What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-02-13 compared with 2023-11-13 · 213 added, 205 removed, 327 unchanged (56% 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 interim condensed consolidated financial statements

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.

This discussion and analysis

contains forward-looking statements and forward-looking information that involve risks, uncertainties, and assumptions.

results may differ materially from those anticipated in these forward-looking statements and information as a result of many factors,

including, but not limited to, those set forth elsewhere in this Quarterly Report on Form 10-Q.

See “Note Regarding Forward-Looking

Statements” below.

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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

and related notes included elsewhere in this Form 10-Q and the Annual Report on Form 10-K filed with the Securities and Exchange

Commission for the year ended June 30, 2023, which have been prepared in accordance with generally

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

This discussion and analysis contains forward-looking

statements and forward-looking information that involve risks, uncertainties, and assumptions.

Our actual results may differ materially

from those anticipated in these forward-looking statements and information as a result of many factors, including, but not limited

to, those set forth elsewhere in this Quarterly Report on Form 10-Q.

See “Note Regarding Forward-Looking Statements”

currency amounts are stated in U.S.

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(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,”

“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.

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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;

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 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

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;

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

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

NioCorp’s ability to attract qualified

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

of mineral resources and reserves;

mineral exploration and production activities;

feasibility study results;

the results of metallurgical testing;

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

competition in the mining industry;

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;

the results of metallurgical

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

competition in the mining

changes 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;

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

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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

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.

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 that forms the basis for the Elk Creek Project disclosure included in this Quarterly Report

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Corporate Events

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.

December 22, 2023, the Company closed a non-brokered private placement (the “December 2023 Private Placement”) of

413,432 units of the Company (the “December 2023 Units”).

Each December 2023 Unit consists of one Common Share and

one Warrant (“December 2023 Warrant”).

Each December 2023 Warrant entitles the holder to acquire one Common Share

at a price of $3.54 at any time until December 22, 2025.

274,587 of the December 2023 Units were issued and sold to certain accredited

investors, who are not affiliated with the Company but with whom the Company had a pre-existing relationship, at a price of $3.08

per December 2023 Unit, and 138,845 of the December 2023 Units were issued and sold to certain officers and directors of the Company

(the “Insider Investors”), at a price of $3.205 per December 2023 Unit.

The price per December 2023 Unit paid by the

Insider Investors included $0.125 per December 2023 Warrant underlying each December 2023 Unit purchased by the Insider Investors

which allowed the Insider Investors to participate in the December 2023 Private Placement in accordance with the rules of The

Nasdaq Stock Market LLC (“Nasdaq”).

The Company received aggregate gross proceeds from the December 2023 Private Placement

of approximately $1.29 million.

Proceeds of the December 2023 Private Placement will be used for continued advancement of the

Elk Creek 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.

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 by weight.

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.

Two of the three

planned 1-kilogram ingots were manufactured at a contract metallurgical facility operated by Creative Engineers in the quarter

ended December 31, 2023.

As funds become available, the Company plans to manufacture a third ingot and pursue the scale-up of

the Nanoscale technology, with an aim towards larger sized ingots and a continuous or semi-continuous production process.

Creek Project Update

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

the quarter ended December 31, 2023, the Company’s demonstration scale processing plant located in Trois-Rivieres, Quebec

(the “Demonstration Plant”) also completed the production of waste materials for follow-on characterization to support

tailings impoundment and paste backfill engineering design.

Additional work at the Demonstration Plant is underway to further

explore improvements to solvent extraction operations and to produce product samples for prospective customers.

the quarter ended December 31, 2023, the Company, through a contract engineering firm (Olsson), completed a 90% engineering package

for various road improvements in the vicinity of the Elk Creek Project site, and shared the 90% engineering drawings with the

Nebraska Department of Transportation and Johnson County as part of the normal process for approving the improvements.

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

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.” 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 6,

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.

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 assurances 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:

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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;

Construction 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;

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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.

As 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;

of design and permitting efforts related to improvements to the junction of Nebraska state highways 50 and 62 and improvements

and paving of County Road 721 to the proposed entrance to the Elk Creek Project mine site.

and Operating Results

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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,

table (in thousands of dollars).

