any additional questions at the end of today's presentation. But you can see here a video of the demonstration plant and the work, some of the work has been completed there. This is really a robust demonstration plant, and we've learned a tremendous amount from this. One of the things that we've learned is that we can process much more efficiently by changing that process flow diagram to what we have in this demonstration plant. We can process these minerals with fewer steps and as an example, we will likely not require acid regeneration at the plant anymore. So we'll be able to eliminate a sulfuric acid plant as an example. We do get better product recovery rates. Scott will cover this in more detail later but those higher recovery rates really bring in the potential for much stronger or higher revenue, lower costs and better overall economics for the project. We will have some additional byproducts as a result of this new process flow diagram, and we'll speak to that today during Scott's presentation. The plant is now making a much higher purity titanium product and that's in response to multiple prospective customers that we're talking to about this product right now. So some really positive developments as a result of this demonstration plant work. Next slide, Jim. With the demonstration plant work completed, we now have some new products that are now possible, namely the magnetic rare earth oxides we will be producing neodymium praseodymium oxide, dysprosium oxide and terbium oxide. We're finalizing all of the technical work on that and the economic analysis of all of that, and we will make certain announcements -- definitive announcements later but this all looks very positive in management's view at this point in time. We're also making a much higher purity and getting a higher yield on niobium. This could be anywhere from 3% to 5% additional niobium production. And as we've mentioned before, getting much higher purity and we're getting much higher yield on the titanium indeed, over twice as much titanium that can be produced. And that's all -- remember, this higher yield for niobium and titanium and the production of rare earth is all coming from the same amount of ore being processed through our plant. So these are very positive economic potentials for the project. Moving on. EXIM, this process is proceeding well. Indeed, Jim and Scott and I were just out in Washington, D.C. this week had another face-to-face meeting with the EXIM team. And this follows up on the letter that they sent to us early last year, indicating an interest to fund debt for this project of up to $800 million. We filed our application for that process in June of 2023. And then in October, very early October 2023, we had been advised by EXIM that we had made it through what they call TRC 1 which is transaction review committee Level 1. That's a very important approval level. You don't get the opportunity to go to TRC 2, 3 or get final approval from their Board of Directors unless you get through TRC 1. So that was a milestone for the company, one that we're very proud of and we are pushing the rest of this as we go here. The EXIM team that's been assigned to this, we're really quite happy with. There were multiple personnel issues that we had to deal with an EXIM on the front end where people were working from home or they left the agency and went to work for another government agency. So we got through all of those, and I really, really am happy with the team that EXIM has assigned to us. These are long-term EXIM members. They're very experienced at what they do, and it's really been a pleasure to deal with them because we get right to the point on so many of the issues that you have to deal with, with loans of this size. The EXIM Chairperson, Reta Jo Lewis, I had the pleasure of meeting personally, and we really hit it off well. I really enjoyed my opportunity to meet her. She is just absolutely full of energy, and she is out there now. She's the one that's touting the need for EXIM to support domestic critical mineral projects and she is really focused on the NioCorp project. I couldn't be happier about that. I have another opportunity to see her probably in early April, which I look forward to. Obviously, if we -- as we develop the EXIM Bank debt program, and that really shows the anchor financing for this project that then allows much better interest, much higher levels of interest for other parties to then come into the project. I think we have that level of interest, I don't want to sound discouraging about that. But there are a lot of investors that sit and wait on the sidelines until certain cornerstone events occur. And certainly, the EXIM financing will be one of those cornerstone events. So a lot of work going into this one. We're now in the process of hiring the third-party due diligence experts that EXIM will manage, and that process is getting kicked off as we speak. So very good news on all fronts there. Next slide. As we have also publicly announced, we have entered into rare earth offtake term sheet with Stellantis, the third largest automobile production company in the world, something that we're exceptionally proud of for a number of reasons. Number one, they're very interested in all of our rare earths, and they're interested in the rare earth offtake for a significant period of time, which goes to help the debt negotiations with EXIM. So very positive. And the Stellantis credit rating, obviously, is one that EXIM thinks very highly of. In addition to that, Stellantis is very