PROSPECTUS SUPPLEMENT No. 3
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Filed Pursuant to Rule 424(b)(3)
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(To Prospectus dated October 13, 2016)
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Registration No. 333-213451
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NioCorp Developments Ltd.
This prospectus supplement supplements the
prospectus dated October 13, 2016 (the “Prospectus”) of NioCorp Developments Ltd. NioCorp Developments Ltd. (the “Company”),
which is part of a registration statement on Form S-1 (File No. 333-213451) filed with the United States Securities and Exchange
Commission relating to the resale of securities by the selling securityholders as described therein.
The Prospectus to the resale or other disposition
from time to time by certain selling security holders as further described in the Prospectus, of up to an aggregate of 10,062,201
common shares (the “Common Shares”) of the Company acquirable upon exercise of common share purchase warrants and options
of the Company that were issued by the Company to such selling security holders in private transactions.
This prospectus supplement incorporates
into the Prospectus (i) the Company’s Current Report on form 8-K filed on November 17, 2016, (ii) the Company’s Current
Report on Form 8-K filed on December 15, 2016, (iii) the Company’s Current Report on Form 8-K as filed on December 21, 2016,
(iv) the Company’s Current Report on Form 8-K as filed on January 20, 2017, (v) the Company’s Current Report on Form
8-K/A as filed on January 20, 2017, (vi) the Company’s Current Report on Form 8-K as filed on February 2, 2017 and (vii)
the Company’s Quarterly Report on Form 10-Q as filed on February 3, 2017.
This prospectus supplement should be read in
conjunction with the Prospectus, as supplemented to date, and this prospectus supplement is qualified by reference to the Prospectus,
as supplemented to date, except to the extent that the information provided by this prospectus supplement supersedes the information
contained in the Prospectus. This prospectus supplement is not complete without, and may not be delivered or utilized except in
connection with, the Prospectus with respect to the securities described above, including any amendments or supplements thereto.
INVESTING IN OUR SECURITIES INVOLVES RISKS.
YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 5 OF THE PROSPECTUS DATED OCTOBER 13, 2016 AND IN OUR MOST RECENT
FILINGS MADE WITH THE SEC INCORPORATED BY REFERENCE THEREIN, INCLUDING OUR QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED
DECEMBER 31, 2016, BEFORE YOU MAKE AN INVESTMENT IN OUR SECURITIES.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or passed upon the accuracy or adequacy of
this prospectus supplement or the Prospectus. Any representation to the contrary is a criminal offense.
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS FEBRUARY 10, 2017
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the
Securities Exchange Act of 1934
Date of Report: November 7, 2016
(Date of earliest event reported)
NioCorp Developments Ltd.
(Exact Name of Registrant as Specified in Charter)
British Columbia, Canada
(State or Other Jurisdiction of Incorporation)
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000-55710
(Commission File Number)
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98-1262185
(IRS Employer Identification No.)
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7000 South Yosemite Street, Suite 115
Centennial, Colorado
(Address of principal executive offices)
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80112
(Zip Code)
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Registrant’s telephone number, including area code:
(720) 639-4647
Check the appropriate box below if the Form 8-K filing
is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 3.02 Unregistered Sales of Equity Securities
On October 7, 2016, NioCorp Developments Ltd.
(the “Company”) issued 531,908 common shares of the Company to Lind Asset Management IV, LLC upon conversion of US$275,000
in principal amount of the Company’s outstanding convertible note issued in December of 2015 at a conversion price of C$0.6834
per share. The common share were issued pursuant to Section 3(a)(9) of the United States Securities Act of 1933, as amended (the
“Securities Act”), in connection with the voluntary conversion of convertible note and based upon representations and
warranties of Lind Asset Management IV, LLC in connection therewith.
On November 9, 2016, the Company issued 606,359
common shares of the Company to Lind Asset Management IV, LLC upon conversion of US$275,000 in principal amount of the Company’s
outstanding convertible note issued in December of 2015 at a conversion price of C$0.60792 per share. The common share were issued
pursuant to Section 3(a)(9) of the Securities Act, in connection with the voluntary conversion of convertible note and based upon
representations and warranties of Lind Asset Management IV, LLC in connection therewith.
In October of 2016, the Company issued 1,220,841
common shares of the Company to private investors upon the exercise of the Company’s outstanding common share purchase warrants.
The Company received aggregate proceeds from the exercise of the warrants of C$793,547. The warrants were exercised at a price
of C$0.65 per share. The common shares were issued inside the United States pursuant to Section 4(a)(2) of the Securities Act
and Rule 506 of Regulation D thereunder and outside the United States pursuant to Rule 903 of Regulation S under the Securities
Act, in each case on the basis of representations and warranties made by the investors at the time of exercise of the warrants.
From November 1 through November 12, 2016,
the Company issued 1,788,458 common shares of the Company to private investors upon the exercise of the Company’s outstanding
common share purchase warrants. The Company received aggregate proceeds from the exercise of the warrants of C$1,162,498. The warrants
were exercised at a price of C$0.65 per share. The common shares were issued inside the United States pursuant to Section 4(a)(2)
of the Securities Act and Rule 506 of Regulation D thereunder and outside the United States pursuant to Rule 903 of Regulation
S under the Securities Act, in each case on the basis of representations and warranties made by the investors at the time of exercise
of the warrants.
The Company previously reported 184,626,976
common shares outstanding as of November 11, 2016. As of November 16, 2016, there were 184,745,785 shares outstanding.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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NIOCORP DEVELOPMENTS LTD.
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DATE: November 16, 2016
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By:
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/s/ Neal S. Shah
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Neal S. Shah
Chief Financial Officer
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: December 9, 2016
(Date of earliest event reported)
NioCorp
Developments Ltd.
(Exact Name of Registrant as Specified in Charter)
British Columbia, Canada
(State or Other Jurisdiction of
Incorporation)
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000-55710
(Commission File Number)
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98-1262185
(IRS Employer Identification No.)
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7000 South Yosemite Street, Suite 115
Centennial, Colorado
(Address of principal executive offices)
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80112
(Zip Code)
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Registrant’s telephone number, including area code:
(720) 639-4647
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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¨
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Written communications
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 5.07. Submission of Matters
to a Vote of Security Holders
On December 9, 2016, NioCorp Developments Ltd.
(the “Company”) held its 2016 Annual Meeting of Shareholders. The matters submitted for a vote and the related results
are set forth below. A more detailed description of each proposal is set forth in the Company’s proxy statement filed with
the Securities & Exchange Commission on November 9, 2016. As of the record date for the meeting, November 2, 2016, there were
182,350,968 common shares issued and outstanding and entitled to vote at the meeting. 60,827,938 common shares were present by
proxy or in person at the meeting representing 33.36% of the shares entitled to vote at the meeting.
Proposal One – Fixing the Number of Directors
By a resolution passed by show of hands at the meeting,
the number of directors was fixed at five (5).
The result
of the voting on this matter was as follows:
For:
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60,364,923 shares
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Against:
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346,543 shares
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Abstain:
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116,470 shares
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Broker Non-Vote:
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2 shares
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Proposal Two –
Election of Directors
By a resolution
passed on a show of hands, each of the following individuals were elected as the directors of the Company to hold office until
the next annual general meeting of the shareholders of the Company or until their successors are elected or appointed:
Mark A. Smith
Joseph A. Carrabba
Michael Morris
David C. Beling
Anna Castner-Wightman
The detailed ballot
voting in respect of the election of directors was as follows:
Nominee
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Votes FOR
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Votes WITHHELD
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Broker Non-Votes
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Mark A. Smith
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30,200,660
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103,389
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30,523,889
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Joseph A. Carrabba
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30,277,624
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26,425
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30,523,889
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Michael Morris
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30,268,980
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35,069
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30,523,889
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David C. Beling
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30,271,080
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32,969
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30,523,889
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Anna Castner-Wightman
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30,262,980
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41,069
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30,523,889
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Proposal Three – Appointment and Compensation
of Auditors
By a resolution passed on a ballot,
BDO USA, LLP, Chartered Accountants, were appointed as the auditors for the Company for the fiscal year ending June 30, 2017 and,
in accordance with the Articles of the Company, the directors were authorized to fix the auditors’ remuneration.
The result
of the voting on this matter was as follows:
For:
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58,823,045 shares
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Withhold:
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2,004,892 shares
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Broker Non-Vote:
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1 shares
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SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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NIOCORP DEVELOPMENTS LTD.
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DATE: December 15, 2016
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By:
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/s/ Neal Shah
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Neal Shah
Chief Financial Officer
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UNITED
STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
_________________
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date
of Report: December 21, 2016
(Date
of earliest event reported)
NioCorp
Developments Ltd.
(Exact Name of Registrant as Specified in Charter)
British
Columbia, Canada
(State or Other Jurisdiction of Incorporation)
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000-55710
(Commission File Number)
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98-1262185
(IRS Employer Identification No.)
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7000
South Yosemite Street, Suite 115
Centennial,
Colorado
(Address
of principal executive offices)
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80112
(Zip Code)
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Registrant’s
telephone number, including area code:
(720) 639-4647
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☐
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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☐
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Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item
8.01. Other Events.
On
December 21, 2016, NioCorp Developments Ltd. (the “Company”) provided an update on its cash and capital position as
of December 16, 2016.
As
of December 16
,
2016, the Company’s current planned operational needs
are approximately $4.2 million through June 2017. This estimate reflects the cash proceeds the Company received from the exercise
of warrants that expired on November 10, 2016. Burn rate now averages to approximately $675k per month, with approximately $355k
per month until June 30, 2017 for planned exploration expenditures related to the completion of the Project feasibility study,
Project permitting efforts, third party consultants, and other activities related to advancing the Project, and approximately
$325k per month for administrative purposes in support of these efforts and for general working capital needs. We currently have
sufficient cash on hand to meet these planned expenditures for approximately the next two to three months (January 2016 –
February 2017). The Company’s ability to continue operations and fund its current work plan is dependent on management’s
ability to secure additional financing during or prior to February 2017. The Company anticipates that it will need to raise a
minimum of $4 to $6 million to continue planned operations for the next twelve months. Management is actively pursuing such additional
sources of debt and/or equity financing, and expects that it will close on a portion of that funding during or prior to February
2017, however, while the Company has been successful in raising funds in the past, there can be no assurance it will be able to
do so in the future.
The
Company’s cash and capital position should be read in conjunction with the Company’s latest unaudited interim consolidated
financial statements as at and for the three months ended September 30, 2016, including the footnotes thereto, and the related
management’s discussion and analysis, each contained in the Company’s quarterly report on Form 10-Q as filed with
the Commission on November 14, 2016.
Certain
statements contained in this report may constitute forward-looking statements, including but not limited to, statements regarding
the Company’s anticipated burn rate and future expenditures and the timing and need for additional capital. Such forward-looking
statements are based upon NioCorp’s reasonable expectations and business plan at the date hereof, which are subject to change
depending on economic, political and competitive circumstances and contingencies. Readers are cautioned that such forward-looking
statements involve known and unknown risks, uncertainties and other factors that may cause a change in such assumptions and the
actual outcomes and estimates to be materially different from those estimated or anticipated future results, achievements or position
expressed or implied by those forward-looking statements. Risks, uncertainties and other factors that could cause NioCorp’s
plans or prospects to change include changes in demand for and price of commodities (such as fuel and electricity) and currencies;
changes or disruptions in the securities markets; legislative, political or economic developments; the need to obtain permits
and comply with laws and regulations and other regulatory requirements; 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 speculative nature of mineral exploration and development, including the risks of diminishing quantities of grades of reserves
and resources; risks involved in the exploration, development and mining business and the risks set forth under the heading “Risk
Factors” in the Company’s S-1 registration statement and other filings with the SEC at www.sec.gov. NioCorp disclaims
any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future
events or otherwise.
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
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NIOCORP
DEVELOPMENTS LTD.
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DATE: December
21, 2016
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By:
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/s/
Neal Shah
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Neal Shah
Chief Financial Officer
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: January 16, 2017
(Date of earliest event reported)
NioCorp
Developments Ltd.
(Exact Name of Registrant as Specified in Charter)
British Columbia, Canada
(State or Other Jurisdiction of
Incorporation)
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000-55710
(Commission File Number)
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98-1262185
(IRS Employer Identification No.)
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7000 South Yosemite Street, Suite 115
Centennial, Colorado
(Address of principal executive offices)
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80112
(Zip Code)
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Registrant’s telephone number, including area code:
(720) 639-4647
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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¨
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Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425)
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¨
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Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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¨
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Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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¨
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Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Item 1.01
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Entry into a Material Definitive Agreement.
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On January 16, 2017, NioCorp Developments Ltd. (the “Company”)
and its Chief Executive Officer, Mark A. Smith, entered into a Credit Facility Agreement (the “Smith Credit Agreement”)
pursuant to which Mr. Smith agreed to make available to the Company a credit facility of up to $2,000,000. Under the Smith Credit
Agreement, Mr. Smith has agreed to advance amounts requested by the Company under the credit facility (the “Loan”)
up to the $2,000,000 maximum. The credit facility is non-revolving and amounts paid back under the terms of the Smith Credit Agreement
do not again become available for drawdowns at the request of the Company.
The Company will pay interest to Mr. Smith on amounts outstanding
under the Loan and on any overdue interest at a rate equal to 10% per annum, calculated monthly in arrears, through to the date
of repayment of the Loan. Interest on the Loan will be computed on the basis of a 360-day year comprised on twelve 30-day months.
Mr. Smith will also receive an establishment fee equal to 2.5% of the amount of any drawdown payable at the time of the drawdown
as consideration of the advancement of such drawdown.
Any outstanding balance on the Loan, including accrued interest,
shall be immediately due and payable by the Company on the date of termination of the Smith Credit Agreement on January 16, 2018
or upon the occurrence of an Event of Default (as described below). The Company can pre-pay the Loan at any time without notice
and without penalty or prepayment fees.
Drawdowns under the Smith Credit Agreement must be made on a
business day before the termination date for a minimum amount of $10,000 and not cause to total amount advanced to exceed $2,000,000.
Further, Mr. Smith must have received the written drawdown request along with payment of the establishment fee. Each drawdown request
is subject to the consent of Mr. Smith, which may be withheld in Mr. Smith’s sole discretion.
Under the terms of the Smith Credit Agreement, the Company has
covenanted that so long as monies are outstanding under the Loan, it will: (a) repay, or cause to be repaid, the Loan and all other
monies required to be paid to Mr. Smith in accordance with the Agreement and (b) duly observe and perform all obligations and agreement
set forth in the Agreement.
The following occurrences will trigger and Event of Default
under the Smith Credit Agreement, causing the principal amount of Loan outstanding, plus accrued interest, costs and all other
monies owing to Mr. Smith to immediately become payable upon demand by Mr. Smith: (a) if the Company shall default in any payment
of principal, interest or other amount when the same is required under the Smith Credit Agreement and such default has continued
for a period of seven (7) days after notice in writing has been given by Mr. Smith to the Company regarding such default, (b) if
the Company shall become insolvent, make a general assignment for the benefit of its creditors, or passes a resolution for the
winding-up, merger or amalgamation of the Company, or the Company declares bankruptcy or a receiver is appointed under applicable
law, or a compromise or arrangement is proposed by the Company to its creditors, or the occurrence of similar events (c) if the
Company defaults in observing or performing any other covenant or agreement of the Smith Credit Agreement and such default has
continued for a period of seven (7) days after notice in writing has been given by Mr. Smith to the Company regarding such default.
