What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-14 compared with 2022-05-06 · 352 added, 289 removed, 240 unchanged (73% of the section changed)

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following discussion and analysis should be read in conjunction with our unaudited condensed interim consolidated financial statements

as of, and for the three and nine months ended March 31, 2022, and the related notes thereto, which have been prepared in accordance

as of, and for the three months ended September 30, 2022, and the related notes thereto, which have been prepared in accordance

with generally accepted accounting principles in the United States (“US GAAP”).

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Forward-looking

statements have been based upon our current business and operating plans, as approved by the Company’s Board of

our cash and other funding requirements and timing and sources thereof;

results of feasibility studies;

accuracy of mineral resource and reserve estimates and assumptions on which they are based;

statements have been based upon our current business and operating plans, as approved by the Company’s Board of Directors,

and may include statements regarding our cash and other funding requirements and timing and sources thereof;

results of feasibility

the accuracy of mineral resource and reserve estimates and assumptions on which they are based;

the results of economic

assessments and exploration activities;

and current market conditions and project development plans.

The material assumptions

used to develop the forward-looking statements and forward-looking information included in this Quarterly Report on Form 10-Q

and current market conditions and project development plans, and the Transaction (as defined

The material assumptions used to develop the forward-looking statements and forward-looking information included in this

Quarterly Report on Form 10-Q include:

our expectations of mineral prices;

our forecasts and expected cash flows;

our projected capital and operating

our projected

capital and operating costs;

accuracy of mineral resource estimates and resource modeling and feasibility study results;

expectations regarding

mining and metallurgical recoveries;

regarding mining and metallurgical recoveries;

timing and reliability of sampling and assay data;

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expected national and local government policies, including legal reforms;

successful advancement of the

Company’s required permitting processes;

successful advancement of the Company’s

required permitting processes;

and the ability to successfully raise additional capital;

NioCorp and GXII (as defined below) being

able to receive all required regulatory, third-party and shareholder approvals for the proposed Transaction;

the amount of redemptions

by GXII public stockholders;

the execution of definitive agreements relating to the convertible debenture transaction and the

standby equity purchase facility contemplated by the term sheets with Yorkville (as defined below);

and other current estimates

and assumptions regarding the proposed Transaction and its benefits.

Forward-looking

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risks related to

cost increases for our exploration and, if warranted, development projects;

the restatement of our consolidated financial statements with respect to the Affected Periods and the impact of such restatement

on our future financial statements and other financial measures;

risks related to

changes in economic valuations of the Elk Creek Project, such as net present value calculations, changes or disruptions in

the securities markets;

the material weakness in our internal control over financial reporting, our efforts to remediate such material weakness and

the timing of remediation;

risks related to

a disruption in, or failure of, our information technology (“IT”) systems, including those related to cybersecurity;

cost increases for our exploration and, if warranted, development projects;

risks related to

a disruption in, or failure of, our information technology systems, including those related to cybersecurity;

risks related to

equipment and supply shortages;

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risks related to

the effects of the COVID-19 pandemic on our business plans, financial condition and liquidity;

risks related to

the effects of the current Russia/Ukraine conflict;

the effects of the COVID-19 pandemic or other global health crises on our business plans, financial condition and liquidity;

risks related to

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risks related to

feasibility study results;

estimates of mineral resources and reserves;

risks related to

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the development of a viable recovery process for REEs;

risks related to

estimates of mineral resources and reserves;

risks related

to the estimation of mineral resources and mineral reserves;

risks related to

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risks related to

differences in U.S.

and Canadian reserve and resource reporting;

risks related to

our exploration activities being unsuccessful;

risks related to

competition in the mining industry;

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risks related to

surface access on our properties;

risks related to

potential future litigation;

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risks related

to our status as a “passive foreign investment company” under the U.S.

to qualifying as a “passive foreign investment company” under the U.S.

Internal Revenue Code of 1986, as amended;

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to our Common Shares, including price volatility, lack of dividend payments, dilution and penny stock rules.

risks related

to our status as an “emerging growth company” and the impact of related reduced reporting requirements on our

ability to attract investors.

Related to the Proposed Transaction

risks related to the amount of any redemptions

by GXII public stockholders being greater than expected, which may reduce the cash in trust available to NioCorp upon the

consummation of the Transaction;

risks related to the occurrence of any event,

change or other circumstances that could give rise to the termination of the Business Combination Agreement (as defined below)

and/or payment of the termination fees;

risks related to the outcome of any legal proceedings

that may be instituted against NioCorp or GXII following announcement of the Business Combination Agreement and the Transaction;

risks related to the inability to complete the

Transaction due to, among other things, the failure to obtain NioCorp shareholder approval or GXII stockholder approval or

the execution of definitive agreements relating to the convertible debenture transaction and the standby equity purchase facility

contemplated by the term sheets with Yorkville;

the risk that the announcement and consummation

of the Transaction disrupts NioCorp’s current plans;

risks relating to the ability to recognize the

anticipated benefits of the Transaction;

relating to unexpected costs related to the Transaction;

the risks that the consummation of the Transaction

is substantially delayed or does not occur, including prior to the date on which GXII is required to liquidate under the terms

of its charter documents.

