Commerce Resources Corp. Announces Mineral Resource Update for Upper Fir Tantalum and Niobium Deposit, Blue River, British Columbia
-- Study results show Indicated Mineral Resources totalling 48.4 million tonnes at 197 ppm Ta2O5 and 1,610 ppm Nb2O5andInferred Mineral Resources totalling 5.4 million tonnes at 191 ppm Ta2O5 and 1,760 ppm Nb2O5. -- Changes result from improved geological interpretation of the mineralized carbonatite host, the grade distribution found in 2011 infill diamond drilling and the increase in Ta metal price over time. -- Approximately 90% of the tantalum and niobium reside in Indicated resource category. -- AMEC's "Blue River Tantalum-Niobium Project, British Columbia, Canada, NI 43-101 Technical Report on Mineral Resource Update", with an effective date of June 21, 2013, will be filed for public disclosure (www.SEDAR.com) within 45 days following this news release. -- With the significant milestone of this resource update successfully achieved, AMEC has recommended a $13.9M program to support a pre-feasibility level study on the Upper Fir deposit.
VANCOUVER, July 12, 2013 /PRNewswire/ – Commerce Resources Corp. (TSXv: CCE; FSE: D7H; OTCQX: CMRZF) has delineated a significant Ta- and
Nb-rich carbonatite deposit near the community of Blue River in central
eastern British Columbia, and is pleased to announce the completion of
a National Instrument (NI) 43-101 compliant Mineral Resource update
that incorporates drilling and other exploration results to the end of
2012 for the Upper Fir Tantalum-Niobium Deposit. A technical report
prepared by independent consultants, AMEC Americas Limited (“AMEC”)
supports the findings of the Mineral Resource update and also includes
summaries from a Preliminary Economic Assessment (“PEA”) study
completed on the Blue River Project and reported in an NI 43-101
compliant Technical Report with an effective date of September 29, 2011
(2011 PEA- see Commerce news release dated November 3, 2011). The
results from the 2011 PEA have not changed in terms of their outcomes
as their underlying assumptions remain reasonable.
AMEC constructed the updated carbonatite hosted resource model using a
total of 271 holes comprising 59,110m of HQ diameter core and 15,512
samples. Most holes were at a nominal spacing of 50m with dips
typically between -60 degrees to sub-vertical. The composite body
extends more than 1,450m in a north-south direction and as much as 800m
in an east-west direction. Tantalum and niobium are contained in the
minerals ferrocolumbite and pyrochlore.
The 2011 PEA was developed assuming a sub-level open stoping method with
no backfill and no pillar recovery using a processing rate of 7,500
tonnes per day for the Mineral Resource estimation and conceptual
design of an underground mine for the Blue River Project. A mineral
processing method using a standard-grind flotation process to make a
concentrate of ferrocolumbite-pyrochlore was assumed for the Upper Fir
material using a proposed process similar to that being used
commercially at Iamgold’s Niobec Mine in Quebec. The concentrate would
be further processed to produce marketable separate oxides of tantalum
and niobium. The proposed processes are mature and already in use
Mineral Resource Statement
The Mineral Resource update is summarized in Table 1.
Table 1: Blue River Project Estimated Mineral Resource: Effective Date
21 June 2013, Tomasz Postolski, P.Eng, Qualified Person
Contained Contained Ta2O5 Nb2O5 Ta price Confidence Ta2O5 Nb2O5 [1000s of [1000s of [US$/kg] Category Tonnes [ppm] [ppm] kg] kg] 381 Indicated 48,410,000 197 1,610 9,560 77,810 Inferred 5,400,000 191 1,760 1,000 9,600
1. Assumptions include commodity prices of US$381/kg Ta, US$46/kg Nb, process recoveries of 65.4% for Ta2O5 and 68.2% for Nb2O5, US$27/tonne bulk mining cost and US$48/tonne selective mining cost, US$15/tonne process and refining cost, US$3/tonne G&A cost. 2. Mineral resources are amenable to underground mining methods and have been constrained using a "Stope Analyzer". 3. An economic cut-off was based on the estimated operating costs assuming either the bulk or selective mining method. The block unit value cut-off was either US$45/t (bulk) or US$66/t (selective). 4. No allowances were made for mining losses or external dilution; planned internal dilution within the minimum stope size is included. 5. In situ contained oxide reported. Discrepancies in contained oxide values are due to rounding.
