Discovery Watch is a weekly 15-30 minute audio show produced by HoweStreet.com where Jim Goddard interviews John Kaiser about resource juniors with projects that have caught John's attention. The projects will not be limited to companies he has covered through the Spec Value Rating System. Jim and John will periodically circle back to review the projects and if necessary close them out as no longer worth watching. Check out the catalog of KRO Free Stuff. KRO offers a USD $450 Annual Individual Membership. This Discovery Watch session is available via YouTube or Podcast.
NioBay Metals Inc was introduced to DW in February 2019 after the junior was granted a drill permit for the James Bay niobium deposit in northern Ontario near the First Nations town of Moosonee. This didn't solve the problem that the tribal council chief was opposed to mining in principle and refused to consult with NioBay as required, and, when the Ontario ministry granted the permit anyway, filed for a judicial review of the decision claiming that NioBay never consulted with the Moose Cree FN. That pissed off the other MCFN tribal council members who resigned and forced an election in July 2019 rather than as scheduled in 2020. The anti-mining chief was not re-elected and most of her anti-mining allies on the council were replaced by members prepared to listen NioBay. That process finally led to a "protection agreement" which plugged the MCFN into NioBay's exploration plans and gave them comfort that this was not going to wreck their backyard. It allowed NioBay to conduct a drill program in Q1 of 2020 which it got done before Covid-19 shut down everything. The drilling deepened and extended the footprint of the carbonatite which led to an updated resource estimate in early July 2020 that boosted the indicated+inferred resource 19% to 63.5 million tonnes at a grade of 0.52-0.53% N2O5. That, however, is not so important because the critical milestone is a PEA which describes a plausible mining scenario and what its economic value might be. The niobium market is dominated by supply from Araxa in Brazil which is five times richer and five times bigger than James Bay. Niobium is a $3 billion market controlled 85% by the CBMM family which has set the niobium price at a level which allows 2 other mines to be viable, one in Brazil owned by ChinaMoly and Niobec in Quebec owned by Magris. Niobium demand has being growing at a CAGR of 6.5%, though this will be lower during the pandemic. But James Bay wouldn't be in production until 2025 or beyond. The deposit was discovered during the 1960's and taken to feasibility by Bechtel, but never developed because of its remote location. NioBay's goal is to make it the world's fourth major primary source of niobium and to do that James Bay needs to be viable at the price set by CBMM. NioBay is working on a PEA it hopes to have out before October 2020. It will present an underground only as well as open-pit/underground hybrid scenarios with a 6,000 tpd processing facility. The market has a hard time quantifying the size of a niobium prize, so I have created a SC 6,000 tpd UG scenario OV within the ShareCollective using a resource of 40 million tonnes at 0.53% N2O5 and the spot ferroniobium price. Its after tax NPV outcome is USD $576 million which translates into a potential future stock price of $13.19 if there is no further dilution. That is quite an impressive target even when you assume 100% dilution to drive James Bay through feasibility. The 43-101 PEA will thus be a critical milestone for the market's perception of the upside for NioBay, and it will also become the basis on which the MCFN will have to decide on what terms, if any, they support a major niobium mine in their backyard. (Jul 15, 2020)
Disclosure: JK owns NioBay and Yorbeau; NioBay is a Good Spec Value rated Favorite, Forum Energy is a Fair Spec Value rated Favorite and Yorbeau is a Bottom-Fish Spec Value rated Favorite.