Tuesday, November 12, 2013

Hallgarten & Company (44) 795 08 53 621

& && & Hallgarten Hallgarten Hallgarten Hallgarten
Company Company Company Company
Initiating Coverage
Christopher Ecclestone
cecclestone@hallgartenco.com

NioCorp Developments (TSXV: NB)
Strategy: LONG


Price (CAD) 0.18 $
12-Month Target Price (CAD) 0.23 $
Upside to Target 28
12!th hi-"o# $0.0$-0.22%
Mar&et Cap (CAD !n) 1'.10 $
Shares Outstanding (millions) $%.0
Fully diluted (millions) 121.0
Key Metrics


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Hallgarten & Company Portfolio trategy Page 2

NioCorp
The Pure Play on Niobium
+ Ditching the (are )arth persona and t*rning itse"+ into one o+ the on", p*re p"a, -io.i*!
pro/ects in the !ar&et p"ace #as a s!art
+ Appointing Mar& 0!ith1 +or!er", o+ Mo",corp1 as C)2 #as a !a/or co*p #ith his strong
3ashington connections and e4perience #ith the #or"d5s "eading -. !ine in 6ra7i"
+ The )"& Cree& Car.onatite grades at t#ice the "e8e" o+ 9a!go"d5s -io.ec propert,
+ -io.i*! ind*str, d,na!ics are good1 #ith it .eing one o+ the +e# specia"t, !eta"s #ith "itt"e
to no Chinese s*pp", or contro"
+ A res*rgent stee" ind*str, #o*"d he"p the !eta"5s d,na!ics
+ Price +"*ct*ations in recent ti!es ha8e not .een as e4tre!e as !an, other !eta"s
Creating a stor, in a niche #here there are no other e4p"orers !eans a"" the hea8, "i+ting in
"e+t to one co!pan,
9t #i"" .e interesting to see i+ Mar& 0!ith can transition +ro! 800". gori""a stat*s to d#e""er
on the /*ng"e +"oor
The en8iron!ent +or +*nding pro/ects is 8er, to*gh at the !o!ent and #hi"e no pro/ections
e4ist on cape4 here1 #e do not thin& it #i"" .e a s!a"" n*!.er

NioCorp Changing Directions

0ince #e "ast #rote a.o*t this pro/ect the co!pan, has changed na!e (+ro! :*ant*! (are )arths) and
in the process "ost its "ong-ter! association #ith the so!e#hat ."ighted ()) space. 0itting thro*gh
another presentation ., a (are )arth co!pan, ta"&ing a.o*t their car.onatite is so!e#hat a&in to that
o"d tort*re o+ +ingernai"s scraping across a ."ac&.oard. The 8er, #ords ;(are )arths< in a co!pan,5s
na!e #as a se8ere do#ner that prod*ced !ood de+"ation +or in8estors in an age #here +*rther !ood
de+"ation is the "ast thing one #ants.

28er the ,ears :*ant*! (to gi8e -ioCorp its +or!er designation) dri+ted in and o*t o+ o*r "ine o+ sight
.*t ne8er got the p*"se racing. =o#e8er1 "i&e so !an, (are )arth co!panies it either had a propert, as
an origina" raison d tre that #as not the >anthanide series or hid so!e other "ight *nder a .*she" /*st
in case things #ent #rong in the ()) space. ?or !ost p"a,ers the secondar, ga!e #as Urani*! and that
is scarce", an,thing !ost #o*"d #ant to cro# a.o*t .*t in :*ant*!5s case the .ac&-*p p"an #as
-io.i*!. 6ac& in ear", 2012 #e decided that this side"ine #as interesting eno*gh to pro!pt *s to add
the stoc& to o*r Mode" Mining Port+o"io. 2*r "ogic at the ti!e #as that the -io.i*! in the :*ant*! !i4
#o*"d !a&e the co!pan, interesting to the "i&es o+ Mo",corp1 #hich had once *pon a ti!e contro""ed
the se"+-sa!e deposit that #as no# :*ant*!5s !ain c"ai! to +a!e.

=o#e8er1 as Mo",corp5s o#n pro."e!s esca"ated and its +oc*s t*rned to se"+-preser8ation1 the prospect
o+ its doing an,thing #ith the :*ant*! asset +aded and #e e8ent*a"", c"osed the position in 2cto.er o+
2012.

