NioCorp Developments (CVE:NB) (OTCQX:NIOBF) has been named the mining sector's top performing company in the 2015 TSX Venture 50, and says it has also received conditional approval to graduate to the bigger Toronto Stock Exchange.
The TSX Venture 50 calls out the top 10 companies listed on the exchange in each of the five major industry sectors: mining, oil and gas, technology & life sciences, diversified industries and clean technology. The companies are selected based on market cap growth, share price appreciation, trading volume and analyst coverage.
The niobium developer, whose shares surged 420 percent last year, said that not only was NioCorp's overall ranking the highest among mining companies, but its share price appreciation was also the largest percentage price increase of any TSX Venture 50 company across all five sectors.
NioCorp is developing its Elk Creek niobium project in Nebraska, which is expected to reach the feasibility study stage later this year. The mining company earlier this week announced that the indicated resources at the property more than tripled to 578.2 million kilograms from the prior report released last September, while average grade also climbed to 0.71%.
The newest estimate is on the back of a three phase infill drilling program completed last year, made up of more than 15,000 metres, or 18 holes, of drilling.
The promise of a high grade niobium supply in North America has already managed to secure NioCorp confidentiality agreements with top investment banks Morgan Stanley and Credit Suisse. The preliminary arrangement puts NioCorp in a leading position as the bankers are able to conduct their due diligence on the project while the company is busy finishing up the feasibility study.
Typically, a feasibility study has to be completed before companies can even sit down to have preliminary discussions with banks, only then beginning a due diligence process which can last up to nine months.
Indeed, the ore grades at the deposit are among the top three in the world, and the recovery rates promise to "reset the standard for what world class niobium recovery is going to be," according to CEO Mark Smith. The average grade NioCorp is looking at is 0.7% or above, placing it solidly as the third richest niobium ore deposit in the world, behind CBMM and Anglo American, which both operate in Brazil.
The development of the Elk Creek mine comes amid a solid backdrop, with a strong compound annual growth rate of 10 percent for global niobium demand from 2000 to 2010, and even more robust growth forecast in the near and longer term. The U.S. currently imports 100 percent of its niobium needs, and NioCorp, with its mine in Nebraska, plans to become the first US supplier, taking up about 5 to 7 percent of the global market with targeted production of 7,500 metric tonnes per year.
The Elk Creek deposit also remains open at depth, as well as to the northwest and southeast, suggesting further upside forNioCorp.
"Over the past year, NioCorp has made significant progress in advancing our resource estimate, and driving the Elk Creek project towards becoming the world's next producing Niobium mine," said Smith in a statement released late Wednesday.
"Our graduation to the TSX is an important step as we broaden our investor audiences both in Canada and abroad."
The company said that final approval of its TSX listing is subject to meeting certain requirements of the exchange, as well as raising an additional $1 million in capital, plans for which have already been agreed upon.
In a separate statement, NioCorp announced Mackie Research Capital has agreed to buy 1.33 million special warrants at a price of 75 cents apiece, on a bought deal basis, raising proceeds of $1.0 million. The underwriter also has the option to increase the size of the offering by up to 15 percent.
The new funds, said NioCorp, will be used for metallurgical studies at Elk Creek and to satisfy the main condition of a listing on the Toronto Stock Exchange. The transaction is expected to close around February 23rd.