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Item 2. Management’s Discussion and Analysis

2023-02-13 compared with 2022-11-14 · 512 added, 544 removed, 48 unchanged (96% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

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”).

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

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

with generally accepted accounting principles in the United States (“U.S.

This discussion and analysis

4 unchanged sentences

Statements” below.

currency amounts are stated in thousands of U.S.

All currency amounts are stated in thousands

dollars unless noted otherwise.

used in this report, unless the context otherwise indicates, references to “we,” “our,” the “Company,”

“NioCorp,” and “us” refer to NioCorp Developments Ltd.

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.

Regarding Forward-Looking Statements

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 of 1933, as amended (the “Securities Act”), and Section 21E of the Securities

Exchange Act of 1934, as amended (the “Exchange Act”), 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 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, 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:

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 of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended

(the “Exchange Act”), 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 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 studies;

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

the results of economic assessments and exploration

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

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 costs;

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

regarding mining and metallurgical recoveries;

our projected capital and operating costs;

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

expectations regarding mining and metallurgical

timing and reliability of sampling and assay data;

anticipated political and social

expected national and local government policies, including legal reforms;

successful advancement of the Company’s

required permitting processes;

anticipated political and social conditions;

expected national and

local government policies, including legal reforms;

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.

NioCorp and GX Acquisition Corp.

II, a Delaware corporation (“GXII”),

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 consummation of the convertible debenture transaction and the standby equity purchase

facility contemplated by the definitive agreements with YA II PN, Ltd., an investment fund managed by Yorkville Advisors Global,

LP (together with YA II PN, Ltd., “Yorkville”);

and other current estimates and assumptions regarding the proposed

Transaction and its benefits.

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

that may be expressed or implied by such forward-looking statements, including, among others, risks related to the following:

Risks Related to Our Business:

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 the restatement of our consolidated financial statements as of and for the fiscal years ended June 30, 2022 and 2021 and the interim periods ended September 30, 2021, December 31, 2021, and March 31, 2022 (collectively, the “Affected Periods”) and the impact of such restatement on our future financial statements and other financial measures;

risks related to 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 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;

risks related to current and future offtake agreements, joint ventures, and partnerships;

risks related to our ability to attract qualified management;

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

risks related to the ability to enforce judgment against certain of our directors.

Risks Related to Mining and Exploration:

risks related to estimates of mineral resources and reserves;

risks related to mineral exploration and production activities;

risks related to our lack of mineral production from our properties;

risks related to the results of our metallurgical testing;

risks related to the price volatility of commodities;

risks related to the establishment of a reserve and resource for Rare Earth Elements (“REEs” or “Rare Earths”) and the development of a viable recovery process for REEs;

risks related to the estimation of mineral resources and mineral reserves;

risks related to changes in mineral resource and reserve estimates;

risks related to competition in the mining industry;

risks related to the management of the water balance at the Elk Creek Niobium/Scandium/Titanium development stage property (the “Elk Creek Project”) located in southeastern Nebraska;

risks related to claims on the title to our properties;

risks related to potential future litigation;

risks related to our lack of insurance covering all our operations.

Risks Related to Government Regulations:

risks related to our ability to obtain or renew 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 changes in federal and/or state laws that may significantly affect the mining industry;

risks related to the impacts of climate change, as well as actions taken or required by governments related to strengthening resilience in the face of potential impacts from climate change;

risks related to land reclamation requirements.

Risks Related to Our Debt:

risks related to covenants contained in agreements with our secured creditors that may affect our assets;

risks related to the extent to which our level of indebtedness may impair our ability to obtain additional financing.

Risks Related to Our Common Shares:

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

Internal Revenue Code of 1986, as amended (the “Code”);

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

Risks 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 failure to consummate the Yorkville Financings;

risks related to the inability to complete the Yorkville Financings due to, among other things, the failure to obtain shareholder approval or regulatory approval;

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;

risks 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.

