Mr. Mark Smith reports

NIOCORP ISSUES 2023 YEAR IN REVIEW REPORT

Niocorp Developments Ltd. has issued the following 2023 year in review report to its shareholders by its chairman and chief executive officer, Mark A. Smith.

2023 progress positions Niocorp for historic advancements in 2024

Dear shareholders:

As we launch into 2024, I have been reviewing many elements of Niocorp's progress in 2023 on the Elk Creek critical minerals project. The company took some enormous strides over the past year that I believe position us to achieve historic advancements in 2024. I want to share my thoughts and takeaways on the year that was 2023, and on our goals for the coming year.

The first quarter of 2023 was marked by some very important milestones for the company and the Elk Creek project. We received a letter of interest from the Export-Import Bank of the United States (EXIM) regarding EXIM's interest in potentially making available as much as $800-million in debt financing to the Elk Creek project. We saw excellent demonstration plant results for rare earth processing and recovery from ore that the company expects to extract from the Elk Creek project. FoxNews published an op-ed I wrote regarding my prediction that China will eventually reduce or cut off exports of rare earth minerals to the West -- emphasizing the critical need for the United States to start making more of its own critical minerals. We also earned a front-page New York Times article that helped to elevate the visibility of the Elk Creek project around the world.

As the year progressed, we signed a term sheet with Stellantis, the world's third-largest automaker, announcing our shared intent to execute definitive agreements on a rare earth offtake contract as well as a possible strategic investment in Niocorp by the automaker. Work on these agreements is proceeding on a good pace.

We also completed all metallurgical test work related to an improved process flow sheet at our Quebec-based demonstration plant in 2023. That effort achieved some very powerful results that have the potential to significantly improve the Elk Creek project's projected economics and process efficiency and expand our planned product offering.

I was admittedly disappointed, as were all Niocorp shareholders, in the outcome of our 2023 SPAC transaction. That deal promised to raise significant new capital for the Elk Creek project. However, many investment firms opted to redeem their GX shares, which we felt was largely due to the emerging banking crisis that hit the U.S. just prior to the SPAC deal close. The transaction did earn us a rapid uplisting to the Nasdaq Stock Exchange, inclusion in the Russell 3000 and 2000 indexes, positions in our stock by many large institutional investment houses, and two new board members who have joined other Niocorp board members in taking very active roles in broadening and intensifying our project financing campaign.

I certainly share shareholders' collective disappointment in Niocorp's share price performance in 2023. As the single largest shareholder of Niocorp stock today, I have made significant investments in Niocorp. My family and I have every reason to see Niocorp succeed. While markets can at times seriously undervalue highly promising companies such as Niocorp, I also know that markets tend to correct such valuations as companies successfully take projects like the Elk Creek project to commercial reality. That is the laser-focused mission of every single member of the Niocorp team.

While I wanted to see 2023 be the year in which we formally launched construction of this historic and much-needed critical minerals project in Nebraska, I have never been more confident of success in securing the project financing we need to move the Elk Creek project forward. As I see it, the stars are increasingly aligning behind our Elk Creek project, and 2024 promises to be a momentous year for Niocorp.

Two thousand twenty-four is already a very busy time for the Niocorp team:

• During the week of Jan. 15, 2024, the Niocorp team will be presenting on the Elk Creek project to some of the world's leading defence industry companies at an industry-only Mine-to-Magnets workshop in the Washington, D.C., area, at the invitation of the National Defense Industries Association. We have a number of other meetings next week in D.C. as we continue to promote the Elk Creek project and pursue project financing.
• Our annual general meeting of shareholders will be conducted in Denver on Jan. 19, 2024. We will be hosting an investor update webcast on that day, and we will issue the details shortly on how investors can tune in.
• I will be presenting on the Elk Creek project to institutional investment funds and other investors at TD Securities' 15th annual Global Mining Conference in Toronto on Jan. 23, 2024.
• Niocorp will participate in the 2024 Motor, Drive Systems, and Magnetics Conference and Exhibition in Orlando, Fla., from Feb. 13 to 15, 2024.
• I will be presenting to our many European investors on April 20, 2024, at the SafeCapital Spring Meeting in Antwerp, Belgium.
• Niocorp will be presenting to the 72rd annual conference of the Colorado chapter of the Society for Mining, Metallurgy & Exploration (SME), to be held April 25 to 27, 2024.

