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Item 2. Management’s Discussion and Analysis

2023-11-13 compared with 2023-05-30 · 389 added, 518 removed, 143 unchanged (86% of the section changed)

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT’S 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 nine months ended March 31, 2023, and the related notes thereto, which have been prepared in accordance

as of, and for the three months ended September 30, 2023, and the related notes thereto, which have been prepared in accordance

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

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Statements” below.

currency amounts are stated in thousands of U.S.

currency amounts are stated in U.S.

dollars unless noted otherwise.

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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 the anticipated benefits of the Transactions (as defined below), including NioCorp’s

ability to access the full amount of the expected net proceeds of the Yorkville Equity Facility Financing Agreement (as defined

below) over the next three years;

NioCorp’s ability to receive a final commitment of financing from the Export-Import Bank

of the United States (“EXIM”);

anticipated benefits of the listing of NioCorp’s common shares, without par value

(the “Common Shares”), on The Nasdaq Stock Market LLC (“Nasdaq”);

the financial and business performance

and may include statements regarding the anticipated benefits of the transactions (the “Transactions”) contemplated

by the previously disclosed Business Combination Agreement, dated September 25, 2022 (the “Business Combination Agreement”),

among the Company, GX Acquisition Corp.

II and Big Red Merger Sub Ltd, including NioCorp’s ability to access the full amount

of the expected net proceeds of the Standby Equity Purchase Agreement, dated January 26, 2023 (the “Yorkville Equity Facility

Financing Agreement”), between the Company and YA II PN, Ltd., an investment fund managed by Yorkville Advisors Global,

LP (“Yorkville”), through April 1, 2026;

NioCorp’s ability to receive a final commitment of financing from the

Export-Import Bank of the United States (“EXIM”);

anticipated benefits of the listing of NioCorp’s common shares,

without par value (the “Common Shares”), on The Nasdaq Stock Market LLC (“Nasdaq”);

the financial and

business performance of NioCorp;

NioCorp’s anticipated results and developments in the operations of NioCorp in future periods;

planned exploration activities;

NioCorp’s planned exploration activities;

the adequacy of NioCorp’s financial resources;

NioCorp’s ability to secure sufficient

project financing to complete construction and commence operation of the Elk Creek Project;

NioCorp’s expectation and ability

to produce niobium, scandium, and titanium at the Elk Creek Project;

NioCorp’s ability to

secure sufficient project financing to complete construction and commence operation of the Elk Creek Project;

expectation and ability to produce niobium, scandium, and titanium at the Elk Creek Project;

NioCorp’s plans to produce

and supply specific products and market demand for those products;

the outcome of current recovery process improvement testing,

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ore production and mining operations over its expected mine life;

the completion of the demonstration plant and technical and

economic analyses on the potential addition of magnetic rare earth oxides to NioCorp’s planned product suite;

the exercise of

options to purchase additional land parcels;

the completion of technical and economic analyses on the potential

addition of magnetic rare earth oxides to NioCorp’s planned product suite;

the exercise of options to purchase additional

land parcels;

the execution of contracts with engineering, procurement and construction companies;

NioCorp’s ongoing evaluation of the impact of inflation, supply chain issues and geopolitical unrest on the Elk Creek Project’s

economic model;

the impact of health epidemics, including the COVID-19 pandemic, on NioCorp’s business and the actions NioCorp

may take in response thereto;

and the creation of full time and contract construction jobs over the construction period of the

Elk Creek Project.

NioCorp’s ongoing evaluation

of the impact of inflation, supply chain issues and geopolitical unrest on the Elk Creek Project’s economic model;

creation of full time and contract construction jobs over the construction period of the Elk Creek Project.

Forward-looking

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“anticipates” or “does not anticipate,” “plans,” “estimates,” or “intends,”

or stating that certain actions, events, or results “may,” “could,” “would,” “might,”

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

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:

NioCorp’s ability to recognize

the anticipated benefits of the Transactions, including NioCorp’s ability to access the full amount of the expected net

proceeds under the Yorkville Equity Facility Financing Agreement over the next three years;

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:

NioCorp’s ability to recognize the anticipated benefits

of the Transactions, including NioCorp’s ability to access the full amount of the expected net proceeds under the Yorkville

Equity Facility Financing Agreement over the next three years;

unexpected costs related to the Transactions;

the outcome of any legal proceedings that may be instituted against NioCorp following closing of the Transactions;

ability to receive a final commitment of financing from EXIM on the anticipated timeline, on acceptable terms, or at all;

ability to continue to meet Nasdaq listing standards;

the outcome of any

legal proceedings that may be instituted against NioCorp following closing of the Transactions;

NioCorp’s ability to receive

a final commitment of financing from EXIM on the anticipated timeline, on acceptable terms, or at all;

NioCorp’s ability

to continue to meet Nasdaq listing standards;

NioCorp’s ability to operate as a going concern;

risks relating to

the Common Shares, including price volatility, lack of dividend payments and dilution or the perception of the likelihood any

of the foregoing;

risks relating to the Common

Shares, including price volatility, lack of dividend payments and dilution or the perception of the likelihood any of the foregoing;

NioCorp’s requirement of significant additional capital;

the extent to which NioCorp’s level of

indebtedness and/or the terms contained in agreements governing NioCorp’s indebtedness or the Yorkville Equity Facility

Financing Agreement may impair NioCorp’s ability to obtain additional financing;

covenants contained in agreements with

NioCorp’s secured creditors that may affect its assets;

the extent to which NioCorp’s level of indebtedness and/or

the terms contained in agreements governing NioCorp’s indebtedness or the Yorkville Equity Facility Financing Agreement

may impair NioCorp’s ability to obtain additional financing;

covenants contained in agreements with NioCorp’s secured

creditors that may affect its assets;

NioCorp’s limited operating history;

NioCorp’s history

the restatement of NioCorp’s 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, March 31, 2022, September 30, 2022, and December

31, 2022 and the impact of such restatement on NioCorp’s future financial statements and other financial measures;

weaknesses in NioCorp’s internal control over financial reporting, NioCorp’s efforts to remediate such material weaknesses

and the timing of remediation;