Pursuant to the Company’s related party transaction corporate
governance policies, the Smith Credit Agreement was approved by the Company’s Audit Committee and the disinterested directors
of the Board of Directors.
The above is a summary of the material terms of the Smith Credit
Agreement and is qualified in its entirety by the complete terms of the Smith Credit Agreement which is filed as Exhibit 10.1 to
this Current Report on Form 8-K and is hereby incorporated by reference.
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Item 2.03
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Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant.
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The disclosure regarding the Smith Credit Agreement contained
in Item 1.01 of this Current Report on Form 8-K is hereby incorporated by reference into this Item 2.03.
On January 18, 2017, the Company completed a drawdown from the
credit facility under the Smith Credit Agreement in the amount of $175,000.
Item 9.01. Exhibits.
Exhibit
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Description
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10.1
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Smith Credit Agreement
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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NIOCORP DEVELOPMENTS LTD.
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DATE: January 20, 2017
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By:
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/s/ Neal Shah
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Neal Shah
Chief Financial Officer
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Exhibit 10.1
CREDIT FACILITY AGREEMENT
THIS AGREEMENT
made effective as
of the 16
th
day of January, 2017 (the “
Effective
Date
”).
BETWEEN:
NioCorp
Developments Ltd.
, a corporation incorporated under the laws of British Columbia with an office at 7000 South Yosemite
Street, Suite 115, Centennial, CO, USA 80112
(the “
Borrower
”)
OF THE FIRST PART
AND:
Mark
Smith
, businessman of Highlands Ranch, CO, USA 80126
(the “
Lender
”)
OF THE SECOND PART
WHEREAS:
A. The
Borrower has requested the Lender provide and maintain a Credit Facility (as hereinafter defined) to the Borrower and the Lender
has agreed to do so on the terms and subject to the conditions of this Agreement; and
B. The
Borrower has agreed to repay all sums owing pursuant to the Credit Facility to the Lender on the terms and conditions set forth
in this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES
that, in consideration of the mutual covenants and agreements herein contained, the parties agree as follows:
In this Agreement:
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(a)
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“
Business
Day
” has the meaning
given to that term in Subsection 2.5 of this Agreement;
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(b)
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“
Credit
Facility
” means the non-revolving
credit facility in the amount of up to $2,000,000 which will be made available by the Lender to the Borrower in accordance with
the terms hereof;
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(c)
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“
Drawdown
” means the drawdown of funds
by the Borrower under the Credit Facility;
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(d)
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“
Drawdown Request
” means a written request
for a Drawdown delivered by the Borrower to the Lender;
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(e)
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“
Due
Date
” has the meaning given
to that term in Subsection 2.4 of this Agreement;
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(f)
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“
Establishment Fee
” means an cash payment
equal to 2.5% of the amount of any Drawdown, payable by the Borrower to the Lender in consideration of the advancement of such
Drawdown;
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(g)
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“
Event of Default
” means any event specified
in Subsection 7.1 of this Agreement;
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(h)
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“
Lender’s
Consent
” means
the written response of the Lender to a Drawdown Request confirming the Lender’s intention to provide the amount specified
in the Drawdown Request in accordance with the provisions of Section 2 hereof, which man be arbitrarily withheld at the sole discretion
of the Lender.
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(i)
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“
Loan
” means the advance by the Lender
to the Borrower of the Principal, together with interest thereupon as set out in Subsection 2.3 of this Agreement;
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(j)
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“Principal
” means the principal amount
advanced under the Credit Facility that has not been repaid; and
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(k)
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“
Term
”
means a period commencing
on the Effective Date and expiring January
16
, 2018.
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This Agreement will be governed by and
construed in accordance with the laws of British Columbia and the parties attorn to the jurisdiction of the Courts of the Province
of British Columbia.
If any provision of this Agreement is determined
to be void or unenforceable in whole or in part, that provision will be deemed not to affect or impair the validity of any other
provision of this Agreement and the void or unenforceable provision will be severable from this Agreement.
The headings to the sections of this Agreement
are inserted for convenience only and will not affect the construction of this Agreement.
Unless otherwise stated, a reference in
this Agreement to a numbered or lettered section or subsection refers to the section or subsection of each part bearing that number
or letter in this Agreement.
All dollar amounts stated in this Agreement
mean lawful money of the United States of America.
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2.
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AMOUNT AND TERMS OF LOAN
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2.1.
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Advance of Future Sums
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The Lender agrees, subject to Subsection
2.7, to make the Credit Facility available to the Borrower, and the Borrower hereby irrevocably authorizes and directs the Lender
to advance amounts requested by the Borrower under the Credit Facility to the Borrower, subject to the terms hereof.
All amounts owing under the Credit Facility
will be secured pursuant a General Security Agreement granted by the Borrower to the Lender dated June 17
th
, 2015.
The Borrower will pay interest to the Lender
on the amount of Principal outstanding and on overdue interest at a rate equal to 10% per annum, calculated monthly in arrears,
through to the date of repayment of the Loan. Interest on the Loan will be computed on the basis of a 360-day year comprised of
twelve 30-day months.
Any outstanding balance of the Loan, including
accrued interest, shall be immediately due and payable by the Borrower to the Lender on the earlier of:
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(a)
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the expiry of the Term; or
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(b)
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the occurrence of an Event
of Default, as defined
in Section 7 hereof,
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(the “
Due
Date
”).
Any amount that is required to be paid
on a day that is not a Business Day will be payable on the next Business Day without adjustment for interest thereon. A “
Business
Day
” means any day except Saturday, Sunday, or a day that is a statutory holiday in Colorado, USA.
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2.5
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Application of Payments
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All payments under the Loan will be applied
first in payment of interest accrued to the date of payment and secondly in payment of outstanding amounts of Principal. The Borrower
may prepay any or all amounts outstanding under the Loan (including for greater certainty any interest or fees owing from the Borrower
to the Lender pursuant hereto) at any time without providing notice and without incurring any penalty or prepayment fee.
All amounts payable by the Borrower under
this Agreement will be paid without set-off or counterclaim, and without any deductions or withholdings whatsoever.
2.7
Drawdown
Procedure
Each Drawdown shall:
(a) be
in the minimum amount of $10,000;
(b) be
made on a Business Day;
(c) be
made prior to the Due Date;
(d) not
cause the total Principal advanced and interest on all such Principal to exceed $2,000,000; and
(e) be
payable by the Lender to the Borrower only upon
|
a.
|
receipt by the Lender from the Borrower of:
|
|
i.
|
a Drawdown Request, and
|
|
ii.
|
the Establishment Fee in respect of such Drawdown; and
|
|
b.
|
receipt by the Borrower from the Lender of the Lender’s
Consent, which may be arbitrarily withheld by the Lender in his absolute discretion.
|
Subject to receipt of each applicable Lender’s
Consent by the Borrower, each Drawdown shall be payable by the Lender to the Borrower fourteen (14) days following delivery by
the Lender to the Borrower of such Lender’s Consent.
The Lender is hereby authorized to open
and maintain books of account and other books and records evidencing all advances under the Loan, interest accruing thereon, fees,
charges, and other amounts from time to time charged to the Borrower hereunder; and amounts from time to time owing, paid, or repaid
by the Borrower under this Agreement. All such books, accounts, and records will constitute prima facie evidence of the amount
owing by the Borrower under this Agreement; but the failure to make any entry or recording in such books, accounts, and records
will not limit or otherwise affect the obligations of the Borrower under this Agreement.
3.1 The
obligations of the Lender under this Agreement are subject to the following conditions being satisfied on the Effective Date:
|
(a)
|
the representations and warranties of the Borrower contained
in this Agreement being true and correct as at the Effective Date; and
|
|
(c)
|
any required approvals of this Agreement having been obtained.
|
3.2 The
obligations of the Borrower under this Agreement are subject to the following conditions being satisfied on the Effective Date:
|
(a)
|
the representations and warranties of the Lender contained
in this Agreement being true and correct as at the Effective Date; and
|
|
(b)
|
all required approvals of this Agreement having been obtained.
|
|
4.
|
BORROWER’S REPRESENTATIONS AND WARRANTIES
|
|
4.1.
|
The Borrower represents and warrants to the Lender that:
|
|
(a)
|
it is a valid and subsisting corporation incorporated and
in good standing under the laws of British Columbia;
|
|
(b)
|
the entering into of this Agreement and the transactions
contemplated hereby will not result in the violation of any of the terms and provisions of any law applicable to the Borrower,
or of any agreement, written or oral, to which the Borrower may be a party or by which it is or may be bound;
|
|
(c)
|
the Borrower has duly signed and delivered this Agreement
and this Agreement constitutes a legal, valid, and binding agreement of the Borrower enforceable against the Borrower in accordance
with its terms; and
|
|
(d)
|
the Borrower has the necessary power, capacity, right and
authority to enter into and deliver this Agreement and to perform its obligations hereunder.
|
4.2. All
representations, warranties, covenants, and agreements made by the Borrower in this Agreement are deemed to have been relied on
by the Lender despite any prior or subsequent investigation by the Lender and will survive the advance of the Loan and continue
in full force and effect so long as any amount of the Loan remains outstanding and unpaid.
|
5.
|
LENDER’S REPRESENTATIONS AND WARRANTIES
|
|
5.1.
|
The Lender represents and warrants to the Borrower that:
|
|
(a)
|
the entering into of this Agreement and the transactions
contemplated hereby will not result in the violation of any of the terms and provisions of any law applicable to the Lender, or
of any agreement, written or oral, to which the Lender may be a party or by which he is or may be bound;
|
|
(b)
|
the Lender has duly signed and delivered this Agreement
and this Agreement constitutes a legal, valid, and binding agreement of the Lender enforceable against the Lender in accordance
with its terms; and
|
|
(c)
|
the Lender has the necessary power, capacity, right and
authority to enter into and deliver this Agreement and to perform his obligations hereunder.
|
5.2 All
representations, warranties, covenants, and agreements made by the Lender in this Agreement are deemed to have been relied on by
the Borrower despite any prior or subsequent investigation by the Borrower and will survive the advance of the Loan and continue
in full force and effect so long as any amount of the Loan remains outstanding and unpaid.
|
6.1
|
The Borrower covenants and agrees that so long as any monies
are outstanding under the Loan, it will:
|
|
(a)
|
repay, or cause to be repaid, the Loan and all other monies
required to be paid to the Lender in accordance with this Agreement; and
|
|
(b)
|
duly observe and perform all covenants and agreements set
forth in this Agreement.
|
|
7.
|
EVENTS OF DEFAULT AND REMEDIES
|
7.1 The
Principal amount of the Loan outstanding, plus all interest, costs and all other money owing to the Lender under this Agreement
shall immediately become payable upon demand by the Lender, unless otherwise waived in writing by the Lender, in any of the following
events (each an “
Event
of
Default
”):
|
(a)
|
if the Borrower shall default in any payment of Principal,
interest or other amount when the same is required hereunder and such default has continued for a period of seven (7) days after
notice in writing has been given by the Lender to the Borrower specifying such default;
|
|
(b)
|
if the Borrower shall become insolvent or shall make a
general assignment for the benefit of its creditors, or if an order be made or an effective resolution be passed for the winding-up,
merger or amalgamation of the Borrower or if the Borrower shall be declared bankrupt or if a custodian or receiver be appointed
for the Borrower under the
Bankruptcy and Insolvency Act
(Canada), or if a compromise or arrangement is proposed by the
Borrower to its creditors or any class of its creditors, or if a receiver or other officer with like powers shall be appointed
for the Borrower; or
|
|
(c)
|
if the Borrower defaults in observing or performing any
other covenant or agreement of this Agreement on its part to be observed or performed and such default has continued for a period
of seven (7) days after notice in writing has been given by the Lender to the Borrower specifying such default.
|
7.2 The
remedies, rights and powers of the Lender under this Agreement and at law and in equity are cumulative and not alternative and
are not in substitution for any other remedies, rights or powers of the Lender and no delay or omission in exercise of any such
remedy, right or power will exhaust such remedies, rights or powers or be construed as a waiver of any of them.
|
8.1
|
Waiver or Modification
|
No failure or delay on the Lender’s
part in exercising any power or right hereunder will operate as a waiver thereof nor will any single or partial exercise of that
right or power preclude any other right or power under this Agreement. No amendment, modification, or waiver of any condition of
this Agreement or consent to any departure by the Borrower therefrom will be effective unless it is in writing signed by the Lender.
No notice to or demand on the Borrower will entitle the Borrower to any other or further notice or demand in similar or other circumstances
unless specifically provided for in this Agreement.
The parties may not amend this Agreement
except by document in writing signed by both parties.
The parties will sign any other documents
and do any other things necessary to carry out the intent of this Agreement.
Neither party may assign this Agreement or any interest herein
without the prior written consent of the other, which consent may be arbitrarily withheld.
Time is of the essence of this Agreement.
Nothing in this Agreement will prejudice
or impair any other right or remedy that the Lender may otherwise have regarding the Loan or any rights or remedies it may have
regarding other loans that the Lender may make to the Borrower.
This Agreement will be binding on and enure
to the benefit of the Borrower, the Lender, and their respective heirs, executors, administrators, successors, and permitted assigns.
|
8.9
|
Independent Legal Advice
|
The Lender acknowledges that Miller Thomson
LLP is the solicitor of the Borrower only and is not protecting the rights or interests of the Lender. The Lender acknowledges
and agrees that the Borrower and Miller Thomson LLP have given the Lender adequate opportunity to seek, and have recommended that
the Lender seek and obtain, independent legal advice with respect to the subject matter of this Agreement and for the purpose of
ensuring his rights and interests are protected. The Lender represents and warrants to the Borrower and to Miller Thomson LLP that
the Lender has sought independent legal advice or consciously chosen not to do so with full knowledge of the risks associated with
not obtaining such independent legal advice. The Lender acknowledges that he has read and understood this provision of this Agreement
and indicates so by signing this Agreement.
IN WITNESS WHEREOF
the parties have
signed this Agreement as of the date on page 1 of this Agreement.
NIOCORP DEVELOPMENTS LTD.
|
|
|
|
|
|
|
Per:
|
|
|
|
|
Authorized Signatory
|
|
|
Signed, sealed and delivered by
|
)
|
|
MARK SMITH
in the presence of:
|
)
|
|
|
)
|
|
Cathy J.Savoie
|
)
|
|
Name
|
)
|
|
|
)
|
|
7000 S.Yosemite St, # 115
|
)
|
/s/ Mark Smith
|
Address
|
)
|
MARK SMITH
|
|
)
|
|
Centennial, Co 80112
|
)
|
|
|
)
|
|
Office Manager
|
)
|
|
Occupation
|
)
|
|
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K/A
(Amendment No. 1)
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: January 16, 2017
(Date of earliest event reported)
NioCorp
Developments Ltd.