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 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:

Related to Our Business:

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

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

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

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;

risks related to

current and future offtake agreements, joint ventures, and partnerships;

risks related to

our ability to attract qualified management;

risks related to

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

risks related to

the ability to enforce judgment against certain of our directors.

Related to Mining and Exploration:

risks related to

estimates of mineral resources and reserves;

risks related to

mineral exploration and production activities;

risks related to

our lack of mineral production from our properties;

risks related to

the results of our metallurgical testing;

risks related

to the price volatility of commodities;

risks related

to the establishment of a reserve and resource for Rare Earth Elements (“REEs” or “Rare Earths”) and

the development of a viable recovery process for REEs;

risks related

to the estimation of mineral resources and mineral reserves;

risks related to

changes in mineral resource and reserve estimates;

risks related to

competition in the mining industry;

risks related to

the management of the water balance at our Elk Creek Project;

risks related to

claims on the title to our properties;

risks related to

potential future litigation;

risks related to

our lack of insurance covering all our operations.

Related to Government Regulations:

risks related to

our ability to obtain or renew 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 changes in federal and/or state laws that may significantly affect the mining industry;

risks related

to the impacts of climate change, as well as actions taken or required by governments related to strengthening resilience

in the face of potential impacts from climate change;

risks related

to land reclamation requirements.

Related to Our Debt:

risks related

to covenants contained in agreements with our secured creditors that may affect our assets;

risks related

to the extent to which our level of indebtedness may impair our ability to obtain additional financing.

Related to Our Common Shares:

risks related

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

Internal Revenue Code of 1986, as amended;

risks related

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

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

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 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

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

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”) development stage property.

The Company is evaluating the potential

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

Niobium is used to produce various superalloys that are extensively

used in high performance aircraft and jet turbines.

It also is used in High-Strength, Low-Alloy (“HSLA”) steel, a

stronger steel used in automobiles, bridges, structural systems, buildings, pipelines, and other applications that generally increases

strength and/or reduces weight, which can result in environmental benefits, including reduced fuel consumption and material usage

and fewer air emissions.

Scandium can be combined with aluminum 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 preferred technology

for high-reliability, distributed electricity generation.

Titanium is a component of various superalloys and other applications

that are used for aerospace applications, weapons systems, protective armor, medical implants and many others.

It also is used

in pigments for paper, paint, and plastics.

Rare Earths are critical to electrification and decarbonization initiatives and can

be used to manufacture the strongest permanent magnets commercially available.

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 associated with securing the project financing necessary to complete mine

development and construction of the Elk Creek Project.

Corporate Events

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.

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 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 (“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 statements.

Qualified Person

All technical and scientific information

that forms the basis for the Elk Creek Project disclosure included in this Quarterly Report on Form 10-Q 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 National Instrument 43-101 – Standards of Disclosure for Mineral Projects and subpart 1300 of

Regulation S-K.

Company Overview

NioCorp is developing the Elk Creek Project,

located in southeast Nebraska.

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

Niobium is used to produce various superalloys that are extensively used in high performance aircraft

and jet turbines.

It also is used in High-Strength, Low-Alloy (“HSLA”) steel, a stronger steel used in automobiles,

bridges, structural systems, buildings, pipelines, and other applications that generally increases strength and/or reduces weight,

which can result in environmental benefits, including reduced fuel consumption and material usage and fewer air emissions.

can be combined with aluminum to make high-performance alloys with increased strength and improved corrosion resistance.

also is a critical component of advanced solid oxide fuel cells, an environmentally preferred technology for high-reliability,

distributed electricity generation.

Titanium is a component of various superalloys and other applications that are used for aerospace

applications, weapons systems, protective armor, medical implants, and many others.

It also is used in pigments for paper, paint,

and plastics.

Rare Earths are critical to electrification and decarbonization initiatives and can be used to manufacture the strongest

permanent magnets commercially available.

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 associated with securing the project financing necessary to complete mine development and construction of the Elk

Creek Project.