NioCorp’s history of losses;

the restatement

of NioCorp’s 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, March 31, 2022, September 30, 2022 and December 31, 2022 and the impact of

such restatement on NioCorp’s future financial statements and other financial measures;

the material weaknesses in NioCorp’s

internal control over financial reporting, NioCorp’s efforts to remediate such material weaknesses and the timing of remediation;

the possibility that NioCorp may qualify as a PFIC under the Code;

the potential that the Transactions

could result in NioCorp becoming subject to materially adverse U.S.

federal income tax consequences as a result of the application

of Section 7874 and related sections of the Code;

cost increases for NioCorp’s exploration and, if warranted, development

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

equipment and supply shortages;

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

NioCorp’s ability

to attract qualified management;

the effects of the COVID-19 pandemic or other global health crises on NioCorp’s business

plans, financial condition and liquidity;

estimates of mineral resources and reserves;

the potential that the Transactions could result in NioCorp

becoming subject to materially adverse U.S.

federal income tax consequences as a result of the application of Section 7874 and

related sections of the Code;

cost increases for NioCorp’s exploration and, if warranted, development projects;

in, or failure of, NioCorp’s information technology systems, including those related to cybersecurity;

equipment and supply

variations in the market demand for, and prices of, niobium, scandium, titanium and rare earth products;

future offtake agreements, joint ventures, and partnerships;

NioCorp’s ability to attract qualified management;

of global health crises on NioCorp’s business plans, financial condition and liquidity;

estimates of mineral resources and

mineral exploration and production activities;

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the results of metallurgical testing;

changes in demand for and price of commodities (such as fuel

and electricity) and currencies;

in demand for and price of commodities (such as fuel and electricity) and currencies;

competition in the mining industry;

changes or disruptions in the securities markets;

political or economic developments, including changes in federal and/or state laws that may significantly affect the mining industry;

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;

the need to obtain permits and comply with laws and regulations and other regulatory

requirements;

or disruptions in the securities markets;

legislative, political or economic developments, including changes in federal and/or

state laws that may significantly affect the mining industry;

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;

the need to obtain permits

and comply with laws and regulations and other regulatory requirements;

the timing and reliability of sampling and assay data;

the possibility that actual results of work may differ from

projections/expectations or may not realize the perceived potential of NioCorp’s projects;

risks of accidents, equipment

breakdowns, and labor disputes or other unanticipated difficulties or interruptions;

the possibility of cost overruns or unanticipated

expenses in development programs;

operating or technical difficulties in connection with exploration, mining, or development activities;

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

the possibility that actual results of work may differ from projections/expectations or may not realize the perceived potential

of NioCorp’s projects;

risks of accidents, equipment breakdowns, and labor disputes or other unanticipated difficulties

or interruptions;

the possibility of cost overruns or unanticipated expenses in development programs;

operating or technical difficulties

in connection with exploration, mining, or development activities;

the management of the water balance at the Elk Creek Project

land reclamation requirements related to the Elk Creek Project;

the speculative nature of mineral exploration and development, including the risks of diminishing quantities of grades of reserves

and resources;

the speculative nature of mineral exploration and development,

including the risks of diminishing quantities of grades of reserves and resources;

claims on the title to NioCorp’s properties;

potential future litigation;

and NioCorp’s lack of insurance

covering all of NioCorp’s operations.

and NioCorp’s lack of insurance covering all of NioCorp’s operations.

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

heading “Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023, 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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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 if circumstances or management’s beliefs, expectations, or opinions should

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.

technical and scientific information that forms the basis for the Elk Creek Project disclosure included in this Quarterly Report

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

The Elk Creek Project is an advanced Niobium, Scandium and

Titanium 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

It also is used in High-Strength, Low-Alloy 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.

The Elk Creek Project is a development-stage property that

has disclosed niobium, scandium, and titanium mineral reserves and resources and disclosed rare earth oxide mineral resources.

The Company is continuing technical and economic studies around the rare earths contained in the Project’s Mineral Resource.

Niobium is used to produce various superalloys that are extensively used in high performance aircraft and jet turbines.

is used in High-Strength, Low-Alloy 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

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.

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Corporate Events

The GXII Transaction

On March 17, 2023 (the “Closing Date”),

the Company closed the GXII Transaction (as defined below) with GX Acquisition Corp.

II ("GXII"), pursuant to the Business

Combination Agreement, dated September 25, 2022 (the “Business Combination Agreement”), among the Company, GXII and

Big Red Merger Sub Ltd (the “Closing”).

The GXII Transaction is being accounted for as an equity raise transaction

in accordance with U.S.

At the Closing, the following transactions (collectively, the “GXII Transaction”) occurred:

a result of a series of transactions, GXII became an indirect, majority-owned subsidiary

of NioCorp and changed its name to “Elk Creek Resources Corp” (“ECRC”).

As the parent company of the merged entity, NioCorp issued 1,753,821 post-Reverse Stock Split (as defined below) Common Shares in exchange for all of the Class A shares of GXII issued and outstanding immediately prior to the Closing, including 83,770 Common Shares issued to BTIG, LLC in exchange for Class A shares of GXII that it received as partial payment for advisory services.

All of the Class B shares of GXII issued and outstanding immediately prior to the Closing (after giving effect to the surrender of certain Class B shares of GXII in accordance with the Sponsor Support Agreement, dated September 25, 2022 (the “Sponsor Support Agreement”), among GX Sponsor II LLC (the “Sponsor”), GXII, NioCorp and the other persons party thereto) were converted into 7,957,404 shares of Class B common stock of GXII (now known as ECRC) as the surviving entity of the mergers that occurred on the Closing Date as part of the GXII Transaction.

Pursuant to the Business Combination Agreement, the Sponsor Support Agreement and the Exchange Agreement, dated as of March 17, 2023 (as amended, supplemented or otherwise modified, the “Exchange Agreement”), by and among NioCorp, ECRC and the Sponsor, after the Closing, the shares of Class B common stock of ECRC are exchangeable into Common Shares on a one-for-one basis, subject to certain equitable adjustments, under certain conditions.

Of the issued and outstanding shares of Class B common stock of ECRC, 4,565,808 shares (the “Vested Shares”) were vested as of the Closing Date and are exchangeable at any time, and from time to time, until the tenth anniversary of the Closing Date (the “Ten-Year Anniversary”) and 3,391,596 shares (the “Earnout Shares”) are exchangeable until the Ten-Year Anniversary, subject to certain vesting conditions.