(Exact Name of Registrant as Specified in Charter)
British Columbia, Canada
(State or Other Jurisdiction of
Incorporation)
|
|
000-55710
(Commission File Number)
|
|
98-1262185
(IRS Employer Identification No.)
|
7000 South Yosemite Street, Suite 115
Centennial, Colorado
(Address of principal executive offices)
|
|
80112
(Zip Code)
|
Registrant’s telephone number, including area code:
(720) 639-4647
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
|
¨
|
Written communications pursuant
to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
¨
|
Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
¨
|
Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
¨
|
Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Explanatory Note
The Registrant hereby files this amendment to
its Current Report on Form 8-K, as filed with the Securities and Exchange Commission on January 20, 2017, to add disclosure
regarding the Smith Credit Agreement (as defined herein) which was inadvertently omitted from the prior filing.
|
Item 1.01
|
Entry into a Material Definitive Agreement.
|
On January 16, 2017, NioCorp Developments Ltd. (the “Company”)
and its Chief Executive Officer, Mark A. Smith, entered into a Credit Facility Agreement (the “Smith Credit Agreement”)
pursuant to which Mr. Smith agreed to make available to the Company a credit facility of up to $2,000,000. Under the Smith Credit
Agreement, Mr. Smith has agreed to advance amounts requested by the Company under the credit facility (the “Loan”)
up to the $2,000,000 maximum. The credit facility is non-revolving and amounts paid back under the terms of the Smith Credit Agreement
do not again become available for drawdowns at the request of the Company.
The Company will pay interest to Mr. Smith on amounts outstanding
under the Loan and on any overdue interest at a rate equal to 10% per annum, calculated monthly in arrears, through to the date
of repayment of the Loan. Interest on the Loan will be computed on the basis of a 360-day year comprised on twelve 30-day months.
Mr. Smith will also receive an establishment fee equal to 2.5% of the amount of any drawdown payable at the time of the drawdown
as consideration of the advancement of such drawdown.
Any outstanding balance on the Loan, including accrued interest,
shall be immediately due and payable by the Company on the date of termination of the Smith Credit Agreement on January 16, 2018
or upon the occurrence of an Event of Default (as described below). The Company can pre-pay the Loan at any time without notice
and without penalty or prepayment fees.
Drawdowns under the Smith Credit Agreement must be made on a
business day before the termination date for a minimum amount of $10,000 and not cause to total amount advanced to exceed $2,000,000.
Further, Mr. Smith must have received the written drawdown request along with payment of the establishment fee. Each drawdown request
is subject to the consent of Mr. Smith, which may be withheld in Mr. Smith’s sole discretion.
Under the terms of the Smith Credit Agreement, the Company has
covenanted that so long as monies are outstanding under the Loan, it will: (a) repay, or cause to be repaid, the Loan and all other
monies required to be paid to Mr. Smith in accordance with the Agreement and (b) duly observe and perform all obligations and agreement
set forth in the Agreement.
The following occurrences will trigger and Event of Default
under the Smith Credit Agreement, causing the principal amount of Loan outstanding, plus accrued interest, costs and all other
monies owing to Mr. Smith to immediately become payable upon demand by Mr. Smith: (a) if the Company shall default in any payment
of principal, interest or other amount when the same is required under the Smith Credit Agreement and such default has continued
for a period of seven (7) days after notice in writing has been given by Mr. Smith to the Company regarding such default, (b) if
the Company shall become insolvent, make a general assignment for the benefit of its creditors, or passes a resolution for the
winding-up, merger or amalgamation of the Company, or the Company declares bankruptcy or a receiver is appointed under applicable
law, or a compromise or arrangement is proposed by the Company to its creditors, or the occurrence of similar events (c) if the
Company defaults in observing or performing any other covenant or agreement of the Smith Credit Agreement and such default has
continued for a period of seven (7) days after notice in writing has been given by Mr. Smith to the Company regarding such default.
The Smith Credit Agreement is secured, along with
the Company’s prior $1 million loan from Mr. Smith pursuant to a loan agreement dated June 17, 2015, by all of the
Company’s assets pursuant to a general security agreement between the Company and Mr. Smith dated June 17, 2015.
Pursuant to the Company’s related party transaction corporate
governance policies, the Smith Credit Agreement was approved by the Company’s Audit Committee and the disinterested directors
of the Board of Directors.
The above is a summary of the material terms of the Smith Credit
Agreement and is qualified in its entirety by the complete terms of the Smith Credit Agreement which is filed as Exhibit 10.1 to
this Current Report on Form 8-K and is hereby incorporated by reference.
|
Item 2.03
|
Creation of a Direct Financial Obligation or an Obligation
under an Off-Balance Sheet Arrangement of a Registrant.
|
The disclosure regarding the Smith Credit Agreement contained
in Item 1.01 of this Current Report on Form 8-K/A is hereby incorporated by reference into this Item 2.03.
On January 18, 2017, the Company completed a drawdown from the
credit facility under the Smith Credit Agreement in the amount of $175,000.
Item 9.01. Exhibits.
Exhibit
|
|
Description
|
10.1
|
|
Smith Credit Agreement, previously filed as
Exhibit 10.1 to the Company’s 8-K filed on January 20, 2017 and incorporated herein by reference.
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
NIOCORP DEVELOPMENTS LTD.
|
|
|
|
DATE: January 20, 2017
|
By:
|
/s/ Neal Shah
|
|
|
Neal Shah
Chief Financial Officer
|
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: January 27, 2017
(Date of earliest event reported)
NioCorp
Developments Ltd.
(Exact Name of Registrant as Specified in Charter)
British Columbia, Canada
(State or Other Jurisdiction of
Incorporation)
|
000-55710
(Commission File Number)
|
98-1262185
(IRS Employer Identification No.)
|
7000 South Yosemite Street, Suite 115
Centennial, Colorado
(Address of principal executive offices)
|
80112
(Zip Code)
|
Registrant’s telephone number, including area code:
(720) 639-4647
Check the appropriate box below if the Form 8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
|
¨
|
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
|
|
¨
|
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
|
|
¨
|
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
|
|
¨
|
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
|
Item 8.01. Other Events.
On January 27, 2017, NioCorp Developments
Ltd. (the “Company”) issued a press release announcing a C$2 million non-brokered private placement of Units of the
Company. A copy of the January 27, 2017 press release is filed as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated
herein by reference.
On January 30, 2017, the Company issued
a press release announcing the upsizing of its previously announced private placement from C$2 million to C$2.5 million. A copy
of the January 30, 2017 press release is filed as Exhibit 99.2 to this Current Report on Form 8-K and is incorporated herein by
reference
Item 9.01. Exhibits.
Exhibit
|
|
Description
|
99.1
|
|
Press Release dated January 27, 2017
|
99.2
|
|
Press Release dated January 30, 2017
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
NIOCORP DEVELOPMENTS LTD.
|
|
|
|
DATE: February 2, 2017
|
By:
|
/s/ Neal Shah
|
|
|
Neal Shah
Chief Financial Officer
|
Exhibit 99.1
NioCorp Announces C$2 Million
Non-Brokered Private Placement
CENTENNIAL, Colo. – January 27, 2017
– NioCorp Developments Ltd. (“NioCorp” or the "Company”) (TSX: NB, OTCQX: NIOBF, FSE: BR3) is pleased
to announce that it will offer, on a non-brokered private placement basis, up to 2,857,143 units of the Company (the "Units")
at a price of C$0.70 per Unit, representing aggregate gross proceeds of up to C$2,000,000 (the "Offering").
Each Unit will consist of one common share
of the Company (a “Common Share”) and one common share purchase warrant (a “Warrant”). Each Warrant will
entitle the holder thereof to acquire one additional Common Share at C$0.85 per Common Share for a period of 36 months from the
closing of the Offering.
The net proceeds from the Offering will be
used by the Company for continued development of NioCorp’s Elk Creek Superalloy Materials Project (the “Elk Creek Project”)
and for general corporate purposes.
The Offering will take place by way of a private
placement to qualified investors in such provinces of Canada (except Quebec) as the Company may designate, and otherwise in those
jurisdictions where the Offering can lawfully be made, including the United States and Europe under applicable private placement
exemptions.
The Company may pay finder’s fees or
commissions on a portion of the private placement in respect of subscriptions originated outside of the United States.
The
closing of the Offering is expected on or about the week of February 10, 2017
and
is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals including the
approval of the Toronto Stock Exchange.
This press release does not constitute
an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of any of the securities in any jurisdiction
in which such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws
of any such jurisdiction. These securities have not been registered under the United States Securities Act of 1933, as amended
(the “U.S. Securities Act”), or any applicable state securities laws and may not be offered or sold in the United States,
or to, or for the account or benefit of, a U.S. person or person in the United States absent such registration or an applicable
exemption from such registration requirements. United States and U.S. person are as defined in Regulation S under the U.S. Securities
Act.
On Behalf of the Board of Directors,
"Mark Smith”
NioCorp Developments Ltd.
(TSX:
NB | OTCQX: NIOBF | FSE: BR3)
7000
South Yosemite, Suite 115, Centennial, Colorado 80112 USA Tel: 720-639-4650
Mark Smith
President, CEO, Chairman and Director
# # #
Source
: NioCorp Developments Ltd.
@NioCorp $NB $NIOBF $BR3 #Niobium #Scandium #ElkCreek
For More Information:
Contact Jim Sims,
VP of External Affairs, NioCorp Developments Ltd., 720-639-4650,
jim.sims@niocorp.com
About NioCorp
NioCorp is developing a superalloy materials
project in Southeast Nebraska with an aim to produce Niobium, Scandium, and Titanium. Niobium is used to produce superalloys as
well as High Strength, Low Alloy ("HSLA") steel, which is a lighter, stronger steel used in automotive, structural, and
pipeline applications. Scandium is a superalloy material that can be combined with Aluminum to make alloys with increased strength
and improved corrosion resistance. Scandium also is a critical component of advanced solid oxide fuel cells. Titanium is used in
various superalloys and is a key component of pigments used in paper, paint and plastics and is also used for aerospace applications,
armor and medical implants.
Cautionary Note Regarding Forward-Looking
Statements
Neither TSX nor its Regulation Services Provider
(as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this document. Certain
statements contained in this document may constitute forward-looking statements, including but not limited to statements related
to the anticipated closing, size and structure of the Offering, as well as the development of the Elk Creek Project. Such forward-looking
statements are based upon NioCorp’s reasonable expectations and business plan at the date hereof, which are subject to change
depending on economic, political and competitive circumstances and contingencies. Readers are cautioned that such forward-looking
statements involve known and unknown risks, uncertainties and other factors that may cause a change in such assumptions and the
actual outcomes and estimates to be materially different from those estimated or anticipated future results, achievements or positions
expressed or implied by those forward-looking statements. Risks, uncertainties and other factors that could cause NioCorp’s
plans or prospects to change include changes in demand for and price of commodities (such as fuel and electricity) and currencies;
changes or disruptions in the securities markets; legislative, political or economic developments; the need to obtain permits and
comply with laws and regulations and other regulatory requirements; 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 speculative nature of mineral exploration and development, including the risks of diminishing quantities of grades of reserves
and resources; the risks involved in the exploration, development, and mining business, and the risks set forth under the heading
“Risk Factors” in the Company’s S-1 registration statement and other filings with the SEC at www.sec.gov. NioCorp
disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information,
future events or otherwise.
NioCorp Developments Ltd.
(TSX:
NB | OTCQX: NIOBF | FSE: BR3)
7000 South Yosemite, Suite 115,
Centennial, Colorado 80112 USA Tel: 720-639-4650
Exhibit 99.2
NioCorp Expands Non-Brokered
Private Placement in Response to Strong Investor Demand
CENTENNIAL, Colo. – January 30, 2017
– NioCorp Developments Ltd. (“NioCorp” or the "Company”) (TSX: NB, OTCQX: NIOBF, FSE: BR3), is pleased
to announce, further to its January 27, 2017 announcement of a non-brokered private placement of Units at a price of C$0.70 per
Unit (the “Offering”), that due to strong investor demand it has increased the maximum gross proceeds of the Offering
to C$2.5 million from C$2 million. Further, the Company has received expressions of interest from certain investment dealers,
and has agreed to pay fees comprised of a commission and broker warrants in respect of certain subscriptions originated by such
investment dealers in each case for services outside of the United States.
Each Unit will consist of one common share
of the Company (a “Common Share”) and one common share purchase warrant (a “Warrant”). Each Warrant will
entitle the holder thereof to acquire one additional Common Share at C$0.85 per Common Share for a period of 36 months from the
closing of the Offering.
The
closing of the Offering is expected on or about the week of February 10, 2017
and
is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals including the
approval of the Toronto Stock Exchange. Full details of the Offering are available in the Company’s January 27, 2017 announcement,
seen here
.
This press release does not constitute
an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of any of the securities in any jurisdiction
in which such an offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws
of any such jurisdiction. These securities have not been registered under the United States Securities Act of 1933, as amended
(the “U.S. Securities Act”), or any applicable state securities laws, and may not be offered or sold in the United
States, or to, or for the account or benefit of, a U.S. person or person in the United States absent such registration or an applicable
exemption from such registration requirements. United States and U.S. person are as defined in Regulation S under the U.S. Securities
Act.
On Behalf of the Board of Directors,
"Mark Smith”
Mark Smith
President, CEO, Chairman and Director
# # #
NioCorp Developments Ltd.
(TSX:
NB | OTCQX: NIOBF | FSE: BR3)
7000 South Yosemite, Suite 115, Centennial,
Colorado 80112 USA Tel: 720-639-4650
www.NioCorp.com
Source
: NioCorp Developments Ltd.
@NioCorp $NB $NIOBF $BR3 #Niobium #Scandium #ElkCreek
For More Information:
Contact Jim Sims,
VP of External Affairs, NioCorp Developments Ltd., 720-639-4650,
jim.sims@niocorp.com
About NioCorp
NioCorp is developing a superalloy materials
project in Southeast Nebraska with an aim to produce Niobium, Scandium, and Titanium. Niobium is used to produce superalloys as
well as High Strength, Low Alloy ("HSLA") steel, which is a lighter, stronger steel used in automotive, structural, and
pipeline applications. Scandium is a superalloy material that can be combined with Aluminum to make alloys with increased strength
and improved corrosion resistance. Scandium also is a critical component of advanced solid oxide fuel cells. Titanium is used in
various superalloys and is a key component of pigments used in paper, paint and plastics and is also used for aerospace applications,
armor and medical implants.
Cautionary Note Regarding Forward-Looking
Statements
Neither TSX nor its Regulation Services Provider
(as that term is defined in the policies of the TSX) accepts responsibility for the adequacy or accuracy of this document. Certain
statements contained in this document may constitute forward-looking statements, including but not limited to statements related
to the anticipated closing, size and structure of the Offering. Such forward-looking statements are based upon NioCorp’s
reasonable expectations and business plan at the date hereof, which are subject to change depending on economic, political and
competitive circumstances and contingencies. Readers are cautioned that such forward-looking statements involve known and unknown
risks, uncertainties and other factors that may cause a change in such assumptions and the actual outcomes and estimates to be
materially different from those estimated or anticipated future results, achievements or positions expressed or implied by those
forward-looking statements. Risks, uncertainties and other factors that could cause NioCorp’s plans or prospects to change
include changes in demand for and price of commodities (such as fuel and electricity) and currencies; changes or disruptions in
the securities markets; legislative, political or economic developments; the need to obtain permits and comply with laws and regulations
and other regulatory requirements; 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 speculative nature of
mineral exploration and development, including the risks of diminishing quantities of grades of reserves and resources; the risks
involved in the exploration, development, and mining business, and the risks set forth under the heading “Risk Factors”
in the Company’s S-1 registration statement and other filings with the SEC at www.sec.gov. NioCorp disclaims any intention
or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
NioCorp Developments Ltd.
