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NioCorp Secures 15-Year Traxys Deal to Cover 100% of Planned Elk Creek Output

BullishHigh impact
NB$3.28 −2.67%

NioCorp Developments Ltd. (NB) signed a 15-year take-or-pay sales contract with Traxys for 50% of its planned ferroniobium output. The company also designated Traxys as its exclusive marketing agent for scandium, titanium, and rare earth elements. Combined with an existing 10-year agreement with ThyssenKrupp for the remaining 50% of planned ferroniobium, 100% of planned production from the Elk Creek project is now under commercial agreements.

Securing complete output coverage helps reduce financial risk for the pre-production critical minerals project as NioCorp seeks project debt financing. The take-or-pay structure provides revenue and volume guarantees that support lenders and key partners, including supporting due diligence for a proposed debt package under review by EXIM. Additionally, Traxys may potentially make an optional equity investment of up to $30 million, though this equity commitment remains uncommitted. All final terms depend on securing project financing and completing construction.

Investors will look for progress on securing a binding financing commitment from EXIM, as well as the formal closing of project debt funding. Reaching subsequent construction milestones will be critical to turning these commercial agreements into operational revenue. Shares of NioCorp Developments Ltd. traded down 2.67% to $3.28 today following the news.

Key points

  • NioCorp Developments Ltd. signed a 15-year take-or-pay agreement with Traxys for 50% of planned ferroniobium production.
  • Traxys was granted exclusive marketing rights for scandium, titanium, and rare earth elements from the Elk Creek project.
  • With ThyssenKrupp holding a 10-year deal for the other 50% of ferroniobium, 100% of planned output is now under contract.
  • Traxys has an option for a potential equity investment of up to $30 million, which is currently uncommitted.
  • The agreements support due diligence for a proposed EXIM debt package and depend on project financing and completion.

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Questions and answers

What deal did NioCorp sign with Traxys?

NioCorp signed a 15-year take-or-pay agreement with Traxys for 50% of planned ferroniobium and granted Traxys exclusive marketing rights for scandium, titanium, and rare earth elements from the Elk Creek project.

How much of NioCorp's Elk Creek output is now under agreement?

100% of planned output from the Elk Creek project is now under commercial agreements, split between Traxys and an existing 10-year deal with ThyssenKrupp.

Will Traxys invest equity into NioCorp?

Traxys has an option for a potential equity investment of up to $30 million, though the investment is not yet committed and depends on financing and project completion.