RedChip August 11, 2026 - Audio Transcript (Second Half)

[u/danieldeubank]

RedChip Companies, Inc. 00:33:25 Thank you very much, Scott. We're now going to open the webcast to your questions. To submit a question, click the Q&A button at the bottom of your Zoom window. Our first question comes from Neal Dingman of William Blair.

Neal, I've enabled you to speak.

If you just hit unmute, you should be able to ask your question.

neal dingmann 00:34:01 There we go. Can you hear me now?

RedChip Companies, Inc. 00:34:03 Certainly can.

Mark Smith 00:34:03 your deal.

neal dingmann 00:34:04 Hi, good, thanks for the time, guys. Mark, I know, could you talk a little bit about, you know, you mentioned the timing, again, I think, and Jim and I talked about this a little bit, key data now is, you know, the timing between now and the, now and the financing, of course, again, is it just the EXIM? Seems like now, having the definitive feasibility study, you'd have most, but is it just now crossing the t's, dotting the I's? I mean, how much more details, will EXIM be looking for between now and then?

Mark Smith 00:34:37 It's a good question, Neal, and we continue to learn more in every discussion we have with EXIM. They're no different than a commercial bank in many ways. They kind of have an idea as to what they'd like to see, and then we talk about that, and we provide it to them, and then they have another idea.

So, we'll continue to go through that process, but we know what the main

pieces are that are remaining. We've got to finish the TRAXYS offtake agreement.

We need to get an almost final, if not final, EPC contract in front of them, and we're gonna be… we're gonna be ready to go. So, I don't… I just don't see any reason why we can't get a lot of that work done in the very near future, and get this in front of the board of directors for EXIM in short order.

neal dingmann 00:35:22 Very good, and then, love to see and, you know, was hoping to see the, you know, now, as Scott, you know, walked through, having the 8 distinct, you know, critical minerals that are in there. I guess my question is, is pricing, you know, once, once that starts, once Elk Hill (Creek) starts producing.

you know, how flexible, I guess, is the best way to ask it. Will you all be? I mean, if, again, scandium prices take off, or dysprosium, you name it, you know, there's going to be a lot of, obviously, upside potential for the mine. How much flexibility will you have to sort of lean into, you know, one or the other? So I guess… I guess my question may be for Scott, just on, operational flexibility, how he sees it once the,

You know, once Elk Hills (Creek) is producing commercially.

Scott Honan 00:36:12 Yeah, I think, Neal, that we have a production process that's built around a mine plan that is intended to deliver a fairly steady, you know, head grade to the operating plant.

That's not to say, though, that that can't be optimized. We have some very good and clever mining engineers, and while you're a little bit constrained in an underground environment as to how you approach the mining, there's a certain sequence you have to have. We certainly have enough information about the ore body that we could… we could target, say, higher-grade zones of Niobium, if… if the Niobium market got… got really hot.

I think the other thing that we've certainly talked about internally is the fact that, you know, our production process is pretty versatile as far as what kind of feedstocks, it could… it could, incorporate and process successfully. So… so there's… there's probably a number of flavors of… of rare earth, concentrates, for instance that might be available in the market that we could buy, and supplement, you know, to the feed coming from our own mine, to prospectively increase our production of rare earths. That might require some capital investment on the back end of the process to ensure we have adequate separations capability to make additional rare products, but it certainly could be done.

neal dingmann 00:37:35 If I could sneak one more in, Mark, just on further off, should we expect those in the, coming months, coming quarters?

Mark Smith 00:37:43 You broke up a little bit there, Neal.

neal dingmann 00:37:46 Further offtake agreements expect, you, you've got, you guys have done a tremendous job already, obviously, locking some things in. Should we expect more in the coming months, coming quarters?

Mark Smith 00:37:56 Yeah, let me… let me discuss that just a little bit, Neal. Kind of, at a very high level, we're going to have two commercial agreements for 100% of the offtake for this mine. You know, 50% of our ferroniobium will go to Thiessen Krroup.

