Super-alloys project firm NioCorp Developments Ltd (TSE:NB) took another step towards realising its huge ambitions in Nebraska - inking a deal with Rockies Express to build and operate a 27.8-mile natural gas pipeline.
The line will supply the group's Elk Creek Facility, as the firm prepares for the construction of the project, once financing, permitting, and other requirements are met.
The value of the contract, to be paid over 11 years, is around $63 million.
NioCorp expects to contract separately on buying the natural gas to be transported by Rockies Express.
“Arranging for long-term delivery of natural gas to the Elk Creek facility is an important milestone to have reached, and we are pleased to be working with the Rockies Express team on this important aspect of our project,” said Mark A. Smith, the executive chairman and chief executive of NioCorp.
The gas line will extend from the Rockies Express main line in Marshall County, Kansas to the Elk Creek Facility and will deliver at least 27,500 MMBTU (Million British Thermal Units) of gas per day when the Elk Creek Facility is fully operational.
Rockies Express Pipeline is one of the United States’ largest pipelines and is the nation’s northernmost bi-directional natural gas header system.
Elk Creek is a superalloy materials project in southeast Nebraska, which will produce chemical elements niobium, scandium and titanium.
The projected life of mine (LOM) has been slated at 32 years, with gross LOM revenue put at US$17.6bn, with an operating margin of US$12.2bn.
It will produce around 143,824 tonnes of payable niobium, 3,237 tonnes of scandium trioxide (Sc2O3), and 359,128 tonnes of titanium dioxide (TiO2).
The pre-tax net present value (NPV) was put at US$2.3bn at an 8% discount rate, with an internal rate of return (IRR) of 24.3%. The post-tax net present value (NPV) was put at US$1.7bn, with an IRR of 21.7%.
Up to 1,200 workers are likely to be needed at the peak of construction and it will cost C$1bn to construct and bring the facility into operation.
Once in production, the facility could support as many as 466 full-time jobs, with an average of $39mln annual payroll.
Niocorp shares nudged 1.01% higher at C$0.50.