Commerce Resources Corp.'s Upper Fir Tantalum and Niobium Deposit Confirmed as a Large Indicated Resource, Blue River, B.C.

Highlights

  • AMEC has determined a base case Indicated mineral resource of 36.35 million tonnes containing 195 ppm (gpt) Ta2O5 and 1,700 ppm (gpt) Nb2O5. Base case Inferred mineral resources are 6.40 million tonnes containing 199 ppm (gpt) Ta2O5 and 1890 ppm (gpt) Nb2O5.
  • AMEC concludes that the 2009 work program has markedly improved the interpretation of the geology of the Upper Fir tantalum- and niobium-bearing carbonatite, which in turn has resulted in an increase in confidence and size of the deposit.
  • The selected base case resource model provides the foundation for the Preliminary Economic Assessment ("PEA"), which is ongoing under the direction of AMEC and which once completed, will provide the basis for a separate news release.

VANCOUVER, Feb. 2 /CNW/ - Commerce Resources Corp. (TSXv: CCE; FSE: D7H; OTCQX: CMRZF)  is pleased to announce that as part of the ongoing Preliminary Economic Assessment ("PEA"), AMEC has completed a new National Instrument 43-101 compliant resource estimate for the Upper Fir Tantalum-Niobium Deposit, at its Blue River Project in British Columbia. 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 90 km south of the town of Valemount.

AMEC used a total of 183 drill holes comprising 37,446 metres of HQ drill core and 8,218 sawn core samples to develop the mineral resource estimate. Most holes were at a nominal spacing of 50m with dips typically between -60 to sub-vertical. Indicated mineral resources total 36.35 million tonnes containing 195 ppm Ta2O5 and 1,700 ppm Nb2O5 and Inferred mineral resources total 6.40 million tonnes containing 199 ppm Ta2O5 and 1,890 ppm Nb2O5

Table 1: Blue River Project Estimated Mineral Resources. Effective Date 30 June, 2010. Tomasz Postolski, P.Eng, Qualified Person

                     
Confidence Category   Tonnes   Ta2O5
[ppm]
  Nb2O5
[ppm]
  ContainedTa2O5
[1000s of kg]
  ContainedNb2O5
[1000s of kg]
Indicated   36,350,000   195   1,700   7,090   61,650
Inferred   6,400,000   199   1,890   1,300   12,100
  1. Assumptions include US$317/kg Ta, US$46/kg Nb, 65.4% Ta2O5 recovery, 68.2% Nb2O5 recovery, US$32/tonne mining cost, US$17/tonne process and refining cost.  Mining losses = 0% and dilution = 0%.
  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 Ta and Nb values per block which is variable based on the location of blocks used in the mineral resource estimate. A block unit value cut-off ranged from $52 to $59.
  4. Discrepancies in contained oxide values are due to rounding.
  5. In situ contained oxide reported.

The mineral resource estimate is supported by a base case price assumption of US$317/kg Ta, which is significantly higher than historic average prices. Market analysts are in general agreement that current political and market conditions support the probability of sustained higher prices, but this may not occur.

Table 2 below 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 Tantalum Price: Effective Date 30 June, 2010, Tomasz Postolski, P.Eng, Qualified Person

                         
Ta price
[US$/kg]
  Confidence
Category
  Tonnes   Ta2O5
[ppm]
  Nb2O5
[ppm]
  ContainedTa2O5      
[1000s of kg]
  ContainedNb2O5     
[1000s of kg]
470   Indicated   51,130,000   188   1,410   9,610   72,300
    Inferred   8,100,000   192   1,700   1,600   13,800
                         
381   Indicated   44,430,000   192   1,530   8,530   68,020
    Inferred   7,300,000   196   1,780   1,400   13,000
                         
317   Indicated   36,350,000   195   1,700   7,090   61,650
    Inferred   6,400,000   199   1,890   1,300   12,100
                         
272   Indicated   29,990,000   197   1,850   5,910   55,480
    Inferred   5,500,000   201   2,010   1,100   11,100
                         
238   Indicated   25,130,000   197   2,000   4,950   50,240
    Inferred   4,900,000   202   2,110   1,000   10,400
  1. Ta price was varied and all other assumptions remain the same as base case.
  2. Base case is in bold.
  3. Mineral resources are amenable to underground mining methods and have been constrained using a "Stope Analyser".
  4. Discrepancies in contained oxide values are due to rounding.
  5. In situ contained oxide reported.

