Developers of southeast Nebraska mine brush off ‘investigation’ by NY law firm
LINCOLN, Neb. (Nebraska Examiner) - Developers of a proposed niobium mine in southeast Nebraska are brushing off an announced “investigation” by a New York law firm over its delayed annual financial report for 2022-23.
The firm, Pomerantz LLP, bills itself as a “premier firm” in the areas of corporate litigation, and stated in a press release earlier this month that it was probing whether NioCorp and its officers or directors “engaged in securities fraud or other unlawful business practices.”
Pomerantz officials declined to comment further when contacted by the Nebraska Examiner.
But a spokesman for NioCorp and a former board member of the project dismissed the probe as “trolling for clients” to file a lawsuit.
‘We ignore them’
“They are soliciting investors to call them and join a lawsuit,” said Jim Sims, the Colorado-based spokesman for NioCorp. “I’ve seen 100s of these kinds of law firms. So we ignore them.”
Former State Sen. Tony Fulton, who once served on the NioCorp Board of Directors, had a similar response, likening the effort by the law firm to “ambulance chasers.”
“When share prices go down, that’s when these releases go out,” said Fulton, a former State Tax Commissioner, to capitalize on angry stockholders.
NioCorp, which has obtained options on land near Elk Creek, has seen its stock price on NASDAQ drop from over $10 per share in March to $4.09 on Tuesday.
Sims said he could not comment on the stock price drop, but Fulton said that some investors became upset after a move by NioCorp to join with GX Accounting Corp. didn’t reap as much of an investment in the project as expected.
A lawsuit has not been filed by Pomerantz, a law firm official confirmed. The firm recently grabbed a headline in Law360.com for negotiating a $26.3 million settlement with Deutsche Bank, resolving allegations that it had mishandled the bank’s “bad actors,” such as Jeffrey Epstein, the now disgraced and deceased financier.
Mine discussed for decades
A critical minerals mine in southeast Nebraska has been discussed for at least five decades, and NioCorp is led by an executive, Mark A. Smith, who was involved in Molycorp, a firm that had explored the Elk Creek project 30 years ago.
But attracting the estimated $1.2 billion in investments to get the deep-rock mine off and running has proven to be challenging. At one time, Smith had said that fund raising for the Elk Creek Superalloy Materials Project would be completed by 2018.
Dozens of Nebraskanas have invested in the project, placing a high-risk bet that the project will become reality. It has been promoted as creating 450 jobs with an annual payroll exceeding $1 billion.
The mine would extract and process niobium, scandium and titanium, minerals used to harden steel, make aluminum stronger and employed as a pigment in paint.
Fulton said he remains optimistic about the project, while acknowledging that it is not a sure thing.
Consultant says mine is ‘a real long shot’
One consultant on rare earth and critical minerals, David Hammond of Highlands Ranch, Colorado, told the Nebraska Examiner he still considers the Nebraska mine “a real long shot.”
“If I had to bet money, I’d bet a year’s worth of my retirement that this thing will never produce a single ounce, kilogram or ton of any product,” Hammond said.
Mining, in general, is a “high-risk game,” he said, and extracting rare earth minerals is difficult and expensive. Hammond said he questions whether the mine can be financially viable.
NioCorp, on Sept. 26, announced that it would be unable to meet a Sept. 28 deadline to file its annual financial report with the Ontario Securities Commission as well as the U.S. Securities and Exchange Commission. The announcement sent NioCorp’s stock value down by 40 cents a share.
The company blamed the missed deadline on the complexity of integrating its accounting systems with GX Acquisitions Corp., a firm NioCorp combined with to gain access to the NASDAQ stock exchange and to attract additional investment.
On Oct. 6, NioCorp announced that it had filed its annual financial statement.
Sims said the company is now focused on seeking $800 million in financing via the U.S. Export Bank and its “Make More in America” program.
That program is part of a larger effort by President Joe Biden to increase U.S. production of critical minerals, and make American less dependent on foreign sources, including China.
In September, the Biden Administration announced that it will invest up to $150 million to advance production and refining of critical minerals and materials here in the United States.
In January, the Administration also provided a $700 million loan for a mine in Nevada to produce lithium, a critical element in the production of batteries for electric cars.
Sims said that those announcements, and growing concerns about American produced resources, has produced a “bullish signal” about the need for projects like Elk Creek.
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