Advancing the Elk Creek project

Successful demonstration of new process flow sheet

In 2023, our technical team, led by chief operating officer Scott Honan, completed metallurgical testing of our improved process flow sheet at our demonstration plant in Trois-Rivieres, Que. With that important effort behind us, we are now working to incorporate rare earths into our mineral reserve, complete the engineering required to support the new process design, update project capital and operating cost estimates, and produce other information required for publication of an updated feasibility study for the Elk Creek project. I expect that to be issued as early as possible in 2024, contingent upon raising the necessary funds to complete this work.

The process innovations developed by Mr. Honan and his team and the talented process engineers at L3 Process Innovation break new ground in the products we can make and how we make them. Fortunately, those innovations all utilize existing and proven technologies, which helps us to keep execution risk to a minimum. That is very important to financing institutions.

• Takeaway: While process demonstration work can be slow and frustrating, getting the technical aspects right at the outset is of paramount importance to projects such as ours. Niocorp does not take shortcuts when it comes to technical development. This philosophy can test one's patience, but my long experience in bringing projects such as this to fruition has shown me that it is the correct strategy. The investment we made in developing this new flow sheet and proving it out at a demonstration level was well worth it, in my view, given the potentially enormous benefits and additional momentum we expect it to bring to the Elk Creek project.

High-value new products now possible

Chief among the benefits are several new products that we have demonstrated the ability to make from ore that we expect to extract from the Elk Creek project:

1. Magnetic rare earths: As we reported in 2023, our plant showed that our new process can produce at demonstration scale magnetic rare earth products with commercial purities at recovery rates of 92 per cent or better. As anyone with experience in commercial rare earth production will tell you, this is considered a very high rate of recovery. I see it as a testament to both the processing system's design and to the deep rare earth processing experience of the Niocorp team. Both Mr. Honan and Rick Sixberry, our director of process development, spent years producing commercial rare earth products at the Mountain Pass rare earth facility. Mr. Honan ran the Mountain Pass facility at one point, and Mr. Sixberry spent 40 years there making rare earth products. Few Americans have the depth and hands-on experience in producing rare earths at commercial scale as Mr. Honan and Mr. Sixberry.

The magnetic rare earth oxides we might produce (neodymium, praseodymium, terbium and dysprosium) are enormously valuable because of their wide use in clean energy technologies such as electric and hybrid vehicles, wind turbines, high-efficiency electric motors, and other applications that save energy and avoid air emissions.

In particular, our potential to produce high-purity heavy rare earths such as dysprosium and terbium also sets the Elk Creek project apart from many other critical minerals plays. Terbium and dysprosium are used in high-strength rare earth permanent magnets that are crucial to the traction motor systems in the majority of electric vehicles today, yet global supply chains for these strategically critical elements are especially precarious today. Nearly all of the world's dysprosium and terbium is processed in China, and nearly all of the dysprosium and terbium processed in China is mined in war-torn regions of Myanmar. Such critical mineral supply chains represent enormously high risk for nations such as the U.S. that very much need these strategic materials.

• Takeaway: Coupled with what might be generated from potential greater production of both niobium and titanium per tonne of mined ore, the potential addition of rare earths could significantly shift the projected product revenue mix of the Elk Creek project and more evenly distribute revenue across our planned products. That would provide additional risk mitigation to investors. All of this awaits final validation in an updated feasibility study and is subject to our ability to obtain sufficient project financing to move the Elk Creek project to commercial production, but, again, I am anxious to release the details of our expanded planned product offering.