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Hallgarten & Company Portfolio trategy Page 3

9n recent ti!es #e ha8e .een #atching #ith so!e interest the de8e"op!ents in the -io.i*! space
(partic*"ar", at that other so!eti!e ()) stoc&1 A"&ane )4p"oration) and it occ*rred to *s to re8isit
-ioCorp1 nota.", as it had !anaged to capt*re Mo",corp5s +or!er C)2 Mar& 0!ith +or its ad8isor,
.oard.

Mark Smith Landing a Big Fish

3e #ere intrig*ed indeed to see that -ioCorp had !anaged to .ag Mar& 0!ith1 +or!er", C)2 o+
Mo",corp (MCP) as a !e!.er o+ its ad8isor, .oard .ac& in ?e.r*ar, o+ 2013. This addition #as a .ig
catch indeed +or -ioCorp1 as it seg*ed +ro! .eing a ()) stor, into .eing a -io.i*! stor,. There #as
e!inent "ogic in the !o8e tho*gh as the )"& Cree& deposit had pre8io*s", .een part o+ his re!it #hen it
had .een o#ned ., Mo",corp in its Unoca" da,s. Th*s the presence o+ 0!ith at -ioCorp #as so!e#hat
o+ a re*nion. Then on the 23rd o+ 0epte!.er 20131 the co!pan, anno*nced that it has appointed 0!ith
as its ne# C)2 (and as a director). This represented ,et another co*p +or -iocorp in netting s*ch a .ig
+ish #ith a s#athe o+ !a/or U0 instit*tiona" in8estors in his (o"ode4.

9n the #a, o+ .ac&gro*nd #e #o*"d note that he ser8ed as the President o+ Mo",Corp Minera"s1 >>C and
its Chie+ )4ec*ti8e 2++icer +ro! 2cto.er 2008 to 2012. =e had pre8io*s", he"d n*!ero*s engineering1
en8iron!enta" and "ega" positions #ithin Unoca" and "ater Che8ron. =e #as responsi."e +or Che8ron@s
three coa" !ines1 one !o",.den*! !ine1 a petro"e*! co&e ca"cining operation and the Mo*ntain Pass
()) !ine. =e he"d n*!ero*s engineering1 en8iron!enta" and "ega" positions #ithin Unoca" and "ater
Che8ron. =e a"so !anaged the rea" estate1 re!ediation1 !ining and car.on di8isions o+ Unoca"
Corporation +ro! Ma, 1$8A to A*g*st 200%. 9n tota" he #or&ed +or Unoca" +or o8er 22 ,ears. =e has a"so
.een a Director +or A8anti Mining 9nc. since -o8e!.er $1 200$ and o+ -eo Materia" Techno"ogies 9nc.
since Ma, 2012.

=e had .een a -on-)4ec*ti8e Director at Ta"ison >ithi*! >i!ited #hich #as part o+ the (eso*rce Capita"
sta."e o+ interests (as #as Mo",corp)1 *nti" Ta"ison #as ta&en o8er ., Chinese interests "ast ,ear. More
interesting", tho*gh he ser8ed as a Director o+ Co!panhia 6rasi"eira de Meta"*rgia e Mineracao
(C6MM)1 part o+ the Moreira 0a""es Bro*p. As !entioned ear"ier this co!pan, is the o8er#he"!ing",
do!inant p"a,er in g"o.a" -io.i*! s*pp"ies.

3hi"e the stor, o+ Mo",corp has not e4act", .een /o,o*s o+ "ate1 Mar& 0!ith5s rep*tation is as a .*i"der
o+ !ines1 not a +a&er as is so co!!on in Canadian /*niors. 3e #o*"d do*.t he has /oined -iocorp to
ind*"ge in Canco*8er-st,"e se"+-p"eas*ring .*t rather to get this thing !o8ing to#ards .eing a rea" !ine.