(TSX:
NB | OTCQX: NIOBF | FSE: BR3)
7000 South Yosemite, Suite 115, Centennial,
Colorado 80112 USA Tel: 720-639-4650
www.NioCorp.com
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
10-Q
|
x
|
QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the quarterly period ended December
31, 2016
OR
|
o
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
For the transition period from
to
Commission
file number: 000-55710
|
NioCorp
Developments Ltd.
|
(Exact
Name of Registrant as Specified in its Charter)
|
British
Columbia, Canada
|
|
98-1262185
|
(State
or other jurisdiction of incorporation or
organization)
|
|
(I.R.S. Employer
Identification
No.)
|
7000
South Yosemite Street, Suite 115
Centennial, CO
(Address of Principal Executive Offices)
|
|
80112
(Zip code)
|
Registrant’s telephone number, including
area code: (855) 264-6267
Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes
¨
No
x
Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files).
Yes
¨
No
x
Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions
of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2
of the Exchange Act. (Check one):
Large Accelerated Filer
¨
|
Accelerated Filer
¨
|
|
|
Non-Accelerated Filer
x
|
Small Reporting Company
¨
|
(Do not check if a smaller reporting company)
|
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
¨
No
x
As of February, 3, 2017, the registrant had 186,366,100 Common Shares outstanding.
TABLE OF CONTENTS
PART I— FINANCIAL
INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Contents
NioCorp Developments
Ltd.
|
Condensed
Consolidated Balance Sheets
|
(expressed in thousands of U.S. dollars, except share data) (unaudited)
|
|
|
|
|
|
As of
|
|
|
|
Note
|
|
|
December 31,
2016
|
|
|
June
30,
2016
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash
|
|
|
|
|
|
$
|
729
|
|
|
$
|
4,412
|
|
Restricted cash
|
|
|
4
|
|
|
|
265
|
|
|
|
-
|
|
Receivables
|
|
|
|
|
|
|
5
|
|
|
|
5
|
|
Prepaid expenses
|
|
|
|
|
|
|
31
|
|
|
|
101
|
|
Total current assets
|
|
|
|
|
|
|
1,030
|
|
|
|
4,518
|
|
Non-current
|
|
|
|
|
|
|
|
|
|
|
|
|
Deposits
|
|
|
|
|
|
|
64
|
|
|
|
65
|
|
Available for sale securities at fair value
|
|
|
|
|
|
|
37
|
|
|
|
32
|
|
Equipment
|
|
|
|
|
|
|
10
|
|
|
|
14
|
|
Mineral interests
|
|
|
|
|
|
|
10,617
|
|
|
|
10,617
|
|
Total assets
|
|
|
|
|
|
$
|
11,758
|
|
|
$
|
15,246
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
|
|
|
$
|
2,073
|
|
|
$
|
1,256
|
|
Related party loan
|
|
|
7
|
|
|
|
1,000
|
|
|
|
1,000
|
|
Convertible debt, current
|
|
|
5
|
|
|
|
4,827
|
|
|
|
-
|
|
Total current liabilities
|
|
|
|
|
|
|
7,900
|
|
|
|
2,256
|
|
Convertible debt, net of current
|
|
|
5
|
|
|
|
530
|
|
|
|
6,466
|
|
Derivative liability, convertible debt
|
|
|
5
|
|
|
|
173
|
|
|
|
330
|
|
Total liabilities
|
|
|
|
|
|
|
8,603
|
|
|
|
9,052
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
Common stock, unlimited shares authorized; shares
outstanding: 185,598,129 and 180,467,990, respectively
|
|
|
6
|
|
|
|
61,059
|
|
|
|
58,401
|
|
Additional paid-in capital
|
|
|
|
|
|
|
9,024
|
|
|
|
8,630
|
|
Accumulated deficit
|
|
|
|
|
|
|
(66,544
|
)
|
|
|
(60,222
|
)
|
Accumulated other comprehensive loss
|
|
|
|
|
|
|
(384
|
)
|
|
|
(615
|
)
|
Total equity
|
|
|
|
|
|
|
3,155
|
|
|
|
6,194
|
|
Total liabilities and equity
|
|
|
|
|
|
$
|
11,758
|
|
|
$
|
15,246
|
|
The accompanying notes are an integral part
of these condensed consolidated financial statements
NioCorp Developments
Ltd.
|
Condensed
Consolidated Statements of Operations and Comprehensive Loss
|
(expressed in thousands of U.S. dollars, except share and per
share data) (unaudited)
|
|
|
|
|
|
For the three months ended
December 31,
|
|
|
For the six months ended
December 31,
|
|
|
|
Note
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consulting
|
|
|
|
|
|
$
|
1
|
|
|
$
|
67
|
|
|
$
|
1
|
|
|
$
|
131
|
|
Depreciation
|
|
|
|
|
|
|
2
|
|
|
|
2
|
|
|
|
4
|
|
|
|
4
|
|
Employee related costs
|
|
|
|
|
|
|
496
|
|
|
|
182
|
|
|
|
1,036
|
|
|
|
520
|
|
Finance costs
|
|
|
|
|
|
|
-
|
|
|
|
266
|
|
|
|
-
|
|
|
|
278
|
|
Professional fees
|
|
|
|
|
|
|
279
|
|
|
|
89
|
|
|
|
612
|
|
|
|
122
|
|
Exploration expenditures
|
|
|
8
|
|
|
|
2,397
|
|
|
|
432
|
|
|
|
4,367
|
|
|
|
2,396
|
|
Other operating expenses
|
|
|
|
|
|
|
175
|
|
|
|
265
|
|
|
|
310
|
|
|
|
491
|
|
Total operating expenses
|
|
|
|
|
|
|
3,350
|
|
|
|
1,303
|
|
|
|
6,330
|
|
|
|
3,942
|
|
Change in financial instrument fair value
|
|
|
5
|
|
|
|
(39
|
)
|
|
|
1,398
|
|
|
|
(335
|
)
|
|
|
1,369
|
|
Foreign exchange loss
|
|
|
|
|
|
|
160
|
|
|
|
47
|
|
|
|
193
|
|
|
|
197
|
|
Interest expense
|
|
|
|
|
|
|
71
|
|
|
|
88
|
|
|
|
140
|
|
|
|
141
|
|
Gain on available for sale securities
|
|
|
|
|
|
|
5
|
|
|
|
-
|
|
|
|
(6
|
)
|
|
|
(6
|
)
|
Loss before income taxes
|
|
|
|
|
|
|
3,547
|
|
|
|
2,836
|
|
|
|
6,322
|
|
|
|
5,643
|
|
Income tax benefit
|
|
|
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net loss
|
|
|
|
|
|
$
|
3,547
|
|
|
$
|
2,836
|
|
|
$
|
6,322
|
|
|
$
|
5,643
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive loss:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
|
|
$
|
3,547
|
|
|
$
|
2,836
|
|
|
$
|
6,322
|
|
|
$
|
5,643
|
|
Other comprehensive gain:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reporting currency translation
|
|
|
|
|
|
|
(165
|
)
|
|
|
(717
|
)
|
|
|
(231
|
)
|
|
|
(951
|
)
|
Total comprehensive loss
|
|
|
|
|
|
$
|
3,382
|
|
|
$
|
2,119
|
|
|
$
|
6,091
|
|
|
$
|
4,692
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per common share, basic
|
|
|
|
|
|
$
|
0.02
|
|
|
$
|
0.02
|
|
|
$
|
0.03
|
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding
|
|
|
|
|
|
|
183,625,989
|
|
|
|
158,287,652
|
|
|
|
182,078,028
|
|
|
|
157,943,346
|
|
The accompanying notes are an integral part
of these condensed consolidated financial statements
NioCorp Developments
Ltd.
|
Condensed
Consolidated Statements of Cash Flows
|
(expressed in thousands of U.S. dollars) (unaudited)
|
|
|
For the six months ended
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
|
Total loss for the period
|
|
$
|
(6,322
|
)
|
|
$
|
(5,643
|
)
|
Non-cash elements included in net loss:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
|
4
|
|
|
|
4
|
|
Change in financial instrument fair value
|
|
|
(335
|
)
|
|
|
1,369
|
|
Unrealized gain on available-for-sale investments
|
|
|
(6
|
)
|
|
|
(6
|
)
|
Accretion of convertible debt
|
|
|
108
|
|
|
|
38
|
|
Foreign exchange loss
|
|
|
174
|
|
|
|
260
|
|
Share-based compensation
|
|
|
394
|
|
|
|
68
|
|
|
|
|
(5,983
|
)
|
|
|
(3,910
|
)
|
Change in working capital items:
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
-
|
|
|
|
10
|
|
Prepaid expenses
|
|
|
68
|
|
|
|
39
|
|
Accounts payable and accrued liabilities
|
|
|
842
|
|
|
|
(3,114
|
)
|
Net cash used in operating activities
|
|
|
(5,073
|
)
|
|
|
(6,975
|
)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
Restricted cash funding
|
|
|
(265
|
)
|
|
|
-
|
|
Acquisition of equipment
|
|
|
-
|
|
|
|
(2
|
)
|
Net cash used in investing activities
|
|
|
(265
|
)
|
|
|
(2
|
)
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
Proceeds from issuance of capital stock
|
|
|
1,675
|
|
|
|
926
|
|
Stock subscriptions
|
|
|
-
|
|
|
|
2,321
|
|
Issuance of convertible debt
|
|
|
-
|
|
|
|
4,800
|
|
Related party debt draws
|
|
|
-
|
|
|
|
600
|
|
Net cash provided by financing activities
|
|
|
1,675
|
|
|
|
8,647
|
|
Exchange rate effect on cash
|
|
|
(20
|
)
|
|
|
(30
|
)
|
Change in cash during the period
|
|
|
(3,683
|
)
|
|
|
1,640
|
|
Cash, beginning of period
|
|
|
4,412
|
|
|
|
753
|
|
Cash, end of period
|
|
$
|
729
|
|
|
$
|
2,393
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information:
|
|
|
|
|
|
|
|
|
Amounts paid for interest
|
|
$
|
32
|
|
|
$
|
-
|
|
Amounts paid for income taxes
|
|
$
|
-
|
|
|
$
|
-
|
|
Non-cash financing transaction
|
|
$
|
983
|
|
|
$
|
-
|
|
The accompanying notes are an integral part
of these condensed consolidated financial statements
NioCorp
Developments Ltd.
|
Condensed
Consolidated Statements of Shareholders’ Equity
|
(expressed in thousands of U.S. dollars, except share data) (unaudited)
|
|
|
Common
Shares
Outstanding
|
|
|
Common
Stock
|
|
|
Additional
Paid-in
Capital
|
|
|
Deficit
|
|
|
Accumulated
Other
Comprehensive
Loss
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, July 1, 2015
|
|
|
156,420,334
|
|
|
$
|
47,617
|
|
|
$
|
7,250
|
|
|
$
|
(48,814
|
)
|
|
$
|
(1,042
|
)
|
|
$
|
5,011
|
|
Exercise of warrants
|
|
|
12,549,309
|
|
|
|
5,838
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
5,838
|
|
Exercise of options
|
|
|
1,415,000
|
|
|
|
405
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
405
|
|
Fair value of broker warrants granted
|
|
|
-
|
|
|
|
-
|
|
|
|
15
|
|
|
|
-
|
|
|
|
-
|
|
|
|
15
|
|
Fair value of Lind Warrants granted
|
|
|
-
|
|
|
|
-
|
|
|
|
620
|
|
|
|
-
|
|
|
|
-
|
|
|
|
620
|
|
Private placement - January 2016
|
|
|
9,074,835
|
|
|
|
3,750
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
3,750
|
|
Debt conversions
|
|
|
1,008,512
|
|
|
|
638
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
638
|
|
Share issuance costs
|
|
|
-
|
|
|
|
(151
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(151
|
)
|
Fair value of stock options exercised
|
|
|
-
|
|
|
|
304
|
|
|
|
(304
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Share-based payments
|
|
|
-
|
|
|
|
-
|
|
|
|
1,049
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,049
|
|
Reporting currency presentation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
427
|
|
|
|
427
|
|
Loss for the year
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(11,408
|
)
|
|
|
-
|
|
|
|
(11,408
|
)
|
Balance, June 30, 2016
|
|
|
180,467,990
|
|
|
$
|
58,401
|
|
|
$
|
8,630
|
|
|
$
|
(60,222
|
)
|
|
$
|
(615
|
)
|
|
$
|
6,194
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Exercise of warrants
|
|
|
3,447,137
|
|
|
|
1,675
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
1,675
|
|
Debt conversions
|
|
|
1,683,002
|
|
|
|
983
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
983
|
|
Share-based payments
|
|
|
-
|
|
|
|
-
|
|
|
|
394
|
|
|
|
-
|
|
|
|
-
|
|
|
|
394
|
|
Reporting currency presentation
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
231
|
|
|
|
231
|
|
Loss for the period
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
(6,322
|
)
|
|
|
-
|
|
|
|
(6,322
|
)
|
Balance, December 31, 2016
|
|
|
185,598,129
|
|
|
$
|
61,059
|
|
|
$
|
9,024
|
|
|
$
|
(66,544
|
)
|
|
$
|
(384
|
)
|
|
$
|
3,155
|
|
The accompanying notes are an integral part
of these condensed consolidated financial statements
NioCorp
Developments Ltd.
Notes
to the Condensed Consolidated Financial Statements
December
31, 2016
(expressed
in thousands of U.S. dollars, unless otherwise stated) (unaudited)
|
1.
|
DESCRIPTION OF BUSINESS
|
NioCorp Developments Ltd. (the
“Company”) was incorporated on February 27, 1987 under the laws of the Province of British Columbia and currently
operates in one reportable operating segment consisting of exploration and development of mineral deposits in North America, specifically,
the Elk Creek Niobium/Scandium/Titanium property (the “Elk Creek Project”) located in southeastern Nebraska.
These financial statements have
been prepared on a going concern basis that contemplates the realization of assets and discharge of liabilities at their carrying
values in the normal course of business for the foreseeable future. These financial statements do not reflect any adjustments
that may be necessary if the Company is unable to continue as a going concern.
The Company currently earns no
operating revenues and will require additional capital in order to advance the Elk Creek Project. The Company’s ability
to continue as a going concern is uncertain and is dependent upon the generation of profits from mineral properties, obtaining
additional financing, and maintaining continued support from its shareholders and creditors.
|
a)
|
Basis of Preparation
and Consolidation
|
The accompanying unaudited interim
condensed consolidated interim financial statements have been prepared in accordance with generally accepted accounting principles
of the United States of America (“US GAAP”) and the rules and regulations of the Securities and Exchange Commission
(“SEC”). The interim condensed consolidated financial statements include the consolidated accounts of the Company
and its wholly-owned subsidiaries with all significant intercompany transactions eliminated. The accounting policies followed
in preparing these consolidated interim financial statements are those used by the Company as set out in the audited consolidated
financial statements for the year ended June 30, 2016.
In the opinion of Management, all
adjustments considered necessary (including reclassifications and normal recurring adjustments) to present fairly the financial
position, results of operations and cash flows at December 31, 2016, and for all periods presented, have been included in these
interim condensed consolidated financial statements. Certain information and footnote disclosures normally included in the consolidated
financial statements prepared in accordance with US GAAP have been condensed or omitted pursuant to such SEC rules and regulations.
These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial
statements for the year ended June 30, 2016. The interim results are not necessarily indicative of results for the full year ending
June 30, 2017, or future operating periods.
|
b)
|
Recent Accounting Standards
|
In May 2014, the Financial Accounting
Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09, Revenue from Contracts with
Customers ("ASU 2014-09"). ASU 2014-09 supersedes the revenue recognition requirements of FASB Accounting Standards
Codification ("ASC") Topic 605, Revenue Recognition, and most industry-specific guidance. ASU 2014-09 requires entities
to recognize revenue in a way that depicts the transfer of promised goods or services to customers in an amount that reflects
the consideration to which the entity expects to be entitled to in exchange for those goods or services. This ASU provides alternative
methods of retrospective adoption and is effective for fiscal years, and interim periods within those years, beginning after December
15, 2017. Early adoption would be permitted but not before annual periods beginning after December 15, 2016. The Company is currently
assessing the potential impact of adopting this ASU on its consolidated financial statements and related disclosures.