one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may

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statements due to a variety of risks, uncertainties, and other factors, including without limitation those discussed under the

heading “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended June 30, 2021, as well as other

heading “Risk Factors” of our Annual Report on Form 10-K/A for the fiscal year ended June 30, 2022, as well as other

factors described elsewhere in this report and the Company’s other reports filed with the Securities and Exchange Commission

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For the reasons set forth above, investors should not attribute undue certainty to, or place undue reliance on, forward-looking

Instrument 43-101 Compliance

Honan, M.Sc., SME-RM, a qualified person as defined by National Instrument 43-101 - Standards of Disclosure for Mineral Projects

(“NI 43-101”), has supervised the preparation of the scientific and technical information that forms the basis for

the Elk Creek Project disclosure in this Quarterly Report on Form 10-Q and has approved the disclosure in this Quarterly Report

on Form 10-Q related thereto.

Honan is not independent of the Company, as he is the Chief Operating Officer.

Additional information

on the updated Feasibility Study for the Elk Creek Project (the “2019 Feasibility Study”) is available in our NI 43-101

Technical Report, issued May 29, 2019, which is available under NioCorp’s profile on the Canadian Administrators website

at www.sedar.com and on our website at www.niocorp.com/wp-content/uploads/180001_FINAL_43-101_FS_NioCorp_AS_FILED.pdf.

technical and scientific information included in this Quarterly Report on Form 10-Q derived from the June 2022 Elk Creek Project

feasibility study prepared by qualified persons (within the meaning of both National Instrument 43-101 – Standards of Disclosure

for Mineral Projects (“NI 43-101”) and subpart 1300 of Regulation S-K (“S-K 1300”), as applicable) has

been reviewed and approved by Scott Honan, M.Sc., SME-RM, NioCorp’s Chief Operating Officer.

Honan is a “Qualified

Person” as such term is defined in NI 43-101 and S-K 1300.

is developing the Elk Creek Project, located in southeast Nebraska.

The Elk Creek Project is an advanced Niobium (“Nb”),

Scandium (“Sc”), and Titanium (“Ti”) exploration project.

The Company also is evaluating the potential

Scandium (“Sc”) and Titanium (“Ti”) development stage property.

The Company is evaluating the potential

to produce several Rare Earth byproducts from the Elk Creek Project.

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funds to carry out our near-term planned work programs associated with securing the project financing necessary to complete mine

development, construction, commissioning, and operation of the Elk Creek Project.

Growth Company Status

qualify as an “emerging growth company” as defined in Section 101 of the Jumpstart our Business Startups Act (“JOBs

Act”) as we did not have more than $1.07 billion in annual gross revenue during our most recently completed fiscal year.

will lose our status as an emerging growth company on June 30, 2022, which is the fiscal year following the fifth anniversary

of the date of the first sale of Common Shares pursuant to an effective registration statement.

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 JOBS Act.

The election is irrevocable.

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 Exchange Act.

Such sections are described 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 Exchange Act, implemented by Section 951 of the Dodd-Frank Wall Street Reform and Consumer Protection Act of

2010 (the “Dodd-Frank Act”), require companies to hold shareholder advisory votes on executive compensation and

golden parachute compensation.

we will lose our status as an emerging growth company as of June 30, 2022, we will become subject to Section 14A(a) and (b) of

the Exchange Act beginning next fiscal year.

However, notwithstanding the loss of our status as an emerging growth company, we

will continue to be exempt from Section 404(b) of the Sarbanes-Oxley Act of 2002 for so long as we are neither a “large

accelerated filer” nor an “accelerated filer” as those terms are defined in Rule 12b-2 under the Exchange Act.

March 2020, several measures have been implemented in the United States, Canada, and the rest of the world in response to the

increased impact from the COVID-19 pandemic.

Such impacts include, among others, supply chain disruptions, labor shortages, regulatory

challenges, inflationary pressures, as well as market volatility.

The full extent to which the COVID-19 pandemic and our precautionary

measures may continue to impact our business will depend on future developments, which continue to be highly uncertain and cannot

be predicted at this time, including, but not limited to, the duration and geographic spread of the pandemic, its severity, the

actions to contain the virus or treat its impact, future spikes of COVID-19 infections resulting in additional preventative measures

to contain or mitigate the spread of the virus, the effectiveness, distribution and acceptance of COVID-19 vaccines, including

the vaccines’ efficacy against emerging COVID-19 variants, and how quickly and to what extent normal economic and operating

conditions can resume.

We believe this could have an adverse impact on our ability to obtain financing, development plans, results

of operations, financial position, and cash flows during the current fiscal year.

As a result of the COVID-19 pandemic, the Company

is following, and will continue to follow, social distancing, health and safety protocol, business-related social gathering restrictions,

and other similar guidelines promulgated by Colorado and Nebraska governmental officials.

COVID-19 pandemic has caused, and continues to cause, uncertainty with regards to overall project funding timelines and a heightened

risk remains that we may be unable to secure sufficient additional capital, including but not limited to equity and debt offerings,

to fund future expenditures or to maintain our liquidity.