For the Three Months Ended

For the Six Months Ended

Operating expenses

Employee-related

Employee-related costs

Professional fees

Exploration expenditures

operating expenses

Total operating

in fair value of Earnout Shares liability

in fair value of warrant liabilities

Other operating expenses

Total operating expenses

Change in fair value of Earnout Shares liability

Change in fair value of warrant liabilities

Loss on debt extinguishment

Interest expense

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

Interest expense (income)

Foreign exchange loss (gain)

Loss on equity securities

Income tax benefit

Loss attributable to noncontrolling interest

Net loss attributable to the Company

Three- and six-month periods ended December

31, 2023 compared to the three- and six-month periods ended December 31, 2022:

items affecting operating expenses are noted below:

Employee-related

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.

costs increased for the three- and six-month periods 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 for the six-month period 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 and review fees associated

with the Company’s June 30, 2023 and September 30, 2023 financial statements, respectively.

These costs increased for the

three-month period ended December 31,2023 as compared to 2022, as 2023 costs included additional accounting fees associated with

quarterly financial statement review procedures as well as increased legal fees associated with the Company’s Annual General

Meeting preparation, our registration statements on Form S-1 filed in October 2023, and the change in our auditors.

expenditures decreased for the six-month period 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.

These costs decreased for

the three-month period ended December 31, 2023 as compared to 2022, as 2022 costs included Demonstration Plant development and

costs, while overall Demonstration Plant operations were winding down during the three-month period in 2023.

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.

These costs increased for the six-month period 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, as well as expenditures related to our Al-Sc master alloy initiative, fair value losses

on Yorkville Equity Facility Financing Agreement transactions, and Delaware franchise fees, partially offset by reduced investor

relations expenditures.

These costs increased for the three-month period ended December 31, 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 :

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

in fair value of Earnout Shares liability represents the changes 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

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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.

in fair value of warrant liability primarily represents the changes 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 anniversary.

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 for both the six-month and three-month periods 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

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

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became the U.S.

on debt extinguishment incurred in 2022 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).

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

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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

of December 31, 2023, the Company had cash of $0.6 million and a working capital deficit of $10.6 million, compared to cash of

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

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The Company’s current planned cash needs are

approximately $9.25 million until June 30, 2024.

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

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.

approximately $7.7 million until June 30, 2024, inclusive of repayments of principal and interest on the Yorkville Convertible

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

June 30, 2024 are expected to be approximately $805,000 per month where approximately $660,000 is for corporate overhead and estimated

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

Approximately $145,000 per month is planned

for expenditures relating to the advancement of the Elk Creek Project by ECRC.

The Company’s ability to continue operations

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

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

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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

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.

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

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 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.

the six months ended December 31, 2023, the Company’s operating activities consumed $4.6 million of cash (2022:

$4.1 million).

The cash used in operating activities for the six months ended December 31, 2023, reflects the Company’s funding of losses

of $6.8 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 six months ended December 31, 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.

Financing inflows were $2.9 million during

the six months ended December 31, 2023 (2022:

$0.5 million outflow), with 2023 inflows reflecting the gross receipts of $1.0 million

from the September 2023 Private Placement, $1.3 million from the December 2023 Private Placement, and $0.8 million from Common

Share issuances under the Yorkville Equity Facility Financing Agreement.

Flow Considerations

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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.

The determination of whether

any corporation was, or will be, a PFIC for a taxable year depends, in part, on the application of complex U.S.

federal income

tax rules, which are subject to differing interpretations.

In addition, whether any corporation will be a PFIC for any taxable

year depends on the assets and income of such corporation over the course of each such taxable year and, as a result, cannot be

predicted with certainty as of the date of this Quarterly Report on Form 10-Q.

In addition, even if NioCorp concluded that it

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.

from the Internal Revenue Service (the “IRS”) concerning the PFIC status of NioCorp or any subsidiary has been obtained

or is currently planned to be requested.

The determination of whether any corporation was, or will be, a PFIC for a taxable year

depends, in part, on the application of complex U.S.

federal income tax rules, which are subject to differing interpretations.

In addition, whether any corporation will be a PFIC for any taxable year depends on the assets and income of such corporation

over the course of each such taxable year and, as a result, cannot be predicted with certainty as of the date of this Quarterly

Report on Form 10-Q.

In addition, even if NioCorp concluded that it 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.

Each 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”

See the “Risk Factors” section of NioCorp’s Annual Report on Form 10-K for the fiscal year ended June

Company has one class of shares, being Common Shares.

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

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

shares of ECRC Class B common stock 1

as of February 13, 2024, is set out below, on a fully diluted basis.

Common Shares Outstanding

(Fully Diluted)

Common Shares

Vested shares of ECRC Class B common stock 1

Stock options 2

Convertible debt 4

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

3 unchanged sentences

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.

principal and accrued interest amount of $3.87 million as of February 13,

2024, assuming a market price per Common Share of $3.17 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