NioCorp Developments (TSX: NB; US-OTC: NIOBF) announced on Friday that its shareholders have approved a merger with GX Acquisition Corp. II and up to $81 million in financing deals to advance its Elk Creek critical minerals project in Nebraska.
The Colorado-based NioCorp is developing North America’s only advanced materials manufacturing facility for producing niobium, scandium and titanium, that would be mined from an adjacent underground site in southeastern Nebraska.
Under the deal with GXII, NioCorp will acquire the U.S.-based special purpose acquisition company, creating a combined entity with a value of US$313.5 million, NioCorp said in a news release last September.
Once the deal closes, the company could have access to as much as US$285 million in net cash from the GX trust account to advance Elk Creek.
According to a feasibility study released last June, the project will cost US$1.1 billion to build. Earlier this week, Niocorp announced it had received notice that it could be eligible for up to US$800 million in project funding from the Export-Import Bank of the United Stated through its “Make More in America” initiative.
Merger details
GXII shareholders will receive approximately 11.18 NioCorp common shares for each GXII Class A common share held. The deal represents a 12.6% premium over NioCorp’s 20-day volume-weighted average share price when the deal was announced on Sept. 23.
NioCorp expects to complete a share consolidation (at a yet-to-be-determined ratio) and be listed on the Nasdaq Stock Exchange shortly after the deal closes. Its shares will continue to be traded on the Toronto Stock Exchange. The two financings are with YA II PN, an investment fund managed by Yorkville Advisors Global, a New Jersey-based investment firm. One involves up to $65 million in equity and another $16 million in convertible debt financing.
Both the merger and the financings are still subject to approval of the Toronto Stock Exchange and by a majority of GX stockholders.
“This business combination with GXII, and the two additional financing packages, have the potential to significantly accelerate our efforts to obtain the required project financing and to ultimately bring the Elk Creek Project to construction and eventual commercial operation,” said NioCorp CEO and executive chairman Mark A. Smith, in the September release.
NioCorp shares showed little movement Friday and closed at $1.32 apiece, down from their high on Monday of $1.37. Its shares have traded in a 52-week window of 76 ¢ and $1.71, valuing the company at $372.7 million.
