This story was first posted at 9:00AM today, and was briefly updated at 8:14PM.
Micro cap Vancouver-based junior miner Niocorp Developments Ltd. (TSXV:NB), which is advancing its Elk Creek, Nebraska niobium project, has announced that they have recruited Marc Smith to become the company's new CEO.
Smith was formerly CEO of rare-earths producer Molycorp (NYSE:MCP), where he was instrumental in bringing a mine into production, the news release states. An engineer by trade, Mr. Smith was also previously an executive with both Chevron and Unocal, and boasts close ties to the Moreira Salles Group, which produces 85% of the world supply of Niobium.
Sour exit from Molycorp
Niocorp's news release spares the full story of Mr. Smith's controversial tenure at Molycorp. Here's an excerpt from a Bloomberg article:
Molycorp Inc. (MCP) Chief Executive Officer Mark Smith left the rare-earths producer amid an investigation of its disclosures and a lawsuit related to engineering deficiencies at its mine.
“We feel that Mark had lost credibility with a number of constituents, shareholders, potential investors and analysts,” said Michael Gambardella, a New York-based analyst at JPMorgan Chase & Co.
Molycorp investors experienced both extreme highs and lows during Mr. Smith's reign, which ended December 2012.
$10 million financing
Niocorp also announced intentions to raise $10 million at $.15, of which Mr. Smith will purchase at least $250,000 worth. The company's entire market cap before the news release this morning was just ~11 million, however the market likes the news. Shares in NB were trading up 20% to $.15 at press time (Update: shares in NB closed at $.165 at press time, up 26.9% on the day).
Although Mr. Smith's reputation is mixed, his appointment is a coup for the tiny Niocorp, which was having difficulty financing Elk Creek on its own. This much needed capital infusion, as well as Mr. Smith's connections in the niobium world, provide the company with a better shot at getting Elk Creek into production.
The market clearly liked it today (NB.V 6 months):
Here's the news release: NIOCORP APPOINTS MR. MARK A. SMITH AS CHIEF EXECUTIVE OFFICER AND DIRECTOR, AND ANNOUNCES PRIVATE PLACEMENT OF COMMON SHARES
Reaction via Twitter:
@tommyhump @ReformedBroker @michaelmccrae I think something big will happen with NB
— Cdn Intl Minerals (@CIN_TSXV) September 23, 2013
What's more relevant, that $NB's new CEO Smith ran $MCP to 70 bucks, or that he ran it back down to 6?
— Dank Sudden (@DSutton1986) September 24, 2013
@DSutton1986 the upside brother, we are in the valley. Smith would have made more than enough people $ on the way up to give $NB a shot
— Tommy Humphreys (@tommyhump) September 24, 2013
@DSutton1986 the Moreira Salles Group from Brazil, whom NB's Smith apparently knows, would top any Chinese group IMO http://t.co/ML53JvkK0y
— Tommy Humphreys (@tommyhump) September 24, 2013
Disclaimer: No conflicts of interests to report with Niocorp. Junior mining is extremely risky business. Do your own due diligence.