NioCorp Issues 2023 Year in Review Report

CENTENNIAL, January 11, 2024 - NioCorp Developments Ltd. ("NioCorp" or the "Company") (NASDAQ:NB)(TSX:NB) today issued the following 2023 Year in Review report to its shareholders by its Chairman and CEO, Mark A. Smith.

2023 Progress Positions NioCorp
for Historic Advancements in 2024

January 11, 2024

Dear Shareholders:

As we launch into 2024, I have been reviewing many elements of NioCorp's progress in 2023 on the Elk Creek Critical Minerals Project. The Company took some enormous strides over the past year that I believe position us to achieve historic advancements in 2024. I want to share my thoughts and takeaways on the year that was 2023, and on our goals for the coming year.

The first quarter of 2023 was marked by some very important milestones for the Company and the Elk Creek Project. We received a letter of interest from the Export-Import Bank of the United States ("EXIM") regarding EXIM's interest in potentially making available as much as $800 million in debt financing to the Elk Creek Project. We saw excellent demonstration plant results for rare earth processing and recovery from ore that the Company expects to extract from the Elk Creek Project. FoxNews published an op-ed I wrote regarding my prediction that China will eventually reduce or cut off exports of rare earth minerals to the West - emphasizing the critical need for the U.S. to start making more of its own critical minerals. We also earned a front-page New York Times article that helped to elevate the visibility of the Elk Creek Project around the world.

As the year progressed, we signed a term sheet with Stellantis, the world's third largest automaker, announcing our shared intent to execute definitive agreements on a rare earth offtake contract as well as a possible strategic investment in NioCorp by the automaker. Work on these agreements is proceeding on a good pace.

We also completed all metallurgical test work related to an improved process flow sheet at our Quebec-based demonstration plant in 2023. That effort achieved some very powerful results that have the potential to significantly improve the Elk Creek Project's projected economics and process efficiency and expand our planned product offering.

I was admittedly disappointed, as were all NioCorp shareholders, in the outcome of our 2023 SPAC transaction. That deal promised to raise significant new capital for the Elk Creek Project. However, many investment firms opted to redeem their GX shares, which we felt was largely due to the emerging banking crisis that hit the U.S. just prior to the SPAC deal close. The transaction did earn us a rapid up-listing to the Nasdaq Stock Exchange, inclusion in the Russell 3000 and 2000 indexes, positions in our stock by many large institutional investment houses, and two new Board members who have joined other NioCorp Board members in taking very active roles in broadening and intensifying our project financing campaign.

I certainly share shareholders' collective disappointment in NioCorp's share price performance in 2023. As the single largest shareholder of NioCorp stock today, I have made significant investments in NioCorp. My family and I have every reason to see NioCorp succeed. While markets can at times seriously undervalue highly promising companies such as NioCorp, I also know that markets tend to correct such valuations as companies successfully take projects like the Elk Creek Project to commercial reality. That is the laser-focused mission of every single member of the NioCorp team.

While I wanted to see 2023 be the year in which we formally launched construction of this historic and much-needed critical minerals project in Nebraska, I have never been more confident of success in securing the project financing we need to move the Elk Creek Project forward. As I see it, the stars are increasingly aligning behind our Elk Creek Project, and 2024 promises to be a momentous year for NioCorp.

2024 is already a very busy time for the NioCorp team:

• During the week of January 15, 2024, the NioCorp team will be presenting on the Elk Creek Project to some of the world's leading defense industry companies at an industry-only Mine-to-Magnets workshop in the Washington D.C. area, at the invitation of the National Defense Industries Association. We have a number of other meetings next week in D.C. as we continue to promote the Elk Creek Project and pursue project financing.
  
• Our Annual General Meeting of Shareholders will be conducted in Denver on January 19, 2024. We will be hosting an investor update webcast on that day, and we'll issue the details shortly on how investors can tune in.
  
• I will be presenting on the Elk Creek Project to institutional investment funds and other investors at TD Securities' 15^th Annual Global Mining Conference in Toronto on January 23, 2024.
  
