NioCorp Developments shares advance as broker HC Wainright notes community support for the project

Shares in NioCorp Developments Ltd (TSE:NB) added over 5% in Toronto as broker HC Wainright issued an upbeat note after a townhall meeting in Nebraska about the Elk Creek project.

Around 450 investors, neighbours of the super-alloys project and community members attended and interest appeared genuine, said analyst Heiko Ihle.

“The overall tone of the Q&A was overwhelmingly positive. There were also no protesters or other disruptive forces at the event, which was a stark contrast to other community meetings we have attended in the past..,” it said.

The broker noted Elk Creek was expected to create 1,232 full-time jobs during the peak of construction, which should decrease to about 466 permanent full-time positions once the site is in operation.

“Many of these jobs are well-paid high-skill positions with an expected payroll of about $835 million over the initial 20-year mine life. Management also highlighted an estimated tax revenue of over $493 million and initial capital of about $1.0 billion before the mine and its associated processing facility ever enter production, in turn creating demand for housing, stores, services and other indirect labor demand drivers,” it added.

The broker repeated a ‘buy’ rating but slightly lowered the price target to C$1.10 from C$1.20 per share – solel;y attributable to recent weakness in the US dollar compared with the Canadian dollar, it said.

A feasibility study in July put the projected life of mine (LOM) at 32 years, with gross LOM revenue put at US$17.6bn, with an operating margin of US$12.2bn.

It will produce around 143,824 tonnes of payable niobium, 3,237 tonnes of scandium trioxide (Sc2O3), and 359,128 tonnes of titanium dioxide (TiO2).

The pre-tax net present value (NPV) was put at US$2.3bn at an 8% discount rate, with an internal rate of return (IRR) of 24.3%.

Niocorp shares today added 5.36% to stand at 59 Canadian cents.

Story by ProactiveInvestors