NioCorp Developments Ltd. (NB) Earnings Call Transcript

Welcome to the Elk Creek mine and processing facility site, everyone. Thanks for coming today. Just a couple of quick administrative notes before we get started. I'm Jim Sims, I'm with NioCorp. You all have your PPE on, your personal protective gear, please keep that on for your entire visit today. We are an operating -- we are in mining and construction, and we are regulated by [ MSHA ]. So we're very careful about safety. That's job number one. We're going to have a short ceremony, and then we're going to transfer our folks up to the mine overlook site, so we'll be able to see the construction. We gave the guys the day off today down there. Normally, there'd be a lot of construction, big trucks going. So for safety reasons, you won't have any of that. But please, everyone take -- keep your eyes peeled for moving vehicles at all times. When we go over to the -- after the program, I'll announce we're going to move to the signing ceremony, which we'll do here, and then we're going to do another one down at the overlook. For our elected officials, we've got 3 vans here. We're going to load you in those vans and drive you down. It's about a 60-second drive. For members of the news media, we'll help you go down in the van as well so you can get set up. And then for the rest of us, you can walk down, it's about a 5-minute walk. And since we don't have rain today, it should be actually a pleasant walk. Other than that, we're not going to have the media availability for members of the press will be done down at the mine oversight, not here. So we'll do the program quickly, move down and then have fun down there. And with that, let me introduce our master of ceremonies Mark Smith, Chairman and CEO of NioCorp.

Thank you, Jim, and thank you all from the bottom of my heart for being here today. It's been a long time, but we're getting there. So anyway, welcome to the Elk Creek Critical Minerals mine. And I'm going to tell you a little bit about that, but we have some pretty important guests here that we want to introduce first. And as Jim mentioned, this is an active mine and construction site. And so sorry for the inconvenience of hard hats and safety glasses and reflective gear and steel toed boots, but that's our life. And that's how we live it here. And safety is a value for our company. It's not a goal. It's a value for our company. It is the #1 thing in our mind at all times. In fact, I have a card here that any time I see anything, I don't like safety-wise on this site, I put that card down, all the work stops, and we get it sorted out. That's how important safety is out here. And we need everybody to keep their eyes open on that at all times. So we do have some very, very important guests here today. I can't believe the turnout that we've had for that. And let me introduce a few of them. What I'll ask for you to do is to hold your applause because I'll give each of them a chance to say a few words as well, and then we can give them a proper applause, and it won't be competitive at that point. So first of all, we're very, very proud to have our host in the best sense of the word and one of our strongest supporters, and that's Governor Jim Pillen. Thank you, Governor, for being here today. We also have Nebraska's Senior Senator, Deb Fischer, a steady voice for a strong national defense and a steadfast supporter of our project. Thank you, Senator. Senator Pete Ricketts, a tireless advocate for American supply chain security and another ardent supporter of our mine, both as Senator and as a former 2-term Governor. We've met many times. Congressman Adrian Smith, who represents this district and the people of Johnson County. For the record, while we share the last name, we're not related, but I would welcome him into my family at any time, Adrian. From Washington, we have our U.S. Secretary of Energy, Chris Wright, an extraordinarily effective member of President Trump's Cabinet. Thank you, Secretary, for being here. And we also have Chairman of the Export-Import Bank of the United States, John Jovanovic. John, thank you for being here. Without whose support and commitment to help bringing this project into reality, we wouldn't be here today. So thank you and your team for what you do. We're also grateful to our local state senator, Bob Hallstrom. Bob, can you raise your hand. There he is. Bob's been a tremendous advocate for the project as well. And we have a number of other local and county officials here today. But I'd also like to call out just a couple of other individuals who I think are very worthy of being called out. So Mark Kristoff with Traxys. Traxys, as we announced yesterday, is our partner in this effort. Traxys will be buying what we make here and selling it to the rest of the world. We have Jim Smith. Jim, can you raise your hand? Jim Smith is with us. [ Doug Durack ], where is Doug? There he is. And I got it right this time, Doug, instead of Greg. Lavon Heidemann, could you raise your hand? There he is back there. We have Greg and Joyce Kruger as well. Raise your hands, Greg and Joyce there. They are -- and I would be remiss if I didn't note Tony Fulton, who is a prior State Senator, Tax Commissioner, and is on the NioCorp Board of Directors today. And finally, at least, but last, but not least, we have Michael Johnson from JPMorgan, Vice Chairman, and has been a real good friend for our project as well. JPMorgan does a great job helping us through the EXIM process and other ways as well. So that's who we have. I'm going to make a few minor comments, and then we'll let the really important people speak here. So right beneath our feet here is 1 of the most remarkable, critical mineral deposits in North America. From this single source, we will be producing 8 different critical mineral products. First of all is niobium. It makes steel stronger and lighter. It's used in bridges, pipelines, vehicles and innumerable defense systems. However, we import 100% of the niobium that we need in this country today. Second is scandium, which makes aluminum alloys lighter and stronger for aerospace and defense. It's an emerging material for the advanced electronics behind artificial, or perhaps more appropriately stated today, super intelligence. And we also import 100% of that critical mineral into the U.S. today. Titanium is the backbone of modern aircraft, as we all know, in military hardware, and we import more than 85% of what we need for that mineral today. And the rare earths we plan to produce are essential to magnets inside the electric motors, drones guided munitions. And it's a supply chain that China overwhelmingly dominates today. We import virtually 100% of the many different rare earths we need, including dysprosium and terbium, which we plan to make great here in Nebraska. Elk Creek is designed to produce all of these from mine to finished product. We're not sending it off to China to be processed. We're processing it right here. And that's rare anywhere in the world, and it's exactly what America needs today. For Nebraska, this means creating and supporting about 1,200 construction jobs and approximately 500 permanent high-skilled permanent jobs over the 40-year mine life of this project. I'd like to say, it's really not a project to us anymore. It's a generational job-creating powerhouse is what it's going to be, and it's going to make Johnson County a different place, a better place. It means new opportunity for Johnson County and the communities across the state, with billions of dollars of investment coming to Nebraska over this mine's long life. For the nation, it means a reliable domestic source of material our economy and our military simply cannot do without. And it's going to be produced to American standards by American workers, on American soil, and that feels really good to say. None of this happens alone. It takes partners at every level of government who understand that critical mineral security is national security. So let me introduce our first partner in this journey. It's fitting that we begin with a man who knows what it means to build something from the ground up in Nebraska. He's a veterinarian, a farmer and an entrepreneur who grew a family business into 1 of the state's leading agricultural enterprises. He served on the University of Nebraska as a regent and some years ago, I understand, actually patrolled the secondary for the [ Corn Huskers ]. That was a new 1 for me, Jim. Since taking office, he's worked relentlessly to make Nebraska a place where people want to invest and build, where they want to raise their families. And he's been a strong supporter of what we're doing here at Elk Creek. So ladies and gentlemen, please join me in welcoming the Governor of the great state of Nebraska, Jim Pillen.