• NioCorp will participate in the 2024 Motor, Drive Systems, and Magnetics Conference and Exhibition in Orlando, FL from February 13-15, 2024.
  
• I will be presenting to our many European investors on April 20, 2024 at the SafeCapital Spring Meeting in Antwerp, Belgium.
  
• NioCorp will be presenting to the 72rd Annual Conference of the Colorado Chapter of the Society for Mining, Metallurgy & Exploration ("SME"), to be held April 25-27, 2024.

We will keep investors updated on the many other events and developments that we expect in 2024.

I hope you enjoy reviewing the progress we made in 2023 as much as the team and I enjoyed producing this impressive list. On behalf of the entire NioCorp family, here's wishing you and your family and loved ones a safe, bountiful, and constructive 2024!

Best regards,

Mark A. Smith
Chairman and CEO
NioCorp Developments Ltd.

Successful Demonstration of our New Process Flow Sheet

In 2023, our technical team, led by Chief Operating Officer Scott Honan, completed metallurgical testing of our improved process flow sheet at our demonstration plant in Trois-Rivières, Quebec. With that important effort behind us, we are now working to incorporate rare earths into our mineral reserve, complete the engineering required to support the new process design, update project capital and operating cost estimates, and produce other information required for publication of an updated Feasibility Study for the Elk Creek Project. I expect that to be issued as early as possible in 2024, contingent upon raising the necessary funds to complete this work.

The process innovations developed by Scott and his team and the talented process engineers at L3 Process Innovation break new ground in the products we can make and how we make them. Fortunately, those innovations all utilize existing and proven technologies, which helps us to keep execution risk to a minimum. That is very important to financing institutions.

• TAKEAWAY: While process demonstration work can be slow and frustrating, getting the technical aspects right at the outset is of paramount importance to projects such as ours. NioCorp does not take short-cuts when it comes to technical development. This philosophy can test one's patience, but my long experience in bringing projects such as this to fruition has shown me that it is the correct strategy. The investment we made in developing this new flow sheet and proving it out at a demonstration level was well worth it, in my view, given the potentially enormous benefits and additional momentum we expect it to bring to the Elk Creek Project.

High-Value New Products Now Possible

Chief among the benefits are several new products that we have demonstrated the ability to make from ore that we expect to extract from the Elk Creek Project:

1. Magnetic Rare Earths: As we reported in 2023, our plant showed that our new process can produce at demonstration scale magnetic rare earth products with commercial purities at recovery rates of 92% or better. As anyone with experience in commercial rare earth production will tell you, this is considered a very high rate of recovery. I see it as a testament to both the processing system's design and to the deep rare earth processing experience of the NioCorp team. Both Scott and Rick Sixberry, our Director of Process Development, spent years producing commercial rare earth products at the Mountain Pass rare earth facility. Scott ran the Mountain Pass facility at one point, and Rick spent 40 years there making rare earth products. Few Americans have the depth and hands-on experience in producing rare earths at commercial scale as Scott and Rick.

The magnetic rare earth oxides we might produce (neodymium, praseodymium, terbium and dysprosium) are enormously valuable because of their wide use in clean energy technologies such as electric and hybrid vehicles, wind turbines, high-efficiency electric motors, and other applications that save energy and avoid air emissions. Please see the cautionary statements in the End Notes at the conclusion of this review about our prospective rare earth development plans.⁽ⁱ⁾

In particular, our potential to produce high-purity heavy rare earths such as dysprosium and terbium also sets the Elk Creek Project apart from many other critical minerals plays. Terbium and dysprosium are used in high-strength rare earth permanent magnets that are crucial to the traction motor systems in the majority of electric vehicles today, yet global supply chains for these strategically critical elements are especially precarious today. Nearly all of the world's dysprosium and terbium is processed in China, and nearly all of the dysprosium and terbium processed in China is mined in war-torn regions of Myanmar. Such critical mineral supply chains represent enormously high risk for nations such as the U.S. that very much need these strategic materials.