Recent Corporate Events

Proposed Transaction

On 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 the Transaction Closing, the

GXII founders will have the right to exchange such shares for Common Shares on a one-for-one basis under certain conditions.

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 following the Transaction Closing.

The Business Combination Agreement contemplates that the

Company will undertake a reverse stock split of the Common Shares at the time of the Transaction Closing in connection with an

expected cross-listing to Nasdaq.

In addition, pursuant to the Business Combination Agreement, post-closing, the Company’s

Board of Directors 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.”

The business combination pursuant to the

Business Combination Agreement will be accounted for as a recapitalization in accordance with U.S.

Under this method of accounting,

GXII will be treated as the “acquired” company for financial reporting purposes.

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.

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

1 unchanged sentence

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,

the registration statement on Form S-4 that the Company originally filed on November 7, 2022, and amended on December 22, 2022,

January 17, 2023, January 31, 2023, and February 6, 2023, and was declared effective by the SEC on February 8, 2023, (iii) receipt

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

for listing on Nasdaq of the 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 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

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.

and after payment of underwriters’ fees or commissions,

that, at the Transaction 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 Agreement.

The proposed additional financings contemplated

by the LOIs will also be subject to the approval of the TSX and the Company’s shareholders.

In addition, in connection with the entry

into the Business Combination Agreement, the Company announced the signing of non-binding letters of intent for two separate financing

packages with Yorkville.

As discussed below, on January 26, 2023, the Company entered into definitive agreements with respect to

these financings.

Final proceeds will depend upon redemption

rates of current GXII shareholders at the consummation of the proposed Transaction.

In connection with the Transaction Closing,

a significant number of GXII shareholders may exercise their redemption rights.

See Part 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.”

Yorkville Financings

further discussed in Note 15 to the unaudited interim condensed consolidated financial statements as of, and for the three and

six months ended December 31, 2022, included elsewhere in the Quarterly Report on Form 10-Q, on January 26, 2023, NioCorp entered

into definitive agreements with respect to two previously announced financings with Yorkville.

The financings contemplated by

the definitive agreements include (i) up to $16.0 million aggregate principal amount of unsecured convertible debentures of NioCorp

(the “Convertible Debentures”) convertible into Common Shares and Common Share purchase warrants (the “Financing

Warrants”) entitling the holders thereof to purchase additional Common Shares (the “Yorkville Convertible Debt Financing”);

and (ii) a standby equity purchase facility pursuant to which NioCorp will have the right, but not the obligation, subject to

the conditions set out therein, to sell Common Shares to Yorkville with a maximum aggregate value of up to $65.0 million over

a period of up to 36 months (the “Yorkville Equity Facility Financing” and, together with the Yorkville Convertible

Debt Financing, the “Yorkville Financings”).

The Yorkville Financings are expected to

become effective on the date of the Transaction Closing.

NioCorp intends to use the proceeds from

the Yorkville Financings to advance its efforts to launch construction of the Elk Creek Project and move it to commercial operation,

and to satisfy the fees and expenses incurred in connection with the Transaction, if required.

Completion of the Yorkville Financings

is subject to certain conditions, including the completion of the Transaction Closing, the receipt of the approval of the TSX,

and the approval of NioCorp’s shareholders in accordance with the rules of the TSX.

Elk Creek Project Update

On October 25,

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

Quebec, Canada, by L3 Process Innovation (“L3”), had completed demonstrating its planned process for removing calcium

and magnesium from ore obtained from the Elk Creek Project.

This positive result is a key milestone in NioCorp’s proposed

optimization of its process flow sheet for the Elk Creek Project, which was designed by L3 and NioCorp.

Removing carbonate

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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

the Company’s efforts to secure federal, state and local permits;

Continued evaluation

of the potential to produce Rare Earth products;

and completion of offtake agreements for the remaining uncommitted production from the project;

Negotiation and

completion of engineering, procurement and construction agreements;

Completion of the

final detailed engineering for the underground portion of the Elk Creek Project;

Initiation and completion

of the final detailed engineering for surface project facilities;

Construction of

natural gas and electrical infrastructure under existing agreements to serve the Elk Creek Project site;

Completion of water

supply agreements and related infrastructure to deliver fresh water to the project site;

Initiation of revised mine

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

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

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.