Nioium !n the "rip o# the Bra$ilians

-io.i*! (-.) is another !eta" that is scarce", the #ord on e8er,one5s "ips as the !ain "isted e4pos*re to
it is 8ia 9a!go"d5s -io.ec s*.sidiar, #hich operates in :*e.ec. Ta"& in 2012 indicated that 9AB intended
to +"oat this o++ in the p*."ic !ar&ets .*t the, see! to .e hanging onto it. This !a, .e .eca*se o+ #ea&
!ar&ets .*t #e #o*"d a"so s*spect it is .eca*se -io.i*! c*rrent", has a .etter o*t"oo& than 9a!go"d5s
stap"e !eta"1 go"d. 9+ the spin-o++ had gone ahead it #o*"d ha8e gi8en the !eta" a !*ch stronger p*."ic
a#areness than hitherto #here it has /*st .een a .onan7a earner +or 9AB hidden in its c"oset.

Despite :*e.ec5s ro"e +or 9AB1 the rea" p"a,er is 6ra7i"1 the #or"d5s "argest prod*cer o+ nio.i*! ($2)1
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+o""o#ed ., Canada.



6ra7i" has t#o o+ the "argest nio.i*! deposits in the #or"d1 the Ara4D and the Cata"Eo deposits. The
Ara4D !ine is operated ., C6MM1 #here decreasing grades are increasing operating costs at the !ine.
C6MM is o#ned ., the Moreira 0a""es +a!i",1 one o+ 6ra7i"5s #ea"thiest gro*ps. Their +ort*ne has "arge",
deri8ed +ro! a p*nt on -io.i*! .ac& in the 1$F0s and interests in the .an&ing sector. According to
6"oo!.erg1 C6MM generates !ore than $F00 !i""ion in ann*a" pro+it. The, ca"c*"ated it #as #orth at
"east $13 .i""ion1 .ased on the +a!i",5s sa"e o+ a 30 sta&e to a gro*p o+ Asian stee"!a&ers +or $3.$
.i""ion in 2011. The .rothers are esti!ated to ho"d an eG*a" share o+ the re!aining '0 sta&e.



The Cata"Eo !ine in the state o+ Boias is o#ned ., Ang"o A!erican 6ra7i". 9t has the s!a""est reser8es o+
the three -io.i*! ;!a/ors<. There has .een spec*"ation that the !ine !a, r*n o*t o+ ore i+ the deposit
si7e cannot .e increased.

Nioium %ses and Dynamics

-io.i*! is an a""o,ing agent #hich1 #hen added to stee"1 creates a !ateria" #ith s*.stantia" .ene+its in
the prod*ction o+ high grade stee". 0tee" containing nio.i*! has !an, properties !a&ing it stronger1
"ighter in #eight and high", resistant to corrosion. Adding nio.i*! to stee" a"so creates stee" #ith a
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higher !e"ting point. ?erronio.i*! (FF -io.i*!1 3A 9ron) represents o8er $0 o+ #or"d nio.i*!
prod*ction. Mo",.den*! and 8anadi*! can .e s*.stit*ted +or nio.i*! in so!e app"ications1 .*t a
per+or!ance or cost pena"t, !a, o*t#eigh s*.stit*tion. ?or !an, app"ications1 s*ch as so!e s*per
a""o,s and oi" and gas pipe"ines1 there are no s*.stit*tes +or nio.i*! as the nio.i*! a""o#s +or
#ithstanding e4tre!e press*res.

-io.i*! de!and has increased on a8erage 10 a ,ear +or the
past decade1 #ith gro#th +orecast to contin*e in si!i"ar +ashion
in the co!ing decade. The g"o.a" !ar&et is esti!ated to reach
1801000 - 2001000 tpa ., 2018 H 2020 #hi"e s*pp", is e4pected to
.e a !a4i!*! o+ 1'01000 tpa.

-io.i*! prices ha8e increased in "ine #ith this gro#th o8er the
"ast decade. The chart at the "e+t sho#s recent prices .*t to p*t
that in conte4t the price #as U0$AA-A% .ac& in !id-2011 so
prices ha8e on", eased o++ 10 o8er #hat has .een a prett,
to*gh ti!e +or the stee" ind*str,.

9nteresting", it ran&s si4th o+ the 6B0 s*r8e, o+ Critica" Meta"s1 one p"ace .ehind (are )arths in critica"it,
o+ s*pp",.