interested in making a strategic investment into NioCorp. And we are moving those discussions along. I think they're going very positively. We just have to keep in mind that when we're dealing with Stellantis, it is a very, very large company with multiple processes that you have to go through. We're certainly familiar with those processes, having worked for Chevron and Union Oil Company in California in our prior careers. So we respect and admire those processes. But it does take a long time for a large company get through those decision-making efforts versus how fast we can make decisions in NioCorp. So we're trying to do everything the right way. And we're really proud of the fact that Stellantis is a company that has a goal of carbon net zero by 2038. They have looked at our project every possible way that they can, and they seem to be very happy, as we are, with the ability of our project to minimize any environmental impacts as a result of our mining projects. So this is a really hand-in-glove situation at this point in time. And although we do note here the third bullet point that we're -- our target is to conclude this process in the first half of 2024. It's really being quite conservative because of the massive governance and processes that you have to go through with Stellantis. We are certainly pushing to make this happen as early in the year as absolutely possible. But I think it's safe to say that between the EXIM and the Stellantis efforts, those are our 2 highest priorities. If those 2 issues come up in front of our things to do for the day, those are always placed as the #1 priorities that we work on. And that's because they have the potential to create just a massive cornerstone position for us on the financing of this project. And we know because other parties have let us know that when those issues are further developed, they are going to be there and ready to support the remainder of the financing that will be needed. So very interesting times. Very hard work to get through all of this. But I think we have the right team, and I think we're dealing with the right parties at this point in time. Next slide. Covered this a little bit already in that we continue to keep numbers and numbers of equity and debt potential partners up to date on everything that we're doing in the company including actions that we're undertaking at EXIM and with Stellantis. But I want to make sure that we all remember that we've got the German government untied loan guarantee program that can also play a very key role in any additional debt that we may need. So as we talked about multiple times before, we have Plan A, Plan B and C, D and E to back up anything that doesn't come in as high as what we want it to. And I feel very confident that we've got the total program. We just have to hit certain cornerstone activities and milestones here that will make this all come together, I think, pretty eloquently. Next slide. So as far as targets and goals go for NioCorp for 2024, here's what I have on my list. I would absolutely like to finish that EXIM debt financing. We've set some timing goals with EXIM that they have agreed to so far. And those would all allow us to achieve the debt financing within 2024. So we will undertake everything in our control to make that happen. The Stellantis offtake agreement and their strategic investment in the company, also would like to see that in 2024. Again, that's a very high priority for us. We're having weekly team calls between the 2 companies, and we have multiple one-off calls with them to advance certain things of this effort as well. So it's a massive effort that we're undertaking right now. But they're offtake agreements. We still have 25% of our ferroniobium or niobium to provide to potential offtakers. That's available. We have multiple discussions going on with that 25%. The titanium has really become an exciting part of our project as well. With Scott's and his team's improvements to the recovery of that -- of the yield of that titanium, we've got twice as much titanium to sell, and it does sell for twice the sales price that it used to sell for about 1 year, 1.5 years ago. So the titanium is high on our list. And you'll hear Scott talk about the fact that we're producing samples for the multiple customers that are interested in this. And I would also like to add that the multiple customers that are indicating interest, all individually would like 100% of what we're going to produce out of this mine. So this is a very high demand element right now, largely because of the Ukraine-Russian conflict. Updated feasibility study, absolutely have to get that done, a very high priority for Scott. He will provide a lot more detail on that as he gets into his presentation, and then obviously, when we get -- as I talked about moments ago, as we get the EXIM financing and the Stellantis offtake and financing, we'll want to fill the remaining gap for financing with equity or other supplemental debt financing, and we've got multiple parties that are expressing interest and waiting on the sidelines for the cornerstone of EXIM and Stellantis to be announced. Finally, construction early works. And I think we're all looking forward to that. That will be a very exciting day when we break ground for the first time and invite all of our very committed and dedicated shareholders out to that event. I look forward to shaking everybody's hand personally that day. So with that, I think I'll turn it over to Scott at this point in time. Scott, floor is yours.

Scott, you're on.