NioCorp
Developments Ltd.
Notes
to the Condensed Consolidated Financial Statements
December
31, 2016
(expressed
in thousands of U.S. dollars, unless otherwise stated) (unaudited)
In August 2014, the FASB issued
ASU 2014-15, Presentation of Financial Statements – Going Concern. The new standard requires management of public and private
companies to evaluate whether there is substantial doubt about the entity’s ability to continue as a going concern and,
if so, to disclose that fact. Management will also be required to evaluate and disclose whether its plans alleviate that doubt.
The new standard is effective for annual periods ending after December 15, 2016, and interim periods within annual periods beginning
after December 15, 2016. The Company adopted this standard during the three-month period ended December 31, 2016, and the adoption
of this standard had no material impacts on our financial statements.
In February 2016, the FASB issued
ASU 2016-02, Leases. The standard requires that a lessee recognize on the balance sheet assets and liabilities for leases with
lease terms of more than twelve months. The recognition, measurement, and presentation of expenses and cash flows arising from
a lease have not significantly changed from the previous GAAP. The standard is effective for fiscal years beginning after December
15, 2018, including interim periods within such fiscal year, with early adoption permitted. The Company is currently assessing
the impact, if any, of implementing this guidance on its consolidated financial position, results of operations, and liquidity.
In November 2016, the FASB issued
ASU 2016-18 Statement of Cash Flows (Topic 230), Restricted Cash. The standard provides guidance on the presentation of
restricted cash and restricted cash equivalents in the statement of cash flows. Restricted cash and restricted cash equivalents
should now be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown
on the statements of cash flows. The amendments of this ASU are effective for reporting periods beginning after December 15, 2017,
with early adoption permitted. Other than the revised statement of cash flows presentation of restricted cash (if any), the adoption
of this new guidance is not expected to have an impact on our financial statements.
The preparation of consolidated
financial statements in conformity with US GAAP requires Management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements
and the reported amounts of expenses during the reporting period. The Company regularly evaluates estimates and assumptions related
to the deferred income tax asset valuations, convertible debt valuations and share-based compensation. The Company bases its estimates
and assumptions on current facts, historical experience, and various other factors that it believes to be reasonable under the
circumstances, the results of which form the basis for making judgments about the other sources. The actual results experienced
by the Company may differ materially and adversely from the Company’s estimates. To the extent there are material differences
between estimates and the actual results, future results of operations will be affected.
The Company incurred a loss of
$6,322 for the six months ended December 31, 2016 (2015 - $5,643), and has an accumulated deficit of $66,544 as of December 31,
2016. In addition, the Company has a working capital deficiency of $6,870 as of December 31, 2016. These factors indicate the
existence of a material uncertainty that raises substantial doubt about the Company's ability to continue as a going concern.
The Company’s ability to
continue operations and fund its expenditures is dependent on Management’s ability to secure additional financing. Management
is actively pursuing such additional sources of financing, and while it has been successful in doing so in the past, there can
be no assurance it will be able to do so in the future. These consolidated financial statements do not give effect to any adjustments
required to realize its assets and discharge its liabilities in other than the normal course of business and at amounts different
from those reflected in the accompanying financial statements.
NioCorp
Developments Ltd.
Notes
to the Condensed Consolidated Financial Statements
December
31, 2016
(expressed
in thousands of U.S. dollars, unless otherwise stated) (unaudited)
Restricted cash represents amounts held
in escrow to secure payment of work related to the Company’s Elk Creek Project feasibility study. Under the terms of the
escrow agreement, the balance of $265 will be drawn against outstanding accounts payable once certain project milestones are met.
|
|
As of
|
|
|
|
December 31, 2016
|
|
|
June 30, 2016
|
|
Current:
|
|
|
|
|
|
|
|
|
Convertible Security
|
|
$
|
4,827
|
|
|
$
|
-
|
|
Long Term, net of current:
|
|
|
|
|
|
|
|
|
Convertible Security
|
|
$
|
-
|
|
|
$
|
5,991
|
|
Convertible Notes
|
|
|
530
|
|
|
|
475
|
|
|
|
$
|
530
|
|
|
$
|
6,466
|
|
Convertible Security Funding
Changes in the Lind Partners Asset
Management IV, LLC (“Lind”) convertible security (the “Convertible Security”) balance are comprised of
the following:
|
|
Convertible Security
|
|
Balance, June 30, 2016
|
|
$
|
5,991
|
|
Conversions, at fair value
|
|
|
(983
|
)
|
Change in fair market value
|
|
|
(181
|
)
|
Balance, December 31, 2016
|
|
$
|
4,827
|
|
The Convertible Security is convertible
into Common Shares of the Company at a conversion price equal to 85% of the volume weighted average trading price of the Common
Shares (in Canadian dollars) on the TSX for the five consecutive trading days immediately prior to the date on which the Lind
provides the Company with notice of its intention to convert an amount of the Convertible Security from time to time. During the
three-month period ended December 31, 2016, $825 face value of the Convertible Security was converted into 1,683,002 Common Shares.
The Convertible Security contains
financial and non-financial covenants customary for a facility of this size and nature, and includes a financial covenant defining
an event of default as all present and future liabilities of the Company or any of its subsidiaries, exclusive of related party
loans, for an amount or amounts exceeding $2,000, and which have not been satisfied on time or within 90 days of invoice, or have
become prematurely payable as a result of its default or breach. The Company was in compliance as of December 31, 2016.
Convertible Notes
Changes in the Company’s
outstanding convertible promissory notes (the “Convertible Notes”) balance are comprised of the following:
|
|
|
Convertible
Notes
|
|
Balance, June 30, 2016
|
|
$
|
475
|
|
Accreted interest, net of interest paid
|
|
|
55
|
|
Balance, December 31, 2016
|
|
$
|
530
|
|
The changes in the derivative liability
related to the conversion feature are as follows:
|
|
Derivative Liability
|
|
Balance, June 30, 2016
|
|
$
|
330
|
|
Change in fair value of derivative liability
|
|
|
(157
|
)
|
Balance, December 31, 2016
|
|
$
|
173
|
|
NioCorp Developments Ltd.
|
Notes to the Condensed Consolidated Financial Statements
|
December 31, 2016
|
(expressed in thousands of U.S. dollars, unless otherwise stated) (unaudited)
|
The Company has a rolling stock
option plan (the “Plan”) whereby the Company may grant stock options to executive officers and directors, employees,
and consultants at an exercise price to be determined by the board of directors, provided the exercise price is not lower than
the greater of (i) the last closing price of the Company’s common shares on the TSX and (ii) the volume weighted average
closing price of the Company’s common shares on the TSX for the five days immediately prior to the date of grant. The Plan
provides for the issuance of up to 10% of the Company’s issued Common Shares as at the date of grant with each stock option
having a maximum term of ten years. The board of directors has the exclusive power over the granting of options and their vesting
provisions.
Stock option transactions are
summarized as follows:
|
|
Number of
Options
|
|
|
Weighted
Average
Exercise Price
(C$)
|
|
Balance, June 30, 2016
|
|
|
11,465,000
|
|
|
$
|
0.69
|
|
Granted
|
|
|
710,000
|
|
|
|
0.96
|
|
Exercised
|
|
|
-
|
|
|
|
-
|
|
Cancelled/expired
|
|
|
(150,000
|
)
|
|
|
0.62
|
|
Balance, December 31, 2016
|
|
|
12,025,000
|
|
|
$
|
0.71
|
|
The following table summarizes
the information and assumptions used to determine option costs for the six-month period ended December 31, 2016:
Fair value per option granted during the period (C$)
|
|
$
|
0.50
|
|
Risk-free interest rate
|
|
|
0.75
|
%
|
Expected dividend yield
|
|
|
0
|
%
|
Expected stock price volatility (historical basis)
|
|
|
97.2
|
%
|
Expected option life in years
|
|
|
2.15
|
|
The following table summarizes
information about stock options outstanding at December 31, 2016:
Exercise
price
(C$)
|
|
|
Expiry date
|
|
Number
outstanding
|
|
|
Aggregate
Intrinsic Value
(C$000s)
|
|
|
Number
exercisable
|
|
|
Aggregate
Intrinsic Value
(C$000s)
|
|
$
|
0.50
|
|
|
May 9, 2017
|
|
|
370,000
|
|
|
$
|
93
|
|
|
|
370,000
|
|
|
$
|
93
|
|
$
|
0.62
|
|
|
January 19, 2021
|
|
|
5,425,000
|
|
|
|
705
|
|
|
|
2,712,500
|
|
|
|
353
|
|
$
|
0.65
|
|
|
May 20, 2017
|
|
|
50,000
|
|
|
|
5
|
|
|
|
50,000
|
|
|
|
5
|
|
$
|
0.65
|
|
|
July 28, 2017
|
|
|
1,250,000
|
|
|
|
125
|
|
|
|
1,250,000
|
|
|
|
125
|
|
$
|
0.76
|
|
|
September 2, 2017
|
|
|
500,000
|
|
|
|
-
|
|
|
|
500,000
|
|
|
|
-
|
|
$
|
0.80
|
|
|
December 22, 2017
|
|
|
3,220,000
|
|
|
|
-
|
|
|
|
3,220,000
|
|
|
|
-
|
|
$
|
0.94
|
|
|
April 28, 2018
|
|
|
500,000
|
|
|
|
-
|
|
|
|
500,000
|
|
|
|
-
|
|
$
|
0.96
|
|
|
July 21, 2021
|
|
|
710,000
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Balance December 31, 2016
|
|
|
12,025,000
|
|
|
$
|
928
|
|
|
|
8,602,500
|
|
|
$
|
576
|
|
NioCorp Developments Ltd.
|
Notes to the Condensed Consolidated Financial Statements
|
December 31, 2016
|
(expressed in thousands of U.S. dollars, unless otherwise stated) (unaudited)
|
The aggregate intrinsic value
in the preceding table represents the total intrinsic value, based on the Company’s closing stock price of C$0.75 as of December
31, 2016, which would have been received by the option holders had all option holders exercised their options as of that date.
In-the-money options vested and exercisable as of December 31, 2016, totaled 4,382,500.
As of December 31, 2016, there
was $160 of unrecognized compensation cost related to unvested share-based compensation arrangements granted under the Plan. The
cost is expected to be recognized over a remaining weighted average period of approximately 1.0 years.
Warrant transactions are summarized
as follows:
|
|
Warrants
|
|
|
Weighted average
exercise price (C$)
|
|
Balance June 30, 2016
|
|
|
22,733,685
|
|
|
$
|
0.74
|
|
Granted
|
|
|
-
|
|
|
|
-
|
|
Exercised
|
|
|
(3,447,137
|
)
|
|
|
0.65
|
|
Expired
|
|
|
(4,114,353
|
)
|
|
|
0.65
|
|
Balance, December 31, 2016
|
|
|
15,172,195
|
|
|
$
|
0.79
|
|
At December 31, 2016, the Company has outstanding
exercisable warrants, as follows:
Number
|
|
|
Exercise
Price
(C$)
|
|
|
Expiry Date
|
|
182,910
|
|
|
$
|
0.85
|
|
|
February 27, 2017
|
|
2,714,000
|
|
|
|
1.00
|
|
|
February 27, 2017
|
|
3,125,000
|
|
|
|
0.72
|
|
|
December 22, 2018
|
|
9,150,285
|
|
|
|
0.75
|
|
|
January 19, 2019
|
|
15,172,195
|
|
|
|
|
|
|
|
|
7.
|
RELATED PARTY TRANSACTIONS AND BALANCES
|
Related party loan represents
the amount outstanding on a loan with Mark Smith, Chief Executive Officer and Executive Chairman of NioCorp. The loan is due June
17, 2017, bears an interest rate of 10%, is secured by the Company’s assets pursuant to a concurrently executed general security
agreement, and is subject to both a 2.5% establishment fee and 2.5% prepayment fee. As of December 31, 2016, accounts payable and
accrued liabilities included interest payable to Mr. Smith of $107.
On January 16, 2017, the Company entered into a non-revolving
credit facility agreement (the “Credit Facility”) in the amount of $2.0 million with Mark Smith as more fully discussed
in Note 10, Subsequent Events.
|
8.
|
Exploration Expenditures
|
|
|
For the three months
ended December 31,
|
|
|
For the six months
ended December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Technical studies and engineering
|
|
$
|
1,551
|
|
|
$
|
54
|
|
|
$
|
1,988
|
|
|
$
|
1,470
|
|
Field management and other
|
|
|
399
|
|
|
|
133
|
|
|
|
633
|
|
|
|
301
|
|
Drilling
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
281
|
|
Metallurgical development
|
|
|
419
|
|
|
|
25
|
|
|
|
1,691
|
|
|
|
110
|
|
Geologists and field staff
|
|
|
28
|
|
|
|
220
|
|
|
|
55
|
|
|
|
234
|
|
Total
|
|
$
|
2,397
|
|
|
$
|
432
|
|
|
$
|
4,367
|
|
|
$
|
2,396
|
|
NioCorp Developments Ltd.
|
Notes to the Condensed Consolidated Financial Statements
|
December 31, 2016
|
(expressed in thousands of U.S. dollars, unless otherwise stated) (unaudited)
|
|
9.
|
Fair Value Measurements
|
The Company measures the fair
value of financial assets and liabilities based on US GAAP guidance which defines fair value, establishes a framework for measuring
fair value, and expands disclosures about fair value measurements.
The Company classifies financial
assets and liabilities as held-for-trading, available-for-sale, held-to-maturity, loans and receivables, or other financial liabilities
depending on their nature. Financial assets and financial liabilities are recognized at fair value on their initial recognition.
Financial assets and liabilities
classified as held-for-trading are measured at fair value, with gains and losses recognized in net income. Financial assets classified
as held-to-maturity, loans, and receivables, and financial liabilities other than those classified as held-for-trading are measured
at amortized cost, using the effective interest method of amortization. Financial assets classified as available-for-sale are measured
at fair value, with unrealized gains and losses being recognized in income.
Financial instruments including
receivables, accounts payable and accrued liabilities, and related party loans are carried at amortized cost, which Management
believes approximates fair value due to the short-term nature of these instruments.
The following table presents
information about the assets and liabilities that are measured at fair value on a recurring basis as at December 31, 2016 and June
30, 2016, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.
In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical instruments.