• Takeaway: Coupled with what might be generated from potential greater production of both niobium and titanium per tonne of mined ore, the potential addition of rare earths could significantly shift the projected product revenue mix of the Elk Creek Project and more evenly distribute revenue across our planned products. That would provide additional risk mitigation to investors. All of this awaits final validation in an updated Feasibility Study and is subject to our ability to obtain sufficient project financing to move the Elk Creek Project to commercial production, but, again, I am anxious to release the details of our expanded planned product offering.

2. Higher Niobium Recovery with Higher-Purity Niobium Products

Our new and improved recovery process can achieve, at demonstration scale, a 90.7% rate of niobium recovery through the hydrometallurgical process. Overall recovery through the pyrometallurgical production of the commercial product ferroniobium is expected to be 86.7%. Our previous approach to niobium production was able to achieve recovery rates, at demonstration scale, through the hydrometallurgical and pyrometallurgical processes of 86.8% and 82.4%, respectively. This points to the likelihood of higher niobium production levels from the same mining tonnage.

What's more, while we intend, when and if the Elk Creek Project reaches the production stage, to convert the majority of our niobium reserve into commercial ferroniobium, which is used to strengthen steel, our new process can make, at demonstration scale, higher-purity niobium in the form of niobium chloride, which can readily be converted to high-purity niobium oxide (Nb₂O₅). This product is sold into many different markets, including superalloys, carbides, superconductors, electronic components, ceramics, gas and wind turbines, medical imaging, particle accelerators, space travel, and in the manufacture of high-performance and ultra-safe, ultra-rapid rechargeable batteries for electric vehicles.

• Takeaway: While NioCorp has already contracted for sale up to 75% of our production of niobium in the form of ferroniobium to two customers over the first 10 years of production, and the remaining 25% is potentially available for sale as either ferroniobium or niobium oxide, NioCorp is now exploring the potential to secure offtake agreements for niobium oxide in addition to ferroniobium.

3. Higher Titanium Recovery with High-Purity Titanium Products

Our demonstration plant also showed that we can potentially double our recovery of titanium from each tonne of ore mined, as well as produce, at demonstration scale, a purer form of titanium that may command a higher price than is assumed in our current Feasibility Study. The process can likely achieve an 83.7% rate of overall titanium recovery to final product, which compares to a 40.3% titanium recovery rate, at demonstration scale, in our previous process approach. Moreover, the titanium produced will be in the form of titanium tetrachloride (TiCl₄), known in commercial markets as "tickle." It is worth noting that TiCl₄ is a highly versatile form of titanium that can be used to make both titanium dioxide, used in paints and pigments, and titanium metal. And, when it comes to titanium metal, global markets are thirsty. Demand for titanium metal is forecasted to grow by 6.8% CAGR between 2022 and 2030, driven primarily by increasing demand in defense and industrial segments.¹ The Russia-Ukraine war has greatly stressed markets for titanium metal. Moreover, current titanium sponge production capacity is overwhelmingly centered today in China, Japan, Russia, Kazakhstan, and a few other nations, while the last remaining titanium sponge plant in the U.S. closed in 2020.

• TAKEAWAY: We have now turned the demonstration plant's attention to producing sample quantities of TiCl₄ in response to multiple customer inquiries - all of whom have expressed potential interest in purchasing substantial quantities of the TiCl₄ we plan to make.

In 2023, we completed an important geotechnical drilling campaign on our land in southeast Nebraska. A number of investors and local residents probably saw Scott and his team conducting this work in the second quarter. This work was done in advance of the proposed site preparation, grading, heavy construction, and eventual foundation pours for the Elk Creek Project that are expected to commence once sufficient financing is obtained. The drilling explored the "glacial till" geological layer, which is comprised of the first 30 meters or so of soil that covers much of southeast Nebraska.

This drilling campaign represents what is typically done prior to site preparation, including grading and foundation preparation. By investing now and getting this work behind us, we should be able to move that much more quickly to construction once we have sufficient financing.