See Note 9 for additional information regarding the Class B common stock of ECRC.

NioCorp assumed GXII’s obligations under the agreement governing the GXII share purchase warrants (the “GXII Warrants”) and issued an aggregate of 15,666,626 warrants (the “NioCorp Assumed Warrants”) to purchase up to an aggregate of 17,519,864 Common Shares.

The NioCorp Assumed Warrants issued at the Closing consisted of (a) 9,999,959 public NioCorp Assumed Warrants (the “Public Warrants”) that were issued in respect of the GXII Warrants that were publicly traded prior to the Closing and (b) 5,666,667 NioCorp Assumed Warrants (the “Private Warrants”) that were issued to the Sponsor in respect of the GXII Warrants that it held prior to the Closing, which NioCorp Assumed Warrants were subsequently distributed by the Sponsor to its members in connection with the Closing.

See Note 10b for additional information regarding the NioCorp Assumed Warrants.

On the Closing Date, the Company also effected

a reverse stock split (the “Reverse Stock Split”) on the basis of one (1) post-Reverse Stock Split Common Share for

every ten (10) pre-Reverse Stock Split Common Shares issued and outstanding, with any fractional shares resulting from the Reverse

Stock Split rounded down to the nearest whole share.

The transactions contemplated by the Business

Combination Agreement, including the GXII Transaction, the Yorkville Convertible Debt Facility Financing (as defined below),

the Yorkville Equity Facility Financing (as defined below) and the Reverse Stock Split, are referred to, collectively, as the

“Transactions.”

The number of Common Shares issued and outstanding immediately following the consummation of the Transactions were as follows:

Common Shares

Legacy NioCorp Shareholders

Former GXII Class A Shareholders 1

Total Common Shares Outstanding Upon Completion of Transactions

– Includes 83,770 Common Shares issued to BTIG, LLC in exchange for Class A shares of GXII that it received

as partial payment for advisory services.

Represents Commitment Shares (as defined below) issued under the Yorkville Equity Facility Financing Agreement.

After consideration of GXII expenses

incurred in connection with the Transactions, the Company acquired net cash of $2,168, and assumed net liabilities of

approximately $392, Private Warrant liabilities of $3,848, and the Earnout Shares liability of $13,195.

The Company incurred

expenses related to the Transactions of $6,309, all of which were recorded as other operating expenses.

addition, in connection with the Transactions, the Common Shares and the NioCorp Assumed Warrants were listed for trading on The

Nasdaq Stock Market LLC (“Nasdaq”).

The Common Shares and the NioCorp Assumed Warrants began trading on The Nasdaq

Global Market and The Nasdaq Capital Market, respectively, on March 21, 2023, under the symbols “NB” and “NIOBW,”

respectively.

The Common Shares continued to trade on the Toronto Stock Exchange (“TSX”) under the symbol “NB,”

and began trading on the TSX on a post-Reverse Stock Split basis on March 21, 2023.

The Common Shares ceased being quoted on the

OTC Markets in connection with the commencement of trading on The Nasdaq Global Market.

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 Advisors Global, LP.

On January 26, 2023, the Company entered into definitive agreements with respect to these financings,

including a Securities Purchase Agreement, dated January 26, 2023 (as amended the “Yorkville Convertible Debt Financing Agreement”),

between the Company and YA II PN, Ltd., an investment fund managed by Yorkville Advisors Global, LP (together with YA II PN, Ltd.,

“Yorkville”), and a Standby Equity Purchase Agreement, dated January 26, 2023 (the “Yorkville Equity Facility

Financing Agreement”), between the Company and Yorkville.

Pursuant to the Yorkville Equity Facility Financing Agreement,

Yorkville has committed to purchase up to $65.0 million of our Common Shares (the “Commitment Amount”), at our direction

from time to time for a period commencing upon the Closing Date and ending on the earliest of (i) the first day of the month next

following the 36-month anniversary of the Closing, (ii) the date on which Yorkville shall have made payment of the full Commitment

Amount and (iii) the date that the Yorkville Equity Facility Financing Agreement otherwise terminates in accordance with its terms

(the “Commitment Period”), subject to certain limitations and the satisfaction of the conditions in the Yorkville Equity

Facility Financing Agreement.

Pursuant to the terms of the Yorkville Equity Facility Financing Agreement, we issued 81,213 of our

Common Shares (the “Commitment Shares”) to Yorkville as consideration for its irrevocable commitment to purchase Common

Shares under the Yorkville Equity Facility Financing Agreement.

Additionally, we are required to pay Yorkville an aggregate fee

of $1,500,000 in cash (the “Cash Fee”), including $500,000 that we paid on the Closing Date and the remainder that

we will pay in installments over a 12-month period following the Closing Date, provided that, we will have the right to prepay

without penalty all or part of the remaining installments of the Cash Fee at any time.

The transactions contemplated by the Yorkville

Equity Facility Financing Agreement are collectively referred to as the “Yorkville Equity Facility Financing.”

to the Yorkville Convertible Debt Financing Agreement, at the Closing, Yorkville advanced a total amount of $15.36 million to

NioCorp in consideration of the issuance by NioCorp to Yorkville of (i) $16.0 million aggregate principal amount of unsecured

convertible debentures (the “Convertible Debentures”) and (ii) Common Share purchase warrants, exercisable for up

to 1,789,267 Common Shares for cash or, if at any time there is no effective registration statement registering, or no current

prospectus available for, the resale of the underlying Common Shares, on a cashless basis, at the option of the holder, at a price

per Common Share of approximately $8.9422, subject to adjustment to give effect to any stock dividend, stock split, reverse stock

split or similar transaction (the “Financing Warrants”).

See Notes 8 and 10 for descriptions of certain terms of the

Convertible Debentures and the Financing Warrants.

The transactions contemplated by the Yorkville Convertible Debt Financing Agreement

are collectively referred to as the “Yorkville Convertible Debt Financing.”

Direct Offering

April 28, 2023, the Company issued and sold 314,465 Common Shares in a registered direct offering at a price of $6.36 per share.

Net proceeds to the Company from the offering were approximately $1.8 million.

NioCorp intends to use the net proceeds from the

offering for working capital and general corporate purposes, including to advance its efforts to launch construction of the Elk

Creek Project and move it to commercial operation.