On January 4,

2023, the Company announced that the demonstration plant has succeeded in obtaining a Rare Earth dissolution rate of 86-95% from

ore from the Elk Creek Project site through hydrochloric acid leaching and has achieved a loading rate of Rare Earths as high as

99% in the follow-on solvent extraction recovery step.

These relatively high rates, which were expected, point to potentially strong

rates of overall recovery of separated Rare Earth oxides, subject to additional demonstration testing over the coming weeks.

Additional solvent

extraction steps will be deployed to establish the ultimate recovery rates of potential Rare Earth products.

The demonstration

plant has further established that the Rare Earths recovered in the initial solvent extraction step are accompanied by only two

impurities of note:

iron and a very small amount of nickel.

Given the success of this initial separation step, L3 and NioCorp expect

that losses in the additional solvent extraction steps would be low.

February 6, 2023, the Company announced that overall recoveries for praseodymium oxide, neodymium oxide, terbium oxide, and

dysprosium oxide are likely to be greater than 92% and meet commercial purity specifications for magnetic rare earth oxides.

results are in line with bench- and pilot-scale testing of L3’s rare earth recovery system, as well as hydrometallurgical

performance models that have been run on the rare earth recovery process upon which the demonstration plant is based.

NioCorp is currently

focused on demonstrating its ability to recover three high-purity Rare Earth products:

(1) neodymium-praseodymium (“NdPr”)

oxide, which is the principal component of neodymium-iron-boron (“NdFeB”) permanent Rare Earth magnets, (2) Dy oxide,

and (3) Tb oxide.

Both Dy and Tb oxides are critical to the type of powerful NdFeB magnets used in the traction motors of electric

The Demonstration Plant is also expected to deliver updated metallurgical recoveries for niobium, scandium and titanium

and expects to complete operations in the first calendar quarter of 2023.

Other Activities

Our long-term financing efforts continued

during the quarter ended December 31, 2022, including the proposed Transaction, discussed above.

As funds become available through

the Company’s fundraising efforts, we expect to undertake the following activities:

Continuation of the Company’s efforts to secure federal, state, and local permits;

Continued evaluation of the potential to produce Rare Earth products;

Negotiation and completion of offtake agreements for the remaining uncommitted production from the project;

Negotiation and completion of engineering, procurement, and construction agreements;

Completion of the final detailed engineering for the underground portion of the Elk Creek Project;

Initiation and completion of the final detailed engineering for surface project facilities;

Construction of natural gas and electrical infrastructure under existing agreements to serve the Elk Creek Project site;

Completion of water supply agreements and related infrastructure to deliver fresh water to the project site;

Initiation of revised mine groundwater investigation and control activities;

Land clearing operations intended to prepare property owned by ECRC for the commencement of project construction;

Initiation of efforts to satisfy conditions of Johnson County’s Special Use Permit, including road upgrades and the provision of additional law enforcement during the construction period;

Initiation of long-lead equipment procurement activities;

Completion of the operations of the 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.

Financial and Operating Results

The Company has no revenues from mining

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 September 30,

Ended December 31,

For the Six Months

Ended December 31,

Operating expenses

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Interest expense

Loss (gain) on equity securities

Gain on sale of assets

Loss 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 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

expenditures and other miscellaneous costs.

These costs increased in 2022 as compared to 2021 primarily due to increased financial

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

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

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.

Six-month period ended December 31,

2022 compared to the six-month period ended December 31, 2021

Significant items affecting operating expenses

are noted below:

Employee-related costs decreased

in 2022 as compared to 2021, primarily due to the timing of employee stock option grants.

These costs decreased in 2022 as compared

to 2021 due to stock options to purchase Common Shares (“Options”) issued in 2021, which were fully vested and expensed

on the grant date.