It is also possible that the COVID-19 pandemic could further adversely

affect our business plans, results of operations, financial condition or liquidity in the future.

The impact of the COVID-19 pandemic

is fluid and continues to evolve, and therefore, we cannot currently predict the extent to which our business plans, results of

operations, financial condition or liquidity will ultimately be impacted.

Russia/Ukraine

February 24, 2022, Russian military forces launched a military action in Ukraine.

In response to this action, the U.S.

countries have imposed various economic sanctions and measures against Russia and related persons and entities.

Russia has subsequently

enacted countermeasures.

We are monitoring developments and potential impacts from enacted sanctions and measures and will take

mitigating actions as appropriate.

This conflict and resulting response has impacted the global economy and financial markets

and could adversely affect our business, financial condition, and results of operations.

development and construction of the Elk Creek Project.

Corporate Events

Company developed and deployed an Environmental and Social Management System (“ESMS”) in the third fiscal quarter

of 2022 based on the “Equator Principles.” The Equator Principles are intended to serve as a common baseline and risk

management framework to facilitate the identification, assessment, and management of environmental, social, and governing risks

(“ESG”), and are oftentimes used to evaluate projects in a financing context.

development of the Equator Principles has formalized and documented many of NioCorp’s existing ESG practices.

The ESMS includes

the following elements:

● Environmental

and Social Risk Assessment;

Change Risk Assessment;

● Environmental

and Community Assessment, including an Environmental Justice evaluation;

website-based Grievance Mechanism for members of the local community;

series of management procedures to guide day-to-day activities;

● Environmental

and Social Management Plans for Air Emissions and Wastewater.

September 25, 2022, the Company, GXII, and Merger Sub, entered into the Business Combination Agreement.

Pursuant to the Business

Combination Agreement, as the result of a series of transactions, GXII will become a subsidiary of the Company (as successor by

merger to the Company’s subsidiary, ECRC), with the pre-combination public shareholders of GXII receiving Common Shares

based on the Exchange Ratio of 11.1829212 Common Shares for each GXII Class A common share held and not redeemed, and the GXII

founders receiving shares in GXII (as successor by merger to ECRC) based on the Exchange Ratio.

Pursuant to the Business Combination

Agreement, after closing, the GXII founders will have the right to exchange such shares for Common Shares on a one-for-one basis

under certain conditions.

Pursuant to the Business Combination Agreement, the Company will also assume the obligations under the

issued and outstanding GXII warrants, which will be converted into warrants exercisable into Common Shares following closing of

the Transaction.

The Business Combination Agreement contemplates that the Company will undertake a reverse stock split of the

Common Shares at the time of close in connection with an expected cross-listing to Nasdaq.

In addition, pursuant to the Business Combination Agreement, post-closing, the Company’s Board will include two directors

from pre-combination GXII.

The transactions contemplated by the Business Combination Agreement and the ancillary agreements thereto

are referred to collectively as the “Transaction.”

business combination pursuant to the Business Combination Agreement will be accounted for as a recapitalization in accordance

Under this method of accounting, GXII will be treated as the “acquired” company for financial reporting

Accordingly, the transaction is treated as the equivalent of NioCorp issuing Common Shares for the net assets of GXII,

accompanied by a recapitalization.

The net assets of GXII will be stated at historical cost, with no goodwill or other intangible

assets recorded.

addition, in connection with the entry into the Business Combination Agreement, the Company announced the signing of non-binding

LOIs for two separate financing packages with Yorkville.

Subject to entering into definitive agreements, these financings could

provide the Company with access to up to an additional $81.0 million to help advance the Elk Creek Project.

The financings contemplated

by the LOIs include $16.0 million in convertible debentures that are expected to be funded at the closing of the Transaction,

and subject to certain limitations can be

repaid by the Company in either cash or Common Shares, and a standby equity purchase

facility pursuant to which the Company will have the ability to require Yorkville, subject to the conditions set out in the definitive

agreements, to purchase up to $65.0 million of its Common Shares.

proposed Transaction is expected to close in the first calendar quarter of 2023, subject to the satisfaction or waiver of certain

customary closing conditions contained in the Business Combination Agreement, including, among other things, (i) obtaining required

approvals of the Transaction and related matters by the respective shareholders of NioCorp and GXII, (ii) the effectiveness of

the registration statement on Form S-4 that the Company originally filed on November 7, 2022, (iii) receipt of approval for listing

on Nasdaq of the NioCorp Common Shares to be issued in connection with the Transaction, (iv) receipt of approval for listing on

Nasdaq of the NioCorp warrants to be issued in exchange for the GXII warrants that NioCorp has agreed to assume, (v) receipt of

approval from the TSX with respect to the issuance and listing of the NioCorp Common Shares issuable in connection with the Transaction,

(vi) that NioCorp and its subsidiaries (including GXII, as successor by merger to ECRC) will have at least $5.000001 million of

net tangible assets upon the consummation of the Transaction, after giving effect to any redemptions by GXII public stockholders

and after payment of underwriters’ fees or commissions, (vii) that, at closing, NioCorp and its subsidiaries (including

GXII, as successor by merger to ECRC) will have received cash in an amount equal to or greater than $15.0 million, subject to

certain adjustments, and (viii) the absence of any injunctions enjoining or prohibiting the consummation of the Business Combination

The proposed additional financings contemplated by the LOIs will also be subject to the approval of the TSX and the

Company’s shareholders.

proceeds will depend upon redemption rates of current GXII shareholders at the consummation of the proposed Transaction.