Thank you, Mark. Thanks, Jim. I wanted to start my remarks today just by giving the audience a bit more color on our demonstration plant and what we've done there and what the outcomes have been. One of the challenges we have is that as we're dealing with the deposit at Elk Creek that's completely underground. When we design something like a demonstration plant, we have limited amount of material to work with. We have to assemble bulk samples from our drill core inventory. And so we have to necessarily operate this at a fairly small scale. So the plant is designed to run at about 10 kilograms an hour of ore. When we build our commercial plant, we'll be running at 115 tons an hour. That's not to say that we do anything different than the commercial plant. This is a small-scale version of the commercial plant. It has all the bits and pieces that you would find in the commercial plant, it's just smaller. And you can see on the slide here a picture of some of our solvent extraction unit operations at the demonstration plant. Those little squares of solvent extraction cells you see are about the size of a shoebox. So we're running at small scale, but again, it's a duplicate of the commercial plant. We wanted to do this plant for 2 reasons. One, there are some potential improvements that were identified in our previous technical work that we wanted to investigate. And the other thing we needed to do was to establish our ability to recover rares and recover those at commercial qualities. One of the things that occurred as we went down the path of the demonstration plant is we really changed our front-end approach to process a new ore. And what's interesting to note is that we have a very high extraction of the rares into our initial leach look are on the order of 95% and that's absolutely world class. And it points to some advantages in our ability to process our ore, which has a couple of different metallurgical components to it. So we're very proud of that result. And again, just in terms of our focus in the rares, there are 17 rares. Some people count them differently than that, they're all present in our ore. But our focus is very narrow. We want to produce the magnetic rares. That's where the value is. That's where the demand is going to come from, and that's what we want to make at the Elk Creek project. Next, Jim. So after all the effort we put into the demonstration plant, we have this little table that shows you what the results look like. And on the left, in yellow you can see the product suite from our feasibility study in 2022 showing the product forms and recoveries. And on the right is what we've achieved in the demonstration plant using continuous operation and what we've built. And you can see we've got an increase in niobium recovery, prospectively a higher purity product as well. Substantial increase in the recovery of titanium, more than double, and we're producing it -- we would be producing it in a form that is a higher value and certainly has a few more outlets than the previous product, which was just titanium dioxide. Scandium in the rares, have recoveries greater than 92%. And we say greater than just because we do a certain amount of work in the demonstration plant to establish what those recoveries will be. It's a conservatively low number. There is opportunity with additional work to improve on the results that you see here. But I think for the audience here, it's helpful to put these results in context because these recovery numbers you see on the right are absolutely world class. And if you were to look at the recovery at the Niobec niobium mine up in the province of Quebec, their recovery to ferroniobium product is 56%. When you look at the rare earth recovery, just to a physical concentrate at the Mountain Pass mine in California. That is just taking the ore, and physically separating the bastnäsite mineral and putting it into a physical concentrate. That recovery is 69%. And after that physical concentrate is produced, it has to be shipped to China for further extraction and recovery in the individual rare products so there's some additional losses there. So I hope everyone can understand just by listening to those comparisons that we are doing very well in our process at the demonstration plant, and this will translate to good results when we build the commercial plant. The big milestone that we achieved, and I'm just going to say one more thing on the prior slide, Jim, is we've established these metallurgical recoveries. We are still operating the demonstration plant. And we're doing that for a couple of things. We believe there's some further optimization and improvement we can make to our solvent extraction. We are running certainly the niobium and titanium operations to produce product samples for prospective offtakers. And in that context, we have one very serious prospective customer for niobium and 3 very serious prospective customers for titanium. And the other thing is that there are financing partners that are interested in the demonstration plant and want to visit it and see it as part of their due diligence. So we're keeping the demonstration plant available for those kind of things. I'll say one more thing about the demonstration plant because I get pretty excited when I talk about it, given the results that we have here. And that is one thing you don't see on a table like this is all that our team has learned in terms of how to operate these different unit operations. As I say, we operate continuously. It's on a small scale, but we learned a lot about the start-up of those unit operations, the shutdown of those operations, what happens in continuous operation, what the kinetics look like? We've got a wealth of information now that is directly applicable to the commercial plant, and we will take those learnings and apply it when we build and start to commission that commercial plant. This is the flow sheet that we've come up with now. And what I want to convey here is that we've got something here that's very efficient. We've integrated rare earth