This Mineral Resource estimate is constrained by a base case price
assumption of US$381/kg Ta, representing a 20% increase over the Ta(2)O(5 )metal price used to constrain previous Blue River Mineral Resource
estimates. The US$381/kg base case price is approximately equal to the
current price for Ta metal scrap and represents approximately a $100/kg
premium on tantalite concentrate. The higher price for Ta metal scrap
compared to the price or Ta(2)O(5) in concentrate is considered to be a proxy to the added value Commerce
could recognize by refining a Blue River concentrate into a high purity
Ta(2)O(5). Nb metal prices remain unchanged from 2010. The operating cost
assumptions used to support the 2013 Mineral Resources reflect an
average escalation of 12% over costs assumptions established for the
project in 2010.
Table 2 shows the sensitivity of the Blue River Mineral Resources to
tantalum metal price. Sensitivities are based on a fluctuating metal
price but could also represent fluctuating mining or processing costs
or metallurgical recoveries or a combination of all of these factors.
Table 2: Blue River Project Sensitivity of Estimated Mineral Resources
to Ta Price: Effective Date 21 June 2013 Tomasz Postolski, P.Eng. Ta
price was varied and all other assumptions remained the same.
Contained Contained Ta2O5 Nb2O5 Ta price Confidence Ta2O5 Nb2O5 [1000s of [1000s of [US$/kg] Category Tonnes [ppm] [ppm] kg] kg] 564 Indicated 56,570,000 191 1,460 10,800 82,350 Inferred 6,600,000 187 1,670 1,200 11,000 470 Indicated 54,400,000 193 1,490 10,500 81,250 Inferred 6,200,000 189 1,690 1,200 10,500 381 Indicated 48,410,000 197 1,610 9,560 77,810 Inferred 5,400,000 191 1,760 1,000 9,600 317 Indicated 41,189,000 201 1,760 8,280 72,670 Inferred 4,600,000 194 1,870 900 8,500 272 Indicated 35,138,000 203 1,910 7,130 67,240 Inferred 3,800,000 196 1,990 700 7,600 238 Indicated 29,916,000 204 2,030 6,110 60,740 Inferred 2,800,000 198 2,060 600 5,800
Notes: Base case is in bold.
Since underground mining methods are envisioned, the mining recovery may
vary from 65% to 85% depending on the success in which pillars can be
mined on retreat and/or fill is utilized.
Resource Classification and Methodology
The Mineral Resource is classified in accordance with the 2010 Canadian
Institute of Mining, Metallurgy, and Petroleum (CIM) Definition
Standards for Mineral Resources and Mineral Reserves, whose definitions
are incorporated by reference into NI 43-101.
Geological interpretations were provided by Commerce to AMEC in the form
of electronic three dimensional (3D) solid wireframes. Capped drill
core assays were composited down the hole to a fixed length of 2.5m
respecting lithological boundaries. Exploratory data analysis (EDA)
was performed on the composites. The coefficients of variation are low
and support the use of linear grade interpolation methods such as
inverse distance methods. Blocks within the model were coded by
lithology solids. Specific gravity values were assigned by
lithological unit. Ta(2)O(5) and Nb(2)O(5) grades were estimated in the carbonatite using an inverse distance to
the power of 3 (ID3) interpolation method. A four-pass interpolation
approach was used with each successive pass having greater search
distances. The block model grades were validated by visual inspection
comparing composites to block grades on-screen, declustered global
statistics checks, local biases checks using swath plots, and finally
model selectivity checks.
The criteria are the same as those used in the June 22, 2012, Mineral
Resource. The current model also incorporates the most recent drill
hole spacing studies completed by AMEC, and composites data statistics
and variography which show little change from those used in the prior
Mineral Resource. Resource classification is restricted to Indicated or
Inferred, based on the following:
-- Confidence limits in drill hole spacing studies; -- Concerns over analytical precision and provisional accuracy for the sample dataset from 2005 to 2008; and -- Required metallurgical test work on the final stage of the proposed metallurgical process is still ongoing to support proof-of-concept.
To assess reasonable prospects for economic extraction AMEC assumed that
the Upper Fir deposit would be mined utilizing self-supported,
underground bulk mining methods under a conceptual scenario that
considers mining and processing at a rate of 7,500 tonnes per day.
2011 PEA Outcomes and the Mineral Resource Update
Commerce completed a Preliminary Economic Assessment of the Blue River
Project in 2011 (2011 PEA). The findings of the 2011 PEA are
summarized in an NI 43-101 compliant Technical Report prepared by AMEC
and dated September 29, 2011. The present 2013 Mineral Resource
estimate includes greater tonnes but has similar grades compared with
the Mineral Resource estimate used to support the 2011 PEA.