In connection

with the closing of the Transaction, a significant number of GXII shareholders may exercise their redemption rights.

II, Item 1A, “Risk Factors—If the Transaction is consummated, the combined company may not realize all or any of the

anticipated benefits expected as a result of the Transaction.”

Creek Project Update

January 3, 2022, the Company announced positive results from its ongoing metallurgical work regarding the process to extract Rare

Earth elements (“REEs”) from ore samples sourced at its Elk Creek Project.

Salt Lake City-based L3 Process Development

(“L3”) has been conducting small-scale testing for NioCorp on Rare Earth recovery and flowsheet improvement, with

the following results and planned work steps:

demonstrated that Scandium can be effectively extracted and separated from the REEs in

solution using a phosphate-based extractant.

With additional work, this phosphate-based

recovery process could be shown capable of replacing the phosphoric acid-based extraction

process that is part of the current Project design.

further demonstrated that the REEs (lanthanum through lutetium, including the magnetic

Rare Earths neodymium, praseodymium, dysprosium, and terbium) can be selectively extracted

and separated from the leach solution using an amide-based extractant.

testing is planned at L3’s laboratory to further verify and optimize a Rare Earth

recovery operation for the Elk Creek project as well as establish metallurgical performance

and recovery data for three prospective Rare Earth products:

neodymium/praseodymium oxide,

dysprosium oxide, and terbium oxide.

is now in the process of constructing a small-scale integrated demonstration plant at

its Quebec facility, which will address hydrometallurgical recommendations from the Company’s

2019 Feasibility Study as well as demonstrating potential Rare Earth recovery operations.

of this demonstration facility advanced during the current quarter along with the bench-scale testing needed to support final

plant design.

Management believes plant construction will be completed, and the test facility will be in operation, during our

current fiscal quarter ending June 30, 2022.

efforts to define a mineral resource with respect to Rare Earth data continued during the quarter;

however, it is not yet certain

if this work will result in Rare Earth data being delineated as a mineral resource.

April 15, 2022, the Company announced that the Nebraska Department of Environment and Energy (“NDEE”) advised the

Company that periodic extensions to the Elk Creek Project’s construction air permit are no longer required because the Company

has met the regulatory definition of “construction, reconstruction, or modification of the source” since the permit

long-term financing efforts continued during the quarter ended March 31, 2022.

However, as noted above under “ COVID-19,”

the COVID-19 pandemic has created uncertainty and continues to impact processes related to the Company’s efforts to

obtain project financing.

As funds become available through the Company’s fundraising efforts, we expect to undertake the

following activities:

September 6, 2022, the Company announced that it filed with the SEC a Technical Report Summary (“TRS”) based on the

Company’s 2022 Feasibility Study for the Elk Creek Critical Minerals Project.

The TRS was filed with the SEC to comply with

Item 601(b)(96) and S-K 1300, which regulates disclosure of Mineral Resources and Mineral Reserves.

A companion Technical Report

for Canadian purposes, pursuant to National Instrument 43-101 (“NI 43-101”), was filed by NioCorp on SEDAR on June

The technical data and economic conclusions of these reports are substantively identical, with minor differences between

the reports resulting only from the respective disclosure requirements of S-K 1300 and NI 43-101.

September 6, 2022, the Company announced that its demonstration-scale processing plant (the “demonstration plant”)

in Quebec, Canada had commenced a three-tonne sample of representative ore from the Elk Creek Project.

The demonstration plant

project is intended to demonstrate that the Company can extract and separate rare earth elements from ore that NioCorp expects

to mine from the Project site, subject to receipt of necessary project financing, and that its simplified process for potentially

producing niobium, scandium, and titanium is technically and economically feasible.

demonstration plant will process Elk Creek ore samples in three phases.

1 is designed to demonstrate a new approach to the initial processing of the ore that

NioCorp expects to mine from the Project site, subject to receipt of necessary project

funding, including calcination, initial leaching, and rare earth extraction;

2 is designed to demonstrate an improved process for the second stage of leaching along

with Niobium and Titanium separation;

3 is designed to demonstrate the technical viability of separating high-purity versions

of several target magnetic rare earth products from Elk Creek ore samples, as well as

confirming previously achieved high recovery rates for high-purity Scandium trioxide.

potential magnetic rare earth products include Neodymium-Praseodymium (“NdPr”) oxide, Dysprosium oxide, and Terbium

NioCorp will utilize conventional solvent extraction (“SX”) technology to test a rare earth separation approach

developed by NioCorp and L3 Process Innovation (“L3”).

October 25, 2022, the Company announced that its demonstration plant had completed demonstrating its planned process for removing

calcium and magnesium from ore obtained from the Elk Creek Project.