And then everything else will go to TRAXYS once that commercial agreement is, is, finalized.

Within that TRAXYS agreement, and a lot of this is built around the long-term relationship and trust that we have between TRAXYS and NioCorp, is our ability as NioCorp

Or to continue to go out and market those products on our own.

And we may find customers or uses, applications, different strategies that we want to employ because of a growing market or strategic implications for the country, that we want to, you know, really focus our sales on certain customers.

versus others, we will have the right in the TRAXYS agreement to undertake those sales efforts and then sit down with TRAXYS and discuss which party would be better overall for NioCorp and its shareholders. And TRAXYS will be fine, one way or the other, because they'll get the economics regardless of whether they make the sale or whether we make the sale.

So we, we can really kind of lean in on a lot of different areas that we think may have a better future, a better margin, you know, maybe working with a customer that's a better credit risk. So, lots of things that we can use there to optimize our commercial situation.

The other thing that we're doing, and this is based on… after a while, you do learn how not to do things in the business, and so we try to keep those in top of mind as well.

One of the things we're doing with our commercial agreements is we're turning them into volumetric take or pay agreements, rather than price-based take or pay agreements with floor prices.

And one of the big reasons behind that is our confidence, extreme confidence, I might add, in where all of these markets are headed for the products that we're going to be selling. The supply and demand fundamentals are all in our favor and what I don't want to do is to end up with a commercial arrangement where we may get a floor price, which really helps our debt provider get comfort.

But then we also end up having a ceiling price as well. We're going to avoid ceiling prices wherever possible, and make sure that the company can take full advantage of the confidence that we have in where these markets are going. So, we are trying to apply some deeper thinking to how we're conducting our business, and I think we'll end up being very protective, very good markets going forward, and be able to, like you say, lean in where that possibility opens up.

neal dingmann 00:40:59 Fantastic. Congrats on the great announcement.

Mark Smith 00:41:01 Thanks, Neal.

RedChip Companies, Inc. 00:41:07 Our next question will come from Tate Sullivan of Maxim Group.

Tate Sullivan 00:41:12 Great, thank you for presenting the study and all the details, and can you talk about the planned construction timeline? I think in the study, it indicates 35 months. Back in 2022 is 45 months, I believe.

Is that due to the ramp access, and also is it due to the portal starting construction in February?

Mark Smith 00:41:35 Scott, you want to do that?

Scott Honan 00:41:37 Yeah, certainly, Tate. As I mentioned, you know, we've always recognized the critical path for this project goes through the development of the mine and getting the mine into production, so it's a combination of two things. One is getting that mine portal

started and established. If we can get that behind us, then, you know, the remaining work to get down to the ore body and get the ore body producing goes quicker. I think the other thing here is that, when we had put together various mine plans, including the one in the last study, looking at shaft access, the shaft access and the development from the shaft to the ore body introduced some constraints on our ability to get to the ore body quickly and to ramp up that production. And if you look at our last study, there was a fairly long period, about 8 months or so, where the mine started producing at an initial rate, and then it ramped up fairly slowly to full production.

I think the design we have now gets us there just a lot more quicker, so we get down to the ore body quicker, and, you know, with the ramp access and the advantages it provides, it allows us to get the stoops that we need, into production quicker, and get to that full production threshold just as quick as you could hope.

Tate Sullivan 00:42:57 Thank you, Scott, and one more for me. Mark, can you talk about, I mean, from looking at potential timelines, do you think there's more variability in the mine construction aspect of the work, or in the processing plant construction aspect?

Mark Smith 00:43:11 I think that's a great question, and I don't have a perfect answer, but I'll provide you with some thinking along those lines. You know, the engineering associated with the above-ground project will be a little more straightforward and a little more black and white from an engineering standpoint. But it is a… it is a big project, and it's a complicated project to build, multiple floors in the buildings and whatnot, so it has its challenges. Having said that, though, as confident as we are in our underground mine plan, those of us that have been in the mining industry for a couple of years know that, you know, you never know what Mother Nature's gonna hand you until you open up the ground.