Well, thank you, a gigantic congratulations. About 6 years ago, I met Scott Honan out here and took me around and said there's a little farm over here. We invested, I don't know, Scott, it was $8 million, $10 million. Then I knew it was really serious stuff. I want to give a shout out to Senator Fischer and Senator Ricketts. They've -- I'm the rookie in this deal. I've only been around for 4 years. They've been around putting a lot into this. And of course, Congressman Smith, tireless advocates to make this happen. So a big shout out there. One is certainly welcome. Mr. Chairman, you come from good family. So welcome. I got to spend time with your father in [ Logis ] last week, and grateful for your family's commitment. And then, of course, Secretary Wright. We got to have a little bit of fun, but I've had the privilege to learn some things from Secretary Wright in the last 20 months. And pretty gifted human being. And I said, "Gee whiz, where did you learn all this stuff about energy and then the secondary?" So Jim, when I was young, I kind of like to look up at the stars and think about fusion and everything. I said, "What the hell kind of books did you read when you hear kid." That's not what I was exposed to. We're incredibly grateful for you to be here. Grateful for you to answer the call when President Trump called because, as you said, it's really, really important. We fix the energy crisis in the United States of America that we get rid of these ideology ideas and just fix the fundamental basics so that we get power and that we lead the world in power. So incredibly grateful for your leadership and saying yes. So I think that's really important. And then the NioCorp team. It's the Nebraska way, 16 years, extraordinary grit, determination, nobody gave up. And then, of course, the belief of everybody in the Elk Creek area that just really, really important piece. And think about Nebraska if I can brag just a minute. Gosh, in Nebraska, it's the people. It's our extraordinary water. We have the largest, most sustainable underground aquifer in the Western Hemisphere. We're #1 in cattle production, significant in food security. We're #1 in the highest value ethanol now because we capture our carbon in 18 of our 24 plants. We just are embarking on making energy from a kernel of corn coming through livestock, making renewable natural gas. And there'll be opportunities to do hundreds of these in the state of Nebraska. And now we're the home of the most extraordinary rare earth mineral deposit in North America. And I think that maybe lastly, what I want to say besides a shout out to everybody here, but an incredible, incredible thank you to the President of the United States that -- he was not duped that we have to get the supply chain solved in this country. We have got to recognize what it's like if we're doing business with foreign adversaries. We have to fix it. We have to make sure that we have all these under control. This is a step -- a big step in the right direction. We have lots of work ahead to do, but I'm incredibly proud to be a small part of it and the grit and determination of all the people in the front row to make it happen. And everybody from your team, Mark, is quite impressive. So congratulations.