&lkane an e'ample to emulate(

9n I*",1 A"&ane (eso*rces >td1 the A0J-"isted Kirconia (and ())) +oc*sed e4p"orer anno*nced that it had
signed a Ioint Cent*re ?ra!e#or& Agree!ent #ith the A*strian specia"t, !eta"s !a/or1 Trei.acher
9nd*strie AB1 #ith a 8ie# to de8e"oping the co!pan,5s potentia" strea! o+ +erro-nio.i*! +ro! the
D*..o Kirconia pro/ect (DKP). This dea" #as a .rea&thro*gh as the co!pan, had pre8io*s", anno*nced a
MoU .ac& in 2cto.er 2011. As #ith !ost s*ch M2Us the !ar&et "oses interest a+ter s*ch a "ong
gestation o+ a dea". There+ore #hen the +ina" dea" ca!e thro*gh it acted as a s*.stantia" &ic&er +or the
A"&ane stoc& price. The p*rpose in !entioning A"&ane5s progress here is t#o+o"d. ?irst", it sho#s that
ne# parties can .rea& into the -io.i*! space and second", that sec*ring a credi."e partner (in this case
a trading ho*se) can .e a !a/or &ic&start +or a stoc& price re8a"*ation.

The intended Ioint Cent*re acti8ities are the prod*ction and !ar&eting o+ +erro-nio.i*! (?e-.) *sing
nio.i*! concentrate +ro! the DKP. The parties #i"" +or! a co!pan,1 initia"", #ho"", o#ned ., A"&ane1 to
*se Trie.acher5s proprietar, techno"og, to process DKP nio.i*! concentrate at a +aci"it, in A*stra"ia (or
other agreed "ocation) to prod*ce ?e-.. Trie.acher has the option to p*rchase %0 o+ the ne#
co!pan, #ithin three ,ears o+ co!!issioning o+ the p"ant and #i"" ha8e e4c"*si8e rights to !ar&et the
?e-..

The Ioint Cent*re e4pects to prod*ce o8er 31000 tonnes o+ ?e-.1 *ti"ising a"" o+ the nio.i*! concentrate
prod*ced +ro! the one !i""ion tonnes per ann*! de8e"op!ent o+ the DKP1 !a&ing it the on", prod*cer
o+ nio.i*! in A*stra"ia once prod*ction co!!ences in 201F. At c*rrent prices1 ann*a" prod*ction o+
?e-. #i"" generate re8en*e o+ appro4i!ate", U0$$0 !i""ion #ith AK>5s share esti!ated to .e a.o*t
A$80 !i""ion (depending *pon A$LU0$ e4change rate)1 #hich is 1F o+ tota" anticipated ann*a" pro/ect
re8en*e as deter!ined ., the de+initi8e +easi.i"it, st*d, re"eased to the A0J in Apri" 2013).
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The )90 +or DKP #as "odged #ith the -03 Depart!ent o+ P"anning and 9n+rastr*ct*re in "ate I*ne 2013
!ar&ing the start o+ the appro8a" process +or this 0tate 0igni+icant Pro/ect.

)lk Creek

-iocorpMs !ain asset is the )"& Cree& pro/ect in 0o*th )ast -e.ras&a (an ho*r so*th o+ >inco"n). :*ant*!
+irst sec*red the propert, in 2011 as a ()) prospect. =o#e8er1 the propert, hosts concentrations o+
nio.i*!1 ()) and .ari*! !inera"i7ation #ithin the )"& Cree& Car.onatite.

The U0B0 has co!!ented that )"& Cree& is potentia"", one o+ the N"argest g"o.a" reso*rces o+ -io.i*!<.



Molycorp and )lk Creek

C*rio*s", eno*gh1 the propert, is a +or!er Mo",corp pro/ect. The ear"iest &no#n re+erence to Mo",corp
operating #ithin the )"& Cree& gra8it, ano!a", area is +ro! 1$'3. 9t is *nc"ear at precise", #hen
Mo",corp +irst acG*ired the !inera" rights in the )"& Cree& ano!a", area. 6et#een1 1$'3 and 1$'A1
Mo",corp co!p"eted si4 dri""ho"esO )C-1 to )C-A1 targeting the )"& Cree& ano!a", and t#o other ho"es
o*tside the )"& Cree& ano!a", area (An7!an1 1$'F). Dri""ho"es #ere t,pica"", carried o*t ., (C dri""ing
thro*gh the o8er",ing sedi!entar, roc&s and dia!ond dri""ing thro*gh the 2rdo8ician-Ca!.rian
.ase!ent roc&s.