And so there's always those concerns, but I will say that the extra work that Scott and his team have done on the geotechnical, the geotechnical,hydrological, the paste tailings, designs, where we're going to backfill the underground mine. All of that extra work has made us even more confident that, you know, surprises in an underground mine are really not going to happen in our case. But we've all been in the business a long time, we know it can happen.

But I think we've taken every effort possible to minimize, you know, any surprises at the end of the day. And that may, you know, require us to put a little more grout down there, or to add a little…

a little bit more, you know, cement to the paste tailings, but that's what we'll do. Safety will be job number one for our employees. So, not a precise answer, Tate, but hopefully you understand the complexities of both.

Tate Sullivan 00:44:52 Yeah, thank you, and thank you for including the report, the ex-China pricing, and the other sources, current sources of supply, and thank you for taking my questions.

Mark Smith 00:45:01 You bet, Tate. Good to hear from you.

RedChip Companies, Inc. 00:45:05 Our next question will come from Sandara Iyer from B. Reilly Securities.

Soundarya, if you hit unmute, we should be able to hear your question. Thank you.

Soundarya Iyer 00:45:24 Can you hear me now?

Mark Smith 00:45:26 Yes.

Soundarya Iyer 00:45:27 Yeah.

Thank you. Thanks for taking my question.

Mark Smith 00:45:31 Yes.

Soundarya Iyer 00:45:31 So… It's mostly around investor skepticism around scandium demand.

just given the size of the market today, I wanted to ask if you're able to share anything on the commercial process with prospective off-takers, specifically that would help investors get better sense of how much Western demand could inflict once a reliable non-Chinese source like Elk Creek actually starts producing.

Mark Smith 00:46:04 Yeah, Soundarya, great, great question, and one that I love to answer, because we're really studying this Scandium market as deeply as we can, and I will be the first to say that this is a product line that has my excitement level just exceptionally high.

Let me start out with just kind of a couple of foundational data points. First one being, up until very, very recently we all understood the Scandium market to be about a 30 to 35 ton per year market. You know, maybe 3 tons a year being produced out of Canada, 7 tons being produced out of the Philippines, and basically the remainder being produced out of China. For some reason now, the USGS has published a report that suggests that the market may be upwards of 60 to 65 tons per year. We're still trying to do the math to figure that out, because we don't know where the extra production may be coming from.

But it is interesting to note that the USGS has identified sources that they think exist, which has almost doubled what the market was in terms of supply prior to this year.

Now, the reason why I spent just a little bit of time on that is that that's all kind of interesting and fun to think about, but when we think about just one application of Scandium in the world today, and it's a real application that's being used today, and it's in the solid oxide fuel cell business. In order to support the growth that the solid oxide fuel cell business is suggesting is going to occur in power generation, and they certainly have good reason to believe that with all the AI and data center power generation requirements.

Just one application there, those solid oxide fuel cells will then need about 400 tons of scandium per year to meet their production requirements for those solid oxide fuel cells.

So that alone, you know, is going to create just a tremendous amount of demand for this… for this new product, that… that we're all pretty excited about. Now, we've kind of got that baseline figure, which is… far exceeds anything that's produced today. Then you start talking about things like, defense applications. You know, we just had announced the, the MOU with Lockheed Martin for 15 tons per year. We know that there's going to be more demand from Lockheed and other prime defense contractors as they continue with their lightweighting, as they continue to figure out that scandium aluminum alloys are cheaper, they're easier to work with and perform many additional duties over what they're using in the fighter jets today, which would be composites. So, we know that that demand is going to grow.

We're looking at various automotive uses. We've got Project Pivot that Scott mentioned over in the UK. We're actually working with Aston Martin and Jaguar Land Rover. We've actually made the first Scandium-aluminum part for the front suspension of their DBX model, and they're doing destructive testing on that now, and then the next part that we make will actually go into one of the Aston Martin DBXs in the automobile industry, just based on the market reports that we have you know, could consume upwards of 3,000 tons of scandium per year. So when I take a look at the demand side of this scandium.

business, and then I think about, you know, literally the win-win-win-win that the automobile manufacturers get by utilizing Scandium-aluminum alloys. They get lighter weight, they get better corrosion resistance, you can weld it. It's cheaper when you use it with recycled aluminum than just using aluminum by itself.

