DFS what to expect, page-13

Niocorp is a joke (IMHO). Their stated sale price of 90 tonnes per annum of scandium oxide at $3400/kg is required to make any sense of the financials. Not going to happen.

My expectations of the Sunrise DFS are:

1. No consideration of scandium at all in the early stages. They will just mine the low grade Sc, high grade cobalt areas first. Remember, the scandium is not where the high grade nickel and cobalt areas are. I am informed that CLQ marketing efforts on scandium have largely stopped, waiting for TSX:SCY and others to do all the downstream market development for them. Selling scandium is not easy, selling cobalt in the current climate is. Do the maths on where the effort is going.

2. Considerably higher capital cost, in the range of US$1.2 billion plus. SNC Lavalin are known for their bloated capital costs. I have heard that the CLQ people have been given the first draft of the number and they fell off their chairs.

3. Increased operating costs compared to previous studies, now that they know how really tough it is to make battery grade nickel and cobalt sulphates. Increased water supply costs and tailings disposal costs also.

4. An IRR of low 20s. Enough to keep people talking, not enough for the project to look magical. The IRR needs to be above 30% for people to really sit up and take notice. After all, the cobalt price is volatile and may not stay at these high levels for long.

But then again, I have been wrong before.