The 2011 PEA conceptual mine plan is based on a subset of the 2013
Mineral Resource estimate that remains essentially unchanged since
2011. Capital and operating costs likely have increased since 2011 but
AMEC is assuming that any increase in costs have been offset by the
increase in the Ta price over the same period. Overall AMEC concluded
the 2011 Preliminary Economic Analysis (2011 PEA) outcomes remain
reasonable and valid in 2013.
The PEA was prepared to define an overall proof of concept for further
development of the Blue River Project. It indicated that the deposit
can be developed economically as an underground mine and recommended
future studies to support an eventual pre-feasibility level assessment
of the project. The PEA included geological and mineral resource
modeling, preliminary mine planning, a description of metallurgical
test work and process design, a summary of environmental baseline work
to date, and estimates for capital and operating costs. As well, it
determined the economics to develop the project as an underground mine
with process facility, and included an estimate of the direct cash
costs to produce tantalum contained in a technical grade oxide
product. Readers are encouraged to review the entire PEA Technical
Report which is available for viewing at www.sedar.com. A link is also available on the Company web site at www.commerceresources.com.
In preparing the 2013 Mineral Resource update AMEC reviewed the 2011
PEA. AMEC considers that the following work and outcomes of the 2011
PEA remain reasonable as any cost escalation is considered to be offset
by increases in long term Ta price:
-- Underground mining at 7,500 tpd using bulk mining with a variation of sublevel open stoping. -- Total estimated capital cost to design and build is CAD$379M. -- Operating costs over the life of mine are estimated at CAD$38.44/t milled. -- Cash costs of tantalum metal of CAD$24.91/kg contained in a technical grade chloride product (after credit for the niobium contribution). -- Production estimated at 2.7M t/a of mineral resources, over 9.3 years. -- Estimated Internal rate of return: 9.1% (before tax). If the project is developed it will be subject to taxes which will result in cash flows and an NPV less than reported. -- Estimated Net present value: CAD$18.5 million at 8% discount rate (before tax). -- Estimated Payback: 6.3 years. -- Average diluted grade in the conceptual mine plan to the mill: 185 ppm Ta2O5 and 1,591 ppm Nb2O5. -- Mineral processing using a standard grind-flotation procedure to produce a concentrate of ferrocolumbite-pyrochlore. -- Metallurgical testing indicates that a mineral concentrate assaying about 30% combined Nb-Ta pentoxide with a Ta-Nb recovery of 65-70% is possible. -- Proposed product: High purity Ta and Nb chloride products containing 2,400 metric tonnes and 18,610 metric tonnes of the respective metals over the life of the mine and that are suitable for several markets. -- Conceptual Mine Life: 9.3 years based upon the mineral resources (effective date 20 September 2011) defined for the PEA using information to the end of 2009 drilling. -- NPV Sensitivity: The Upper Fir deposit is most sensitive to changes in exchange rate, commodity prices, and mining costs.
Results of the Mineral Resource update and the PEA represent
forward-looking information. The PEA is preliminary in nature and it
includes Inferred mineral resources that are considered too speculative
geologically to have the economic considerations applied to them that
would enable them to be categorized as mineral reserves, and there is
no certainty that the PEA will be realized. Mineral resources are not
mineral reserves as they do not have demonstrated economic viability.
Opportunities Arising from the Mineral Resource Update
Though a 25 Mt life-of-mine plan prepared in 2011 for the PEA remains
valid, the 2013 Mineral Resource is larger than the 2011 Mineral
Resource used to prepare the plan. This shows potential to extend the
life-of-mine plan, though its impact on the economics of the Upper Fir
deposit has not yet been examined. Further opportunities exist that may
allow additional improvements to the economics of the project including
optimizing the mine plan by mining higher grade zones earlier in the
mine life and optimizing the mine layout to minimize development costs,
as well as preparation of a geotechnical model to examine opportunities
to increase the size of the stopes.