Exploration expenditures

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

costs incurred in 2022, as well as costs related to the completion and filing of the Technical Report Summary based on the Company’s

2022 Feasibility Study for the Elk Creek Project, which was filed with the SEC on September 6, 2022.

Other operating expenses

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

and other miscellaneous costs.

These costs decreased in 2022 as compared to 2021, primarily due to director Options issued in 2021,

which were fully vested and expensed on the grant date.

This reduction in costs associated with director Options was partially

offset by increased financial advisory fees and investor relations fees associated with our ongoing financing efforts.

Other significant items impacting the change

in the Company’s net loss are noted below :

Foreign 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.

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

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, convertible securities issuances, the exercise of incentive

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

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.

expect that the Company will operate at a loss for the foreseeable future.

The Company’s current planned cash needs are

approximately $16.0 million until June 30, 2023.

In addition to outstanding accounts payable and short-term liabilities, our average

monthly planned expenditures are approximately $1,125 per month where approximately $475 is for corporate overhead and estimated

costs related to securing financing necessary for advancement of the Elk Creek Project.

Approximately $650 per month is planned

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

of financing, permitting, and detailed engineering.

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

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

To maintain our currently held properties and fund our currently

anticipated general and administrative costs and planned exploration and development activities at the Elk Creek Project for the

fiscal year ending June 30, 2023, the Company will likely require additional financing during the current fiscal year.

such financing not be available in that timeframe, we will be required to reduce our activities and will not be able to carry

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

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;

The 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.

Interest expense decreased

in 2022 as compared to 2021 due to the impacts of conversions on the outstanding balance of the convertible security (the “Lind

III Convertible Security”) issued to Lind Global Asset Management III, LLC (“Lind”).

Three-month period ended December 31,

2022 compared to the three-month period ended December 31, 2021

Overall, the decrease in net loss for the

three-month period ended December 31, 2022, as compared to the same period in 2021, is primarily the result of the same factors

underlying the six-month changes in expense categories as discussed above.

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, convertible securities issuances, the exercise of incentive Options and Warrants, and related party

As of December 31, 2022, the Company had

cash of $0.4 million and a working capital deficit of $6.6 million, compared to cash of $5.3 million and working capital surplus

of $0.6 million on June 30, 2022.

We expect that the Company will operate

at a loss for the foreseeable future.

The Company’s current planned cash needs are approximately $13.5 million until June

In addition to outstanding accounts payable and short-term liabilities, our average monthly planned expenditures are

approximately $1,165 per month where approximately $405 is for corporate overhead and estimated costs related to securing financing

necessary for advancement of the Elk Creek Project.

Approximately $760 per month is planned 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 financing.

The Company anticipates that it does not

have sufficient cash to continue to fund basic operations for the next twelve months, and additional funds totaling $13.5 million

to $15.5 million are likely to be necessary to continue advancing the project in the areas of financing, permitting, and detailed

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.

Elk Creek property lease commitments are

$12 until June 30, 2023.

To maintain our currently held properties and fund our currently anticipated general and administrative

costs and planned exploration and development activities at the Elk Creek Project for the fiscal year ending June 30, 2023, the

Company will likely require additional financing during the current fiscal year.

Should such financing not be available in that

timeframe, we will be required to reduce our activities and will not be able to carry out all our presently planned activities

at the Elk Creek Project.

On September 25, 2022, the Company, GXII

and Merger Sub entered into the Business Combination Agreement.

The NioCorp Board of Directors 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 transition;

Yorkville Term Sheets.

The signing of non-binding LOIs for two separate financing packages with Yorkville.

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 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 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 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.

The NioCorp Board of Directors also considered

a variety of uncertainties and risks and other potentially negative factors concerning the Transaction, including, but not limited

to, the following:

Risks 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 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 Common Shares;

the 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;

if 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;

the substantial costs to be incurred in connection with the Transaction, including those incurred regardless of whether the Transaction are completed;

Risks 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.

not 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;

the substantial costs to be incurred in connection with the Transaction, including those incurred regardless of whether the anticipated benefits of the Transaction are realized;

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.