recovery operations into a flow sheet that was originally designed to produce niobium, scandium, titanium. And I'm just going to hit a few high points here on what the flow sheet has achieved. So we start out with a calcining operation. That's really just heating up the ore to about 1,000 degrees. And that breaks down all of the carbonate minerals in the ore. And we do that because, number one, it reduces the mass and number two, it gets rid of those carbonate minerals, which would otherwise consume acid later in the circuit. The second thing we do is what's called an ammonium chloride leach, and we use the gas from the first stage calcining to remove the magnesium and calcium that's in the ore. This is a large portion of the ore that's coming into the front end. And again, calcium and magnesium are acid consumers. So we've done 2 things here in the first 2 steps. We've reduced the mass that we're dealing with considerably, and we've removed most of the acid consumers. As Mark mentioned earlier, this is the kind of thing that gets us away from having a large acid plant on site. We've really reduced our acid consumption. What comes out of the ammonium chloride circuit is leached with hydrochloric acid that gets us the rare [earth] solution. And you can see there's a little thing called Rare Earth extraction on the right-hand side. We use a solvent extraction step there just to grab all of the rare side of solution and concentrate them. We then go through a releach exercise with those rare earths and that releach exercise is, again, just intended to concentrate those [rare earth] solution before we get to the bottom right step where we actually separate the rares and the scandium from each other, and we produce our 3 rare earth products and our scandium product. What's left over after hydrochloric acid leaching is the niobium and titanium. And we take that through an acid baking step. We mix it with sulfuric acid and heat it up. That puts all of the niobium and titanium in the solution. We then mix that with water to extract the niobium and titanium, and we recover the niobium and titanium together in a hydrolysis step. The last thing at the bottom of the slide here is a chlorination step where we actually get the niobium and the titanium and there's a little bit of iron as well separated from each other. The intent there is to produce a titanium chloride product, a niobium product and then an iron that would go to waste. But the important thing here is that this bottom part of the flow sheet in particular, gets us a very nice separation between niobium and titanium. And it's the reason why we have the good recoveries that you saw on the previous slide. I wanted to just give some credit to our demonstration plant team. These are folks that worked very long hours up at our plant in the province of Quebec. This is not the whole team, but just a portion of them. And what they have there is a high purity rare earth oxalate they made from processing our ore. These folks take a lot of pride in their work. They worked very hard. I'd also like to recognize my colleague, Rick Sixberry, hydrometallurgist with 40 years' experience. And he spent a lot of time with these folks up at the demonstration plant and they've been working together to get to everyone the results that we saw on the prior slide. Getting to a point where we've got good niobium and titanium recovery has been a long road, and we have to actually build a custom-made testing system to chlorinate the niobium and titanium and get them separated from each other. And the first iteration of this, what we call the Chlorinator Mark 1 is shown on the left-hand side of the slide here. So in that slide, you'll see a chlorinator. We put the niobium and titanium mixture together there. We heat it up to 900 degrees and react it with chlorine that turns the niobium, titanium and iron into chlorides in the gas phase. That then goes through a series of condensers, each have a different temperature. And the idea is that at each temperature, a fraction of those gaseous chlorine will condense iron first, niobium second, titanium third. And you can see in the pictures here, some of the results that we've been able to achieve from this very simple system. We were able to get the different chlorides separated from each other. And you can see in the picture on the right there that the titanium is making a little bit of gas there. That's a typical reaction, titanium chloride is fairly reactive in the presence of oxygen and water. So when we do these chlorination tests, we do it in a system that is completely isolated from any oxygen or water. We have to take some serious steps to make sure that water and oxygen don't get into the system. Last picture there is just some nice niobium chloride crystals that were produced from this first stage chlorinator. So this is a good start to getting a good niobium, titanium separation. It certainly showed us that the reactions work, the kinetics were fast and we were able to get a separation between the different elements. But there is a further need for us to produce higher purity materials that we can share as prospective product samples with our prospective offtakers. And that led us to the next slide which is the Mark II chlorinator. And really, what we're trying to do here is address some of the shortcomings in the first system. We needed a lot more controls. We needed a way to run more continuously to produce larger quantity samples. And again, this is a custom-built system that our colleagues at L3 process developments came up with. We just started running this towards the end of 2023. We've got some initial results for our niobium product showing that we've got something that's now 75% niobium, 7% iron and just a little bit of titanium. And that, to put it in context, is a really good result for a first run on this system. And as with most things that we run at the demonstration plant on a continuous basis, as we run the system, we learn a lot about the reactions and the chemistry that's happening and that we expect