This positive result, which is part of Phase I operations

of the demonstration plant, is a key milestone in NioCorp’s proposed optimization of its process flow sheet for the Project,

which was designed by L3 and NioCorp.

well-known and time-tested process NioCorp is employing to remove calcium and magnesium carbonates from the ore using thermal

treatment and leaching is part of the demonstration plant’s Phase I flowsheet.

This step operated successfully, and the

removed calcium and magnesium were produced at demonstration scale as a mixed calcium and magnesium carbonate.

Removing carbonate

minerals in this fashion is expected to reduce the size of the follow-on planned production steps and make them more efficient.

Characterization of the calcium and magnesium carbonate from the completed demonstration plant production runs has demonstrated

very low levels of impurities, and an overall 99% purity of the mixed calcium-magnesium carbonate.

Phase I demonstration plant

operations will continue with calcination and a ramp-up of leaching operations as testwork and assembly of Phase II and Phase

III of the demonstration plant’s planned operations proceed in parallel.

long-term financing efforts continued during the quarter ended September 30, 2022, including the proposed Transaction, discussed

As funds become available through the Company’s fundraising efforts, we expect to undertake the following activities:

Continuation of

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groundwater investigation and control activities;

Land clearing operations intended to prepare

property owned by ECRC for the commencement of project construction,

Initiation of long-lead equipment procurement

Construction and operation of a small-scale

demonstration plant to address process recommendations contained in the 2019 Feasibility Study and to quantify REE metallurgical

Operation of a small-scale demonstration plant

to address process recommendations contained in the NI 43-101 technical report for the Elk Creek Project filed on SEDAR on May 29, 2019 and to quantify REE metallurgical performance.

and Operating Results

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as well as the activities necessary to support corporate and shareholder duties, and are detailed in the following table.

the Three Months

Ended March 31,

the Nine Months

Ended March 31,

For the Three Months

Ended September 30,

Operating expenses

Employee-related

Employee-related costs

Professional fees

Exploration expenditures

operating expenses

Total operating

on debt extinguishment

in financial instrument fair value

Foreign exchange (gain)

Other operating expenses

Total operating expenses

Foreign exchange loss

Interest expense

Loss (gain) on equity

months ended March 31, 2022 compared to nine months ended March 31, 2021

Loss (gain) on equity securities

Income tax benefit

months ended September 30, 2022 compared to three months ended September 30, 2021

items affecting operating expenses are noted below:

Employee-related

costs increased in 2022 as compared to 2021 due to increased share-based compensation costs, which primarily reflected the

impact of increased Common Share values in the Black Scholes model.

Options issued in both 2022 and 2021 were fully vested upon

issuance and expensed on the grant date.

fees increased in 2022 as compared to 2021, primarily due to the timing of legal services related to SEC filings, including

our shelf registration statement on Form S-3 filed in November 2021.

expenditures increased in 2022 as compared to 2021, reflecting costs incurred in connection with high pressure grinding rolls

comminution testing, process optimization, demonstration plant EPC efforts, Equator Principles program development and current

efforts in evaluating the potential to update the existing mineral resource with REEs.

costs decreased in 2022 as compared to 2021 due to timing of the retirement of our general counsel in the second quarter of

fees increased in 2022 as compared to 2021, primarily due to the timing of legal services related to the TRS filed with the

SEC on September 6, 2022.

expenditures increased in 2022 as compared to 2021, primarily due to the timing of demonstration plant development and start-up

costs incurred in 2022, as well as costs related to the completion and filing of the TRS filed with the SEC on September 6, 2022.

operating expenses include investor relations, general office expenditures, equity offering and proxy expenditures, board-related

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advisory fees and investor relations fees associated with our ongoing financing efforts.

In addition, share-based compensation

for directors and other advisors increased in 2022 as compared to 2021 due to increased share-based compensation costs, which

primarily reflected the impact of increased Common Share values in the Black Scholes model.

Options issued in both 2022 and 2021

were fully vested upon issuance and expensed on the grant date.

significant items impacting the change in the Company’s net loss are noted below :

income for 2021 represents the one-time forgiveness of the Company’s U.S.

Small Business Administration Loan, which

occurred on November 18, 2020.

on extinguishment for 2021 represents the one-time loss incurred in connection with the December 18, 2020, conversion of the

Nordmin accounts payable balance to a one-year convertible note (the “Nordmin Note”).

exchange (gain) loss is primarily due to changes in the U.S.

exchange loss is primarily due to changes in the U.S.

dollar against the Canadian dollar and reflects the timing of

foreign currency transactions, primarily U.S.

dollar-based related party loans, and subsequent changes in exchange rates, and

the loss during 2022 as compared to a gain in 2021 is due to an increase in the U.S.

dollar relative to the Canadian dollar in

2022, and a decrease in the U.S.

dollar relative to the Canadian dollar in 2021.

expense increased in 2022 as compared to 2021 primarily due to the accretion of the Nordmin Note, which was issued in December

2020, as well as accretion of the convertible security issued to Lind Global Asset Management III, LLC, which was issued in February

months ended March 31, 2022 compared to three months ended March 31, 2021

the increase in net loss for the three months ended March 31, 2022, as compared to the same period in 2021, is primarily the result

of the same factors underlying the nine-month changes in exploration expenditures and interest expense as discussed

dollar-based related party loans, and subsequent changes in exchange rates.

decline in foreign exchange loss during 2022 as compared 2021 is due to a declining U.S.

dollar-based debt balance, partially

offset by increased foreign exchange rates in 2022.

expense decreased in 2022 as compared to 2021 due to the impacts of conversions on the outstanding balance of the Lind III

Convertible Security.

and Capital Resources

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stock options and share purchase warrants, and related party loans.