Potential EXIM Financing

Following our receipt of a letter of interest from EXIM in March 2023 for up to $800 million in debt financing, we filed an application with EXIM in June 2023 and have been vigorously pursuing this potential funding with EXIM.

EXIM has assigned a highly experienced team of loan officers and other finance professionals to review our application, and I have been very impressed with the professionalism and dedication of the EXIM staff. They are now in the process of engaging independent consultants to review the economic and technical aspects of the Elk Creek Project. The Company was informed that its application received approval by the first of three reviews by the EXIM Transaction Review Committee on October 2, 2023.

The Chairperson of EXIM continues to publicly state the urgency of enabling more U.S.-based critical minerals production.

It is my goal to have the EXIM process reach a conclusion in 2024. Please keep in mind that there is no guarantee that EXIM will provide the debt financing as further discussed in the End Notes section of this report.⁽ⁱⁱ⁾

• TAKEAWAY: If EXIM agrees to provide up to $800 million in debt financing to the Elk Creek Project, we hope that such an anchor investment would rapidly leverage the remaining financing needed to advance the Elk Creek Project to commercial production.

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_{¹TiO2 market analysis performance for NioCorp by TZMI, 2023.}

Stellantis

In July 2023, NioCorp and Stellantis signed a Rare Earth Offtake Term Sheet, the objective of which is to enter into a definitive rare earth supply agreement and possible strategic investment in NioCorp by Stellantis to support Stellantis' commitment to build resilient supply chains and reach carbon net zero by 2038 and to help accelerate NioCorp's path to commercial production of magnetic rare earth oxides in the U.S.⁽ⁱ⁾

As noted at the time of signing the Term Sheet, Stellantis' Chief Purchasing and Supply Chain Officer, Maxime Picat, said: "Stellantis intends to lead the industry with the commitment to be carbon net zero by 2038 - a goal that requires innovation and a complete redefinition of our sourcing strategies. By working with partners like NioCorp, we are taking important steps, with the aim of decarbonizing mobility and ensuring strategic supplies of raw materials necessary for the success of the Company's global electrification plans highlighted in our Dare Forward 2030 strategy."

NioCorp's position as a potential U.S. supplier of multiple critical minerals needed for vehicle electrification offers Stellantis important optionality to secure supply chains and support its growth targets.

• TAKEAWAY: Work by both teams is continuing toward final agreements in these matters, and NioCorp looks forward to supporting Stellantis in its Carbon Net Zero by 2038 Initiative.

Other Debt and Equity Investors

As many of you have heard me reference publicly, a number of banks and investment funds have expressed interest in participating in the overall project financing for the Elk Creek Project, and NioCorp remains in active discussions with these firms. In addition, the German Government's Untied Loan Program may also participate in our financing, depending upon how the debt financing packages are structured.

In 2023, we launched an extremely exciting initiative designed to complement the Elk Creek Project: phased commercialization of aluminum-scandium (Al-Sc) master alloy in the U.S. for commercial and defense applications. We launched this vertical integration program with the intent of producing a scandium-based product that would allow us to address a wider range of markets and capture higher margins.

Adding scandium to aluminum produces a much stronger alloy that reduces weight, improves corrosion resistance, and allows for reliable welding operations. Al-Sc alloys have large emerging applications in automotive and mass transit systems, commercial aviation, space, and defense markets.

We established in 2023 a pilot-scale operation at a lab in Pennsylvania operated by Creative Engineers. The team has successfully produced two 1-kilogram ingots of Al-Sc master alloy using a proprietary process developed by Nanoscale Powders LLC ("Nanoscale").

Subject to the receipt of sufficient financing, our current plan is to progress toward commercial-scale production of Al-Sc master alloy, prior to the onset of scandium oxide production at the Elk Creek Project, if possible. We would use commercially obtained scandium at first, then switch to Nebraska-made scandium once the Elk Creek Project is online. With about 100 tonnes/year of scandium oxide that could potentially be produced in Nebraska, that potentially positions NioCorp to operate as one of the world's largest producers of Al-Sc master alloy.