that as we do some more runs here in the first part of 2024, we'll get correspondingly better results as we continue to operate. And again, the overall objective here is to make some product samples for our prospective offtakers. So very, very pleased with these results so far. I also wanted to spend a minute just on our scandium initiative. And I think what I'd like everyone to think about here is scandium is not like a conventional commodity. If I was making a copper concentrate, it will be very simple. I'd sign a contract with a smelter and we make and sell copper concentrate. Scandium is a little bit different. People understand the properties that scandium can impart to an aluminum alloy. There's some very, very interesting and positive properties that can happen there but there hasn't been enough supply in the world for widespread adoption. So our approach here has been not only to try and sell the scandium we're going to make but also to go to individual users of aluminum alloys, point out the advantages of scandium-aluminum formulations and get them to think about how our scandium could help them solve particular problems that they might have with an existing alloy formulation. Of course, to do that, we have to make master alloy and we're working with Dr. Matheson to make that happen. And Dr. Matheson's got a process that he's developed, which is really a 3-step process. We can take the scandium that we'll make from the Elk Creek Project. The first step is to reduce that from its oxide or chloride form to a metal. Then we have to heat it up to get rid of the reductant that we've used and then we have to take that scandium metal and combine it in a master alloy melt with aluminum. We made a couple of ingots there, and I've got some pictures on the screen that shows some of the steps that we use to make these master alloy ingots. Picture #1 is just a picture of scandium that's reduced in Dr. Matheson's process of some metallic scandium. Picture 2 is the little crucible we use and what you see is the crucible filled with pieces of aluminum. We combine picture #1 and picture #2 and put it into a little induction furnace which is picture #3, and we heat it up to 1,000 degrees. Let the phases mixed together and let the scandium combine with the aluminum. We then pour that combination into the mold, which is in a picture 4, and that gives us a hunk of scandium-aluminum master alloy, which you can see in Picture 5. So we've done this successfully in a contract facility in Pennsylvania. And really, our objective with this technology now is to scale it up. We want to -- we've started at 1 kilogram. We want to go up to 10 kilograms, perhaps 100 kilograms and also work on trying to make this process more continuous. At the same time, we're working on this master alloy. We're doing work in parallel looking at other prospective ways to make master alloy but this is an important work for NioCorp in that making master alloy really opens doors for us in terms of our ability to sell scandium and it allows us really to develop a market, develop outlets for our prospective production before that production takes place. Just a couple of examples here of things that are on our radar screen in terms of aluminum-scandium applications. The picture on the left there is what's known as a cast node. So it's an aluminum casting that's used to attach an electric vehicle battery box to the rest of the car. And when you think about what that cast node has to do, it has to be certainly strong because the battery box is heavy. It's going to be exposed to the elements, so it needs to be corrosion resistant. And it's nice to be made in a casting, which is a cheap and easy way to make a part for a car. The other thing that we need from this cast node is if you look at that picture closely, you can see the weld beads that attach the node to the battery box. So we need something that's weldable. And in terms of an aluminum alloy with scandium in it, it really checks all those boxes. You get something that's strong, you get something that's corrosion-resistant and you get something that's imminently weldable. I want to talk a bit about the picture on the right as well. That's some car bumpers. And I got very interested in car bumpers just a few years ago when I was teaching my teenage daughter to drive. You become very appreciative of the properties of a bumper in that context. And what do you need in a bumper? You need several unique engineering properties. You need strength. You also need a property known as elongation. So when there's an impact, you want that bumper to absorb the energy, you want it to bend, but you want it to bend a lot before it fails. And again, scandium is a really good addition to a formulation for a bumper because a lot of times, when you make an alloy for this particular application, when you get good elongation properties, you don't have very good strength. And what we're finding is if we add a little bit of scandium to that alloy, we're able to maintain the really good elongation property and at the same time, make that bumper very strong. So again, our objective here is we're looking for partners, and we're talking to a lot of people right now that have problems with existing alloys, existing engineering issues and we can sell them aluminum-scandium as a cost-effective solution to those problems. I wanted to round up my technical remarks here this morning, just with something that I think about on the side, and it's all of the other technical work that's going on. And as a mineral process engineer, I think a lot about mass balance. So what's coming in the front end of the plant, what's coming out the back end. And you can see here a representation of what's happening at the Elk Creek Project. We have ore coming in. We have a number of processing steps. And out of those processing steps, we get products, of course, but we also get waste streams. And those waste streams are the 3 that are shown in the center of the slide, calcium magnesium carbonate, iron oxide and leach residue. We can take