Fair values determined by Level 2 inputs utilize data points that are observable, such as quoted prices, interest rates, and yield
curves. Fair values determined by Level 3 inputs are unobservable data points for the financial instrument and included situations
where there is little, if any, market activity for the instrument:
|
|
As of December 31, 2016
|
|
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
729
|
|
|
$
|
729
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Available for sale securities
|
|
|
37
|
|
|
|
37
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
$
|
766
|
|
|
$
|
766
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible debt
|
|
$
|
4,827
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
4,827
|
|
Derivative liability, convertible debt
|
|
|
173
|
|
|
|
-
|
|
|
|
-
|
|
|
|
173
|
|
Total
|
|
$
|
5,000
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
5,000
|
|
|
|
As of June 30, 2016
|
|
|
|
Total
|
|
|
Level 1
|
|
|
Level 2
|
|
|
Level 3
|
|
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
4,412
|
|
|
$
|
4,412
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Available for sale securities
|
|
|
32
|
|
|
|
32
|
|
|
|
-
|
|
|
|
-
|
|
Total
|
|
$
|
4,444
|
|
|
$
|
4,444
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Convertible debt
|
|
$
|
5,991
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
5,991
|
|
Derivative liability, convertible debt
|
|
|
330
|
|
|
|
-
|
|
|
|
-
|
|
|
|
330
|
|
Total
|
|
$
|
6,321
|
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
6,321
|
|
NioCorp Developments Ltd.
|
Notes to the Condensed Consolidated Financial Statements
|
December 31, 2016
|
(expressed in thousands of U.S. dollars, unless otherwise stated) (unaudited)
|
The Company measures the fair
market value of the Level 3 components using the Black-Scholes model and discounted cash flows, as appropriate. These models are
prepared by a third party and take into account Management's best estimate of the conversion price of the stock, an estimate of
the expected time to conversion, an estimate of the stock's volatility, and the risk-free rate of return expected for an instrument
with a term equal to the duration of the convertible debt.
The following table sets forth
a reconciliation of changes in the fair value of the Company's convertible debt components classified as Level 3 in the fair value
hierarchy:
Beginning balance
|
|
$
|
6,321
|
|
Conversions to equity
|
|
|
(983
|
)
|
Realized and unrealized losses
|
|
|
(338
|
)
|
Ending balance
|
|
$
|
5,000
|
|
On January 16, 2017, the Company
entered into a non-revolving credit facility agreement (the “Credit Facility”) in the amount of $2.0 million with Mark
Smith. The Credit Facility bears an interest rate of 10% and drawdowns from the Credit Facility are subject to a 2.5% establishment
fee. Amounts outstanding under the Credit Facility will become due January 16, 2018, and are secured by all of the Company’s
assets pursuant to a general security agreement between the Company and Mr. Smith dated June 17, 2015. The Credit Facility contains
financial and non-financial covenants customary for a facility of this size and nature. On January 18, 2017, the Company completed
a drawdown from the Credit Facility in the amount of $175.
On January 27, 2017, the Company
announced a C$2.0 million non-brokered private placement for up to 2,857,143 units of the Company (the “Units”) at
a price of C$0.70 per Unit. Each Unit will consist of one Common Share of the Company and one transferable Common Share purchase
warrant (a “Warrant”). Each Warrant will exercisable to acquire one additional Common Share of the Company for a period
of 36 months at a price of $0.85 per Common Share. On January 30, 2017, the Company announced that due to strong
investor demand it has increased the maximum gross proceeds of the Offering to from C$2.0 million to C$2.5 million. Further, the
Company has received expressions of interest from certain investment dealers, and has agreed to pay fees in respect of certain
subscriptions originated by such investment dealers in each case for services outside of the United States.
ITEM 2.
|
MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
The following discussion and analysis
should be read in conjunction with our unaudited condensed interim consolidated financial statements as at and for the three and
six months ended December 31, 2016 and the related notes thereto, which have been prepared in accordance with generally accepted
accounting principles in the United States (“U.S. GAAP”). This discussion and analysis contains forward-looking
statements and forward-looking information that involve risks, uncertainties, and assumptions. Our actual results may differ materially
from those anticipated in these forward-looking statements and information as a result of many factors, including, but not limited
to, those set forth elsewhere in this Quarterly Report on Form 10-Q. See section heading “Note Regarding Forward-Looking
Statements” below.
All currency amounts are stated in thousands
of U.S. dollars unless noted otherwise.
As used in this report, unless the context otherwise indicates,
references to “we,” “our,” the “Company,” “NioCorp” and “us” refer
to NioCorp Developments Ltd. and its subsidiaries collectively.
Note Regarding Forward Looking Statements
This Quarterly Report
on Form 10-Q and the exhibits attached hereto contain “forward-looking statements” within the meaning of Section 27A
of the Securities Act and Section 21E of the United States Exchange Act of 1934, as amended, and “forward-looking information”
within the meaning of applicable Canadian securities legislation, collectively “forward-looking statements.” Such forward-looking
statements concern our anticipated results and developments in the operations of the Company in future periods, planned exploration
activities, the adequacy of the Company’s financial resources, and other events or conditions that may occur in the future.
Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,”
“believes,” “intends,” “estimates,” “potential,” “possible,” and similar
expressions, or statements that events, conditions, or results “will,” “may,” “could,” or “should”
(or the negative and grammatical variations of any of these terms) occur or be achieved. Any statements that express or involve
discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, or future events or
performance (often, but not always, using words or phrases such as “expects” or “does not expect,” “is
expected,” “anticipates” or “does not anticipate,” “plans,” “estimates” or
“intends,” or stating that certain actions, events, or results “may,” “could,” “would,”
“might” or “will” be taken, occur or be achieved) are not statements of historical fact and may be forward-looking
statements. Such forward-looking statements reflect the Company’s current views with respect to future events and are subject
to certain known and unknown risks, uncertainties, and assumptions. Many factors could cause actual results, performance, or achievements
to be materially different from any future results, performance, or achievements that may be expressed or implied by such forward-looking
statements, including, among others, risks related to the following:
|
·
|
risks related to our ability to operate as a going concern;
|
|
·
|
risks related to our requirement of significant additional capital;
|
|
·
|
risks related to our limited operating history;
|
|
·
|
risks related to our history of losses;
|
|
·
|
risks related to cost increases for our exploration and, if warranted, development projects;
|
|
·
|
risks related to our properties being in the exploration stage;
|
|
·
|
risks related to mineral exploration and production activities;
|
|
·
|
risks related to our lack of mineral production from our properties;
|
|
·
|
risks related to estimates of mineral resources;
|
|
·
|
risks related to changes in mineral resource estimates;
|
|
·
|
risks related to differences in United States and Canadian reserve and resource reporting;
|
|
·
|
risks related to our exploration activities being unsuccessful;
|
|
·
|
risks related to our ability to obtain permits and licenses for production;
|
|
·
|
risks related to government and environmental regulations that may increase our costs of doing
business or restrict our operations;
|
|
·
|
risks related to proposed legislation that may significantly affect the mining industry;
|
|
·
|
risks related to land reclamation requirements;
|
|
·
|
risks related to competition in the mining industry;
|
|
·
|
risks related to equipment and supply shortages;
|
|
·
|
risks related to current and future joint ventures and partnerships;
|
|
·
|
risks related to our ability to attract qualified management;
|
|
·
|
risks related to the ability to enforce judgment against certain of our Directors;
|
|
·
|
risks related to currency fluctuations;
|
|
·
|
risks related to claims on the title to our properties;
|
|
·
|
risks related to surface access on our properties;
|
|
·
|
risks related to potential future litigation;
|
|
·
|
risks related to our lack of insurance covering all our operations;
|
|
·
|
risks related to our status as a “passive foreign investment company” under US federal
tax code;
|
|
·
|
risks related to the Common Shares, including price volatility, lack of dividend payments, dilution,
and penny stock rules; and
|
|
·
|
risks related to our debt.
|
Should one or more of
these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially
from those described herein. This list is not exhaustive of the factors that may affect any of the Company’s forward-looking
statements. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of
the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements due
to a variety of risks, uncertainties, and other factors, including without limitation those discussed under the heading “Risk
Factors” of our Registration Statement on Form S-1, as filed with the SEC on September 2, 2016, as amended September 22,
2016, which are incorporated herein by reference, as well as other factors described elsewhere in this report and the Company’s
other reports filed with the SEC.
The Company’s forward-looking
statements contained in this Quarterly Report on Form 10-Q are based on the beliefs, expectations, and opinions of Management as
of the date of this report. The Company does not assume any obligation to update forward-looking statements if circumstances or
Management’s beliefs, expectations, or opinions should change, except as required by law. For the reasons set forth above,
investors should not attribute undue certainty to or place undue reliance on forward-looking statement.
Company Overview
NioCorp is developing the Elk Creek Project,
located in southeast Nebraska. The Elk Creek Project is an advanced Niobium/Scandium/Titanium exploration project. Niobium is used
to produce High-Strength, Low-Alloy (“HSLA”) steel, a stronger steel used in automotive, structural, and pipeline applications
that is lighter than carbon steel with the same strength. Scandium can be combined with Aluminum and other metals to make high-performance
alloys with increased strength and improved corrosion resistance. Scandium also is a critical component of advanced solid oxide
fuel cells, an environmentally advanced method of generating electricity with fewer emissions than conventional methods. Titanium
is a key component of pigments used in paper, paint, and plastics, and also is a component of high-performance metal alloys used
for aerospace applications, armor, and medical implants.
Our primary business strategy is to advance
our Elk Creek Project to commercial production. We are focused on obtaining additional funds to carry out our near-term planned
work programs and complete a feasibility study for the Elk Creek Project (the “Feasibility Study”). Subject to delivering
a positive Feasibility Study, we intend to secure the project financing necessary to complete the development, construction, commissioning,
and start-up of commercial operation of the Elk Creek Project.
Emerging Growth Company Status
We qualify as an “emerging growth
company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBS Act”) as we do not have
more than $1.0 billion in annual gross revenue and did not have such amount as of June 30, 2016, being the last day of our most
recently completed fiscal year.
We may lose our status as an emerging growth
company on the last day of our fiscal year during which (i) our annual gross revenue exceeds $1.0 billion or (ii) we issue more
than $1.0 billion in non-convertible debt in a three-year period. We will lose our status as an emerging growth company if at any
time we are deemed to be a large accelerated filer. We will lose our status as an emerging growth company on the last day of our
fiscal year following the fifth anniversary of the date of the first sale of common equity securities pursuant to an effective
registration statement.
As an emerging growth company under the
JOBS Act, we have elected to opt out of the extended transition period for complying with new or revised standards pursuant to
Section 107(b) of the Act. The election is irrevocable.
As an emerging growth company, we are exempt
from Section 404(b) of the Sarbanes-Oxley Act of 2002 and Section 14A(a) and (b) of the Securities Exchange Act of 1934. Such sections
are provided below:
|
·
|
Section 404(b) of the Sarbanes-Oxley Act of 2002 requires a public
company’s auditor to attest to, and report on, Management's assessment of its internal controls.
|
|
·
|
Sections 14A(a) and (b) of the Securities and Exchange Act, implemented
by Section 951 of the Dodd-Frank Act, require companies to hold shareholder advisory votes on executive compensation and golden
parachute compensation.
|
As long as we qualify as an emerging growth
company, we will not be required to comply with the requirements of Section 404(b) of the Sarbanes-Oxley Act of 2002 and Section
14A (a) and (b) of the Securities Exchange Act of 1934.
Recent Corporate Events
|
·
|
On October 14, 2016, we announced that
NioCorp’s resale registration statement on Form S-1 (“S-1”) filed on September 2, 2016, as amended September
22, 2016, was brought effective by the SEC. The S-1 permits selling securityholders of Common Share purchase warrants (“Selling
Securityholders”) who registered the resale of Common Shares issuable upon exercise of such warrants in the S-1 to avoid
potentially indefinite hold periods on the Common Shares under U. S. federal securities laws. NioCorp will not receive any proceeds
from the sale of the Common Shares by Selling Securityholders and will only receive the exercise price of the Warrants upon exercise
of such Warrants.
|
|
·
|
On December 9, 2016 NioCorp held its 2016
annual general meeting of shareholders (the “AGM”), at which the re-election of all five nominated directors and the
re-appointment of BDO LLP, USA as NioCorp’s auditor were approved. Joseph Cecil, a director of the Company since November
14, 2014, determined not to stand for re-election at the AGM, and accordingly ceased to be a director on December 9, 2016. Mr.
Cecil’s former position on the Company’s Audit Committee was filled by Dave Beling.
|
|
·
|
On January 16, 2017, we entered into a
non-revolving credit facility agreement (the “Credit Facility”) in the amount of $2.0 million with Mark Smith. The
Credit Facility bears an interest rate of 10% and is drawdowns are subject to a 2.5% establishment fee. Amounts outstanding under
the Credit Facility will become due January 16, 2018, and are secured by all of the Company’s assets pursuant to a general
security agreement between the Company and Mr. Smith dated June 17, 2015. The Credit Facility contains financial and non-financial
covenants customary for a facility of this size and nature. On January 18, 2017, we completed a drawdown from the Credit Facility
in the amount of $175.
|
|
·
|
On January 27, 2017, the Company announced
a C$2.0 million non-brokered private placement (the “Offering”) for up to 2,857,143 units of the Company (the “Units”)
at a price of C$0.70 per Unit. Each Unit will consist of one Common Share of the Company and one transferable Common Share purchase
warrant (a “Warrant”). Each Warrant will be exercisable to acquire one additional Common Share of the Company for a
period of 36 months at a price of $0.85 per Common Share.
|
|
·
|
On January 30, 2017, the Company announced
that, further to its January 27, 2017 announcement regarding the Offering, due to strong investor demand it has
increased the maximum gross proceeds of the Offering to from C$2.0 million to C$2.5 million. Further, the Company has received
expressions of interest from certain investment dealers, and has agreed to pay fees in respect of certain subscriptions originated
by such investment dealers in each case for services outside of the United States.
|
Elk Creek Project Update
|
·
|
On November 7, 2016, we announced the
successful conclusion of the Acid Regeneration Pilot Plant as part of the Feasibility Study. This pilot produced hydrochloric acid
under continuous conditions and was constructed and operated at the SGS Canada Inc. (“SGS”) facility in Lakefield,
Ontario. The Acid Regeneration Pilot Plant operated continuously from October 17 through October 22, 2016. Sulphuric acid was used
to regenerate the hydrochloric acid used in the Company’s Pre-Leach operation, which is the key first step in the Superalloy
materials recovery process. Data from the pilot demonstrates that 99.94% of the hydrochloric acid used in the Pre-Leach operation
can be regenerated.
|
|
·
|
On December 6, 2016, we announced the
successful completion of the Calcination Pilot Plant, which demonstrated a means of recycling sulphuric acid under continuous conditions.