September 1, 2023, the Company closed a non-brokered private placement (the “September 2023 Private Placement”) of

units of the Company (the “September 2023 Units”).

A total of 250,000 September 2023 Units were issued at a price

per September 2023 Unit of $4.00, for total gross proceeds to the Company of $1.0 million.

Each September 2023 Unit consists of

one Common Share and one Common Share purchase warrant (a “Warrant” and, as a part of a September 2023 Unit, a “September

2023 Warrant”).

Each September 2023 Warrant entitles the holder to acquire one Common Share at a price of $4.60 at any time

prior to September 1, 2025.

Proceeds of the September 2023 Private Placement will be used for continued advancement of the Company’s

Elk Creek Critical Minerals Project and for working capital and general corporate purposes.

May 2023, we announced an aluminum-scandium (“Al-Sc”) master alloy initiative (the “Al-Sc master alloy initiative”),

in partnership with Boston-based Nanoscale Powders LLC (“Nanoscale”).

This Al-Sc master alloy initiative is expected

to result in the production of several ingots of Al-Sc master alloy at potentially commercial amounts of scandium content using

a proprietary process developed by Nanoscale that is expected to increase efficiency and reduce environmental impacts of Al-Sc

production over traditional approaches.

Al-Sc master alloy, which generally contains 2% by weight scandium, is used to introduce

scandium into aluminum for the purpose of producing various Al-Sc alloys, which generally contain a fraction of a percent scandium

These alloys help to reduce weight, increase strength and corrosion resistance, and make the material weldable in automotive

and mass transit, aerospace, defense, space, and other systems.

NioCorp’s goal is to demonstrate the ability to make Al-Sc

master alloy containing from 2% by weight scandium to as much as 10% by weight scandium.

August 14, 2023, the Company announced the production of scandium metal at pilot-scale at a facility owned and operated by Creative

Engineers in New Freedom, Pennsylvania.

The production of scandium metal represented the first phase in the Al-Sc master alloy

Subsequently, on October 18, 2023, the Company announced the successful pilot-scale production of a 1-kilogram ingot

of Al-Sc alloy at the Creative Engineers facility.

Creek Project Update

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.

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

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.

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.

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.

These 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.

February 20, 2023, the Company announced that it had executed a contract with Zachry Group (“Zachry“) to develop a

cost for the surface facilities associated with NioCorp’s Elk Creek Project.

The contract represents the first phase of

engineering, procurement, and construction (“EPC”) contracting for the Elk Creek Project.

NioCorp had previously selected

Zachry as its EPC firm for the Elk Creek Project’s surface facilities.

April 4, 2023, the Company announced a process breakthrough in niobium and titanium recovery achieved at the demonstration plant.

The breakthrough points to a potentially more efficient way to process niobium and titanium into higher-purity products, which

may in turn open up new markets for the Elk Creek Project’s planned products.

The demonstration plant is also expected to

deliver updated metallurgical recoveries for niobium, scandium and titanium and expects to complete operations in the second calendar

quarter of 2023.

long-term financing efforts continued during the quarter ended March 31, 2023, including consummating the Transactions, as discussed

In addition, on March 6, 2023, the Company announced the receipt of a Letter of Interest from the EXIM for potential debt

financing of up to $800 million through EXIM’s “Make More In America” initiative to fund a portion of the project

costs of the Elk Creek Project.

A project finance letter of interest from EXIM represents only a preliminary step in the formal

EXIM application process, and the Letter of Interest states that the communication “does not represent a financing commitment”

and “is not an explicit indication of the financial or commercial viability of a transaction.” NioCorp expects to

submit an application to EXIM to begin the first phase of the underwriting process (“Phase I”) as soon as possible.

As stated in the Letter of Interest, “Upon receipt of NioCorp’s application for financing, EXIM will conduct all requisite

due diligence necessary to determine if a Final Commitment may be issued for this transaction.” The process from submission

of a Phase I application to a final commitment of financing by EXIM, if any, is expected to take approximately six to nine months

and is subject to a number of risks and uncertainties.

As explained in the Letter of Interest, “Any final commitment will

be dependent on meeting EXIM’s underwriting criteria, authorization process, and finalization and satisfaction of terms

and conditions.

All Final Commitments must be in compliance with EXIM policies as well as program, legal, and eligibility requirements.”

The debt financing is subject to the satisfactory completion of due diligence, the negotiation and settlement of final terms,

and the negotiation of definitive documentation.

There can be no assurance that the debt financing will be completed on the terms

as described above or at all.

Company completed the installation and commissioning of a continuous groundwater level monitoring system during the quarter ended

September 30, 2023.

The system collects and records data in three geologic strata of interest:

the upper glacial till, the Pennsylvanian

limestone that underlies the glacial till, and the carbonatite that underlies the limestone.

The data collected from this effort

will assist the Company’s contract hydrogeologists to refine and improve the hydrogeologic model for the Elk Creek Project.

Company completed a mine geotechnical review and a site visit by a qualified person, as defined in National Instrument 43-101

– Standards of Disclosure for Mineral Projects and subpart 1300 of Regulation S-K (a “Qualified Person”), during

the quarter ended September 30, 2023.

The Company’s contract geotechnical engineering firm inspected drill core and conducted

a site inspection.

As funding becomes available, the geotechnical firm will review and update their geomechanical model of the

project to ensure that the mining operation will be conducted under safe and stable ground conditions.

Company’s demonstration plant completed metallurgical operations during the quarter ended September 30, 2023.

for the demonstration plant was to address recommendations in the Company’s most recent technical report and to establish

metallurgical performance criteria for the rare earths.

The demonstration plant was successful in this regard, and the measured

improvements in metallurgical performance are summarized in the following table:

remaining work at the demonstration plant entails producing sufficient quantities of waste materials for follow-on characterization

to support tailings impoundment and paste backfill engineering designs.

Additional work at the demonstration plant may be undertaken

to support potential offtake agreements, where the counterparty to the offtake requests product samples for evaluation.

metallurgical data presented above has been provided to the Qualified Persons responsible for the Company’s previously disclosed

mineral resource and mineral reserve estimates, and these firms have been tasked with updating the mineral resource and mineral

reserve estimates.