2. Higher niobium recovery with higher-purity niobium products

Our new and improved recovery process can achieve, at demonstration scale, a 90.7-per-cent rate of niobium recovery through the hydrometallurgical process. Overall recovery through the pyrometallurgical production of the commercial product ferroniobium is expected to be 86.7 per cent. Our previous approach to niobium production was able to achieve recovery rates, at demonstration scale, through the hydrometallurgical and pyrometallurgical processes of 86.8 per cent and 82.4 per cent, respectively. This points to the likelihood of higher niobium production levels from the same mining tonnage.

What is more, while we intend, when and if the Elk Creek project reaches the production stage, to convert the majority of our niobium reserve into commercial ferroniobium, which is used to strengthen steel, our new process can make, at demonstration scale, higher-purity niobium in the form of niobium chloride, which can readily be converted to high-purity niobium oxide (Nb2O5). This product is sold into many different markets, including superalloys, carbides, superconductors, electronic components, ceramics, gas and wind turbines, medical imaging, particle accelerators, space travel, and in the manufacture of high-performance and ultrasafe, ultrarapid rechargeable batteries for electric vehicles.

• Takeaway: While Niocorp has already contracted for sale up to 75 per cent of our production of niobium in the form of ferroniobium to two customers over the first 10 years of production, and the remaining 25 per cent is potentially available for sale as either ferroniobium or niobium oxide, Niocorp is now exploring the potential to secure offtake agreements for niobium oxide in addition to ferroniobium.

3. Higher titanium recovery with high-purity titanium products

Our demonstration plant also showed that we can potentially double our recovery of titanium from each tonne of ore mined, as well as produce, at demonstration scale, a purer form of titanium that may command a higher price than is assumed in our current feasibility study. The process can likely achieve an 83.7-per-cent rate of overall titanium recovery to final product, which compares with a 40.3-per-cent titanium recovery rate, at demonstration scale, in our previous process approach. Moreover, the titanium produced will be in the form of titanium tetrachloride (TiCl4), known in commercial markets as "tickle." It is worth noting that TiCl4 is a highly versatile form of titanium that can be used to make both titanium dioxide, used in paints and pigments, and titanium metal. And, when it comes to titanium metal, global markets are thirsty. Demand for titanium metal is forecasted to grow by 6.8 per cent compound annual growth rate between 2022 and 2030, driven primarily by increasing demand in defence and industrial segments. The Russia-Ukraine war has greatly stressed markets for titanium metal. Moreover, current titanium sponge production capacity is overwhelmingly centered today in China, Japan, Russia, Kazakhstan and a few other nations, while the last remaining titanium sponge plant in the U.S. closed in 2020.

• Takeaway: We have now turned the demonstration plant's attention to producing sample quantities of TiCl4 in response to multiple customer inquiries -- all of whom have expressed potential interest in purchasing substantial quantities of the TiCl4 we plan to make.

Geotechnical drilling campaign completed in 2023

In 2023, we completed an important geotechnical drilling campaign on our land in southeast Nebraska. A number of investors and local residents probably saw Mr. Honan and his team conducting this work in the second quarter. This work was done in advance of the proposed site preparation, grading, heavy construction and eventual foundation pours for the Elk Creek project that are expected to commence once sufficient financing is obtained. The drilling explored the glacial till geological layer, which comprises the first 30 metres or so of soil that covers much of southeast Nebraska.

This drilling campaign represents what is typically done prior to site preparation, including grading and foundation preparation. By investing now and getting this work behind us, we should be able to move that much more quickly to construction once we have sufficient financing.

Efforts to secure project financing continue to advance

Potential EXIM financing

Following our receipt of a letter of interest from EXIM in March, 2023, for up to $800-million in debt financing, we filed an application with EXIM in June, 2023, and have been vigorously pursuing this potential financing with EXIM.

EXIM has assigned a highly experienced team of loan officers and other finance professionals to review our application, and I have been very impressed with the professionalism and dedication of the EXIM staff. They are now in the process of engaging independent consultants to review the economic and technical aspects of the Elk Creek project. The company was informed that its application received approval by the first of three reviews by the EXIM transaction review committee on Oct. 2, 2023.

The chairperson of EXIM continues to publicly state the urgency of enabling more U.S.-based critical minerals production.

It is my goal to have the EXIM process reach a conclusion in 2024. Please keep in mind that there is no guarantee that EXIM will provide the debt financing.

• Takeaway: If EXIM agrees to provide up to $800-million in debt financing to the Elk Creek project, we hope that such an anchor investment would rapidly leverage the remaining financing needed to advance the Elk Creek project to commercial production.

Stellantis

In July, 2023, Niocorp and Stellantis signed a rare earth offtake term sheet, the objective of which is to enter into a definitive rare earth supply agreement and possible strategic investment in Niocorp by Stellantis to support Stellantis's commitment to build resilient supply chains and reach carbon net zero by 2038 and to help accelerate Niocorp's path to commercial production of magnetic rare earth oxides in the U.S.

As noted at the time of signing the term sheet, Stellantis's chief purchasing and supply chain officer, Maxime Picat, said: "Stellantis intends to lead the industry with the commitment to be carbon net zero by 2038 -- a goal that requires innovation and a complete redefinition of our sourcing strategies. By working with partners like Niocorp, we are taking important steps, with the aim of decarbonizing mobility and ensuring strategic supplies of raw materials necessary for the success of the company's global electrification plans highlighted in our Dare Forward 2030 strategy."

Niocorp's position as a potential U.S. supplier of multiple critical minerals needed for vehicle electrification offers Stellantis important optionality to secure supply chains and support its growth targets.

• Takeaway: Work by both teams is continuing toward final agreements in these matters, and Niocorp looks forward to supporting Stellantis in its carbon net zero by 2038 initiative.

Other debt and equity investors

As many of you have heard me reference publicly, a number of banks and investment funds have expressed interest in participating in the overall project financing for the Elk Creek project, and Niocorp remains in active discussions with these firms. In addition, the German government's Untied Loan program may also participate in our financing, depending upon how the debt financing packages are structured.

Phased commercialization of aluminum-scandium master alloy

In 2023, we launched an extremely exciting initiative designed to complement the Elk Creek project: phased commercialization of aluminum-scandium (Al-Sc) master alloy in the U.S. for commercial and defence applications. We launched this vertical integration program with the intent of producing a scandium-based product that would allow us to address a wider range of markets and capture higher margins.

Adding scandium to aluminum produces a much stronger alloy that reduces weight, improves corrosion resistance and allows for reliable welding operations. Al-Sc alloys have large emerging applications in automotive and mass transit systems, commercial aviation, space, and defence markets.

We established in 2023 a pilot-scale operation at a lab in Pennsylvania operated by Creative Engineers. The team has successfully produced two one-kilogram ingots of Al-Sc master alloy using a proprietary process developed by Nanoscale Powders LLC.

Subject to the receipt of sufficient financing, our current plan is to progress toward commercial-scale production of Al-Sc master alloy, prior to the onset of scandium oxide production at the Elk Creek project, if possible. We would use commercially obtained scandium at first, then switch to Nebraska-made scandium once the Elk Creek project is on-line. With about 100 tonnes/year of scandium oxide that could potentially be produced in Nebraska, that potentially positions Niocorp to operate as one of the world's largest producers of Al-Sc master alloy.

We will keep investors updated on the many other events and developments that we expect in 2024.

I hope you enjoy reviewing the progress we made in 2023 as much as the team and I enjoyed producing this impressive list. On behalf of the entire Niocorp family, here is wishing you and your family and loved ones a safe, bountiful and constructive 2024!

Best regards,

Mr. Smith

Chairman and CEO

Niocorp Developments

Qualified person

Mr. Honan, MSc, SME-RM, COO of Niocorp Developments, a qualified person as defined by National Instrument 43-101, has reviewed and approved the technical information and verified the data contained in this document.

We seek Safe Harbor.