While the COVID-19 pandemic has created uncertainty with respect

to overall project funding timelines, we believe that we will be able to secure additional private placement financings in the

future, although we cannot predict the timing, size, or pricing of any such financings.

In addition, we could raise funds through

the sale of interests in our mineral properties, although current market conditions and the impacts of the COVID-19 pandemic have

substantially reduced the number of potential buyers/acquirers of any such interests.

However, we cannot provide any assurances

that we will be able to be successful in raising such funds.

of March 31, 2022, the Company had cash of $3.5 million and a working capital deficit of $1.4 million, compared to cash of $7.3

of September 30, 2022, the Company had cash of $3.2 million and a working capital deficit of $3.1 million, compared to cash of

$5.3 million and working capital surplus of $0.6 million on June 30, 2022.

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Approximately $650 per month is planned

for expenditures relating to the advancement of Elk Creek Project by NioCorp’s wholly owned subsidiary, Elk Creek Resources

The Company’s ability to continue operations and fund our current work plan is dependent on management’s ability

to secure additional financing.

Company anticipates that it may not have sufficient cash to continue to fund basic operations for the next twelve months, and

for expenditures relating to the advancement of Elk Creek Project by NioCorp’s wholly owned subsidiary, ECRC.

The Company’s

ability to continue operations and fund our current work plan is dependent on management’s ability to secure additional

Company anticipates that it does not have sufficient cash to continue to fund basic operations for the next twelve months, and

additional funds totaling $12.0 million to $13.5 million are likely to be necessary to continue advancing the project in the areas

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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

Creek property lease commitments are -nil- until June 30, 2022.

Creek property lease commitments are $6 until June 30, 2023.

To maintain our currently held properties and fund our currently

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out all our presently planned activities at the Elk Creek Project.

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

or debt markets.

The quantity of funds to be raised and the terms of any proposed equity or debt financing that may be undertaken

will be negotiated by management as opportunities to raise funds arise.

Management is currently pursuing 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 arm’s length.

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.

September 25, 2022, the Company, GXII and Merger Sub entered into the Business Combination Agreement.

The NioCorp Board considered

a number of factors as generally supporting its decision to enter into the Business Combination Agreement, including, but not

limited to, the following material factors:

Anticipated Acceleration

of Financing Efforts .

The Transaction has the potential to (1) provide NioCorp with up to $285.0 million in net cash proceeds

at the consummation of the Transaction, depending upon the amount of redemptions by GXII public stockholders, and up to an

additional $81.0 million over the next three years (as further discussed below), depending on the consummation of other additional financing arrangements

that NioCorp and GXII intend to pursue prior to and following the expected closing of the Transaction and (2) significantly

accelerate NioCorp’s efforts to obtain the required Elk Creek Project financing by increasing exposure to institutional

investors looking to make strategic investments in critical minerals plays that are crucial to the world’s clean energy

Non-Binding Yorkville

The signing of non-binding LOIs for two separate financing packages with Yorkville, where, subject to entering

into definitive agreements, such financings could provide NioCorp with access to up to an additional $81.0 million to help

advance the Elk Creek Project.

The financings contemplated by the LOIs include $16.0 million in convertible debentures that

are expected to be funded at the closing of the Transaction, and subject to certain limitations can be repaid by NioCorp in

either cash or NioCorp Common Shares, and a standby equity purchase facility pursuant to which NioCorp will have the ability

to require Yorkville, subject to the conditions set out in the definitive agreements, to purchase up to $65.0 million of NioCorp

Common Shares;

Anticipated Benefits

of Nasdaq Listing .

A listing on Nasdaq, which is an established national exchange in the United States, would provide

broader access to capital and financing alternatives and would otherwise enhance NioCorp’s public profile;

Minimum Cash Condition .

The consummation of the Transaction is subject to the satisfaction or waiver of certain closing conditions contained in the

Business Combination Agreement, including, among other things, that, at the closing, NioCorp and its subsidiaries (including

GXII, as successor by merger to ECRC) will have received cash in an amount equal to or greater than $15.0 million, subject

to certain adjustments.

NioCorp Board also considered a variety of uncertainties and risks and other potentially negative factors concerning the Transaction,

including, but not limited to, the following:

of Failure to Complete the Transaction .