This data, along with updated capital and operating costs for the prospective Elk Creek operation, will form

the basis of an updated economic evaluation of the Elk Creek Project that will reflect the improved metallurgical performance

as well as the impact of potential rare earth production.

long-term financing efforts continued during the quarter ended September 30, 2023.

As previously disclosed, on March 6, 2023,

the Company announced the receipt of a Letter of Interest from the EXIM for potential debt financing of up to $800 million through

EXIM’s “Make More In America” initiative to fund a portion of the project costs of the Elk Creek Project.

project finance letter of interest from EXIM represents only a preliminary step in the formal

application process, and the Letter of Interest states that the communication “does not represent a financing commitment”

and “is not an explicit indication of the financial or commercial viability of a transaction.” As stated in the Letter

of Interest, “Upon receipt of NioCorp’s application for financing, EXIM will conduct all requisite due diligence necessary

to determine if a Final Commitment may be issued for this transaction.” The process from submission of an application to a final commitment of financing by EXIM, if any, is subject to a number of risks and uncertainties.

As explained in the

Letter of Interest, “Any final commitment will be dependent on meeting EXIM’s underwriting criteria, authorization

process, and finalization and satisfaction of terms and conditions.

All Final Commitments must be in compliance with EXIM policies

as well as program, legal, and eligibility requirements.” The debt financing is subject to the satisfactory completion of

due diligence, the negotiation and settlement of final terms, and the negotiation of definitive documentation.

submitted a formal application to EXIM for a loan under EXIM’s “Make More in America” initiative on June

The Company was informed that its application received approval by the first of three reviews by the EXIM

Transaction Review Committee on October 2, 2023.

EXIM has indicated that they will now devote additional resources to the

processing of the Company’s application and will require the Company to execute indemnity fee agreements with external

consultants who will be tasked with conducting detailed reviews of the financial and technical (including environmental)

aspects of the Company’s application.

We are currently unable to estimate how long the application process may take, and there can be no assurance that we will be able to successfully negotiate

a final commitment of debt financing from EXIM.

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

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.

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

evaluation of the potential to produce rare earth products and sell such products under offtake agreements;

and completion of offtake agreements for the remaining uncommitted production of niobium, scandium, and titanium from the

project, including the potential sale of titanium as titanium tetrachloride;

and completion of engineering, procurement, and construction agreements;

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

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

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

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

of revised mine groundwater investigation and control activities;

of long-lead equipment procurement activities;

a follow-on to the Company’s demonstration plant operations, complete characterization and testing of waste materials

to support tailings impoundment and paste backfill plant designs.

and Operating Results

Company has no revenues from mining operations.

Operating expenses incurred related primarily to costs incurred in connection

with the Transactions, as well as performing exploration activities and the activities necessary to support corporate and shareholder

duties, and are detailed in the following table.

For the Three Months Ended March 31,

For the Nine Months Ended March 31,

Operating expenses incurred related primarily to costs incurred for the advancement

of the Elk Creek Project and the activities necessary to support corporate and shareholder duties, and are detailed in the following

the Three Months

September 30,

Operating expenses

Employee-related costs

Employee-related

Professional fees

Exploration expenditures

Other operating expenses

Total operating expenses

Change in fair value of Earnout Shares liability

Change in fair value of warrant liabilities

Debt extinguishment

Foreign exchange (gain) loss

operating expenses

Total operating

in fair value of Earnout Shares liability

in fair value of warrant liabilities

Loss on debt extinguishment

Interest expense

Gain on sale of assets

Loss on equity securities

Income tax benefit

Loss attributable to noncontrolling interest

Net loss attributable to the Company

period ended March 31, 2023 compared to the nine-month period ended March 31, 2022

Foreign exchange (gain)

(gain) on equity securities

attributable to noncontrolling interest

Net loss attributable

to the Company

period ended September 30, 2023 compared to the three-month period ended September 30, 2022

items affecting operating expenses are noted below:

Other operating expenses

include costs incurred in connection with the Transactions, including direct transaction expenses, and the fair value of warrant

and Earnout Shares liabilities assumed, as well as costs related to investor relations, general office expenditures, equity offering

and proxy expenditures, board-related expenditures, and other miscellaneous costs.

These costs increased in 2023 as compared to

2022 primarily due to the costs incurred in connection with the Transactions, which closed on March 17, 2023.

A summary of these

costs is presented below:

Gross cash proceeds, net of transaction costs incurred by GXII

Net liabilities assumed

Private Warrants assumed at fair value

Earnout Shares assumed at fair value

Transaction costs expensed

Yorkville Equity Facility Financing Agreement expenses

Transaction related losses incurred

Employee-related

costs increased in 2023 as compared to 2022, primarily due to the timing of board-authorized employee award payments, partially

offset by a decrease in share-based compensation expense and the impact of reduced headcount.

Share based compensation costs increased

in 2023 as compared to 2022 due to the impact of an increased Common Share price offset slightly by a decrease in the number of

Options issued.

Options granted in both 2023 and 2022 were fully vested and expensed on the grant date.

expenditures increased in 2023 as compared to 2022, primarily due to the timing of demonstration plant development, start-up,

and operational costs incurred in 2023, 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.

costs increased in 2023 as compared to 2022, primarily due to the impact of board-authorized employee salary increases, which

became effective April 1, 2023.

fees increased in 2023 as compared to 2022, primarily due to the timing of legal services associated with the Company’s

SEC registration statements filed in October 2023, as well as increased audit fees associated with the Company’s June 30,

2023 financial statements.

expenditures decreased in 2023 as compared to 2022, as 2022 costs included demonstration plant development and start-up costs,

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.

operating expenses include costs related to investor relations, general office expenditures, equity offering and proxy expenditures,

board-related expenditures, and other miscellaneous costs.

These costs increased in 2023 as compared to 2022 primarily due to

the impact of increased director and officer insurance costs associated with the Company’s listing on the Nasdaq, which

began in March 2023.

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

Change in fair value of Earnout

Shares liability represents the change in fair value related to the Earnout Shares between the Closing Date and the end of

the quarter, based on the results of Monte Carlo financial modeling.

Change in fair value of warrant

liability represents the change in fair value related to the additional Warrants (the “Contingent Consent Warrants”)

that the Company agreed to issue to Lind Global Asset Management III, LLC (“Lind”) upon certain conditions in connection

with the Waiver and Consent Agreement, dated September 25, 2022, between the Company and Lind (the “Lind Consent”),

as discussed in Note 8, as well as the change in the fair value of the Private Warrants based primarily on the impacts of a lower

closing Common Share price, which increases the probability of these Contingent Consent Warrants being issued on the 18-month anniversary.