We've had a very special item that we want to hand out to all of our guests today. It's an acrylic piece. Of course, it's a little bit of advertising. It does say NioCorp on it. But this is actually a piece of ore from 1 of our core drill holes. And we want every 1 of our special visitors to take 1 of these, put it in your office, use it to hold down our loan papers, Mr. Chairman. Because they're going to be big. But we would like to make sure we hand out each 1 of those. So Governor, here is yours.

Thank you.

Thank you, Governor. Our next speaker is a [ Sand Hills ] cattle rancher from Valentine who served in the Nebraska legislature before going to the U.S. Senate. As a senior member of the Armed Services and Appropriations Committees, she has been 1 of the Senate's most respected voices on national defense. And she knows our military is only as strong as the materials it can be built from. Please welcome Nebraska's Senior Senator, Deb Fischer.

Thank you very much. Good afternoon, Mr. Secretary. Welcome to Nebraska. We are so happy you are here for a wonderful, wonderful event that we're having here in the Elk Creek area today. Mr. Chairman, welcome to you as well. This is a big deal for our state, but it is a huge deal for our country. Always good to be with my friend, Jim Pillen, Governor of Nebraska. We have my colleague and great partner in the U.S. Senate, Pete Ricketts. And my dear friend and good colleague, he's been there forever. In the House, he's on the Ways and Means Committee, a mentor to the rest of the delegation, and we certainly enjoy having Adrian here. I'm going to give a shout out to a really good friend of mine. Where is Lavon? Stand up, Lavon. Because I think Lavon Heidemann -- Lavon Heidemann and I served in the Nebraska legislature together. He was Chair of Appropriations Committee. And I think it was in 2010 when Lavon started talking about rare minerals and stuff. And I'm busy worried about how we're going to build roads and bridges and take care of our water in the state of Nebraska, my focus. And besides taking care of the state budget, Lavon was 1 of the first -- the first who mentioned this area and the potential in this area and what we would see and benefit from as a state because of that. So Lavon, wonderful, wonderful to see you today. This is a very, very exciting milestone that we're all here to share today. And as it's been said, our country depends on these critical minerals for everything from advanced manufacturing to our military equipment and our national security. Every day, we rely on these minerals to power our lives. They're from our iPhones to our TVs, to our cars, and lots more. And yet, we continue to rely on these critical minerals coming from foreign countries. That's not a good thing. That is not a good thing. That dependence, it creates vulnerabilities for our economy and especially for our national security as well. As a senior member of the Senate Armed Services Committee, I have been advocating for bringing critical mineral production and processing back to the United States. So what a thrill it is to see this in Nebraska. I was extremely proud to help secure $10 million federal investment in the domestic production of aluminum scandium alloys, and that's exactly what's going to be produced right here in Elk Creek. Through the National Defense Authorization Act, I pushed the department to examine the need for American production of these critical minerals and to use existing federal programs to encourage that production. NioCorp is also working to develop a domestic source of the niobium -- I didn't read those books either at night -- and titanium, among other rare earth elements. These minerals are essential to our defense industrial base, our aerospace industry and American manufacturing. This project also represents an extraordinary economic opportunity for rural Nebraska with the potential to support thousands of American jobs and entered -- and really to generate some long-term economic growth across this region. I couldn't be more pleased to see the Trump administration recognizing the importance of this project to America's economic and national security. Today's letter signing marks another important step for NioCorp as they work to continue to get that federal financing review process going. Of course, none of this progress would be possible without the commitment of the people here in Elk Creek. For years, local leaders, landowners, community members and NioCorp's team have worked together to move this project forward. Their dedication, it reflects the determination, the cooperation and the work ethic that defines our great state. Nebraska has long been a leader in national security through the critical work that is done at [ Stratcom ] and at [ Offed ] Air Force Base. And we're also leading in securing America's energy independence. So today, as we showcase how Nebraska will help secure the resources that America needs, we also celebrate the new opportunities that we are creating for the next generation of Nebraskans. I am so excited for what lies ahead. And I am also excited and thrilled to be able to look forward as this project continues to grow. Thank you very much.

