NioCorp lines up Traxys as potential buyer for Elk Creek’s planned output

NioCorp Developments (NASDAQ: NB) says it has signed up commodity trader Traxys to buy and market the remaining planned output from its US-based critical minerals project.

On Thursday, the parties signed a non-binding agreement that positions NioCorp to sell out the rest of the scheduled minerals output from its Elk Creek project in Nebraska over an initial term of 10 years.

The company already had contracts in place for 75% of its planned ferroniobium production — 25% from Traxys and 50% from ThyssenKrupp — and 12% of scandium oxide production, entirely from Traxys, over that period.

The new agreement would cover the remaining 25% of the ferroniobium production, on a take-or-pay basis, and the remaining scandium, on a best-efforts basis. It would also include all other planned products such as titanium dioxide or rare earth elements.

In addition, Traxys will serve as the marketing intermediary for other product sales, including certain third-party commercial agreements identified by NioCorp.

The arrangement, said NioCorp, would make Traxys the “exclusive offtake and marketing partner” for all planned production from the Elk Creek project during the first 10 years of operation, with the exception of the ferroniobium allocated to ThyssenKrupp.

Along with the offtake and marketing arrangement, Traxys would also make an equity investment of up to $30 million in NioCorp. Terms of the investment were not disclosed.

Shares of NioCorp traded 0.8% lower after an initial pop above $5 during the early trading hours. The Colorado-based company has a market capitalization of over $700 million.

Key to unlock financing

“Upon execution of definitive agreements with Traxys, we believe that this initiative moves NioCorp closer to securing full project financing for the Elk Creek project,” Mark Smith, CEO and executive chairman of NioCorp, stated in a press release on Thursday.

Over the past two years, the company has been working with the US Export-Import Bank (EXIM) to secure up to $800 million in debt financing to fund what it sees as a key project for building America’s critical minerals supply chain.

According to NioCorp, the site is host to the highest-grade niobium resource in North America and one of the world’s largest scandium resources. It also has the second-largest indicated rare earth resource in the US.

In the press release, Smith noted that a definitive deal with Traxys — a key participant in the Trump administration’s recent $12 billion initiative known as Project Vault — “would address one of the key remaining due diligence items” in the EXIM of the financing package. The full loan amount would cover most of the Elk Creek project’s initial costs, which is projected to be $1.1 billion.

“The Elk Creek project represents a key future source of critical minerals for US and allied markets,” said Mark Kristoff, CEO of Traxys, noting that the US currently has no primary domestic production of niobium or scandium and has limited production of the magnetic rare earths neodymium and praseodymium.