Loss on debt extinguishment

represents the loss incurred under Accounting Standards Codification (“ASC”) Topic 470, Debt, related to the convertible

security issued to Lind (the “Lind III Convertible Security”) pursuant to the Convertible Security Funding Agreement,

dated February 26, 2021, as amended by Amendment #1 to the Convertible Security Funding Agreement, dated December 2, 2021, between

the Company and Lind), as discussed in Note 3 to the interim condensed consolidated financial statements.

Interest expense decreased

in 2023 as compared to 2022 due to the impacts of conversions on the outstanding balance of the Lind III Convertible Security during

2022, as well as the impact of debt extinguishment accounting as discussed in Note 3.

Loss attributable to noncontrolling

interest represents the portion of net loss in ECRC attributable to the Vested Shares, which are not owned by the Company.

period ended March 31, 2023 compared to the three-month period ended March 31, 2022

the increase in net loss for the three-month period ended March 31, 2023, as compared to the same period in 2022, is primarily

the result of the same factors underlying the nine-month changes in expense categories as discussed above.

The increase in employee-related

costs for the three-month period ended March 31, 2023 is due to the timing of Options issued to employees.

in fair value of Earnout Shares liability represents the change in fair value related to the shares of Class B common stock

of Elk Creek Resource Corporation (“ECRC”), an indirect, majority-owned subsidiary of NioCorp formerly known as GX

Acquisition Corp.

II, the rights of the holders of which to exchange such shares into Common Shares are subject to certain vesting

conditions (such shares of ECRC Class B common stock, the “Earnout Shares”) for 2023, based on the results of Monte

Carlo financial modeling.

The Company recognized this liability in connection with the Transactions, which closed in March 2023.

in fair value of warrant liability primarily represents the change in fair value related to Lind Global Asset Management III,

LLC’s (“Lind”) right to receive additional Warrants (the “Contingent Consent Warrants”) as consideration

for entering into the previously disclosed Waiver and Consent Agreement, dated September 25, 2022 (the “Lind Consent”),

between the Company and Lind, based on the impact of a lower closing Common Share price, which increases the probability of these

Contingent Consent Warrants being issued on the 18-month

This expense was partially offset by a slight decrease in the valuation of the Warrants issued to GX Sponsor II LLC (the “Sponsor”)

in connection with the closing of the Transactions (the “Private Warrants”).

expense increased in 2023 as compared to 2022 due to accretion expense associated with the unsecured convertible debentures

(the “Convertible Debentures”) issued to Yorkville, which were issued in March 2023.

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

dollar against the Canadian dollar.

During 2022, the functional currency

of the parent company was Canadian dollars, and the loss for the period was primarily due to changes in the foreign exchange rates

applied to U.S.

dollar-denominated debt instruments.

Effective March 17, 2023, the parent company’s functional currency

became the U.S.

attributable to noncontrolling interest represents the portion of net loss in ECRC not owned by the Company.

and Capital Resources

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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 loans.

With respect to currently outstanding Options and Warrants, we believe that exercise

of these instruments, and cash proceeds from such exercises, will not occur unless and until the market price for our Common Shares

equals or exceeds the related exercise price of each instrument.

In connection with the Closing of the Transactions,

the Company received net cash proceeds of $8.7 million, as follows:

Net cash received from GXII trust account, after payment of direct and incremental transaction costs incurred

Net proceeds from the Yorkville Convertible Debt Financing Agreement

Net cash costs incurred in connection with Yorkville Equity Facility Financing Agreement

NioCorp direct and incremental transaction costs

Net proceeds from Transactions

The Transactions delivered to NioCorp

several important benefits, including a ready pathway to an up-listing to the Nasdaq, which is expected to allow additional institutional

firms to invest in the Company for the first time.

Further, we believe it has given NioCorp and the Elk Creek Project a much higher

profile among institutional investors evaluating projects in the critical materials space.

Many new investors, including institutional

and other large investment funds, are now anticipated to look more closely at NioCorp, particularly since the Common Shares and

the Public Warrants are now trading on Nasdaq.

The Yorkville Convertible Debt Financing

has provided, and the Yorkville Equity Facility Financing is expected to provide, near-term and longer-term access to capital.

The ability of the Company to draw down on the Yorkville Equity Facility Financing Agreement, at its discretion, is subject to

certain limitations and the satisfaction of certain conditions.

If and when available, the Yorkville Equity Facility Financing

Agreement provides an opportunity to actively manage the cash needs of the Company more closely.

Historically, cash has generally

been available to the Company through private placements of equity for which the timing did not always coincide with the Company’s

The Company may utilize the Yorkville Equity Facility Financing Agreement to potentially generate funds at a time

when they are in need.

Alternatively, the Company can also utilize the Yorkville Equity Facility Financing Agreement for opportunistic

of March 31, 2023, the Company had cash of $7.1 million and working capital of $2.6 million, compared to cash of $5.3 million

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

April 28, 2023, the Company issued and sold 314,465 Common Shares in a registered direct offering at a price of $6.36 per share.

Net proceeds to the Company from the offering were approximately $1.8 million.

NioCorp intends to use the net proceeds from the

offering for working capital and general corporate purposes, including to advance its efforts to launch construction of the Elk

Creek Project and move it to commercial operation.

options to purchase Common Shares (“Options”) and Warrants, and related party loans.

With respect to currently outstanding

Options and Warrants, we believe that exercise of these instruments, and cash proceeds from such exercises, will not occur unless

and until the market price for our Common Shares equals or exceeds the related exercise price of each instrument.

Yorkville Equity Facility Financing Agreement is expected to provide near-term and longer-term access to capital.

of the Company to draw down on the Yorkville Equity Facility Financing Agreement, at its discretion, is subject to certain limitations

and the satisfaction of certain conditions and, when available, provides an opportunity to actively manage the cash needs of the

Company more closely.

Historically, cash has generally been available to the Company through private placements of equity for

which the timing did not always coincide with the Company’s cash needs.

The Company may utilize the Yorkville Equity Facility

Financing Agreement to potentially generate funds at a time when they are in need.

