NioDevelopments .(NB) - 2024 Q2 - Quarterly Report

Financing Activities - The company closed a non-brokered private placement on December 22, 2023, raising approximately $1.29 million by issuing 413,432 units, each consisting of one common share and one warrant[72] - The company received a Letter of Interest from EXIM for potential debt financing of up to $800 million for the Elk Creek Project on March 6, 2023[77] - The company submitted a formal application to EXIM for a loan under the "Make More in America" initiative on June 6, 2023, and received approval from the first of three reviews by the EXIM Transaction Review Committee on October 2, 2023[78] - The company is focused on obtaining additional funds to complete mine development and construction of the Elk Creek Project[71] - Financing inflows were $2.9 million during the six months ended December 31, 2023, including $1.0 million from a September 2023 private placement and $1.3 million from a December 2023 private placement[105] - The company expects to require additional financing during the fiscal year ending June 30, 2024, to fund exploration and development activities at the Elk Creek Project[98] - The Yorkville Equity Facility Financing Agreement provides near-term and longer-term access to capital, subject to certain limitations and conditions[94] - The company's ability to arrange additional financing depends on capital market conditions and the success of the Elk Creek Project development[109] - The company has outstanding convertible debentures with an aggregate principal and accrued interest amount of $3.87 million as of February 13, 2024[115] Elk Creek Project Development - The company completed a 90% engineering package for road improvements near the Elk Creek Project site during the quarter ended December 31, 2023[76] - The company is developing the Elk Creek Project, which has disclosed niobium, scandium, and titanium mineral reserves and resources, as well as rare earth oxide mineral resources[70] - The company's forward-looking statements are based on current business and operating plans, including expectations for the Elk Creek Project's production and market demand for its products[63] - The company's forward-looking statements are subject to risks and uncertainties, including the ability to secure sufficient project financing and the impact of inflation and supply chain issues on the Elk Creek Project[65] - The company expects to require additional financing during the fiscal year ending June 30, 2024, to fund exploration and development activities at the Elk Creek Project[98] Operational Updates - The company's demonstration scale processing plant in Trois-Rivieres, Quebec, completed the production of waste materials for tailings impoundment and paste backfill engineering design during the quarter ended December 31, 2023[75] - The company announced an aluminum-scandium master alloy initiative in May 2023, with two of three planned 1-kilogram ingots manufactured by December 31, 2023[73] Financial Performance and Expenses - The company has no revenues from mining operations, with operating expenses of $2.9 million for the three months ended December 31, 2023, and $6.4 million for the six months ended December 31, 2023[80][81] - Employee-related costs increased to $328,000 for the three months ended December 31, 2023, up from $291,000 in the same period in 2022, primarily due to board-authorized salary increases[82] - Professional fees surged to $952,000 for the three months ended December 31, 2023, compared to $262,000 in 2022, driven by legal services and audit fees[83] - Exploration expenditures decreased to $828,000 for the three months ended December 31, 2023, from $1.3 million in 2022, as 2022 costs included Demonstration Plant development and start-up costs[84] - The company had cash of $0.6 million and a working capital deficit of $10.6 million as of December 31, 2023, compared to cash of $2.3 million and working capital of $0.2 million on June 30, 2023[95] - Operating activities consumed $4.6 million of cash during the six months ended December 31, 2023, reflecting funding of losses of $6.8 million and Convertible Debenture accretion[104] Risk Factors and Financial Controls - The company's exposure to interest rate risk primarily relates to earned interest income on cash deposits and short-term investments[116] - NioCorp faces foreign currency exchange risk due to expenditures in both U.S. dollars and Canadian dollars, primarily related to Common Share-related costs and corporate professional services[117] - The company is exposed to commodity price risk related to the elements associated with the Elk Creek Project, which is not yet in production[118] - Material weaknesses in the company's control environment, risk assessment, control activities, and monitoring activities were identified and continued to exist as of December 31, 2023[123] - These material weaknesses resulted in errors that required restatements of the company's consolidated financial statements for fiscal years 2021 and 2022, as well as interim periods in 2021 and 2022[124] - The company is implementing a technical accounting policy to address material weaknesses, including separation of analysis and review of accounting issues and development of a non-routine transactions policy[127] - NioCorp is enhancing controls over its financial statement close and reporting process to remediate material weaknesses related to monitoring activities[127] - NioCorp's disclosure controls and procedures are designed to ensure timely and accurate reporting of material information to management, including the CEO and CFO[120] Tax and Regulatory Matters - NioCorp was classified as a PFIC for the taxable years ended June 30, 2023 and 2022, and may continue to be classified as a PFIC in the current or future taxable years[112]