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April 22, 2024

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NioCorp (NB.TO) finalizes financing before SPAC acquisition

NioCorp Developments (NB.TO) who owns the Elk Creek Critical Minerals Project, the second largest indicated-or-better rare earth resource in the US, announced today it has entered into definitive agreements with respect to two previously announced financings with YA II PN Ltd., an investment fund managed by Yorkville Advisors Global.

The financings include up to (i) US $16,000,000 aggregate principal amount of unsecured convertible debentures of NioCorp convertible into common shares of NioCorp and common share purchase warrants. And (ii) a standby equity purchase facility pursuant to which NioCorp will have the right, but not the obligation, subject to conditions to sell common shares of Yorkville with a maximum aggregate value of up to US $65,000,000 over a period of up to 36 months.

The Yorkville financings are expected to come into effect on the date of the closing of the company’s proposed business combination with GX Acquisition Corp (GXII) a SPAC. Once this is completed, NioCorp will be listed on the US Nasdaq exchange, and Yorkville Financings could provide NioCorp with access to up to an additional US $80,360,000 before related fees and expenses payable by NioCorp.

NioCorp will use these proceeds to advance its Elk Creek Project and moving it into commercial production.

Completion of the Yorkville Financings is subject to certain conditions, including the Closing of the Transaction, the receipt of the approval of the Toronto Stock Exchange and the approval of NioCorp’s shareholders in accordance with the rules of the TSX.

Since we are talking about a great deal of money here, let’s break down the numbers:

Pursuant to the Securities Purchase Agreement, dated January 26, 2023  by and between NioCorp and YorkvilleYorkville, and any investor that exercises its contractual right previously granted by NioCorp to participate in the Yorkville Convertible Debt Financing, will advance an initial total amount of US$9,600,000 to NioCorp in consideration of the issuance by NioCorp to the Investors of US$10,000,000 aggregate principal amount of Convertible Debentures at the time of Closing, and an additional total amount of US$5,760,000 to NioCorp in consideration of the issuance by NioCorp to the Investors of US$6,000,000 aggregate principal amount of Convertible Debentures on a date to be determined at the election of NioCorp.

In conjunction with each Debenture Closing, NioCorp will issue to the Investors Financing Warrants to purchase a number of Common Shares as is equal to the quotient of the principal amount of Convertible Debentures issued in such Debenture Closing divided by the “Exercise Price“. The Financing Warrants will be exercisable, in whole or in part, but not in increments of less than US$50,000 aggregate Exercise Price (unless the remaining aggregate Exercise Price is less than US$50,000), beginning on the earlier of (a) six months following the issuance of the applicable Financing Warrants or (b) the effective date of the initial Convertible Debt Financing Registration Statement (the “Exercise Date“) and may be exercised at any time prior to their expiration.

The Yorkville Convertible Debt Financing Agreement will terminate automatically if the Business Combination Agreement, by and among NioCorp, GXII and Big Red Merger Sub Ltd, is terminated.

Pursuant to the Standby Equity Purchase Agreement, dated January 26, 2023 NioCorp will have the right, but not the obligation, to sell Common Shares to Yorkville with a maximum aggregate value of up to US$65,000,000 for a period commencing at the Closing of the Transaction and ending on the earliest of (i) the first day of the month next following the 36-month anniversary of the Closing, (ii) the date on which Yorkville shall have made payment of the full Commitment Amount and (iii) the date that the Yorkville Equity Facility Financing Agreement otherwise terminates in accordance with its terms (the “Commitment Period“), and will issue to Yorkville US$650,000 aggregate principal amount of Common Shares for no additional consideration.

 

TradingView Chart

The stock is currently up over 11% at time of writing with over 139,000 shares traded.

Plenty of positives on the chart here for NioCorp bulls! The stock has been drifting downwards in recent months. A downward trend to the major psychologically important $1.00 zone. We had a battle between the bulls and the bears there.

Recently, on January 23rd 2023, NioCorp broke down below the $1.00 zone. Briefly. Buyers came in and bid the price up back above $1.00. We failed to close below $1.00. A false breakdown or a fakeout. This is very bullish.

As you can see, the bullish momentum just gained more momentum with today’s news. Where to next? If we can climb back across the trendline I have drawn, then the stock is back in bullish mode and a new uptrend is in the works. With the US listing, and macro geopolitical fundamentals for rare earth materials, I can see this stock testing recent highs around $1.70 once again.

 

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