Scott Honan, M.Sc., SME-RM, COO of NioCorp Developments Ltd., a Qualified Person as defined by National Instrument 43-101, has reviewed and approved the technical information and verified the data contained in this document.

⁽ⁱ⁾ As no economic analysis has been completed on the rare earth mineral resource comprising a portion of the Elk Creek Project, further studies are required before determining whether extraction of rare earth elements can be reasonably justified and economically viable after taking into account all relevant factors. Final determination by NioCorp of possible rare earth production can be made only after NioCorp publishes a new Feasibility Study for the Elk Creek Project.

⁽ⁱⁱ⁾ Potential debt financing from EXIM is subject to, among other matters, the satisfactory completion of due diligence, the negotiation and settlement of final terms, and the negotiation of definitive documentation. There can be no assurance that the EXIM financing will be completed on acceptable terms or at all.

This letter contains forward-looking statements within the meaning of the U.S. federal securities laws and forward-looking information within the meaning of applicable Canadian securities laws (collectively, "forward-looking statements"). Forward-looking statements may include, but are not limited to, statements about; NioCorp's expectation and ability to mine ore from the Elk Creek Project; the results of the demonstration plant metallurgical testing and its impact on potential future production levels and efficiency; NioCorp's expectation and ability to produce niobium, scandium, and titanium at the Elk Creek Project; completion of a new Feasibility Study, including the work related to a mineral reserve update, additional engineering, updated project capital and operating cost estimates, and other required information necessary for publication therein; NioCorp's plans regarding upcoming presentations by the Company or its officers or their participation in any anticipated conference or exhibition in 2024; NioCorp's expectation and ability to produce rare earth products; NioCorp's ability to show the technical and financial feasibility of recycling rare earths; market demand for niobium, scandium, titanium and rare earth products; NioCorp's ability to produce higher-purity niobium and titanium products; NioCorp's ability to enter into offtake agreements with customers; NioCorp and EXIM closing the proposed debt financing, including the prospects of securing financing from EXIM on acceptable terms, or at all; the expected timing of, and benefits to the Elk Creek Project of, securing such financing from EXIM; NioCorp's ability to secure sufficient project financing to complete construction of the Elk Creek Project and move it to commercial production; NioCorp and Stellantis entering into a binding agreement with respect to the proposed transaction, if at all, and the anticipated terms, conditions and benefits of the proposed transaction; the possibility of Stellantis making a strategic investment in NioCorp; NioCorp's ability to secure financing from banks or investment funds or the German Government's Untied Loan Program; the results of the Nanoscale technology at pilot scale and its impact on potential future production levels and efficiency; the ability to establish U.S. commercial production of Al-Sc master alloy; the ability to achieve full-scale Al-Sc master alloy production at approximately the same time as the Elk Creek Project achieves commercial operation and production of scandium oxide; and NioCorp's ability to become one of the world's largest producers of Al-Sc master alloy. Forward-looking statements are typically identified by words such as "plan," "believe," "expect," "anticipate," "intend," "outlook," "estimate," "forecast," "project," "continue," "could," "may," "might," "possible," "potential," "predict," "should," "would" and other similar words and expressions, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements are based on the current expectations of the management of NioCorp and are inherently subject to uncertainties and changes in circumstances and their potential effects and speak only as of the date of such statement. There can be no assurance that future developments will be those that have been anticipated. Such expectations and assumptions are inherently subject to uncertainties and contingencies regarding future events and, as such, are subject to change. Forward-looking statements involve a number of risks, uncertainties or other factors that may cause actual results or performance to be materially different from those expressed or implied by these forward-looking statements. These risks and uncertainties include, but are not limited to, those discussed and identified in public filings made by NioCorp with the U.S. Securities and Exchange Commission and with the applicable Canadian securities regulatory authorities and the following: NioCorp's ability to recognize the anticipated benefits of the business combination with GX Acquisition Corp. II (the "Business Combination") and the standby equity purchase agreement (the "Yorkville Equity Facility Financing Agreement" and, together with the Business