AMEC’s Recommendations in Support of Prefeasibility Study
AMEC’s recommended work program is expected to take two years to
complete and will include the budgeted items recommended in Table 3
Table 3: Summary of Proposed Work to Support a Pre-Feasibility Study (in
_____________________________________________________________________ |Task |Estimated |Comment | | |Budget | | |___________________________|___________|_____________________________| |Database | $50,000|Prepare standards for | | | |accuracy monitoring | |___________________________|___________|_____________________________| |Local Anisotropic Kriging: | $40,000|Improve local grade estimate | |mineral resource estimate | | | |___________________________|___________|_____________________________| |Drilling | $5,460,000|125 Infill, step-out, | | | |hydrological, and | | | |condemnation | | | |holes, totaling 27,300m | |___________________________|___________|_____________________________| |Mineral Resource Update | $400,000|Geologic interpretation and | | | |grade estimation | |___________________________|___________|_____________________________| |Mining studies | $750,000|Geotechnical and hydrological| | | |models, mining | | | |method, access, and | | | |ventilation | |___________________________|___________|_____________________________| |Metallurgical test work | $1,550,000|Flotation, filtration, and | | | |hardness test work. | | | |Preparation | | | |of concentrate. | | | |Aluminothermic and | | | |Chlorination test | | | |work. | |___________________________|___________|_____________________________| |Co-disposal studies | $400,000|Geotechnical/hydrological | | | |design | |___________________________|___________|_____________________________| |Environmental | $400,000|Extend baseline studies to | | | |local infrastructure | |___________________________|___________|_____________________________| |Waste Rock Characterization| $350,000|Static and kinetic | | | |geochemical testing | |___________________________|___________|_____________________________| |Marketing Studies | $100,000|Examine marketing | | | |requirements | |___________________________|___________|_____________________________| |Project Management | $2,400,000| | |___________________________|___________|_____________________________| |Sub-total |$11,900,000| | |___________________________|___________|_____________________________| |Contingency | $2,000,000|@ 20% | |___________________________|___________|_____________________________| |TOTAL |$13,900,000|Pre-Feasibility Study | |___________________________|___________|_____________________________|
Comparison of Mineral Resources
The inclusion of the results from the 2011 drill campaign into the
updated Upper Fir model has not resulted in any significant changes to
the interpreted size or geometry, but has resulted in increased local
confidence in the geometry and grade.
End Products and Base Case Metal Pricing
The processes proposed for the Upper Fir deposit will produce 99.9% pure
tantalum and niobium oxides, generally known as technical grade oxide
products. These products are generally sold under contract and the
prices are typically kept confidential between buyer and seller to
preserve competitive advantages. Tantalum and niobium price assumptions
used to support the 2013 Mineral Resources are based on publically
available and subscription service reports.
Tantalum is commonly quoted as two separate products:
-- Ta2O5in tantalite concentrate: a non-refined, tantalum-bearing concentrate of variable composition and trace element content; and -- tantalum metal scrap (99.9% pure Ta): this form of tantalum product receives a premium price in the market relative to tantalite concentrate.
Between January 2010 and January 2013, tantalite concentrate prices have
risen from US$88/kg to US$285/kg. In the same period Ta metal scrap
prices have risen from US$145/kg to US$385/kg. Prices rose dramatically
in 2010 in response to changing market conditions including reduced
production, increased concerns about tantalum mined from conflict
regions (i.e. conflict tantalum), depletion of known strategic
stockpiles, and curtailed exports from China. These market conditions
remain in 2013.
Nb generally trades as Nb metal, or ferroalloy, and the price has
remained relatively constant at US$50/kg Nb metal over the last several
years. A base case price of US$46/kg Nb metal was assumed for
consistency with previous estimates.
AMEC’s Comment on Resource Update Price Assumptions
Tantalum is not a freely traded commodity and information regarding Ta
and Nb market prices is not as readily available as it is for base and
precious metals; Ta and Nb are typically sold on a contract basis. The
Ta and Nb price assumptions used to support the Mineral Resource
estimate and the preliminary economic analysis are based on current
market trends which are considered volatile. AMEC concludes that the
price assumptions used reflect current market conditions but
acknowledges there is a risk these price assumptions may not reflect
long term prices.
Comments of Commerce President
“We are again extremely pleased with the results of this study which
represents a major milestone in the progress to develop the Upper Fir.
The resource reported today is further confirmation of Commerce’s
belief that we are in the process of building a very important
long-term source of conflict free and ethical tantalum which could
potentially supply 10% of the current world’s market for the long
term.” said Dave Hodge, Commerce’s President. “Results of all the
technical work completed to date give solid evidence of the quality of
the mineral resource. Commerce continues to be active in its search
for a strategic partner who will work with us to define appropriate
project financing options to support the recommended pre-feasibility
The Blue River Project is located near the village of Blue River, which
is approximately 250 km north of the city of Kamloops and approximately
90km south of the town of Valemount. The Project comprises 105,373
hectares (1,000 km(2)) of mineral claims. Power transmission lines, rail, and paved and
gravel roads are all adjacent to, or within the property boundaries.
