NioCorp Developments (CVE:NB)(OTCQX:NIOBF) says it has obtained approval to be eligibile for a loan guarantee from the Federal Republic of Germany, which will support its debt financing strategy to help develop its Elk Creek niobium project in Nebraska.
The approval, which represents the first of four required, is based on a signed offtake agreement with Germany-based ThyssenKrupp Metallurgical Products announced last year, under which ThyssenKrupp agreed to purchase about 50 percent of planned ferro-niobium production from Elk Creek for an initial 10 years.
The move no doubt shows that the project will contribute in securing strategic raw material supplies for Germany, NioCorp said.
"This in-principle eligibility approval for a loan guarantee by the Federal Republic of Germany continues to demonstrate a strong level of confidence in NioCorp and its Elk Creek project," said chief executive officer Mark Smith.
The company also said it has appointed Northcott Capital as its financial advisor to help with project debt financing for the advancement of Elk Creek, which is expected to reach the feasibility study stage later this year.
NioCorp is planning to complete project financing by late 2015 or early 2016.
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 Smith.
Shares of NioCorp rose 1.1 percent to 90 Canadian cents on Thursday.