Combination, the "Transactions") with YA II PN, Ltd., an investment fund managed by Yorkville Advisors Global, LP, including NioCorp's ability to access the full amount of the expected net proceeds under the Yorkville Equity Facility Financing Agreement over the next three years; unexpected costs related to the Transactions; the outcome of any legal proceedings that may be instituted against NioCorp following closing of the Transactions; NioCorp's ability to receive a final commitment of financing from EXIM on the anticipated timeline, on acceptable terms, or at all; NioCorp's ability to continue to meet Nasdaq listing standards; NioCorp's ability to operate as a going concern; risks relating to NioCorp's common shares, including price volatility, lack of dividend payments and dilution or the perception of the likelihood any of the foregoing; NioCorp's requirement of significant additional capital; the extent to which NioCorp's level of indebtedness and/or the terms contained in agreements governing NioCorp's indebtedness or the Yorkville Equity Facility Financing Agreement may impair NioCorp's ability to obtain additional financing; covenants contained in agreements with NioCorp's secured creditors that may affect its assets; NioCorp's limited operating history; NioCorp's history of losses; the restatement of NioCorp's consolidated financial statements as of and for the fiscal years ended June 30, 2022 and 2021 and the interim periods ended September 30, 2021, December 31, 2021, March 31, 2022, September 30, 2022, and December 31, 2022 and the impact of such restatement on NioCorp's future financial statements and other financial measures; the material weaknesses in NioCorp's internal control over financial reporting, NioCorp's efforts to remediate such material weaknesses and the timing of remediation; the possibility that NioCorp may qualify as a passive foreign investment company under the U.S. Internal Revenue Code of 1986, as amended (the "Code"); the potential that the Transactions could result in NioCorp becoming subject to materially adverse U.S. federal income tax consequences as a result of the application of Section 7874 and related sections of the Code; cost increases for NioCorp's exploration and, if warranted, development projects; a disruption in, or failure of, NioCorp's information technology systems, including those related to cybersecurity; equipment and supply shortages; variations in the market demand for, and prices of, niobium, scandium, titanium and rare earth products; current and future offtake agreements, joint ventures, and partnerships; NioCorp's ability to attract qualified management; the effects of global health crises on NioCorp's business plans, financial condition and liquidity; estimates of mineral resources and reserves; mineral exploration and production activities; feasibility study results; the results of metallurgical testing; changes in demand for and price of commodities (such as fuel and electricity) and currencies; competition in the mining industry; changes or disruptions in the securities markets; legislative, political or economic developments, including changes in federal and/or state laws that may significantly affect the mining industry; the impacts of climate change, as well as actions taken or required by governments related to strengthening resilience in the face of potential impacts from climate change; the need to obtain permits and comply with laws and regulations and other regulatory requirements; the timing and reliability of sampling and assay data; the possibility that actual results of work may differ from projections/expectations or may not realize the perceived potential of NioCorp's projects; risks of accidents, equipment breakdowns, and labor disputes or other unanticipated difficulties or interruptions; the possibility of cost overruns or unanticipated expenses in development programs; operating or technical difficulties in connection with exploration, mining, or development activities; the management of the water balance at the Elk Creek Project site; land reclamation requirements related to the Elk Creek Project; the speculative nature of mineral exploration and development, including the risks of diminishing quantities of grades of reserves and resources; claims on the title to NioCorp's properties; potential future litigation; and NioCorp's lack of insurance covering all of NioCorp's operations.

Should one or more of these risks or uncertainties materialize or should any of the assumptions made by the management of NioCorp prove incorrect, actual results may vary in material respects from those projected in these forward-looking statements.

All subsequent written and oral forward-looking statements concerning the matters addressed herein and attributable to NioCorp or any person acting on its behalf are expressly qualified in their entirety by the cautionary statements contained or referred to herein. Except to the extent required by applicable law or regulation, NioCorp undertakes no obligation to update these forward-looking statements to reflect events or circumstances after the date hereof to reflect the occurrence of unanticipated events.

SOURCE: NioCorp Developments Ltd.