Alternatively, the Company can also utilize

the Yorkville Equity Facility Financing Agreement for opportunistic share sales.

of September 30, 2023, the Company had cash of $1.1 million and a working capital deficit of $10.5 million, compared to cash of

$2.3 million and working capital of $0.2 million on June 30, 2023.

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

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

monthly planned expenditures are approximately $1,136 per month where approximately $610 is for corporate overhead and estimated

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

Approximately $526 per month is planned

for expenditures relating to the advancement of Elk Creek Project by NioCorp’s majority-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

The Company anticipates that it does not

have sufficient cash on hand to continue to fund basic operations for the next twelve months, and additional funds totaling $3.0

million to $5.0 million, in addition to the $1.8 million raised from the Registered Direct Offering completed on April 28, 2023,

are likely to be necessary to continue advancing the project in the areas of financing, permitting, and detailed engineering.

the Yorkville Equity Facility Financing Agreement may provide the Company with access to additional capital, the Company may require

additional capital to meet its cash needs.

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.

Creek property lease commitments are nil until June 30, 2023.

monthly planned expenditures through June 30, 2024 are expected to be approximately $745,000 per month where approximately $495,000

is for corporate overhead and estimated costs related to securing financing necessary for advancement of the Elk Creek Project.

Approximately $250,000 per month is planned for expenditures relating to the advancement of the Elk Creek Project by ECRC.

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 does not have sufficient cash on hand to continue to fund basic operations for the next twelve months,

and additional funds totaling $10.0 million to $11.0 million are likely to be necessary to continue advancing the project in the

areas of financing, permitting, and detailed engineering.

While the Yorkville Equity Facility Financing Agreement may provide

the Company with access to additional capital, the Company may require additional capital to meet its cash needs.

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.

Creek property lease commitments are $18,000 until June 30, 2024.

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.

Except for potential funding under the

Yorkville Equity Facility Financing, discussed above, and the potential exercise of Options and Warrants, we currently have no

further funding commitments or arrangements for additional financing at this time, and there is no assurance that we will be able

to obtain any such additional financing on acceptable terms, if at all.

Pursuant to the Exchange Agreement, NioCorp is restricted

from issuing equity or equity-linked securities (other than Common Shares) or any preferred equity or non-voting equity if such

issuance would adversely impact the rights of the holders of the shares of Class B common stock of ECRC, without the consent of

the holders of a majority of the shares of Class B common stock of ECRC.

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 Exchange 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

June 6, 2023, the Company announced that it had submitted an application to EXIM for debt financing (the “EXIM Financing”)

to fund the project costs for the Elk Creek Project, under EXIM’s “Make More in America” initiative.

Financing is subject to, among other matters, the satisfactory completion of due diligence, the negotiation and settlement of

final terms, and the negotiation of definitive documentation.

There can be no assurance that the EXIM Financing will be completed

on the terms described herein or at all.

for potential funding under the Yorkville Equity Facility Financing Agreement, discussed above, and the potential exercise of

Options and Warrants, we currently have no further funding commitments or arrangements for additional financing at this time,

and there is no assurance that we will be able to obtain any such additional financing on acceptable terms, if at all.

to the Exchange Agreement, dated as of March 17, 2023 (as amended, supplemented or otherwise modified, the “Exchange Agreement”),

by and among NioCorp, ECRC and the Sponsor, NioCorp is restricted from issuing equity or equity-linked securities (other than

Common Shares) or any preferred equity or non-voting equity if such issuance would adversely impact the rights of the holders

of the shares of Class B common stock of ECRC, without the consent of the holders of a majority of the shares of Class B common

stock of ECRC.

The Yorkville Convertible Debt Financing Agreement also contains certain covenants that, among other things, limit

NioCorp’s ability to use the proceeds from the issuance of the securities pursuant to the Yorkville Convertible Debt Financing

Agreement 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

Exchange 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

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.

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.

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 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

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

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.

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.

In addition, we could raise

funds through the sale of interests in our mineral properties, although current market conditions 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, as supported by the notes that accompany our financial statements

for the year ended June 30, 2023, 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.

Recent worldwide events have created general global economic uncertainty as well as uncertainty

in capital markets, supply chain disruptions, increased interest rates and inflation, 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 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.

Recent worldwide events have created general global economic uncertainty as well as uncertainty in capital markets,

supply chain disruptions, increased interest rates and inflation, and the potential for geographic recessions.

During fiscal year

2023 and continuing into fiscal year 2024, 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.

have no exposure to any asset-backed commercial paper.

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

During the nine months ended March 31,

2023, the Company’s operating activities consumed $11.5 million of cash (2022:

$4.4 million).

The cash used in operating

activities for the nine months ended March 31, 2023, reflects the Company’s funding of losses of $35.7 million, partially

offset by net fair value losses related to NioCorp Assumed Warrants and the Earnout Shares liability, share-based compensation

the three months ended September 30, 2023, the Company’s operating activities consumed $2.7 million of cash (2022:

The cash used in operating activities for the three months ended September 30, 2023, reflects the Company’s funding

of losses of $3.4 million and Convertible Debenture accretion, partially offset by a reduction in the Earnout Shares liability

and other non-cash transactions.

Overall, operational outflows during the nine months ended March 31, 2023, increased from the

corresponding period of 2022 due to cash expenses related to the Transactions and 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 inflows were $13.6 million during

the nine months ended March 31, 2023 (2022:

$0.7 million), with 2023 inflows reflecting the receipt of $14.9 million from the Yorkville

Convertible Debt Financing (net of costs), and $1.13 million of additional borrowings under the related party loan with our President,

Chief Executive Officer (“CEO”) and Executive Chairman, Mark Smith, partially offset by the repayment of the outstanding

balance at maturity of the Lind III Convertible Security, and a partial repayment of the related party loan with our CEO.

Overall, operational outflows during the three months ended September 30, 2023, increased from

the corresponding period of 2022 due to increased professional services performed in 2023.

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 $1.5 million during the three months ended September 30, 2023 (2022:

$0.02 million outflow), with 2023 inflows reflecting

the receipt of $1.0 million from the September 2023 Private Placement and $0.5 million from Common Share issuances under the Yorkville

Equity Facility Financing Agreement.