The Calcination Pilot Plant was constructed and operated at the SGS facility in Lakefield, Ontario. The Calcination Pilot Plant
operated continuously from November 28 through December 2, 2016. Solid material generated during the Acid Regeneration Pilot Plant
was fed to a kiln where it was heated to decompose the solids into the gaseous precursors of sulphuric acid. The Calcination Pilot
Plant accomplished all three of its objectives, which were to run the calcination unit operation continuously, to generate quantities
of Calcine product for follow-on characterization testing, and to provide a characterization of the gas generated during calcining.
|
|
·
|
On December 14, 2016, we announced the
successful conclusion of the Niobium Optimization Pilot Plant, which has demonstrated high Niobium recoveries under continuous
operating conditions. This was the Company’s final pilot plant planned for the Feasibility Study. The Niobium Optimization
Pilot Plant was constructed and operated at the SGS facility in Lakefield, Ontario. The primary objective of the Niobium Optimization
Pilot Plant was to test the level of Niobium recoveries that could be achieved in continuous operation, and these Niobium recoveries
averaged 97% over a 36-hour period of the first 48 hours of Niobium Optimization Pilot Plant operations. Additional testing of
the Niobium Precipitation process demonstrated potential operational efficiencies that may provide options for reductions in capital
expenditures (CAPEX) and/or operating expenditures (OPEX) for this portion of the flowsheet if and when NioCorp’s processing
facility is built and brought into operation.
|
|
·
|
On January 9, 2017, we announced the successful
conclusion of negotiations with private landowners in the Elk Creek, Nebraska area that will allow the Company to purchase land
needed for the preferred layout of the Elk Creek Project’s proposed underground mine and surface processing facility.
|
|
·
|
On January 18, 2017, we announced the
achievement of two major process breakthroughs as part of final design work for the Feasibility Study. Both advances – one
in the Niobium metallurgical process and one related to regenerating useful materials from process streams previously slated for
disposal – may lead to lower-than-expected capital expenditures (CAPEX) and operating expenses (OPEX) for the sub-systems
involved. Subsequently, on January 24, 2017, we announced that based on these breakthroughs we will eliminate a planned railroad
spur line and supporting infrastructure from the Elk Creek Project. The original railroad spur line would have required constructing
several railroad bridges over the Nemaha River, Elk Creek, and various tributaries, as well as impacting an estimated 2.6 acres
of wetlands and open water, and more than 1,700 feet of various water channels. Final CAPEX estimates will be determined
when all remaining Feasibility Study work is complete.
|
We continued to advance Feasibility Study
and other Elk Creek Project-related work during the quarter, and completed all planned pilot testing including the Acid Regeneration,
Calcination, and Niobium Optimization Pilot Plants. These final three pilots demonstrated the ability to regenerate and recycle
hydrochloric and sulphuric acids within the plant, as well as confirming the ability to recover high levels of Niobium under continuous
operating conditions. The successful completion of these pilots was a critical step towards the finalization of the flow sheet
for use in the Feasibility Study.
The processing breakthroughs announced
on January 18, 2017 (as discussed above), will allow the Elk Creek Project to recycle many of the reagents from material that was
previously planned for disposal either in an on-site tailings storage area or as mine backfill, and allow the elimination of the
planned railroad spur line and supporting infrastructure. Our October 16, 2015 Preliminary Economic Assessment (the “PEA”)
included a CAPEX estimate of $21.3 million for the rail and supporting rail infrastructure, which included a 24% contingency.
NioCorp understands that those costs will now be removed from the Feasibility Study. We believe that the elimination of the
railroad spur and supporting infrastructure will reduce the projected impacts to wetlands and waterways that are subject to regulation
by the United States Army Corps of Engineers.
Our work efforts and project breakthroughs
announced to date demonstrate Managements’ continued efforts deliver the completed Feasibility Study i
n
2017.
Our continued investment in metallurgical studies has helped improve the overall flow sheet for the Elk Creek Project,
and these advances could reduce both OPEX and CAPEX for specific portions of the Elk Creek Project. However, other aspects of
the Elk Creek Project may involve higher costs than were assumed in the PEA. Final CAPEX and OPEX estimates for the Elk Creek
Project depend upon a number of other factors and will not be determined until all remaining work is complete on the Feasibility
Study.
In the fifteen months since the publication
of our PEA, we have spent approximately $9.0 million in exploration related expenditures. The following table compares cost guidance
from the PEA to actual exploration costs incurred.
|
|
|
|
PEA
|
|
|
Actual Expenditures
|
|
Category
|
|
Description
|
|
Guidance
1
|
|
|
2016
|
|
|
2017
|
|
|
Totals
|
|
PEA Recommended & Budgeted Work
1
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Feasibility Study and Engineering
|
|
Feasibility study with hydrogeological, geochemistry, and geotechnical work programs
|
|
$
|
6,000
|
|
|
$
|
2,617
|
|
|
$
|
1,971
|
|
|
$
|
4,588
|
|
Metallurgical
|
|
Process feasibility study design and metallurgical testing program including backfill testing
|
|
|
2,400
|
|
|
|
844
|
|
|
|
1,691
|
|
|
|
2,535
|
|
Other
2
|
|
Tailings geotechnical field test work with drilling, logging, cone penetration testing, and in situ and borrow materials laboratory testing in Area 7
|
|
|
160
|
|
|
|
-
|
|
|
|
17
|
|
|
|
17
|
|
|
|
Marketing Studies
|
|
|
200
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
Sub Total
|
|
|
|
|
8,760
|
|
|
|
3,461
|
|
|
|
3,679
|
|
|
|
7,140
|
|
Other exploration expenditures
3
:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Drilling
|
|
|
|
|
-
|
|
|
|
197
|
|
|
|
-
|
|
|
|
197
|
|
Geologists and Field Staff
|
|
|
|
|
|
|
|
|
|
|
|
|
55
|
|
|
|
55
|
|
Field Management and Other
|
|
|
|
|
|
|
|
|
944
|
|
|
|
633
|
|
|
|
1,577
|
|
Total
|
|
|
|
$
|
8,760
|
|
|
$
|
4,602
|
|
|
$
|
4,367
|
|
|
$
|
8,969
|
|
1
Anticipated
expenditures required to develop a feasibility study, as outlined in the PEA.
2
Expenditures
included in “Feasibility study and engineering” in financial statements.
3
Expenditures
incurred to advance the overall Elk Creek Project and Feasibility Study.
The vast majority of the Feasibility Study
work is completed and we anticipate approximately $2.1 million of work remains. This includes about $0.2 million of work for completion
of metallurgical testing work, while the balance is expected to be incurred for final Feasibility Study and engineering wrap up.
While we may ultimately exceed the amounts as budgeted in the PEA by 5-10%, most of this deviation is for additional metallurgical
analyses that Management incurred to identified process breakthroughs with the potential to reduce CAPEX and OPEX, as discussed
above.
Financial and Operating Results
The Company continues to expense all expenditures
when incurred, except for equipment, which is capitalized. The Company has no revenues from mining operations. Operating expenses
incurred related primarily to performing exploration activities, as well as the activities necessary to support corporate and shareholder
duties, and are detailed in the following table.
|
|
For the three
months ended
December 31,
|
|
|
For the six
months ended
December 31,
|
|
|
|
2016
|
|
|
2015
|
|
|
2016
|
|
|
2015
|
|
Operating expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consulting
|
|
$
|
1
|
|
|
$
|
67
|
|
|
$
|
1
|
|
|
$
|
131
|
|
Depreciation
|
|
|
2
|
|
|
|
2
|
|
|
|
4
|
|
|
|
4
|
|
Employee-related costs
|
|
|
496
|
|
|
|
182
|
|
|
|
1,036
|
|
|
|
520
|
|
Finance costs
|
|
|
-
|
|
|
|
266
|
|
|
|
-
|
|
|
|
278
|
|
Professional fees
|
|
|
279
|
|
|
|
89
|
|
|
|
612
|
|
|
|
122
|
|
Exploration expenditures
|
|
|
2,397
|
|
|
|
432
|
|
|
|
4,367
|
|
|
|
2,396
|
|
Other operating expenses
|
|
|
175
|
|
|
|
265
|
|
|
|
310
|
|
|
|
491
|
|
Total operating expenses
|
|
|
3,350
|
|
|
|
1,303
|
|
|
|
6,330
|
|
|
|
3,942
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in financial instrument fair value
|
|
|
(39
|
)
|
|
|
1,398
|
|
|
|
(335
|
)
|
|
|
1,369
|
|
Foreign exchange loss
|
|
|
160
|
|
|
|
47
|
|
|
|
193
|
|
|
|
197
|
|
Interest expense
|
|
|
71
|
|
|
|
88
|
|
|
|
140
|
|
|
|
141
|
|
Loss (gain) on available for sale securities
|
|
|
5
|
|
|
|
-
|
|
|
|
(6
|
)
|
|
|
(6
|
)
|
Income tax expense
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
|
|
-
|
|
Net Loss
|
|
$
|
3,547
|
|
|
$
|
2,836
|
|
|
$
|
6,322
|
|
|
$
|
5,643
|
|
Six months ended December 31, 2016 compared
to six months ended December 31, 2015
Significant items affecting operating expenses
are noted below:
Employee related costs
increased
primarily due to increased share-based compensation costs reflecting the timing and amount of stock option grants, and the impact
of additional personnel to support finance and external communications activities.
Professional fees
include
legal and accounting services, and increased in connection with the Company’s initial registration statement with the SEC.
The Company expects that professional fees through the remainder of the fiscal year will continue to be higher than historical
periods as the Company transitions to being a reporting issuer with the SEC.
Exploration expenditures
increased $2.0 million, reflecting the timing of expenditures at the Elk Creek Project as discussed above under “
Elk
Creek Project Update
.” 2016 expenditures primarily related to engineering and metallurgical bench and pilot plant testwork
in support of our continuing Feasibility Study work, while 2015 costs were directed towards engineering costs in support of the
Preliminary Economic Assessment studies that were completed that year.
Other operating expenses
include investor relations, general office expenditures, stock and proxy expenditures and other miscellaneous costs. The decline
in expenditures was related to financing-related costs incurred in 2015.
Other significant items impacting the change
in the Company’s net loss are noted below
:
Change in financial instrument
fair value
represents non-cash changes in the market value of the Convertible Security, which is carried at fair value, as
well as changes in the market value of the derivative liability component of the Convertible Notes.
Foreign exchange loss
is primarily due to changes in the United States dollar (“USD”) against the Canadian dollar (“C$”), and
reflects the timing of foreign currency transactions and subsequent changes in exchange rates. The impacts in both periods primarily
relates to the USD-denominated Convertible debt and related party debt, which are recorded on the Canadian parent company books.
Three months ended December 31, 2016
compared to three months ended December 31, 2015
Overall, the increase in net loss for the
quarter are reflective of the six-month changes, as discussed above, for employee-related costs, professional fees, exploration
expenditures, and change in financial instrument fair value.
Liquidity and Capital Resources
We have no revenue generating operations
from which we can internally generate funds. To date, our ongoing operations have been financed by the sale of our equity securities
by way of private placements and the exercise of incentive stock options and share purchase warrants. We believe that we will be
able to secure additional private placements financings in the future, although we cannot predict the size or pricing of any such
financings. In addition, we can raise funds through the sale of interests in our mineral properties, although current market conditions
have substantially reduced the number of potential buyers/acquirers of any such interest(s). This situation is unlikely to change
until such time as we can complete work on the Feasibility Study. When acquiring an interest in mineral properties through purchase
or option, we will sometimes issue Common Shares to the vendor or optionee of the property as partial or full consideration for
the property interest in order to conserve our cash.
As of December 31, 2016, the Company had
cash of $0.7 million and a working capital deficiency of $6.9 million, compared to cash of $4.4 million and working capital of
$2.3 million on June 30, 2016. This change in working capital is the result of two primary factors: Our continued work towards
completion of the Feasibility Study primarily related to engineering and metallurgical development, and the transfer of the Lind
Convertible Security from a long-term liability to a current liability based on maturity date. Following the execution of the Lind
Convertible Security Agreement in December 2015, $1,375 of the Convertible Security has been converted into NioCorp equity, thereby
reducing the outstanding liability. Additional components of this Convertible Security may be converted into equity at the discretion
of the debt holder, however, there is no obligation that the debt holder convert any additional portion of the debt prior to the
expiration of the Convertible Security.
We expect that the Company will operate
at a loss for the foreseeable future. The Company’s current planned operational needs are approximately $5.0 million until
June 30, 2017. In addition to outstanding accounts payable, our ongoing burn rate averages to approximately $695 per month where
approximately $255 is for administrative purposes and approximately $440 is for planned exploration expenditures related to the
completion of the Feasibility Study, permitting efforts, and third party consultants until June 30, 2017. The Company’s ability
to continue operations and fund our current work plan is dependent on Management’s ability to secure additional financing.
In addition to the recent announcements
regarding the Company entering into the Credit Facility with Mark Smith on January 16, 2017, the recently announced Offering on
January 27, 2017, and subsequent Offering gross proceeds increase announced on January 30, 2017, the Company anticipates that it
may need to raise $2.0 to $8.2 million to continue planned operations for the next twelve months, primarily depending on the amount
of additional Convertible Security conversions, if any, that may occur. Management is actively pursuing such additional sources
of debt and equity financing, and while it has been successful in doing so in the past, there can be no assurance it will be able
to do so in the future.
Exploration expenditure commitments (for
example, lease payments) are $36 until June 30, 2017 and planned exploration and development activities are approximately $2.1
million until June 30, 2017. To maintain its currently held properties and fund its currently anticipated general and administrative
costs and planned exploration and development activities at the Elk Creek Project for the fiscal year ending June 30, 2017, the
Company will require additional financing during 2017. Should such financing not be available in that time-frame, we will be required
to reduce our activities and will not be able to carry out all our presently planned exploration and development activities at
the Elk Creek Project.
We currently have no further funding commitments
or arrangements for additional financing at this time (other than the potential exercise of options and warrants) and there is
no assurance that we will be able to obtain additional financing on acceptable terms, if at all. There is significant uncertainty
that we will be able to secure any additional financing in the current equity markets. The quantity of funds to be raised and the
terms of any proposed equity financing that may be undertaken will be negotiated by Management as opportunities to raise funds
arise. Specific plans related to the use of proceeds will be devised once financing has been completed and Management knows what
funds will be available for these purposes. Management intends to pursue funding sources of both debt and equity financing, including
but not limited to the issuance of equity securities in the form of Common Shares, warrants, subscription receipts, or any combination
thereof in units of the Company pursuant to private placements to accredited investors or pursuant to equity lines of credit or
public offerings in the form of underwritten/brokered offerings, at-the-market offerings, registered direct offerings, or other
forms of equity financing and public or private issuances of debt securities including secured and unsecured convertible debt instruments
or secured debt project financing. Management does not currently know the terms pursuant to which such financings may be completed
in the future, but any such financings will be negotiated at arms-length. Future financings involving the issuance of equity securities
or derivatives thereof will likely be completed at a discount to the then-current market price of the Company’s securities
and will likely be dilutive to current shareholders.
The audit opinion and notes that accompany
our financial statements for the year ended June 30, 2016 disclose a “going concern” qualification to our ability to
continue in business. The accompanying financial statements have been prepared under the assumption that we will continue as a
going concern. We are an exploration stage company and we have incurred losses since our inception. We do not have sufficient cash
to fund normal operations and meet debt obligations for the next 12 months without deferring payment on certain current liabilities
and raising additional funds. We believe that the going concern condition cannot be removed with confidence until the Company has
entered into a business climate where funding of its planned ongoing operating activities is secured.
We have no exposure to any asset-backed
commercial paper. Other than cash held by our subsidiaries for their immediate operating needs in Colorado and Nebraska, all of
our cash reserves are on deposit with major United States and Canadian chartered banks. We do not believe that the credit, liquidity,
or market risks with respect thereto have increased as a result of the current market conditions. However, in order to achieve
greater security for the preservation of its capital, we have, of necessity, been required to accept lower rates of interest, which
has also lowered our potential interest income.
Operating Activities
During the six months ended December 31,
2016, the Company's operating activities consumed $5.1 million of cash (2015: $7.0 million). The cash used in operating activities
for 2016 reflects the Company's funding of losses of $6.3 million offset by minor non-cash adjustments and changes in working capital
items. Overall, operational outflows decreased from 2015 primarily reflecting the timing of vendor payments. Going forward, the
Company’s working capital requirements are expected to increase substantially in connection the development of the Elk Creek
Project.
Financing Activities
Financing inflows decreased $7.0 million from 2015 to 2016,
due to the timing of convertible debt instrument and private placement issuances initiated during 2015.
Cash Flow Considerations
The Company has historically relied upon
equity financings, and to a lesser degree, debt financings, to satisfy its capital requirements and will continue to depend heavily
upon equity capital to finance its activities. The Company may pursue debt financing in the medium term if it is able to procure
such financing on terms more favorable than available equity financing; however, there can be no assurance the Company will be
able to obtain any required financing in the future on acceptable terms.