The risks that:

Transaction may not be completed despite the parties’ efforts, including the possibility

that the conditions to the parties’ obligations to complete the Transaction (which

include certain conditions that are not within the control of the parties to the Business

Combination Agreement) may not be satisfied or that completion of the Transaction may

be unduly delayed, and any resulting adverse impacts on NioCorp, its business and the

trading price of NioCorp Common Shares;

circumstances under which the Business Combination Agreement could be terminated and

the impact of such termination, including the requirement that NioCorp must pay GXII

(1) a Base Termination Fee of $15.0 million if it terminates the Business Combination

Agreement in order to enter into an agreement providing for a Superior Proposal (as defined

in the Business Combination Agreement), for a change of recommendation of the NioCorp

Board, or a material breach of certain of NioCorp’s covenants relating to soliciting

acquisition proposals or (2) an Intentional Breach Termination Fee of $25.0 million if

GXII terminates the Business Combination Agreement as a result of a willful and material

breach by NioCorp or as a result of NioCorp’s failure to consummate the closing

of the Transaction within five business days after all the conditions to closing have

been satisfied;

GXII is entitled to the Base Termination Fee or the Intentional Breach Termination Fee

upon termination of the Business Combination Agreement, NioCorp is also required to pay

all documented and reasonable out-of-pocket expenses paid or payable by GXII and its

sponsor in connection with the Business Combination Agreement and the Transaction, not

to exceed $5.0 million;

substantial costs to be incurred in connection with the Transaction, including those

incurred regardless of whether the Transaction are completed;

Relating to the Benefits of the Transaction .

The risks of:

realizing all the anticipated benefits expected as a result of the Transaction, including

the anticipated acceleration of its financing efforts and the benefits of the expected

Nasdaq listing, and that general economic and market conditions outside the control of

the parties to the Business Combination Agreement could deteriorate, any of which could

result in NioCorp being unable to achieve the financing necessary to advance, complete

construction and commence operation of the Elk Creek Project;

substantial costs to be incurred in connection with the Transaction, including those

incurred regardless of whether the anticipated benefits of the Transaction are realized;

Relating to the Financing .

The absence of committed financing and that the parties

may not be able to negotiate definitive documentation related to the Yorkville LOIs or

may not otherwise be able to consummate the financing transactions contemplated thereby,

which could cause NioCorp to encounter difficulties in completing the Transaction with

financing terms as favorable as anticipated or at all;

● Restrictions

on the Conduct of Business .

The Business Combination Agreement places certain restrictions

on the conduct of the NioCorp business prior to the consummation of the Transaction and

other alternatives reasonably available to NioCorp if it did not pursue the Transaction,

including continuing to pursue alternative financing arrangements.

as set forth above, 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 any such additional

financing on acceptable terms, if at all.

Notwithstanding the restrictions set forth in the Business Combination Agreement, there

is significant uncertainty that we would be able to secure any

financing in the current equity or debt markets.

The quantity of funds to be raised and the terms of any proposed equity or debt

financing that may be undertaken will be negotiated by management as opportunities to raise funds arise.

In addition to the proposed

Transaction and subject to receipt of the consent of GXII as may be required pursuant to the Business Combination Agreement, management

may 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.

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 arm’s 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.

In addition, we could raise funds through the sale of interests in our mineral properties, although current

market conditions and the impacts of the COVID-19 pandemic and other recent worldwide events have substantially reduced the number

of potential buyers/acquirers of any such interests.

However, we cannot provide any assurances that we will be able to be successful

in raising such funds.

on the conditions described within, management has concluded and the audit opinion and notes that accompany our financial statements

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statements included in this Quarterly Report on Form 10-Q have been prepared under the assumption that we will continue as a going

We are an exploration stage company and we have incurred losses since our inception.

We may not have sufficient cash

to fund normal operations and meet debt obligations for the next twelve months without deferring payment on certain current liabilities

We are a development stage issuer and we have incurred losses since our inception.

We may not have sufficient cash to

fund normal operations and meet debt obligations for the next twelve months without deferring payment on certain current liabilities

and raising additional funds.

The continuing COVID-19 pandemic has resulted in business travel restrictions and capital market

disruptions, and this has had an adverse impact on our ability to obtain financing, development plans, results of operations,

financial position, and cash flows during the current fiscal year.

We believe that the going concern uncertainty cannot be alleviated

with confidence until the Company has entered into a business climate where funding of its planned ongoing operating activities

Therefore, these factors raise substantial doubt as to our ability to continue as a going concern.

The COVID-19 pandemic and other recent worldwide events have created general global economic uncertainty

as well as uncertainty in capital markets, supply chain disruptions, increased interest rates, and the potential for geographic

During fiscal year 2022 and continuing into fiscal year 2023, these events continued to create uncertainty with respect

to overall project funding and timelines.

We believe that the going concern uncertainty cannot be alleviated with confidence until

the Company has entered into a business climate where funding of its planned ongoing operating activities is secured.

these factors raise substantial doubt as to our ability to continue as a going concern.

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 our capital,

we have, of necessity, been required to accept lower rates of interest, which has also lowered our potential interest

the nine months ended March 31, 2022, the Company’s operating activities consumed $4.4 million of cash (2021:

$3.6 million).