Thank you, Senator Fischer. Our next speaker saw early what Elk Creek could mean for Nebraska as our former 2-term governor. Now in the United States Senate, including on the Foreign Relations and Banking Committees, he's 1 of Washington's clearest voices on the threat China poses, including its grip on critical minerals, our economy and military and what we all depend on. So please help me in welcoming Senator Pete Ricketts.

Preparation for war is the surest guarantee of peace. Theodore Roosevelt said those words. And while I'm a huge fan of our 26th President, he did not invent that saying. It actually goes back to ancient Roman times, where [ Brigette ] said, [ Sets Pathum Pablo ]. The concept carried through [ in class woods ]. The idea is simple. The simplest way to avoid a conflict is by being strong. President Reagan knew that, too. We live in a very dangerous world. We can see it. [ A rod ]. The largest state sponsor of terrorism continues to pursue nuclear weapons. The dictator Putin has launched a war of aggression in Europe that has lasted now over 4 years. And communist China, the dictator there, Xi Jinping, wants to replace us as the world's superpower. And he's aggressively putting pressure our allies such as Japan and the Philippines. It's a dangerous world. And as my senior Senator just mentioned, we cannot be reliant on our chief adversary in the world, communist China, for things that are critical for our defense. And that's why this project is so important. Because establishing secure supply lines on things such as niobium and scandium, titanium, magnetic rare earths and processing them here is vital. Because what we see in the world is even when China doesn't mine these, they process over 80% of them. Now if you go back 20 years, we actually used to do this. And then we stopped. We've got to get back to the point where we have these available here in our country. And this project here is a great first example of how we are doing this. It is a win-win-win. It's a win for the community of Elk Creek. Mark was talking about all the great jobs that are going to be here. The construction jobs, certainly, we see it right now, with the 500 jobs that are being great paying jobs that will go on for the next 40 years. We think about all the investment will come to Johnson County and how that will create more prosperity, allow the families here to be able to send their kids to school, go to that family vacation, buy a house. To be grateful to state of Nebraska as it adds to our overall state's economy. And it's going to be vital for our defense. Niobium, helping make steel and super allies stronger. This goes into armored vehicles, naval vessels, drones, jet engine turbines. Scandium, which goes into aerospace and defense materials. We must mine and process that here. And that's why this is such an important process and why Chairman Jovanovic and Secretary Wright, we're glad that you are here to recognize that and especially your support to fast-tracking this project to be able to make sure we get it done. When I was governor, I recommended this project to the White House because of its importance. And now as Senator, I've introduced a bill to actually help the EXIM Bank have more flexibility when our adversary countries like communist China started dumping on the market to put competitors out of business. My bill will help with that [ CTEP ] program that he's got, the China and Transformational Export Program, give them more flexibility and also add things such as semiconductors and medical supplies, which we also need to make sure that we have secure supply lines here in the United States. This is a vital project. I'm so proud that Nebraska is part of it. This is something that's important for our country, for our state and for the community here at Elk Creek and Johnson County. So I want to thank everybody who's involved with it. I appreciate Mark, all the great work you and your team have done at NioCorp. I want to give a special shout out to Tony Fulton, who sits on the Board and actually was my tax commissioner when I was governor. But he was 1 of the people that first clued me in on how important this was. And then, of course, all the team that is working on this. And of course, the great support it continues to have from Governor Pillen, Senator Fischer, Congressman Smith. This is a team effort. Team America, but Team America can win. When we put our minds to it, and that's what you see here with this project. Thank you all very much for coming here today to help see the continuation of this process. We're going to work very hard to make sure that we bring this to a conclusion. Thank you.