a lot of those materials and we can put them with -- mix them with cement and fly ash and pump them back into our underground mine to fill the voids that we create by mining. But that may not be all we can do with those materials. And we're talking to a couple of entities right now. One of which could probably take our calcium magnesium carbonate and there's a picture of that calcium magnesium carbonate in the bottom left hand of the slide. You can see it's a pretty white material. The color there is a reflection of the purity of that material. It's about 99% pure. And that was a nice outcome we got from the demonstration plant that I wanted to highlight. At that purity, there are prospective customers for that material. Similarly, we're making an iron oxide that, again, is close to 99% purity. It looks a lot like the mineral hematite and there's a picture in the bottom left there. And again, we're making a material here that prospectively has enough purity that we could find someone as an offtaker for that material. And when I think about a stretch goal for the technical team and myself, it would be really nice if we got to a point where we were selling enough of these waste materials such that between the sales and what's going underground as a backfill material, we actually have nothing going into our tailings and pounding. And again, that's a stretch goal, but this is things we're working on in the background to make the project even better than it is today. Last thing I wanted to address is the technical report or the next technical report. Mark made it pretty clear how important that is to our activities here in 2024. And the first thing about the technical report is that especially at the feasibility study level, you have to meet some pretty strict targets before you can issue a report like that. A lot of times, I'll reference the AACE Class 3 cost estimates. It's just a particular reporting standard. And your cost estimate has to be at the level of plus or minus 15% of accuracy and no more than 10% contingency. So that is why we have to do a lot of engineering work before we issue a new technical report because we have to go and we have to get all the cost information. We have to do a lot of pricing work, a lot of engineering work to get everything designed to meet those accuracy and contingency targets. The other thing that happens that everyone should be aware of is that as soon as you change the recovery number or the prospective value of one of your products, it changes the value of every block in the mineral resource and mineral reserve. There are millions of blocks in these models. And that then changes your mine plan and everything that you're going to do underground. So it's not a simple situation where you can just change one thing and reissue a report. When you change recoveries, when you change the value of prospective products, you have to go back to the beginning and you have to do all that work again. So what have we done so far on this next technical report? Well, we've -- for those who've certainly been around the site, they've probably seen some of the geotechnical and hydrogeological work that we've done in 2023. That work is continuing. We have updated some elements of the technical report model. So we've got an update to the resource and reserve, and we've got an updated cost model. But until we complete the entirety of the work, we really can't release those in a public context. What remains for us to do is to complete work on characterization of the waste streams that have come out of the demonstration plant. That work should start shortly. We do have to ensure that those materials can be used as pace tailings to backfill our underground mine and there's some testing associated with that. But really, the biggest part is to make sure we update all the costing in terms of CapEx and OpEx and put together an economic model using current pricing and current engineering. And that's really going to be the focus here in 2024 is to get that work done, get that economic model updated and get an update out that we can share in the public domain. I think that's it for me. And with that, I'll turn things over to Dr. Matheson.

Thank you, Scott. Good morning, everybody, and good afternoon, everyone in Europe. It's a pleasure to be here. I'm very happy to be able to introduce Nanoscale Powders' exclusive development work with NioCorp dedicated to producing scandium-aluminum alloys. I'd like to say a few words about why it's important for scandium producers to be able to make and sell alloys. And I'll describe Nanoscale process as well as other approaches that one can take the production of scandium-aluminum alloys. Briefly, Nanoscale ourselves -- Nanoscale is a Delaware LLC. I'm 1 of 3 founders, and I serve as a CEO. We have a patent process covered by a number of U.S. and other issued patents in different jurisdictions that protect the process, product and applications that broadly speaking, involve the metallothermic reduction of input raw materials. Besides the work we're doing with NioCorp, we have developments with other companies in areas such as the production of rare earth metals, production of other new energy materials and we are actively exploring the production of titanium and refractory materials such as niobium carbide. So although our work today is focused from our side, exclusively with NioCorp in the production of scandium-aluminum alloys, there are other potential areas of cooperation between the companies that are on the horizon. So let me say a few things about scandium and the rationale for NioCorp to produce certain alloys. So first of all, the majority of scandium as is consumed today is -- the best of my understanding, consumed in solid oxide fuel cells produced by Bloom Energy, which is a California company. Bloom has never said anything public about its scandium use but I'm confident that they obtain a significant fraction of their scandium from producers in China. And then they tightly control the processing of that scandium raw material into the