Flow Considerations

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Subject to the restrictions set forth

in 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

in the Exchange Agreement and the Yorkville Convertible Debt Financing Agreement, 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

3 unchanged sentences

and its success in developing the Elk Creek Project.

Any quoted market for the Common Shares

may be subject to market trends generally,

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

10 unchanged sentences

Accounting Estimates

Except as discussed below, 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.

We apply relevant accounting guidance for

warrants to purchase our stock based on the nature of the relationship with the counterparty.

For warrants issued to investors

or lenders in exchange for cash or other financial assets, we follow guidance issued within ASC 480, Distinguishing Liabilities

from Equity, and ASC Topic 815, Derivatives and Hedging, (“ASC 815”) to assist in the determination of whether the

warrants should be classified as liabilities or equity.

The fair value of warrants is estimated using Black Scholes modeling or

Monte Carlo modeling, depending on the settlement features embedded in the warrant.

Inputs under both models include inputs such

as NioCorp’s Common Share price, the risk-free interest rate, the expected term, the volatility, and the dividend rate.

that are determined to require liability classifications are measured at fair value upon issuance and are subsequently remeasured

to their then fair value at each subsequent reporting period with changes in fair value recorded in current earnings.

that are determined to require equity classifications measured at fair value upon issuance and are not subsequently remeasured

unless they are required to be reclassified.

Earnout Shares

The Earnout Shares are classified as a

liability due to failure to meet the equity classification criteria under ASC 815-40.

The fair value of the Earnout Shares on the

date of issuance and on each measurement date is estimated using a Monte Carlo simulation methodology, which includes inputs such

as NioCorp’s Common Share price, the risk-free interest rate, the expected term, the implied volatility underlying the Company’s

Public Warrants, the dividend rate, the conversion price, and the number of Earnout Shares outstanding.

Assumptions used in the

model are subjective and require significant judgment.

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, 2023, in our Annual Report on Form 10-K for the fiscal year ended June 30, 2023.

Federal Income Tax Considerations

NioCorp (or a subsidiary) is a “passive foreign investment company” (“PFIC”) for any taxable year during

the holding period of a U.S.

shareholder (as determined under applicable U.S.

federal income tax law), then certain significant

adverse tax consequences could apply to such U.S.

shareholder, including requirements to treat any gain realized upon a disposition

of Common Shares (or Warrants) as ordinary income, to include certain “excess distributions” on Common Shares in income,

and to pay an interest charge on a portion of any such gain or distribution.

NioCorp believes that it was classified as a PFIC

during the taxable years ended June 30, 2022 and 2021, and, based on the current composition of its income and assets, as well

as current business plans and financial expectations, that it may meet the PFIC qualification tests for its current taxable year

or in future taxable years.

No opinion of legal counsel or ruling from the Internal Revenue Service (the “IRS”) concerning

NioCorp (or a subsidiary) is a “passive foreign investment company” (“PFIC”) for any taxable year (or

portion thereof) that is included in the holding period of a U.S.

holder of Common Shares or other NioCorp securities (as determined

under applicable U.S.

federal income tax law), then certain significant adverse tax consequences could apply to such U.S.

including requirements to treat any gain realized upon a disposition of Common Shares (or other securities) as ordinary income,

to include certain “excess distributions” on Common Shares in income, and to pay an interest charge on a portion of

any such gain or distribution.

NioCorp believes that it was classified as a PFIC during the taxable years ended June 30, 2023

and 2022, and, based on the current composition of its income and assets, as well as current business plans and financial expectations,

that it may be classified as a PFIC for its current taxable year or in future taxable years.

No opinion of legal counsel or ruling

from the Internal Revenue Service (the “IRS”)

the PFIC status of NioCorp or any subsidiary has been obtained or is currently planned to be requested.

7 unchanged sentences

In addition, even if NioCorp concluded that it

or any subsidiary did not qualify as a PFIC, the IRS could challenge any determination made by NioCorp (or any subsidiary) concerning

its PFIC status in any taxable year, and a court could sustain such challenge.

Accordingly, there can be no assurance that NioCorp

or any subsidiary will not be treated as a PFIC for any taxable year.

Each holder of Common Shares or other NioCorp instruments

should consult its own tax advisors regarding the PFIC status of NioCorp and each subsidiary thereof and the resulting tax consequences

to the shareholder.

See the “Risk Factors” section of this Quarterly Report on Form 10-Q.

or any subsidiary was not classified as a PFIC, the IRS could challenge such determination and a court could sustain the challenge.

Accordingly, there can be no assurance that NioCorp or any subsidiary will not be classified as a PFIC for any taxable year.

holder of Common Shares or other NioCorp securities should consult its own tax advisors regarding the PFIC status of NioCorp and

each subsidiary thereof and the resulting tax consequences to the holder, as well as any potential to mitigate such tax consequences

through a “QEF” or “mark-to-market” election.

See the “Risk Factors” section of NioCorp’s

Annual Quarterly Report on Form 10-K for the fiscal year ended June 30, 2023.

Company has one class of shares, being Common Shares.

A summary of outstanding shares, Options, Warrants, and convertible debt

option as of May 30, 2023, is set out below, on a fully-diluted basis.

(fully diluted)

Vested Shares 1

Each exchangeable into one Common Share at any time, and from time to time, until the tenth anniversary

of the Closing Date.

Each exercisable into one Common Share.

Includes 15,666,626 NioCorp Assumed Warrants that are each exercisable into 1.11829212 Common Shares, and 1,737,651 Warrants that are each exercisable into one Common Share.

Represents Common Shares issuable on conversion of an aggregate outstanding principal amount of $16,147 of convertible debt as of May 30, 2023, assuming a market price per Common Share of $5.19 on that date.

as of November 13, 2023, is set out below, on a fully-diluted basis.

shares of ECRC Class B common stock 1

exchangeable into one Common Share at any time, and from time to time, until March 17,

exercisable into one Common Share.

15,666,626 NioCorp Assumed Warrants that are each exercisable into 1.11829212 Common

Shares, and 3,250,573 Warrants that are each exercisable into one Common Share.

Common Shares issuable on conversion of Convertible Debentures with an aggregate outstanding

principal and accrued interest amount of $7.6 million as of November 13, 2023, assuming a market price per Common Share of $3.91

on that date.

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What changed 10-Q

Item 2. Management’s Discussion and Analysis