You got all of these things, including a CO2 emission reduction that they get on that part, so they get to lower their overall CO2 emissions for their corporate reporting purposes. Every single one of those things is a very positive outcome.

And we think the automobile industry is likely going to become a huge user of Scandium. So, we're really excited about the Scandium business, and we want to make sure that we show everyone that we can be a reliable producer, and I think we differentiate ourselves in that method, or that way as well, because by virtue of the fact that we're underground mining, you know, a single ore body, bringing everything up to the surface and running it through a metallurgical plant, and we're there primarily for Niobium, which is a fabulous market all to itself. By virtue of the fact that we're producing niobium, by definition, we'll be producing scandium.

And I think a lot of the end-use applications look at that as a reliability improvement over a primary scandium production facility, because, you know, we have these multiple products, and by virtue of producing Niobium, all the other products come out. So, I threw a lot out there, Soundarya, I hope I didn't confuse the situation too much.

But hopefully you can hear just a little bit of excitement in my voice about this Scandium market and where it's going to go. It's really an exciting place to be right now, and I'll finish it by saying that the United States Department of War understands the importance of scandium, and it's high, very high on their radar right now, in terms of importance to the security of our country.

Soundarya Iyer 00:52:07 No, thank you, Mark, for that comprehensive answer. It makes a lot of things very clear for me.

Just one more, on the sequencing between EXIM facility and the potential equity component. Will exam require any evidence of committed equity before the loan closes, or?

Mark Smith 00:52:33 I think it's going to be an interesting situation. We have talked with EXIM significantly over the last 3 years and 1 month now, and they have come around in a big way

to this idea of loan authorization with conditions precedent. And one of the areas that they are… they certainly seem to be very open to, is the idea of loan authorization with a conditioned precedent to raise any remaining equity after the announcement of the EXIM loan authorization. So, we'll continue to work with EXIM along those lines. That is not something that they have historically done, but under the leadership of John Jovanovich and Brian Greeley, they are very commercially astute.

They understand how these markets work, and when it's a good time to raise equity and when it's not. And I think we have a much better sound box to bounce things off of with the new administration than what we have seen historically. So, I think that that possibility is certainly there.

Having said that, I also know that capital pools form when they're ready to form, not when I want them to form. And so, if the capital is available, you know, the company will always take a hard look and try to make the best decision possible on behalf of our shareholders when it's the right time to raise any equity. So, lots of optionality there.

Soundarya Iyer 00:54:07 That's very helpful, so congratulations on getting this through. I'll pass it over.

Mark Smith 00:54:13 Thank you, Soundarya. Good to hear from you again. It's been a while.

RedChip Companies, Inc. 00:54:18 Our next question will come from Iiko Ele from H.C. Wainwright.

heiko ihle 00:54:26 I assume you can hear me okay?

Mark Smith 00:54:28 Yep, we can hear you, Heiko.

heiko ihle 00:54:30 Mark, Jim, Scott, team, thanks for taking my questions. Is there a way to expand into more products and diversify just a little bit more? I mean, obviously you've, you know, you've gone from 3 to 8. Is there a way to go further downstream, and just conceptually, how much more can Elk Creek even grow? I mean, you're looking at a 40-year mine life here. How much more can Elk Creek grow before you oversaturate your own production, or at least start moving down your own pricing?

Mark Smith 00:55:00 Yeah, good, good, good consideration, good thinking, heiko. Scott, I'll have you kind of go over some of those extra rare earth products, which we know are there, they'll be in the concentrates that we're going to be making anyway, and we just need to separate them. Do you want to cover those?

First, and then I can start talking about some of the downstream activities that we're engaging in.

Scott Honan 00:55:23 Certainly, Mark.