final form that they need for their process. So they maintain active control of every step of the manufacturing. And by doing so, they are able to purchase scandium oxide as a commodity and drive pricing of that down to its marginal cost. Bloom is unusual in that they're the only producer today of any consequence of these forms of solid oxide fuel cells. Besides fuel cells, Scandium is very promising, as Scott mentioned earlier, as a reinforcing and corrosion improving agent in small amounts added to aluminum. It's a niche market today because of a small supply of scandium but increasingly, as aluminum consumers see the scandium supply increasing and new producers entering the field, there is a volume of work actively exploring improvements to scandium alloys that will drive down the overall cost of the alloy, which obviously broadens the market application substantially and, at the same time, preserves the value-adding performance that scandium brings. Now this is particularly true in a range of large ground transportation markets, including trains, trucks and particularly electric vehicles. And Scott mentioned something about that earlier. The key issue in all of these applications for metal is to provide the scandium in usable form. The aluminum is quite fragmented. There isn't the same degree of coordination and control Bloom shows for its business. And so anyone producing scandium needs to provide the product in a way that can be used efficiently and adopted expeditiously by the market. And so the opportunity for NioCorp is to produce a master alloy, which brings it close to its customers, helps understand what's going on in the downstream markets -- in downstream demand segments. And by producing an engineered product rather than a simple commodity, offers the potential to reduce volatility in margins and also to obtain higher margins than would be possible through single commodity sale. So let me say a little bit about the various competing technologies. Jim, if you could proceed to the next page. Thank you. So there are a range of ways to make master alloys. These are 4 common approaches. Electrolysis is of these 4 is probably the most advanced because it borrows from the established technique of producing rare earth metals that's been developed in China, and the chemistry of scandium compounds is actually quite similar to that of rare earths. The challenges of electrolysis are related to process safety and environmental compliance. And the production of alloys through electrolysis is limited to relatively low levels of scandium. Nonetheless, this is a viable technique. It is used. It's probably the predominant means of making scandium alloys today along with direct reduction. And it may well be that this is a long-term viable solution for a class of low scandium products that serve certain markets. The higher scandium content processes, such as the FFC process that was developed in Cambridge in the 1990s in the U.K., or Nanoscale process for that matter, typically do not have the environmental issues that are presented by electrolysis or direct reduction. But every process right now is -- should be considered an early stage because the overall market is small. It's maybe 10 tonnes of scandium metal total in aluminum. And so there's room for development and improvement in all fronts. Next slide, please, Jim. So this graphic is just a first graph of us actually making some scandium-aluminum or making some scandium metal in a lab setup in Pennsylvania. And this is Nanoscale's process. So we use -- we reduced scandium halides typically with sodium. We then take the scandium metal that we've produced and disperse into aluminum. There are no air emissions. The only byproduct is solid materials that would either go that may be landfill, but depending upon the approach we take, may also find an outlet in the battery chemical supply chain for battery cathode materials. The process we are developing can produce high concentrations of scandium alloys and also pure scandium. That's an area of active interest for us. It may also be that the chlorination work at NioCorp facilitates some of the things we're doing. We're currently at the kilogram scale. Just to emphasize, Nanoscale is working exclusively with NioCorp. NioCorp is not precluded from working with other companies to develop parallel technologies and we're perfectly comfortable as Nanoscale with that. We think it's a prudent thing to do. Last slide, please, Jim. So our outlook for next steps. So we're currently, as Scott mentioned earlier, producing kilogram scaling, that's which we are producing -- reproducibly. We've begun the development of high scandium alloys and scandium metal, which is starting now. And our goal for 2024 is to scale the master alloy ingot production to a minimum of 10 kilograms. In parallel, our goal for this year is to produce kilogram scale scandium metal, and we are furthering the development of raw material preparation as they feed for the process. And one last point, which I think is becoming increasingly important in a dividing world, all this work will be carried out exclusively in the U.S. Thank you.

Thank you, Andrew. Excellent, fascinating with all the work you're doing. Now let's turn to questions from our audience. And to post your question -- we had a number of investors who sent their questions in early, which is always helpful. Thank you for that. But to post your question today, please submit that via the Q&A tool in the Teams app. Alternatively, you can send your question to me at jim.sims@niocorp.com. We'll try to get to everyone's questions. But as I mentioned before, for those, we don't have time to take on this webcast, we'll certainly try to get back to you with answers as we can. Let me start with a few that came in early. The first one I got was from Hank. A lot of us had high hopes that the SPAC deal would have delivered some real funding to the company to move us forward. What happened there and what are our next steps? I think Mark, we'll have you do that one. Mark, you're on mute.

