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NioCorp inks offtake with ThyssenKrupp Metallurgical, obtains credibility and support

NioCorp Developments (CVE:NB)(OTCQX:NIOBF) has signed an offtake agreement with ThyssenKrupp Metallurgical Products, which has agreed to purchase about 3,750 metric tons, or roughly 50 percent, of the company's planned ferro-niobium production from its Elk Creek deposit for an initial 10-year term. 

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NioCorp Developments (CVE:NB)(OTCQX:NIOBF) has signed an offtake agreement with ThyssenKrupp Metallurgical Products, which has agreed to purchase about 3,750 metric tons, or roughly 50 percent, of the company's planned ferro-niobium production from its Elk Creek deposit for an initial 10-year term. 

The deal includes an option to extend beyond the initial 10 years, according to NioCorp's statement released earlier Monday.

It also expects the company will obtain project financing and all necessary approvals to construct a mine at Elk Creek. 

The property is the highest grade undeveloped niobium deposit in North America, discovered by Molycorp back in the late 1960s. 

NioCorp is in the process of developing the deposit, and recently raised $10.6 million in a special warrant financing for continued infill drilling, pilot plant testing, and ultimately, the finalization of its full feasibility study for Elk Creek. It also last week unveiled the final phase II drilling results from the property, which it said continue to be "extremely encouraging". 

Niobium is mainly used in the form of ferro-niobium to produce high strength, low alloy steel, for use in automotive, structural and pipeline applications, and demand is seen increasing as the U.S. currently imports 100% of its niobium needs.  

Germany-based Thyssen Krupp is one of the world's leading commodity trading companies, and is part of the Business Area Materials Services, a global materials distributor and service provider with 500 branches in 44 countries.           

The German company will act as NioCorp's exclusive sales agent of its production in Europe, the company said, with a specific amount to be sold to Germany. 

Both companies will work closely together to support NioCorp's project financing, including debt, equity financing and government loan options, said NioCorp

"We are extremely pleased to have one of the world's leading commodity trading company as a significant customer," said chief executive officer Mark Smith.

"This agreement is obviously conditional on the company obtaining project financing to build a mine at Elk Creek. However, having the agreement in place and discussing debt and equity financing possibilities with ThyssenKrupp Metallurgical Products, clearly enhances NioCorp's prospects of achieving those milestones.

"We caution that achieving this is not assured at this time, as we have not concluded the feasibility stage; the process commenced in the spring of this year and is expected to conclude in the first half of 2015."

The CEO added, however, that signing this deal provides it with the confidence that it is pursuing the "right strategic plan". 

The company said it has also granted ThyssenKrupp a warrant to acquire 8.57 million common shares of NioCorp at a price of 67 Canadian cents, resulting in proceeds of US$5.0 million should all the warrants be exercised. 

Quick facts: NioCorp Developments Ltd.

Price: 0.82 CAD

TSX:NB
Market: TSX
Market Cap: $195.25 m
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