The prospects of NioCorp Developments Ltd (OTCMKTS: NIOBF) delivering stronger investment returns as well as accelerated cash flows at lower risk from the Elk Creek project explains why the stock has taken a flight in recent weeks. After a rollercoaster first quarter, depicted by wild price swings, the stock has once again started surging.
NioCorp Price Analysis
A breach of the $0.46 resistance level has opened the door for the stock to make a run for this year highs, as the upward momentum continues to gather steam. The confirmation that the company has closed a C$1.2 million non-brokered private placement means the company is well positioned to bring its flagship project to fruition.Investor sentiments in the stock have also inched higher in view of recent developments with the stock resuming its uptrend that began in the second half of last year. Given that the stock has been trading in a tight trading range of between $0.60 and $0.40 mark, the next stop after the recent spike appears to be the $0.60 handle. NIOBF Daily ChartThe underlying long-term uptrend supports a rally to the higher end of the tight trading range. A rally followed by a close above the $0.60 technical level, should pave the way for the stock to surge even higher and register a new 52-week high.Conversely, a breach of the $0.44 mark could result in the stock plunging to the lower end of the trading range at $0.40. Above the support level, the stock remains well positioned to continue edging higher. However, a breach of the $0.40 support level could result in the stock plunging back to 52-week lows.
What Does NioCorp Do?
NioCorp is an exploration and development company pursuing mineral deposits in North America. The company’s flagship project is the Elk Creek in Nebraska, where exploration works for niobium, scandium, and titanium is ongoing.
Elk Creek Project Mining Prospects
NioCorp has started breaking out from the lower end of the tight trading range on announcing a new design for an underground mine at the Elk Creek Superalloy Materials Project. The company has also unveiled a new Feasibility study for the project, which completes a critical milestone and de-risks the project for project financing.The new feasibility study indicates that the Elk Creek project has the potential to deliver higher Net Present Value as well as stronger investment returns and accelerated cash flows. Thanks to a new design of the underground mine, NioCorp is projecting longer mine life as well as higher production in the first 10 years of operation and a reduction in execution risk.The proposed mining plan utilizes artificial ground freezing technology to target higher-grade ore for initial mining. Tonnage in the Projects Probable Mineral Reserve thanks to the new design has increased by 14.7% while tonnage in Indicated Mineral Resources is up by 101.5%.The new mine plan should accelerate revenue generation and deliver increased environmental performance in the process. The new design also accelerates ongoing works paving the way for completion of detailed engineering on the surface processing facilities.
“Environmental impacts and associated permitting risks are reduced further from the previous 2017 FS, including the utilization of artificial ground freezing technologies for mine shaft sinking, onsite water treatment that eliminates process water discharge, and the elimination of previous plans to discharge excess water into the Missouri River,” NioCorp in a statement.
Revenue Projections
With the new mining design Elk Creek project, NioCorp is projecting revenues of as much as $20 Billion over Life of Mine. The company also expects cumulative revenue of as much as $2.9 billion over five years of mining operations commencing. Cumulative EBITDA could come in at $1.9 billion.NioCorp has since moved to close a C$1.2 million non-brokered private placement as it looks to raise additional capital for working capital and general corporate purposes.
Bottom Line
NioCorp introducing a new mining design for its flagship Elk Creek project with the potential of increasing operating cash flow by 23.6% explains renewed investor interest in the stock.The prospects of the company generating up to $2.9 billion in the first five years of the Elk Creek mine operation is another milestone that underscores long term prospects.That said the stock looks set to continue bottoming out from the lower end of the tight trading range as investors take note of Elk Creek's tremendous potential.We will be updating our subscribers as soon as we know more. For the latest updates on NIOBF, sign up below!Disclosure: We have no position in NIOBF and have not been compensated for this article.
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