Sorry. My apologies. Very good question. This is something that I addressed in the shareholder letter a couple of weeks ago. It's something that we were all disappointed in at the end of the day. But I think a little bit of history here is worthwhile. Number one, we went into that transaction very skeptical because SPAC transactions at the time were starting to tail off in terms of positive results. We worked with the GX II management team. We worked with some investment bankers. Really felt at the end of the day that we had something very unique, very, very special as part of undertaking this destack and decided to go ahead and move forward with it. We met with literally hundreds of potential investors and existing investors in the GX II, SPAC making every effort possible to make sure that people understood the NioCorp story. They understood the economics of this project as they stood without rare earth and really told the story for NioCorp and it was a fun story to tell. And I think GX II participating with us in all those meetings really got to the point where they could tell the story as well, and they were believers in this story as well. So we undertook that effort. I think we really had everything quite prepared for success on that SPAC, including receiving the EXIM letter of interest for $800 million in financing roughly 2 weeks before the SPAC company shareholders voted whether they were going to stay in or not. That was an unbelievable -- we had no idea that was coming and the timing was certainly perfect for that SPAC effort. Unfortunately, the Thursday before the Monday vote that all the SPAC shareholders were allowed to make on whether they were going to stay in the company or not, the Thursday before, the Silicon Valley Bank went under, and that caused a great deal of turmoil in the markets to say the least. And then that Sunday before the Monday vote, Signature Bank also announced that they were in trouble and going under as well. So this really created a sense of financial institution failure and how big was that going to be and how massive was this problem going to be. And it really became a risk off situation in the market. And the timing was just extremely unfortunate but I firmly believe that was a large part of why that SPAC failed. Now in terms of getting money into the company, clearly, we were all disappointed in that, that it could have provided the vast majority of the equity that we needed to finance the project. On the other hand, there were some positive things. We are listed in trading on the NASDAQ right now, very, very different. The liquidity of our shares has drastically increased. These are all positive things as we go out and look for equity investors to fund this project. We have 2 members on our board who are GX II management representatives. I couldn't be happier having Mike Maselli, and Dean Kehler on our board. They bring a tremendous amount of experience and contacts in the financial industry to what we're doing and they have opened up doors that we simply didn't have access to before, which just makes the diversity of potential investors that much better which is a good thing. So very disappointing, Hank. I was very disappointed as well. Some very unfortunate events that happened right before that vote became official. So our apologies for all the effort that was undertaken there. This team at NioCorp, I couldn't be as proud -- more proud at the end of the day, this is a very small group of close-knit people, and everybody just worked their tails off to make this successful. I wish that Silicon Valley Bank and Signature Bank would have waited a week, maybe that would have made a difference. I don't know. But anyway, hopefully, that helps explain some of the background on that deal.

Thanks, Mark. I got 2 questions from Leon, so I'll segment those, but they're along with same line. So number one, what are scandium prices in today's market and Andrew, I think I may have you take that, if you don't mind.

No, not all. It's not a particularly transparent market. There aren't posted prices. I think the most relevant indicator would be the price at which one can purchase scandium master alloys, which are typically 2%. And from that price, you can infer the price of the scandium. Today, Western companies are offering or based upon things you can read in public domain have been selling in last -- recent times, products at an implied scandium price of $3,000 to $5,000 a kilogram.

Okay. And the follow-on question from Leon, Scott, I'll give to you, which is, will the revenue from the prospective sale of scandium-aluminum ingots be included in the next feasibility study?

Thanks, Jim. I think the consideration there is -- has to do with how you define your business for a technical report. So if you look at a big aluminum company, they'll produce technical reports for their front-end aluminum mines and initial processing, but they don't include their downstream business. And in our view, what we're doing with master alloy qualifies as a downstream business. So it's unlikely that we would include that in a technical report as it is a downstream business. The advantage, though, is that as a downstream business, I think we can talk a little bit more freely about what we're doing in terms of scandium-aluminum master alloys than we could if it was in the technical report.