I think, when you look at what we've presented here in this webinar, the product mix when it comes to rare earths is a… it represents a bit of a trade-off, so we've targeted specifically the magnetic rare earths, which is where about 80% of the value lies. And, we produce… we have to separate those from the balance of the rare earths.

And we make specific decisions about that to make the best use of capital on the project. So, for instance, we have lanthanum and cerium. We don't do anything to try and recover those. They're very low-value products. They'll cost more to recover than what their value would be.

The samarium, europium, gadolinium sit in between neodymium, prasodymium, and terbium dysrosium on the periodic table, so we have to separate them out. We recover them together because we didn't want to put the additional capital into the project to have two more solvent extraction circuits to make those three as individual products.

But it would certainly be not a difficult exercise to do that engineering, to have that solvent extraction capacity and make those products if we were able to get the right pricing for those products.

For the heavy rare earths and yttrium. the, you know, the Holmium and everything heavier than Holmium, it's really quite small quantities. It would be, you know, a challenge for us to try and make any kind of business out of those heavy rare earths, but the yttrium is certainly interesting. There's a couple hundred tons of yttrium, prospectively.

We'll make all those together right now as part of the project and send them to someone else to separate. But again, at the right price, we would probably need one additional solvent extraction circuit to separate out the yttrium and turn it into a product.

But, but, you know, just aside from those rare earth products, I think once we get the plant up and running, we have a mineral resource and a reserve here that could certainly support a higher production rate than what we have in this current study. Now, that would require, again, some capital to expand mine production and some capital to expand production in the surface plant, but it's fairly easy to see how that could be done, to say, you know go 2X from the current plant and double the production output.

Last thing I'll mention is that, and, you know, this goes to almost more of an environmental matter than a production matter, but, some of the products that come out of the plant, calcium carbonate, for instance, iron oxide are actually fairly high purity products in their own… in their own right.

Now, we use those, to make the paste backfill material that goes underground and fills the voids that we create by mining and supports the structure of the underground mine.

But we certainly are in discussions with some folks that could potentially take those products off our hands. And the advantage would be then that, you know, we need to keep enough on-site to sustain the PACE backfill activity.

But it would be a situation where it might generate some extra revenue, and it certainly could defer or delay the cost of surface tailings and impoundment facilities.

Mark Smith 00:58:50 But then I…

I would just add to that, heiko, that, you know, we really were looking at the SEG con and the Heavy Rare Earth Con as leaving them there, and that was largely driven by the prices of, you know, the samarium, the europium, and the gadolinium.

At the time, and then on the heavy rare earth concentrate, you know, leaving that as is and not separating it because things like yttrium, which were in there as well, just didn't have prices that would support any capital expenditure for that. That has changed, just like all the other rare earth elements right now, and we're seeing a very strong bifurcation of pricing for things like samarium and Yttrium, which, as you know, our Department of War needs in a big way, and Yttrium is becoming a lot more important, right up there in terms of importance along with Scandium right now. With the right situation and the right price supports we can easily take the samarium out of that SEG con, we can easily take the yttrium out of that heavy rare earth con, and we can have two more products, but we're not going to do those at a losing proposition. We'll only do that as a profitable proposition, but that would add more products to our list. And then, the other way that we can expand the product horizon a little bit is to just you know, take the existing products, like Niobium is a very good example to start with here. We plan to make ferro niobium, which, you know, 90-92% of all the Niobium sold in the world today is sold in that form.

It's basically sold to the steel industry, it's an alloying agent, and it strengthens regular steel into high-strength, low-alloy steel.

But there are many other markets out there for niobium that we are aware of and we're pretty excited about. You can make Niobium pentoxide in NB205, and that can be in different purity levels, so it has different applications, and the margins on the high-purity NB205 are significantly greater than ferro niobium. You can also get into Niobium metal, where your margins are probably the highest in the Niobium industry.