The Company has limited financial resources
compared to its proposed expenditures, no source of operating income, and no assurance that additional funding will be available
to it for current or future projects, although the Company has been successful in the past in financing its activities through
the sale of equity securities.
The ability of the Company to arrange additional
financing in the future will depend, in part, on the prevailing capital market conditions and its success in developing the Elk
Creek Project. Any quoted market for the Company's shares may be subject to market trends generally, notwithstanding any potential
success of the Company in creating revenue, cash flows, or earnings, and any depression of the trading price of the Company’s
Common Shares could impact its ability to obtain equity financing on acceptable terms.
Historically, the Company has used net
proceeds from issuances of Common Shares to provide sufficient funds to meet its near-term exploration and development plans and
other contractual obligations when due. However, further development and construction of the Elk Creek Project will require substantial
additional capital resources. This includes near-term funding and, ultimately, funding for Elk Creek Project construction and other
costs. See “
Liquidity and Capital Resources
” above for the Company’s discussion of arrangements related
to possible future financing(s).
Contractual Obligations
There have been no material changes to
our contractual obligations
discussed in “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” under the heading “Tabular Disclosure of Contractual
Obligations”
as of June 30, 2016, in our registration statement on Form S-1 (333-213451) filed on September 2, 2016,
as amended September 22, 2016.
Off Balance Sheet Arrangements
The Company has no off balance sheet arrangements.
Critical Accounting Policies
There have been no material changes in
our critical accounting policies
discussed in “Management’s
Discussion and Analysis of Financial Condition and Results of Operations” under the heading “Critical Accounting Policies”
as of June 30, 2016, in our registration statement on Form S-1 (333-213451) filed on September 2, 2016, as amended September 22,
2016.
Certain U.S. Federal Income Tax Considerations
The Company has been a “passive foreign
investment company” (“PFIC”) as defined under Section 1297 of the U.S. Internal Revenue Code of 1986, as amended,
in recent years and expects to continue to be a PFIC in the future. Current and prospective United States shareholders should consult
their tax advisors as to the tax consequences of PFIC classification and the U.S. federal tax treatment of PFICs. Additional information
on this matter is included in the Company’s registration statement on Form S-1 (333-213451) filed on September 2, 2016, as
amended September 22, 2016, under the heading “Certain United States Federal Income Tax Considerations.”
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
Interest rate risk
The Company’s exposure to changes
in market interest rates, relates primarily to the Company’s earned interest income on cash deposits and short term investments.
The Company maintains a balance between the liquidity of cash assets and the interest rate return thereon. The carrying amount
of financial assets, net of any provisions for losses, represents the Company’s maximum exposure to credit risk.
Foreign currency exchange risk
The company incurs expenditures in both
U.S. and Canadian dollars. Canadian dollar expenditures are primarily related to metallurgical-related exploration expenses, as
well as certain common share-related costs and professional services. As a result, currency exchange fluctuations may impact the
costs of our operating activities. To reduce this risk, we maintain sufficient cash balances in Canadian dollars to fund expected
near-term expenditures.
Commodity price risk
The Company is exposed to commodity price
risk related to the elements associated with the Elk Creek Project. A significant decrease in the global demand for these elements
may have a material adverse effect on our business. The Elk Creek Project is not in production, and the Company does not currently
hold any commodity derivative positions.
ITEM 4. CONTROLS AND PROCEDURES
Disclosure Controls and Procedures
At the end of the period covered by this
quarterly report on Form 10-Q for the six months ended December 31, 2016, an evaluation was carried out under the supervision of
and with the participation of our Management, including the Chief Executive Officer (“CEO”) and Chief Financial Officer
(“CFO”), of the effectiveness of the design and operations of our disclosure controls and procedures (as defined in
Rule 13a-15(e) and Rule 15d-15(e) under the Exchange Act). Based on that evaluation, the CEO and the CFO have concluded that as
of the end of the period covered by this quarterly report, our disclosure controls and procedures were effective in ensuring that:
(i) information required to be disclosed by us in reports that we file or submit to the SEC under the Exchange Act is recorded,
processed, summarized, and reported within the time periods specified in applicable rules and forms and (ii) material information
required to be disclosed in our reports filed under the Exchange Act is accumulated and communicated to our Management, including
our CEO and CFO, as appropriate, to allow for accurate and timely decisions regarding required disclosure.
Our Management does not expect that our
disclosure controls and procedures will prevent all error and all fraud. The effectiveness of our or any system of disclosure controls
and procedures, however well designed and operated, can provide only reasonable assurance that the objectives of the system will
be met and is subject to certain limitations, including the exercise of judgment in designing, implementing and evaluating controls
and procedures and the assumptions used in identifying the likelihood of future events.
Changes in Internal Control over Financial Reporting
There have been no changes in the Company’s
internal control over financial reporting during the six months ended December 31, 2016 that have materially affected, or are reasonably
likely to materially affect, the Company’s internal controls over financial reporting.
PART II —
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
We know of no material, active, or pending
legal proceedings against the Company, nor are we involved as a plaintiff in any material proceeding or pending litigation. There
are no proceedings in which any of our directors, officers, or affiliates, or any registered or beneficial shareholder, is an adverse
party or has a material interest adverse to our interest.
ITEM 1A. RISK FACTORS
There have been no changes to the risk
factors set forth under the heading “Risk Factors” in our Registration Statement on Form S-1/A filed with the SEC on
September 22, 2016, which are incorporated herein by reference.
ITEM 2. UNREGISTERED SALES
OF EQUITY SECURITIES AND USE OF PROCEEDS
The table below sets forth sales of unregistered
equity securities in the period covered by this Quarterly Report on Form 10-Q, all dollar amounts are in thousands.
Date
|
|
Description
|
|
Number
|
|
|
Purchaser
|
|
Proceeds
($000)
|
|
|
Consideration
|
|
Exemption
(A)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
October 2016
|
|
Common Shares (B)
|
|
|
1,220,841
|
|
|
Private Investor
|
|
C$
|
794
|
|
|
Cash
|
|
Private Offering
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares (C)
|
|
|
531,908
|
|
|
Private Investor
|
|
US$
|
275
|
|
|
Cash
|
|
Private Offering
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
November 2016
|
|
Common Shares (B)
|
|
|
2,096,067
|
|
|
Private Investor
|
|
C$
|
1,362
|
|
|
Cash
|
|
Private Offering
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Common Shares (C)
|
|
|
606,359
|
|
|
Private Investor
|
|
US$
|
275
|
|
|
Cash
|
|
Private Offering
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 2016
|
|
Common Shares (C)
|
|
|
544,735
|
|
|
Private Investor
|
|
US$
|
275
|
|
|
Cash
|
|
Private Offering
|
A –
“Private Offering” above means that the Common Shares were offered and sold to private investors pursuant to exemptions
from the registration requirements under the United States Securities Act of 1933, as amended (the “Securities Act”),
provided by Section 4(a)(2) thereof and Rule 506 of Regulation D under the Securities Act for issuances inside the United States
and by Rule 903 of Regulation S under the Securities Act for issuances outside the United States, on the basis of representations
and warranties of the private investors provided to the Company at the time of exercise regarding certain factual matters.
B – Warrants with an exercise price
of C$0.65 with an expiration date of November 10, 2016.
C – Conversions of the Convertible
Security into Common Shares. Proceeds represents the face value converted.
ITEM 3. DEFAULTS UPON
SENIOR SECURITIES
None.
ITEM 4. MINE SAFETY DISCLOSURES
Pursuant to Section 1503(a) of the Dodd-Frank
Act, issuers that are operators, or that have a subsidiary that is an operator, of a coal or other mine in the United States are
required to disclose specified information about mine health and safety in their periodic reports. These reporting requirements
are based on the safety and health requirements applicable to mines under the Federal Mine Safety and Health Act of 1977 (the “Mine
Act”) which is administered by the U.S. Department of Labor’s Mine Safety and Health Administration (“MSHA”).
During the six-month period ended December 31, 2016, the Company and its subsidiaries and their properties or operations were not
subject to regulation by MSHA under the Mine Act and thus no disclosure is required under Section 1503(a) of the Dodd-Frank Act.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS
Exhibit
No.
|
|
Title
|
|
|
|
3.1(1)
|
|
Notice of Articles dated April 5, 2016
|
3.2(1)
|
|
Articles dated January 27, 2015
|
4.1# (1)
|
|
Option Plan
|
4.2(1)
|
|
Special Warrant Indenture in respect of 2014 Special Warrants
|
4.3(1)
|
|
Special Warrant Indenture in respect of 2015 Special Warrants
|
4.4(1)
|
|
Warrant Indenture in respect of the 2014 Warrants
|
4.5(1)
|
|
Warrant Indenture in respect of the 2015 Warrants
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a),
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a),
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS (2)
|
|
XBRL Instance Document
|
101.SCH(2)
|
|
XBRL Taxonomy Extension- Schema
|
101.CAL(2)
|
|
XBRL Taxonomy Extension – Calculations
|
101.DEF(2)
|
|
XBRL Taxonomy Extension – Definitions
|
101.LAB(2)
|
|
XBRL Taxonomy Extension – Labels
|
101.PRE(2)
|
|
XBRL Taxonomy Extension – Presentations
|
|
#
|
Management compensation plan, arrangement or agreement.
|
|
(1)
|
Previously filed as an exhibit to the Company’s draft registration statement on Form S-1 submitted to the Commission
on July 27, 2016 and incorporated herein by reference.
|
|
(2)
|
Submitted Electronically Herewith. Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business
Reporting Language): (i) the Condensed Interim Consolidated Balance Sheets at December 31, 2016 and June 30, 2016, (ii) the
Condensed Interim Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months ended December 31,
2016 and 2015, (iii) the Condensed Interim Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2016
and 2015, (iv) the Condensed Interim Consolidated Statements of Changes in Equity for the Six Months Ended December 31, 2016
and the Year ended June 30, 2016, (v) the Notes to the Condensed Interim Consolidated Financial Statements
|
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
NIOCORP DEVELOPMENTS
LTD.
(Registrant)
By:
|
/s/ Mark A. Smith
|
|
|
Mark A. Smith
|
|
|
Chief Executive Officer
|
|
|
(Principal Executive Officer)
|
|
|
|
|
Date:
|
February 3, 2017
|
|
|
|
|
By:
|
/s/ Neal Shah
|
|
|
Neal Shah
|
|
|
Chief Financial Officer
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
Date:
|
February 3, 2017
|
|
INDEX TO EXHIBITS
Exhibit
No.
|
|
Title
|
|
|
|
3.1(1)
|
|
Notice of Articles dated April 5, 2016
|
3.2(1)
|
|
Articles dated January 27, 2015
|
4.1#(1)
|
|
Option Plan
|
4.2(1)
|
|
Special Warrant Indenture in respect of 2014 Special Warrants
|
4.3(1)
|
|
Special Warrant Indenture in respect of 2015 Special Warrants
|
4.4(1)
|
|
Warrant Indenture in respect of the 2014 Warrants
|
4.5(1)
|
|
Warrant Indenture in respect of the 2015 Warrants
|
31.1
|
|
Certification of Chief Executive Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a),
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
31.2
|
|
Certification of Chief Financial Officer pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a),
as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
32.1
|
|
Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
32.2
|
|
Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
101.INS(2)
|
|
XBRL Instance Document
|
101.SCH(2)
|
|
XBRL Taxonomy Extension- Schema
|
101.CAL(2)
|
|
XBRL Taxonomy Extension – Calculations
|
101.DEF(2)
|
|
XBRL Taxonomy Extension – Definitions
|
101.LAB(2)
|
|
XBRL Taxonomy Extension – Labels
|
101.PRE(2)
|
|
XBRL Taxonomy Extension – Presentations
|
|
#
|
Management compensation plan, arrangement or agreement.
|
|
(1)
|
Previously filed as an exhibit to the Company’s draft registration statement on Form S-1 submitted to the Commission
on July 27, 2016 and incorporated herein by reference.
|
|
(2)
|
Submitted Electronically Herewith. Attached as Exhibit 101 to this report are the following formatted in XBRL (Extensible Business
Reporting Language): (i) the Condensed Interim Consolidated Balance Sheets at December 31, 2016 and June 30, 2016, (ii) the
Condensed Interim Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months ended December 31,
2016 and 2015, (iii) the Condensed Interim Consolidated Statements of Cash Flows for the Six Months Ended December 31, 2016
and 2015, (iv) the Condensed Interim Consolidated Statements of Changes in Equity for the Six Months Ended December 31, 2016
and for the Year ended June 30, 2016, (v) the Notes to the Condensed Interim Consolidated Financial Statements
|
EXHIBIT 31.1
CERTIFICATION
I, Mark Smith, certify that:
1. I have reviewed this Quarterly Report on
Form 10-Q of NioCorp Developments Ltd.;
2. Based on my knowledge, this report does not contain
any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not misleading with respect to the period covered
by this report;
3. Based on my knowledge, the financial statements,
and other financial information included in this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s)
and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant
and have:
(a) Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's
disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s)
and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's
auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses
in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: February 3, 2017
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By:
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/s/ Mark Smith
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Mark Smith
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Chief Executive Officer
(Principal Executive Officer)
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EXHIBIT 31.2
CERTIFICATION
I, Neal Shah, certify that:
1. I have reviewed this Quarterly Report on
Form 10-Q of NioCorp Developments Ltd.;
2. Based on my knowledge, this report does not contain
any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light
of the circumstances under which such statements were made, not misleading with respect to the period covered
by this report;
3. Based on my knowledge, the financial statements,
and other financial information included in this report, fairly present in all material respects the financial condition,
results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant's other certifying officer(s)
and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e)
and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant
and have:
(a) Designed such disclosure controls and procedures, or
caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating
to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting,
or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes
in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant's
disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure
controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant's
internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's
fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially
affect, the registrant's internal control over financial reporting; and
5. The registrant's other certifying officer(s)
and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's
auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent
functions):
(a) All significant deficiencies and material weaknesses
in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's
ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management
or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: February 3, 2017
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By:
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/s/ Neal Shah
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Neal Shah
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Chief Financial Officer
(Principal Financial and Accounting Officer)
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EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION
1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF
2002
In connection with the Quarterly Report on Form
10-Q of NioCorp Developments Ltd. (the "Company"), for the period ended December 31, 2016, as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, Mark Smith, Chief Executive Officer of the Company, hereby
certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
1. The Report fully complies with the requirements
of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents,
in all material respects, the financial condition and results of operation of the Company.
Date: February 3, 2017
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By:
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s/ Mark Smith
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Mark Smith
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Chief Executive Officer
(Principal Executive Officer)
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EXHIBIT 32.2
CERTIFICATION PURSUANT TO 18 U.S.C. SECTION
1350
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF
2002
In connection with the Quarterly Report on Form
10-Q of NioCorp Developments Ltd. (the "Company"), for the period ended December 31, 2016, as filed with the Securities
and Exchange Commission on the date hereof (the "Report"), I, Neal Shah, Chief Financial Officer of the Company, hereby
certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to my knowledge:
1. The Report fully complies with the requirements
of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2. The information contained in the Report fairly presents,
in all material respects, the financial condition and results of operation of the Company.
Date: February 3, 2017
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By:
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/s/ Neal Shah
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Neal Shah
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Chief Financial Officer
(Principal Financial and Accounting Officer)
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