As you can see from the above graph from Niocorp, (about a third of the way into document, it has no page numbers), the ferroniobium price has been fairly stable over the last decade, yet in 2018-9 CBMM had to delve into inventory to supply the market. they also went on an expansion build at that time, increasing supply by around 50,000 tonnes/a at a cost of $US555M. This was completed by 2021.
With worldwide ferroniobium growth of around 12,000t/a, the increased production from CBMM will go close to being fully allocated by 2026-27, so the following years growth, assuming battery use takes off will need new mine capacity.
Parts of the 'renewable energy' growth sphere like offshore wind turbines are increasing uses for ferroniobium as they need the extra strength in the structural steel to support the loads from the high winds. These types of uses are growing exponentially. Also if we assume higher steel prices in the future from metallurgical coal shortages, carbon taxes and hydrogen made steel, the cost of reducing the quantity of steel vs adding niobium. to increase strength, therefore reducing overall steel required, will probably spread like wildfire unless it pushes the niobium price too high.
The other producers of niobium have plans to increase production and work with CBMM in longer term planning, as in they don't all increase supply in the one year, it seems really well spread out the additions and the future plans. I'm fairly sure we would work in with CBMM instead of competition.
Of our really high grade ore we don't have huge quantities yet, but enough to run an initial plant size of 1Mt/a at a 2.5% grade for 15-20 years. The quantity of ferroniobium around 15,000 tonnes at current prices, would equal just over one years addition to world market growth, so easily absorbed by the growing market. It would also give a revenue of over $1B from the niobium alone and we could and should have byproduct credits.
Another aspect not often mentioned is how our niobium mineralisation seems to be accompanied with low thorium grades often in the 60 -80 ppm range. Araxa has thorium in their ore at around 1,200ppm and go to considerable effort in processing, to reduce the thorium levels in their ferroniobium product. We shouldn't have the same problem with anything that detrimental, so possibly cheaper processing costs..
Considering the number of FIFO mines in WA, our remoteness will not be much of an issue, with the exception of transport costs of phosphate out. all our other product will be worth a lot per B double load, that the transport cost will be a non event. Phosphate as a lower priced product could be the one thing we can't sell due to economics of transport, but we await Mets and FS to know more.
I suspect we will have some very keen offtake partners and financing a long life mine will be a non issue. For me the appointment of the ex CBMM niobium processing expert, is a clear sign that the BOD want to take this through to production. I see no point in engaging any T/O type talk or negotiations. does anyone really think the BOD and management could ever replicate this type of value find, plus as I've stated previously, this is Paul's shot at becoming a billionaire, given future performance shares etc, and running a successful miner gives plenty of cashflow to do a lot more exploration for a lot of other minerals, and build a great mining company. All the other great mining companies started with a single highly profitable mine..
All IMHO of course...
WA1 Price at posting:
$21.30 Sentiment: Buy Disclosure: Held
(20min delay)