Transalta Corp.’s 18 MW Bone Creek run-of-river hydroelectricity
project near the project was commissioned in June 2011.
NI 43-101 Disclosure
The following Qualified Persons for the report are AMEC employees, based
out of Vancouver: Mr. Greg Kulla, P.Geo., Principal Geologist,; Mr.
Tomasz Postolski, P.Eng., Senior Geostatistician,; Mr. Ramon Mendoza
Reyes, P.Eng., Principal Mining Engineer,; Mr. Tony Lipiec, P.Eng.,
Director, Process Engineering, , and Mr. Behrang Omidvar, P.Eng;
Financial Analyst. All of the Qualified Persons have read and approved
the contents of this news release that are extracted or summarized from
the “Blue River Tantalum-Niobium Project, British Columbia, Canada, NI
43-101 Technical Report on Mineral Resource Update” with an effective
date of June 21, 2012.
Ms. Jenna Hardy, M.Sc., P.Geo., Commerce Resources Corp., is a Qualified
Person as defined by National Instrument 43-101, read and approved the
disclosure of the technical information in this news release with
respect to the exploration. A Technical Report compliant with National
Instrument 43-101 standards summarizing the Mineral Resource Update
will be filed on SEDAR (www.sedar.com) within 45 days.
About Commerce Resources Corp.
Commerce Resources Corp. is an exploration and development company with
a particular focus on tantalum, niobium and rare metal deposits with
potential for economic grades and large tonnages. The Company is
specifically focused on the development of its Upper Fir Tantalum and
Niobium Deposit in British Columbia and its Ashram Rare Earth Element
Project in Quebec.
On Behalf of the Board of Directors
COMMERCE RESOURCES CORP.
President and Director
Neither TSX Venture Exchange nor its Regulation Services Provider (as
that term is defined in the policies of the TSX Venture Exchange)
accepts responsibility for the adequacy or accuracy of this release.
This news release contains forward-looking information which is subject
to a variety of risks and uncertainties and other factors that could
cause actual events or results to differ from those projected in the
forward-looking statements. Forward looking statements in this press
release include that we will have positive cash flow for a potential
7,500 tonnes per day underground operation at the Upper Fir property
with cash costs of CAD$24.91 per kilogram of tantalum metal; that we
will have opportunities for optimization in the geology and mining
areas and enhance the quality of the resource; that prices for our
potential products are conservatively estimated and may trend upwards;
that our property has Indicated Mineral Resources totalling 48.4
million tonnes at 197 ppm Ta(2)O(5) and 1,610 ppm Nb(2)O(5). Inferred Mineral Resources total 5.4 million tonnes at 191 ppm Ta(2)O(5) and 1,760 ppm Nb(2)O(5; )that total estimated capital cost to design and build a mine is CAD$379M
and other assumptions listed will be accurate; that operating costs
over the life of mine are estimated at CAD$38.44/t milled; and the
projected method of mining and its results will be accurate. These
forward-looking statements are based on the opinions and estimates of
management and its consultants at the date the information is
disseminated. They are subject to a variety of risks and uncertainties
and other factors that could cause actual events or results to differ
materially from those projected in the forward-looking information. Risks that could change or prevent these statements from coming to
fruition include changing costs for mining and processing and their
impact on the cut off value established; increased capital costs;
changing forecasts of mine production rates; the timing and content of
upcoming work programs; geological interpretations based on drilling
that may change with more detailed information; potential process
methods and mineral recoveries assumption based on limited test work
and by comparison to what are considered analogous deposits that with
further test work may not be comparable; the availability of labour,
equipment and markets for the products produced; market pricing for the
products produced; and despite the current expected viability of the
project, conditions changing such that the minerals on our property
cannot be economically mined, or that the required permits to build and
operate the envisaged mine can be obtained. The forward-looking
information contained herein is given as of the date hereof and the
Company assumes no responsibility to update or revise such information
to reflect new events or circumstances, except as required by law.
For a description of the data verification procedures, analytical and
testing procedures and a description of the identification of any known
legal, political, environmental, or other risks that could materially
affect the potential development of the mineral resources, see “Blue
River Ta-Nb Project NI 43-101 Technical Report on Mineral Resource
Update”, by AMEC with effective date 21 June-2013 that is filed on
SOURCE Commerce Resources Corp.