Mo",corp contin*ed their dri"" progra! +ro! 1$'' and1 in Ma, 1$'81 Mo",corp !ade their disco8er, o+
the )"& Cree& -.-()) deposit #ith dri""ho"e )C-11. The )"& Cree& -.-()) deposit #as intersected at a
8ertica" depth o+ 203.F1 ! (FF8 +t) in the )"& Cree& Car.onatite. Mo",corp contin*ed their dri""ing
progra! thro*gh to 1$8A that !ain", centred on the )"& Cree& -.-()) deposit #ithin a radi*s o+ ro*gh",
2 &!. 6, 1$8A1 Mo",corp had co!p"eted %' dri""ho"es #ithin the )"& Cree& gra8it, ano!a", area1 #hich
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inc"*ded 2% dri""ho"es o8er the )"& Cree& -.-()) deposit.

?ro! 1$8A to 1$8F1 dri""ing #as +oc*sed on the )"& Cree& gra8it, ano!a", area. The ano!a", area is
ro*gh", ' &! in dia!eter and dri""ing #as cond*cted on a grid pattern o+ appro4i!ate", F10 ., F10 !
(ro*gh", 21000 ., 21000 +t.) #ith so!e c"oser spaced dri""ho"es in se"ected areas. 6, 1$8F1 a tota" o+ 10F
dri""ho"es #ere co!p"eted +or a tota" o+ appro4i!ate", AF1'$' ! (1%31%32 +t). The deepest ho"e reached
a depth o+ 11038 ! (31A0F +t) and .otto!ed in car.onatite. Mo",corp "e+t )"& Cree& in the ear", 1$$0@s
#hen it a.andoned its e4p"oration e++orts to +oc*s on the Mo*ntain Pass pro/ect in Ca"i+ornia. Then1 *nti"
20111 no +*rther e4p"oration #as recorded on the propert,.



3e !ight a"so note that MCP .eca!e a -. processor #ith its p*rchase o+ the 0i"!et p"ant in )stonia .*t
it does not o#n its so*rce o+ s*pp", +or that operation. 0o!e 1%01000 +eet o+ historica" dri"" core is sti""
e4tant (!ost o+ #hich is stored at the Uni8ersit, o+ -e.ras&a in >inco"n) +ro! 113 ho"es dri""ed .,
Mo",corp in the 1$'0s and 80s.

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)lk Creek "eology

The propert, is co!prised o+ the )"& Cree& Car.onatite that has intr*ded into the o"der Preca!.rian
granitic and !eta!orphic .ase!ent roc&s. The )"& Cree& Car.onatite and Preca!.rian roc&s are
*ncon+or!a.", o8er"ain ., "a,er o+ ro*gh", 200 ! o+ Pa"aeo7oic !arine sedi!entar, roc&s o+
Penns,"8anian age (appro4i!ate", 2$$ to 318 Ma). There are no s*r+ace e4pressions o+ the )"& Cree&
Car.onatite on the propert,.

The )"& Cree& Car.onatite has .een identi+ied as a car.onatite since its disco8er, in 1$'1 thro*gh
dri""ing. The 3D graphic at the right sho#s the concept*a" appearance o+ the -.-.earing car.onatite.

Tre8es et a". (1$'2a and 1$'2.) indicated that the roc&s rese!."ed those o+ the ?en District o+ -or#a,
and s*ggested that the, #ere car.onatites. The )"& Cree& Car.onatite has a"so .een co!pared to the
9ron =i"" car.onatite stoc& in B*nnison Co*nt,1 Co"orado. The re"ationship #as .ased on roc&-t,pes and
!inera"og, (J* 1$$F).


Source: Quantum Rare Earths
C*rrent st*dies s*ggest that the )"& Cree& Car.onatite #as e!p"aced a.o*t %00 Ma d*e to stress a"ong
the -e!aha Up"i+t .o*ndar,. Three other geoph,sica" ano!a"ies #ere ana",7ed and dri""ed near the )"&
Cree& Car.onatite a"ong the -e!aha Up"i+t .*t #ere +o*nd to .e ga..roic intr*si8e roc&s.