The cash used in operating activities for the nine months ended March 31, 2022, reflects the Company’s funding of losses

of $7.2 million, partially offset by the accretion of convertible debt, share-based compensation costs and other non-cash transactions,

as well as a $0.5 million increase in prepaid expenses related to the set-up of the L3 demonstration plant.

Overall, operational

outflows during the nine months ended March 31, 2022, increased from the corresponding period of 2021 due to an increase in exploration-related

spending at the Elk Creek Project and a prepayment related to planned process optimization testing.

Going forward, the Company’s

working capital requirements are expected to increase substantially in connection with the development of the Elk Creek Project.

inflows were $0.7 million during the nine months ended March 31, 2022, as compared to $11.9 million during the corresponding period

in 2021, primarily reflecting the timing of convertible debt issuance, warrant and option exercises, and related party debt repayments

during the comparative periods.

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

However, in order to achieve greater security for the preservation of our capital, we have, of necessity, been required

to accept lower rates of interest, which has also lowered our potential interest income.

the three months ended September 30, 2022, the Company’s operating activities consumed $1.7 million of cash (2021:

The cash used in operating activities for the three months ended September 30, 2022, reflects the Company’s

funding of losses of $2.6 million, partially offset by the accretion of convertible debt and other non-cash transactions.

Overall, operational outflows during the three months ended September 30, 2022, increased slightly from the corresponding

period of 2021 due to an increase in exploration-related spending at the Elk Creek Project.

Going forward, the

Company’s working capital requirements are expected to increase substantially in connection with the development of the

Elk Creek Project.

inflows were nil during the three months ended September 30, 2022, as compared to $0.3 million during the corresponding period

in 2021, primarily reflecting the timing of warrant and option exercises during 2021.

Flow Considerations

noted above under “ COVID-19 ,” the COVID-19 pandemic has created uncertainty with respect to overall project

funding timelines.

The Company has historically relied upon debt and equity financings to finance its activities.

may pursue additional debt and/or equity financing in the medium term;

however, there can be no assurance the Company will be

able to obtain any required financing in the future on acceptable terms.

Company has historically relied upon debt and equity financings to finance its activities.

The Company may pursue additional debt

and/or equity financing in the medium term;

however, there can be no assurance the Company will be able to obtain any required

financing in the future on acceptable terms.

Company has limited financial resources compared to its proposed expenditures, no source of operating income, and no assurance

16 unchanged sentences

of arrangements related to possible future financings.

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 “Contractual Obligations” as of June 30, 2021,

in our Annual Report on Form 10-K for the fiscal year ended June 30, 2021, other than reductions in convertible debt balances

as noted in Note 5 to the financial statements accompanying this Quarterly Report on Form 10-Q, and the extension of the term

of the related party credit facility as discussed in Note 7 to the financial statements accompanying this Quarterly Report on

Sheet Arrangements

Company has no off-balance sheet arrangements.

Accounting Policies

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, 2021, in our Annual Report on Form 10-K for the fiscal year ended June 30, 2021.

Accounting Estimates

have been no material changes in our critical accounting estimates discussed in “Management’s Discussion and Analysis

of Financial Condition and Results of Operations” under the heading “Critical Accounting Estimates and Recent Accounting

Pronouncements” as of June 30, 2022, in our Annual Report on Form 10-K/A for the fiscal year ended June 30, 2022.

Federal Income Tax Considerations

Company has been a “passive foreign investment company” (“PFIC”) as defined under Section 1297 of the

Internal Revenue Code of 1986, as amended, in recent years and expects to continue to be a PFIC in the future.

prospective United States shareholders should consult their tax advisors as to the tax consequences of PFIC classification and

believes that it qualified as 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, including its taxable years ended June 30, 2022 and

June 30, 2021.

However, based on the current composition of its income and assets, as well as current business plans and financial

expectations, NioCorp does not currently expect to be treated as a PFIC for its taxable year or foreseeable future taxable years.

However, this conclusion is a factual determination that must be made annually at the close of each taxable year and, thus, is

subject to change.

In addition, it is possible notwithstanding NioCorp’s conclusion that the IRS could assert, and that

a court could sustain, a determination that NioCorp is a PFIC.

Accordingly, there can be no assurance that NioCorp (or any of

its subsidiaries) will not be treated as a PFIC for any taxable year.

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 “Risk Factors” section

of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2021, under the heading “Risks Related

to the Common Shares.”

information on this matter is included in the “Risk Factors” section of the Company’s Annual Report on Form

10-K/A for the fiscal year ended June 30, 2022, under the heading “Risks Related to the Common Shares.”

Company has one class of shares, being Common Shares.

A summary of outstanding shares, share options, warrants, and convertible

debt option as of February 4, 2022, is set out below, on a fully-diluted basis.

debt option as of November 14, 2022, is set out below, on a fully-diluted basis.

Shares Outstanding

exercisable into one Common Share

Common Shares issuable on conversion of aggregate outstanding principal amounts of $4.05 million of convertible debt as of

May 6, 2022, assuming a market price per Common Share of $0.74

on that date.

Common Shares issuable on conversion of aggregate outstanding principal amounts of $0.8

million of convertible debt as of November 14, 2022, assuming a market price per Common

Share of $0.81 on that date.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis