NIOCORP DEVELOPMENTS LTD (NB)

ITEM 2. MANAGEMENT’S 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 Quarterly Report on Form 10-Q and the Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) for the year ended June 30, 2025 filed on September 11, 2025 (the “Annual Report on Form 10-K”), which have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”). The Company uses certain non-GAAP financial measures. For a detailed description of each of the non-GAAP measures used herein, please refer to the discussion under “—Use of Non-GAAP Financial Measures and Reconciliations.”

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” below.

All currency amounts are stated in thousands of U.S. dollars, except for share data, unless noted otherwise.

As used in this Quarterly Report on Form 10-Q, unless the context otherwise indicates, references to “we,” “our,” the “Company,” “NioCorp,” and “us” refer to NioCorp Developments Ltd. and its subsidiaries, collectively.

Note Regarding Forward-Looking Statements

This Quarterly Report on Form 10-Q and the exhibits attached hereto contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and “forward-looking information” within the meaning of applicable Canadian securities legislation (collectively, “forward-looking statements”). Such forward-looking statements concern our anticipated results and developments in the operations of the Company in future periods, planned exploration activities, the adequacy of the Company’s financial resources, and other events or conditions that may occur in the future.

Forward-looking statements have been based upon our current business and operating plans, as approved by the Board, and may include statements regarding, among other matters, the financial and business performance of NioCorp; NioCorp’s anticipated results and developments in the operations of NioCorp in future periods; 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 Company’s niobium, scandium, and titanium project (the “Elk Creek Project”) located in southeastern Nebraska; NioCorp’s ability to receive a final commitment of financing from the Export-Import Bank of the United States (“EXIM”); the estimated timing and capital costs of the Portal Project (as defined below); the estimated total upfront capital expenditure for the Elk Creek Project; NioCorp’s expectation and ability to produce niobium, scandium, and titanium and the potential to produce rare earth elements at the Elk Creek Project; NioCorp’s plans to produce and supply specific products and market demand for those products; NioCorp’s expectation that it will receive the full $10.0 million in reimbursement under the Project Sub-Agreement (the “DoD Agreement”) with Advanced Technology International, an entity acting on behalf of the Defense Industrial Base Consortium under the authority of the U.S. Department of Defense; the intended use of our cash balance as of March 31, 2026, the proceeds from the exercise of Common Share purchase warrants (“Warrants”) and the reimbursement payments pursuant to the DoD Agreement; the expected results of the previously announced drilling program at the Elk Creek Project (the "2025 Drilling Program"); the expectation that the results of the 2025 Drilling Program will be used to update the feasibility study for the Elk Creek Project; the Elk Creek Project’s ability to produce multiple critical metals; the Elk Creek Project’s projected ore production and mining operations over its expected mine life; the completion of technical and economic analyses on the potential addition of rare earth oxides to NioCorp’s planned product suite; statements with respect to the estimation of mineral resources and mineral reserves; the exercise of options to purchase additional land parcels; the execution of contracts with engineering, procurement and construction companies; the duration and anticipated benefits of the Rights Plan (as defined below); NioCorp’s ongoing evaluation of the impact of inflation, supply chain issues, tariffs, and geopolitical unrest on the Elk Creek Project’s economic model; and the creation of full-time and contract construction jobs over the construction period of the Elk Creek Project.

Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimates,” “potential,” “possible,” and similar expressions, or statements that events, conditions, or results “will,” “may,” “could,” or “should” (or the negative and grammatical variations of any of these terms) occur or be achieved. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives,

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assumptions, or future events or performance (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,” or “will” be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. Forward-looking statements reflect material expectations and assumptions, including, without limitation, expectations and assumptions relating to: NioCorp’s ability to receive sufficient project financing for the construction of the Elk Creek Project on acceptable terms, or at all; the future price of and demand for metals, including aluminum-scandium("Al-Sc") alloy; and the stability of the financial and capital markets. 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 requirement of significant additional capital; NioCorp’s ability to receive sufficient project financing for the construction of the Elk Creek Project on acceptable terms, or at all; NioCorp’s ability to achieve the required milestones and receive the full $10.0 million in reimbursement under the DoD Agreement; NioCorp’s ability to receive a final commitment of financing from EXIM or other debt financing or financial support on acceptable timelines, on acceptable terms, or at all; NioCorp’s ability to continue to meet Nasdaq listing standards; risks relating to the common shares, no par value, of the Company (“Common Shares”), including price volatility, lack of dividend payments and dilution or the perception of the likelihood of any of the foregoing; the extent to which NioCorp’s level of indebtedness and/or the terms contained in agreements governing NioCorp’s indebtedness, if any, or other agreements may impair NioCorp’s ability to obtain additional financing, on acceptable terms, or at all; covenants contained in agreements with NioCorp’s secured creditors that may affect its assets; NioCorp’s limited operating history; NioCorp’s history of losses; 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 “passive foreign investment company (“PFIC”) under the Internal Revenue Code of 1986, as amended (the “Code”); the potential that the 2023 business combination with GX Acquisition Corp. II 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; 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 products; current and future offtake agreements, joint ventures, and partnerships, including our ability to negotiate extensions to existing agreements or to enter into new agreements, on favorable terms or at all; NioCorp’s ability to attract qualified management; estimates of mineral resources and reserves; mineral exploration and production activities; feasibility study results; the results of metallurgical testing; the results of technological research; changes 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; legislative, political or economic developments, including changes in federal and/or state laws that may significantly affect the mining and scandium alloy industries; trade policies and tensions, including tariffs; inflationary pressures; 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, development, or scandium alloy production activities; management of the water balance at the Elk Creek Project site; 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; claims on the title to NioCorp’s properties; the infringement or loss of NioCorp's intellectual property rights; potential future litigation; and NioCorp’s lack of insurance covering all of NioCorp’s operations.

Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described herein. This list is not exhaustive of the factors that may affect any of the Company’s forward-looking statements. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking 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, as well as other factors des

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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The
following Management’s Discussion and Analysis (“MD&A”) provides information that management believes is
relevant to an assessment and understanding of the consolidated financial condition and results of operations of NioCorp and subsidiaries.
This item should be read in conjunction with our consolidated financial statements and the notes thereto included in this Annual
Report on Form 10-K.

Summary
of Consolidated Financial and Operating Performance

The
Company had no revenues from mining operations during the fiscal years presented below. Operating expenses incurred related primarily
to performing exploration and feasibility study related activities, as well as the activities necessary to support corporate and
shareholder duties.

The
net loss attributable to the Company increased to $17.4 million for fiscal year 2025 from $11.4 million for fiscal year 2024.
This increased net loss in fiscal year 2025 as compared to fiscal year 2024 is primarily due to the fiscal year 2025 recognition
of non-cash losses related to the valuation of the Earnout Share and Warrant liabilities, partially offset by lower interest
expense, financial instrument fair values, and operating expenses.

Results
of Operations

The
Company had no revenues from mining operations during the fiscal years presented below. Operating expenses incurred related primarily
to performing exploration and feasibility study related activities, and the activities necessary to support corporate and shareholder
duties, as detailed in the following table:

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Fiscal
Year 2025 as Compared to Fiscal Year 2024

Significant
items affecting operating expenses are noted below:

Employee-related
expenditures decreased in fiscal year 2025 as compared to fiscal year 2024 primarily due to a reduction in the number of Options
issued to employees and the impact of a lower stock price on the Black-Scholes modeling results.

Professional
fees decreased for fiscal year 2025 as compared to fiscal year 2024, primarily due to higher costs incurred in 2024 related
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 and increased review fees in connection
with the Company’s September 30, 2023 financial statements.

Exploration
expenditures increased for fiscal year 2025 as compared to 2024, as fiscal year 2025 costs include expenditures related to
a drilling program initiated by the Company in April 2025 designed to support the conversion of a portion of the Company’s
current Indicated Resources into Measured Resources and the subsequent conversion of a portion of current Probable Mineral Reserves
into Proven Mineral Reserves. Fiscal year 2024 costs included expenses associated with the third-party owned and operated Demonstration Plant, for which testwork was completed during the third quarter of fiscal year 2024.

Other
operating expenses decreased for fiscal year 2025 as compared to fiscal year 2024 primarily due to a decrease in director
and officer insurance expense, the timing of fully vested Options issued to board members and advisors, and declines in scandium
development initiatives and financial-related services, partially offset by the expense incurred in 2025 associated with a cybersecurity
incident that resulted in misdirected vendor payments.

Other
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 based on the results
of Monte Carlo financial modeling. Overall, the increased expense in fiscal year 2025 corresponds to an overall increase in our
share value during fiscal year 2025.

Change
in fair value of Warrant liability represents the change in fair value related to our liability-classified Warrant obligations.
The increase in expense during fiscal year 2025 is due primarily to the increase in the ending market value of our Common Shares
as of June 30, 2025.

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Change
in fair value of convertible notes represents the impact of the initial allocation of fair value to the April 2024 Notes (as
defined below), which are carried at fair value, as well as the impact of fair value adjustments through final payoff.

Interest
expense decreased in fiscal year 2025 as compared to fiscal year 2024 due to the impacts of convertible debenture interest
expense incurred in fiscal year 2024. This convertible debt instrument was paid off in early fiscal year 2025.

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.

Liquidity
and Capital Resources

We
have no revenue generating operations from which we can internally generate funds. To date, our ongoing operations have been financed
by the sale of our equity securities by way of public and private offerings, 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.

On
April 12, 2024, the Company issued and sold to Yorkville and Lind Global Fund II (“Lind II” and, together with Yorkville,
the “April 2024 Purchasers”), $8.0 million aggregate principal amount of unsecured notes (the “April 2024 Notes”),
pursuant to a securities purchase agreement, dated April 11, 2024, between the Company and each of the April 2024 Purchasers.
The Company also issued to the April 2024 Purchasers, in proportion to the aggregate principal amount of the April 2024 Notes
issued to each April 2024 Purchaser, Warrants to purchase up to 615,385 Common Shares. All remaining amounts due to Lind II ($176,000)
and Yorkville ($1.0 million) under the April 2024 Notes were repaid on January 6, 2025, and February 7, 2025, respectively.

On
September 11, 2024, the Company and Mark Smith entered into the Loan Agreement, by and between the Company and Mark Smith (the
“Smith Loan Agreement”), which provides for a $2.0 million non-revolving credit facility (the “Smith Loan”).
A total of $504,000 was subsequently drawn down, and subsequently the Company repaid $508,000, representing the balance of the
interest and principal outstanding under the Smith Loan, plus $41,000 related to the loan origination fees payable.

On
November 5, 2024, the Company closed an underwritten public offering (the “November 2024 Registered Offering”), pursuant
to the underwriting agreement, dated November 3, 2024, with Maxim, as underwriter, which consisted of 1,592,356 Common Shares,
1,672,090 Series A Warrants to purchase up to an additional 1,672,090 Common Shares and 836,045 Series B Warrants to purchase
up to 836,045 Common Shares.

On
November 13, 2024, the Company closed a non-brokered private placement (the “November 2024 Private Offering”) pursuant
to binding subscription agreements with certain accredited investors as part of a non-brokered private placement of 2,199,602
units of the Company (the “November 2024 Units”). Each November 2024 Unit consists of one Common Share, one Series
A Warrant to purchase up to an additional Common Share and one-half of one Series B Warrant to purchase up to one-half of one
Common Share.

On
January 31, 2025, the Company closed an underwritten public offering (the “January 2025 Offering”), pursuant to the
underwriting agreement, dated January 29, 2025, with Maxim, as underwriter, which consisted of 2,577,320 Common Shares, 2,577,320
Series A Warrants to purchase up to an additional 2,577,320 Common Shares and 1,288,660 Series B Warrants to purchase up to 1,288,660
Common Shares.

On
April 21, 2025, the Company closed an underwritten public offering (the “April 2025 Offering”), pursuant to an underwriting
agreement dated April 17, 2025, with Maxim, as underwriter, pursuant to which the Company issued and sold an aggregate of 8,015,812
Common Shares (or pre-funded Warrants in lieu thereof), which includes 323,504 Common Shares issued and sold pursuant to Maxim’s
partial exercise of its over-allotment option.

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The
combined gross proceeds from the November 2024 Registered Offering, the November 2024 Private Offering, the January 2025 Offering,
and the April 2025 Offering were approximately $31.8 million, before deducting underwriting discounts and offering expenses. In
addition, during fiscal year 2025, the Company issued an aggregate of 6,499,977 Common Shares under the Yorkville Equity Facility
Financing Agreement and through the exercise of Warrants by their holders, as a result of which, the Company received cash totaling
approximately $13.8 million. A portion of these proceeds were used for working capital and general corporate purposes, to repay
amounts outstanding on the Smith Loan, to repay the April 2024 Notes, and to advance efforts to launch construction of the Elk
Creek Project and move it to commercial operation.

As
of June 30, 2025, the Company had cash of $25.6 million and working capital of $24.8 million, compared to cash of $2.0 million
and a working capital deficit of $9.0 million on June 30, 2024.

We
expect that the Company will operate at a loss for the foreseeable future. The Company’s current planned cash needs are
approximately $40.0 million to $50.0 million for the next twelve months. In addition to outstanding accounts payable and short-term
liabilities, our planned expenditures over the next twelve months are expected to consist of expenditures relating to certain
advancements of the Elk Creek Project by NioCorp’s majority owned subsidiary, ECRC, corporate overhead costs, and estimated
costs related to securing financing necessary for advancement of the Elk Creek Project. As discussed below, if the Company were
able to obtain additional funding, the Company would be in a position to accelerate planned expenditures ahead of its current
schedule.

The
planned expenditures relating to the advancement of the Elk Creek Project over the next twelve months include, but are not
limited to, an updated resource and reserve estimate and associated mine plan and an updated capital cost estimate in
connection with the EXIM application proce

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