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Hallgarten & Company Portfolio trategy Page 9

The )"& Cree& Car.onatite consists predo!inant", o+ do"o!ite1 ca"cite1 and an&erite #ith "esser ch"orite1
.arite1 ph"ogopite1 p,roch"ore1 serpentine1 +"*orite1 s*"phides and G*art7

0o!e !etrics on the deposit inc"*deO

1$.3 Mt P 0.F' -.22Q - 9ndicated and 83.3 Mt P 0.F3 -.22Q - 9n+erred

9ndicated reso*rces o+ 12$11821000 &g o+ contained -.22Q and an 9n+erred reso*rce o+
%2318AA1000 &g o+ contained -.22Q

9n A*g*st 20111 :*ant*! re"eased res*"ts o+ three ho"es that #ere the +irst ho"es to .e dri""ed across the
deposit #ith a high"ight o+ 131 ! -.
2
2
%
grading 1.02. To p*t this in perspecti8e the reso*rce at -io.ec
grades at 0.%3.

*esource )stimate(s)

9n Apri" 20121 :() re"eased an -9A3-101 (eso*rce esti!ate prepared ., 3ardrop Tetratech. The !ain
+indings #ereO

N+O, -onnage N+O, Contained O'ide
. . N+O,
Classi#ication cuto## (Mt) "rade -onnes
9ndicated 0.'0 '.22F 0.8F F11$A0
9ndicated 0.F0 11.3'3 0.'8 881''0
9ndicated 0.%0 1%.8AA 0.'1 11312'1
9ndicated 0.A0 1$.31$ 0.F' 12$1182
9ndicated 0.3% 1$.F32 0.FF 13013'F
9n+erred 0.'0 20.$8A 0.8 1F'1AA'
9n+erred 0.F0 AA.%$F 0.'2 3201%21
9n+erred 0.%0 '1.333 0.FF AF8102F
9n+erred 0.A0 83.288 0.F3 %2318AA
9n+erred 0.3% 83.'AA 0.F3 %2%1%$1


9n TetraTech5s 8ie# the -io.i*! !inera"i7ation appears !ost concentrated in the north#est1 and at
depth1 o+ the &no#n )"& Cree& deposit1 #ith an iso"ated concentration o+ e"e8ated nio.i*! 8a"*es in the
*pper so*theast portion.

Tetra Tech reco!!ended a Phase 9 and Phase 99 dri""ing progra! +or the in8estigation o+ the )"& Cree&
deposit. The +irst phase o+ dri""ing #i"" concentrate in the so*theast portion o+ the deposit #here dri""
and sa!p"e data are "ess dense. The Phase 9 dri"" progra! #i"" red*ce the no!ina" dri"" spacing .et#een
F0 to 100! #hich #i"" esta."ish a greater con+idence in the contin*it, o+ geo"og, and grade to #arrant a
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higher reso*rce c"assi+ication. 0*.seG*ent",1 Phase 99 dri""ing #i"" +oc*s on the north#estern portion o+
the deposit and at depth #here -io.i*! grades appear to increase. -iocorp note tho*gh that pending
the res*"ts o+ the Phase 9 dri""ing1 this phase is s*./ect to change.

*ecent Financing

9n "ate 0epte!.er1 -iocorp p*."ished a pri8ate p"acing !e!orand*! +or the iss*ance o+ *p to FF.F!n
shares at CAD$0.1% to raise aro*nd $10!n. The a""ocation o+ +*nds #as intended to .e $%!n +or the
a+ore!entioned dri""ing at )"& Cree&1 $2.%!n +or !eta""*rgica" testing (a si7ea."e n*!.er +or e8en a
!a/or)1 $2%0R +or repa,!ent o+ a principa" "oan (o#ed to a director1 Peter Dic&ie) and the re!aining
$1.3F!n #as to .e +or #or&ing capita".

The co!pan, anno*nced a !onth "ater on 2cto.er 221 2013 that it had c"osed the +irst tranche o+ its
.ro&ered pri8ate p"ace!ent +inancing +or gross proceeds o+ a disappointing U0$$2'1$$2. =o#e8er1 the
a!.itions #ere !ight, and the disappoint!ent is on", in re"ation to the n*!.er desired1 +or raising
near", $1!n in the c*rrent en8iron!ent is a tri*!ph in itse"+. This ?irst Tranche consisted o+ the
iss*ance o+ F118F1F12 co!!on shares at a price o+ U0$0.1% per 0hare. -orth"and 0ec*rities arranged the
transaction.