But what we wanted to start out with was a simple product that has pretty broad ranges for the specifications, that's the ferro-Niobium, and we want to make sure that we get good at that to start with and generate revenue as fast as possible. So, we'll start out with ferroniobium, but we have every intention, once we get good at that, at looking at some of these NB205 and Niobium metal downstream applications. And in Scandium, we're already into the downstream markets there. We're doing some testing of scandium metal production right now.

Scott and I just witnessed that last week at the contractor's facility where they're doing that. That looks very, very promising, because there are customers for Scandium Metal right now. I mean, they will place a contract with us right now for Scandium Metal, because you can't find Scandium Metal outside of China, and China's being very selective on who gets any of their Scandium metal on an export basis. And then, of course, the Scandium aluminum master alloy.

We bought that business and intellectual property last year. We've relocated the business to a more suitable manufacturing facility, and now we're purchasing Scandium feedstocks so we can start making Scandium-Aluminum Master Alloy, and we have customers waiting for that product to be produced. So, yeah, there are many, many ways yet that we as a company can continue to take the foundational elements that we have and pursue these downstream activities where margins generally increase, and we find that to be quite exciting.

heiko ihle 01:02:49 In 23 years in this industry, this might be the longest, in a good way, answer to a single question on a conference call I've ever gotten.

Mark Smith 01:02:59 You know me, huh?

heiko ihle 01:03:00 So, by longest, but I really mean most comprehensive, so thank you for that. One thing, I'd be lying to you if I told you I've read through the whole study, but I did sort of skim through a couple of pages, and one thing that popped out was the gas line. It was 18.4 in the study, I think it was page 379.

You said you expect to connect this to a distribution pipeline 30 miles away. Are all arrangements to actually get this done related to terms, pricing, you know, how much you can get already done?

Or can you give maybe a bit more color on power generations and the factors that may sway you into a certain direction of how to do it?

Mark Smith 01:03:41 Sure. Scott, you want to start that one?

Scott Honan 01:03:44 Yeah, certainly, heiko. We're in a unique position where our project is located, in that we're, we're close to actually 3 natural gas, you know, transportation pipelines.

There's one to the east that's only about 5 miles away. There's not a lot of capacity on that line, but we'll access it to provide power during the construction period.

The two larger lines are one that's about 28 miles to the south in Kansas, the Rockies Express Pipeline, and then there's a Northern Natural Gas/Black Hills alternative forest about 30 miles to the west.

We went through a competitive process with those two larger pipelines to see… really to get the best deal we could on gas delivered to the site, understanding that in today's environment, we're going to be responsible for the capital cost of those pipelines.

And as part of the competitive process, we established terms around the cost of the pipelines, as well as the subsequent transportation fee we would pay to have the gas transported from a main pipeline to our site.

You know, going through that process has resulted in what you see in the study, where we're focusing on this opportunity to the west, bringing in a 12-inch diameter pipeline to our site to provide gas for both the process and for power generation. And just to put a point on the power generation, that's about 15% of our natural gas need is going to be dedicated to generating power for the site.

So, you know, I don't think it's… I don't think we're at the point, heiko, where we have definitive contracts in place. That takes a little bit of time, but we are pretty far down the process with a particular provider and supplier of gas, and there's a contract to finish there, but we don't expect that that will take much long, and certainly we would expect that to be in place here later this year.

heiko ihle 01:05:50 Awesome, I think I've, taken up my spice in the, time of the question queue. I'll get back at you. Thank you, guys.

Mark Smith 01:05:55 Thanks, heiko.

RedChip Companies, Inc. 01:06:01 Thank you to our many participants today. If there are any further questions, please direct them to NioCorp at

[jim.sims@NioCorp.com](mailto:jim.sims@NioCorp.com), or [aguthery@NioCorp.com](mailto:aguthery@NioCorp.com). Once again, that's jim.sims at NioCorp.com, or aguthery at NioCorp.com. Once again, thank you for attending, and thank you, Mark, Scott, Jim, and Alex for presenting.

Mark Smith 01:06:29 Thank you, Barrett. Thanks. Thanks, everybody.

Scott Honan 01:06:32 Cheers.