A Canadian company's pursuit of rare earth minerals in southeast Nebraska will ramp up again by the end of May or early June, officials with Vancouver-based NioCorp Developments Ltd. say.
NioCorp says it had raised more than $5.5 million to fast-track drilling and analysis of what could be the last core samples taken from the site near Elk Creek, Neb.
The company anticipates six to eight weeks of drilling to be followed by a feasibility study that would determine what it would take and how long to get a mine at the site producing niobium and other rare earth minerals used in steel alloys and high-tech devices like laptops and smartphones. It would cost as much as $400 million to build a niobium mine.
“If everything goes really well, we anticipate having a completed and bankable feasibility study by the end of the year,” said Mark Smith, CEO of NioCorp.
That would bring the Elk Creek site as close as it has ever been to commercializing minerals.
Recent developments pushed shares of NioCorp — it trades on the Toronto Stock Exchange and on the OTC Markets Group exchange in the U.S. — to its highest level in three years.
Christopher Ecclestone, a London-based industry analyst, said the study itself is an ambitious move for NioCorp.
“That (feasibility study) would signal that they are serious about production and probably would use it as bait to get an offtaker on the hook as a strategic shareholder or funder to secure their Niobium output,” Ecclestone said.
Niobium is mainly used to make harder and tougher steel alloys. Consumers include automakers, the defense and construction sectors as well as high-tech electronics manufacturers. Brazil accounts for 92 percent of the world's supply of niobium, and there are no mines in the U.S. that produce the mineral.
NioCorp in 2010 acquired a circular piece of land about four miles in diameter that sits on top of a 14-square-mile deposit of rare earth minerals. The company refers to the Elk Creek site as its “prized asset.”
It's easy to understand why.
NioCorp estimates the volume of niobium — which is valued at about $42 per kilogram — at Elk Creek is worth about $26 billion.
“This is a freak geologic anomaly,” said Shawn Westcott, who leads corporate development for NioCorp.
Westcott said an operating niobium mine near Elk Creek would employ up to 250, making it an economic anomaly in the area, as well. The Village of Elk Creek had a population of 98 people in the 2010 Census.
Referring to the potential for new jobs and the value of the deposit, former State Sen. Tony Fulton called the site a “huge economic opportunity” for the state.
“I'm from Auburn originally and those kinds of figures are not thrown around very often,” said Fulton, who also is a member of the company's advisory board.
Already, landowners in the area have been receiving lease payments since at least 2010 and there could be a lot more money coming in if the feasibility study proves rare earth minerals can be mined and sold there.
“They've leased a lot of land that may never get mined, but there's still been a lot of lease money paid,” said Lt. Gov. Lavon Heidemann, who operated drilling rigs on the site for Colorado-based Molycorp from 1978 to 1986 and later worked with NioCorp's predecessor, Quantum Rare Earth Developments. Mining companies began drilling test holes at the site in the 1970s, and Heidemann owns land “right across the road” from what he said is the company's main area of interest.
Locals know the job prospects remain uncertain, said Johnson County Board member Scotty Gottula, who also owns Scotty's Grocery in Elk Creek.
“We hope it flies, but we went through this 30 years ago, too,” Gottula said. “We just hope everything works and they get investments.”
Greg Krueger, a local contractor who worked on drilling rigs at the site in the 1970s and 1980s, said the excitement is still hard to ignore — despite the decadeslong promise of what rare earth minerals could mean for the community.
“If this thing turns out, it actually has national implications,” Krueger said.