3e #o*"d note that a good", proportion o+ the iss*e #as ta&en *p ., insiders #ith Mar& 0!ith
s*.scri.ing +or 3.A !n shares and Peter Dic&ie1 the s*.scri.ing %001000 0hares. Th*s o8er F0 #ent to
insiders.

As the +*nds raised c"ear", do not "end the!se"8es to +*"+i""!ent o+ the dri""ing ca!paign (e8en in part)
the +oc*s #i"" .e on co!!encing the !inera"ogica" and !eta""*rgica" st*dies to .e "ed ., 0B0 Canada.

-he *est o# the -eam

The co!pan,5s C)2 (and a director) is Peter Dic&ie #ho is a grad*ate o+ .oth the Uni8ersit, o+ 6ritish
Co"*!.ia1 and the Uni8ersit, o+ Cictoria (6.C.)1 his .ac&gro*nd inc"*des +o*r ,ears in the 0ec*rities
ind*str, #ith Iones1 Ba."e S Co. =e has ser8ed on the .oard o+ a n*!.er p*."ic co!panies1 inc"*ding
>ateegra Bo"d Corp. #here he #as instr*!enta" in acG*iring the pri!ar, asset +or the co!pan, #hich
*"ti!ate", res*"ted in a ta&eo8er o+ >ateegra ., )4ce""on (eso*rces.

Da8e 6e"ing1 Director1 has o8er A' ,ears o+ e4perience in the g"o.a" precio*s !eta"1 .ase !eta" and
energ, !inera" sectors. =e has signi+icant", re8ie#ed or #as direct", in8o"8ed #ith 8A *ndergro*nd
!ines1 12' open pit !ines and 1F3 !inera" processing p"ants as a cons*"tant or #hi"e e!p"o,ed #ith
Phe"ps Dodge1 Union 2i"1 ?"*or1 United Techno"ogies1 3estingho*se1 and se8era" Canadian and U0 /*nior
!ining co!panies. 0ince 1$81 he ser8ed as a senior e4ec*ti8e and !e!.er o+ the 6oard o+ Directors o+
eight p*."ic !ining co!panies. 9n addition to de8e"oping and !anaging operations1 he initiated or
strong", contri.*ted to the !ar&eting and c"osing o+ se8era" de.t and eG*it, +inancings1 co!!odit, and
asset sa"es1 !ergers1 acG*isitions and /oint 8ent*res.

2+ a"" the directors pro.a.", the !ost intrig*ing (e8en !ore than Mar& 0!ith) is C"a*de D*+resne. This is
d*e to the +act that he co""a.orated #ith 9a!go"d@s Corporate De8e"op!ent gro*p #hi"e contin*ing #ith
its 0a"es S Mar&eting acti8ities1 #hich inc"*ded nio.i*! and .a*4ite. 9n Ian*ar, 20081 he started Ca!et
Tuesday, November 12, 2013
Hallgarten & Company Portfolio trategy Page 11

Meta""*rg, 9nc1 a /oint 8ent*re co!pan, #ith 9a!go"d1 #hich is responsi."e +or the #or"d#ide 0a"es and
Mar&eting o+ 9a!go"d@s nio.i*! +ro! the -io.ec !ine. This ro"e !a&es hi! one o+ the !ost in+or!ed
peop"e aro*nd on the arcane s*./ect o+ -io.i*! !ar&eting.

The &ic&start to his career #as #hen he grad*ated #ith a 6ache"ors degree in Mining )ngineering +ro!
>a8a" Uni8ersit, in 1$$1. =e then started #or&ing #ith Ca!.ior as a !eta""*rgist. 9n 1$$F1 he #as
trans+erred to Ca!.ior@s "argest operation1 2!aiBo"d Mines >td.1 "ocated in B*,ana1 0.A .e+ore .een
pro!oted to Mar&eting Manager. A+ter Ca!.ior@s acG*isition ., 9a!go"d Corp1 he !ade the !o8e into
9a!go"d5s -io.ec di8ision. =e is a !e!.er o+ the 2rdre des 9ngenie*rs d* :*e.ec1 and o+ the Tanta"*!
S -io.i*! 9nternationa" 0t*d, Center.