Except for the Yorkville Financings discussed

in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the heading

“ Recent Corporate Events ,” 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.

The Yorkville Convertible Debt Financing Agreement also contains

certain covenants that, among other things, limit NioCorp’s ability to use the proceeds from the Yorkville Convertible Debt

Financing to repay related party debt or to enter into any variable rate transaction, including issuances of equity or debt securities

that are convertible into Common Shares at variable rates and any equity line of credit, ATM agreement or other continuous offering

of Common Shares, other than with Yorkville, subject to certain exceptions.

Notwithstanding the restrictions set forth in the Business

Combination Agreement and the Yorkville Convertible Debt Financing Agreement, there is

significant uncertainty that we would 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

In addition to the proposed Transaction and Yorkville Financings, 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 public offerings

in the form of underwritten/brokered 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

8 unchanged sentences

in raising such funds.

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

for the year ended June 30, 2022, disclose that substantial doubt exists as to our ability to continue in business.

The financial

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

Based on the conditions

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

ended June 30, 2022, disclose that substantial doubt exists as to our ability to continue in business.

The financial statements

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

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 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

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

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

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.

ability of the Company to arrange additional financing in the future will depend, in part, on the prevailing capital market conditions,

including the impacts of the COVID-19 pandemic on the timing and availability of funding, and its success in developing the Elk

Creek Project.

Any quoted market for the Common 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 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, 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 financings.

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.

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 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 recessions.

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.

Therefore, these factors

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

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 U.S.

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 income.

Operating Activities

During the six months ended December 31,

2022, the Company’s operating activities consumed $4.1 million of cash (2021:

$3.0 million).

The cash used in operating activities

for the six months ended December 31, 2022, reflects the Company’s funding of losses of $4.8 million, partially offset by

the accretion of convertible debt and other non-cash transactions.

Overall, operational outflows during the six months ended December

31, 2022, increased 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.

Financing Activities

Financing outflows were $0.5 million during

the six months ended December 31, 2022, as compared to $0.6 million of inflows during the corresponding period in 2021, with 2022 outflows reflecting the timing of vendor payments related to deferred Transaction costs incurred during the period and 2021 inflows primarily

reflecting the timing of warrant and option exercises, partially offset by a partial repayment under the related party

loan with our President, Chief Executive Officer (“CEO”) and Executive Chairman, Mark Smith.

Cash Flow Considerations

The Company has historically relied upon

debt and equity financings to finance its activities.

Subject to the restrictions set forth in the Business Combination Agreement

and the Yorkville Convertible Debt Financing Agreement, the Company may pursue additional debt and/or equity financing in the medium

however, there can be no assurance the Company will be able to obtain any required financing in the future on acceptable

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, including the impacts of the COVID-19

pandemic on the timing and availability of funding, and its success in developing the Elk Creek Project.

Any quoted market for

the Common 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 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, 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

See “ Liquidity and Capital Resources ” above for the Company’s discussion of arrangements related

to possible future financings.

Critical Accounting Estimates

There 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

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.

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 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 $0.8

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

Share of $0.81 on that date.

NioCorp believes that it qualified as a

“passive foreign investment company” (“PFIC”) as defined under Section 1297 of the Code, 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

shareholders should consult their tax advisors as to the tax consequences of PFIC classification and the U.S.

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

The Company has one class of shares, being

Common Shares.

A summary of outstanding shares, Options, Warrants, and convertible debt option as of February 13, 2023, is set

out below, on a fully-diluted basis.

Common Shares

(fully diluted)

Common Shares

Convertible Debt 2

1 Each exercisable into one Common Share

2 Represents Common Shares issuable on conversion

of aggregate outstanding principal amounts of $0.515 million of convertible debt as of February 13, 2023, assuming a market price

per Common Share of $0.92 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