NioCorp Developments (NB.TO) announced today the signing of a definitive agreement for a proposed business combination. Under this business combination agreement, NioCorp will acquire GXII, a US based special purpose acquisition company (SPAC), and intends to be listed on the US Nasdaq exchange soon after the acquisition closes. The acquisition close is expected in Q1 2023. This means that NioCorp will be traded both on the Canadian Toronto Stock Exchange, and the US Nasdaq Stock Exchange.

The proposed transaction values the combined entity at an enterprise value of $313.5 million.

What is the major benefit? The merger can give NioCorp access to as much as $285 million in net cash from the GXII trust account which can be deployed to advance the Elk Creek Critical Minerals Project. This project has been confirmed as the second largest indicated-or-better rare earth resource in the US. The Elk Creek Project is well advanced with a resource and now it is all about raising capital to finance the project.

Included in this press release is news that NioCorp announced the signing of non-binding letters of intent for two separate financing packages with Yorkville Advisors Global. These financings could provide NioCorp with access to up to an additional $81 million.

NioCorp CEO and Executive Chairman Mark A. Smith said:  “This business combination with GXII, and the two additional financing packages, have the potential to significantly accelerate our efforts to obtain the required project financing and to ultimately bring the Elk Creek Project to construction and eventual commercial operation.  Our goal is to rapidly build secure and reliable U.S. supply chains of the critical minerals that multiple industries need to help us build a more sustainable and less carbon-intensive future and for other critical domestic uses.  Once completed, these transactions have the potential to put NioCorp on the fast track to obtain the required project financing to deliver on that promise, and to do so in an environmentally smart manner.”

Dean C. Kehler, Co-Chairman and CEO of GXII said: “NioCorp’s Elk Creek project is the highest-grade niobium deposit under development in North America, and the second largest indicated rare earth resource in the U.S.¹  Critical minerals such as niobium and scandium, and magnetic rare earth elements, can accelerate the world’s transition to a lower carbon economy. We believe NioCorp is well-positioned to be a reliable, US-based supplier that will produce these products on a sustainable basis. We are pleased that GXII shareholders will have the opportunity to invest in NioCorp’s Elk Creek Project and help accelerate the transition to a greener world.”

NioCorp has recently announced that its demonstration scale processing plant in Quebec is now processing samples from Elk Creek. The company also outlined how the recent Inflation Reduction Act passed in the US, will provide tax credits for critical mineral production in the US.

At time of writing, the stock is currently up over 13% with over 325,000 shares traded.

Technically, we have seen a nice gap up which is extremely bullish. Support comes in at $1.10, and resistance is being tested. NioCorp is seeing some rejection at the trendline, but a breakout in coming days would be a technical trigger for the stock to continue higher. However, there are some resistance zones above as you can see from the large candle wicks. $1.50 is of significant importance.