Another director1 and one o+ o*r pre8io*s acG*aintance1 is )rin Ch*tter. 3e &no# her +ro! her ro"e at
B"o.a" Co.a"t (BC2.8) #hich has a n*!.er o+ pro/ects on the go in that !eta". 0he is a"so a +o*nder and
director o+ t#o pri8ate co!panies. Acti8e in po"itics since the "ate 1$80s1 )rin has !anaged and ad8ised
ca!paigns at three "e8e"s o+ go8ern!ent1 as #e"" as part, "eadership races.

The co!pan, a"so has a +or!er 9daho 0tate 0enator1 Ton, ?*"ton1 on the .oard +or so!e po"itica"
g*idance.

*isks

The pri!e ris&s #e can en8ision at this stage areO

?inancing pro."e!s
2ngoing stoc& price #ea&ness
Association #ith the ."ighted ()) sector
28er-s*pp", in -io.i*! space
P*nitor, action ., C6MM to #ard o+ threats to its G*asi-!onopo",

The +irst t#o +actors are "in&ed. 3e +ee" that i+ the co!pan, can get a strategic shareho"der or a
signi+icant end-*ser "ined *p then +inancing pro."e!s #o*"d e8aporate and stoc& price #o*"d not .e an
iss*e (as it #o*"d rise). =o#e8er1 #itho*t s*ch a part, in sight1 the stoc& price co*"d contin*e to "ang*ish
!a&ing +inancing an on-going pro."e!. The Canadian !ar&et is not s,!pathetic to !eta"s it
*nderstands and is +a!i"iar #ith1 "et a"one ne# concepts that it !*st a.sor.. The recent +inancing ca!e
in #e"" *nder target and that "ea8es the co!pan, short on +*"+i""ing e4pectations. 9ts dri""ing progra! has
to sta, in hi.ernation and the !eta""*rgica" e++orts !*st .e sca"ed .ac& se8ere",.

The co!pan, has a +*rther .*rden1 the co!pensation in the e4ec*ti8e s*ite1 #hich is r*nning at "east
$3%1000 per !onth. 0a"aries #i"" need to .e sca"ed .ac& to !atch the tight +inancing.

Conclusion

The attraction +or *s at -ioCorp is the -. content. Another car.onatite #ith ()) does nothing +or *s1
and c"ear", the !anage!ent at :*ant*! (are )arth did the right thing in e4iting +ro! the dead-7one
that is (are )arths. The ne# "eadership &no#s -io.i*! +ro! the inside o*t and this is a .ig +eather in
the cap +or the co!pan,.
Tuesday, November 12, 2013
Hallgarten & Company Portfolio trategy Page 12


The co!pan, no# needs to start !a&ing a dia"og*e #ith the !ar&et on prod*ction and cape4 thereon.
The !ar&et needs !ore dri""ing "i&e it needs a ho"e in the head and cannot ha8e .een thri""ed to hear o+
a $%!n .*dget +or the e4tra #or&. Ma,.e the coat sho*"d ha8e .een c*t to s*it the c"oth on this score.
6*t *n+ort*nate", +or -iocorp1 on", !ore dri""ing #i"" gi8e it a reso*rce +ro! #hich it can cra+t a credi."e
P)A and P?0.

3ith a reso*rce o+ this si7e in a strategic !eta" A-D "ocated in the United 0tates1 #e start to ponder
#ho !ight #ant to !a&e a !o8e on this co!pan,. ?or!er", the o.8io*s candidate #as Mo",corp1 no#
signi+icant", "ess so. 0*re", Iapanese and Rorean stee" !a&ers #o*"d "i&e to see an a"ternati8e so*rce o+
s*pp", to the 6ra7i"ians1 #hi"e the U0 reso*rce sec*rit, ha#&s #o*"d .e happ, to see a -io.i*! so*rce
#ithin the U0 (.*t the, ha8e pro8en "ess a!ena."e to pa,ing to de8e"op s*ch so*rces in the recent
past).

3e consider -iocorp has >ong characteristics and good potentia" to reach o*r 12-!onth target price o+
U0$0.23.








Tuesday, November 12, 2013
Hallgarten & Company (44) 795 08 53 621

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