To assess reasonable prospects for economic extraction, AMEC considered the concept of mining the Blue River Deposit using variations of room and pillar methods under a conceptual scenario that considers mining and processing at a rate of 7,500 tonnes per day. Mining and economic parameters were adjusted based on AMEC's experience with analogous deposits and mining methods. Economic viability of the mineral resource can only be demonstrated by Pre-Feasibility and Feasibility Studies, and there is no assurance that the stated resources can be upgraded in confidence and converted to mineral reserves.  Further, since underground mining methods are envisioned (room and pillar or variants), 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.

AMEC has concluded that the 2009 work program resulted in a marked improvement in the interpretation of the geology of the Upper Fir tantalum- and niobium-bearing carbonatite, which in turn has resulted in an increase in confidence and size of the deposit.

The resource comprises a series of sill-like carbonatite bodies with up to 91.2m in estimated cumulated true thickness. 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.

Preliminary results from 54 holes, totalling 12,949m of HQ drill core, drilled in 2010 were provided to AMEC for review after completion of the resource estimation. Only lithological information from these holes was available. Assays for these holes are expected in the second quarter 2011. The results from 2010 drilling will be used as a basis for an updated resource estimate once received. The Company's focus is on the Blue River PEA currently being completed under the direction of AMEC.

The Upper Fir Deposit would be mined underground using room and pillar with backfill in most areas. A mineral processing method using a standard-grind flotation process to make a concentrate of ferro-columbite-pyrochlore is assumed for the Upper Fir material. The proposed process is 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 industrially.

The Blue River Project covers 105,373 hectares (1,000 km2). Power transmission lines, rail, and paved and gravel roads are all adjacent or within the property boundaries. Transalta Corp.'s 18 MW Bone Creek run-of-river hydroelectricity project is under construction near the project and is expected to be in production in 2011.

Resource Classification and Methodology

Mineral resources were classified in accordance with the 2005 CIM Definition Standards for Mineral Resources and Mineral Reserves, incorporated by reference into NI 43-101. The resource model was constructed inside carbonatite using 183 diamond drill holes and an average specific gravity of 3.01 assigned to all blocks in carbonatite. Based on a grade drill hole spacing study, AMEC established the following criteria for classification of mineral resources at Blue River with eighty percent of the carbonatite blocks classified as Indicated, and fourteen percent classified as Inferred.

Indicated mineral resources are those where blocks contain at least two holes, where the average distance between the closest composites is less than 50m and the distance to the second closest composite is less than 70m. Inferred mineral resources are those where blocks contain at least one hole and the distance to the closest composite is less than 110m.

Assay data were statistically analyzed and as a result Ta2O5 was capped at 1,000 ppm and Nb2O5 was capped at 10,000 ppm. Capped drill core assays were composited down the hole to a fixed length of 2.5m honouring geological boundaries. The coefficients of grade variation are low and support the use of linear grade interpolation methods such as kriging or inverse distance methods.

Ta2O5 and Nb2O5 were estimated using ordinary kriging (OK) and inverse distance to power 3 (ID3) interpolation methods for the carbonatite domains. Additional Nb2O5 mineralization, which immediately surrounds the carbonatite domains, is not included as there is insufficient data for interpolation of the unit. Nearest Neighbour (NN) validation models for Ta2O5 and Nb2O5 were prepared with the same searches used for the OK and the ID3 models. A comparison of global means of capped and uncapped OK and ID3 models showed the amount of metal removed by capping is minor. Swath plot checks using only indicated blocks show there are no local biases for estimated Ta2O5 or Nb2O5 present in either OK or ID3 models. The ID3 model was chosen for tabulating the Blue River mineral resources as the OK model is considered too smooth.

Market Study

Commerce has prepared analyses of the markets which outline demands by producers and end users of tantalum and niobium. The tantalum analysis was prepared by a tantalum market expert, although he is not independent of Commerce. His analysis reflects the general consensus of other analysts regarding the tantalum market expressed in publicly available information. The niobium analysis was prepared by an independent niobium expert and also reflects the general consensus of analysts, in publicly-available information, for the niobium market.

As the project is still at an early evaluation stage, Commerce has not initiated requests from potential buyers for expression of interests in the proposed Blue River products and has not negotiated any purchase or off-take agreements.

End Products and Base Case Metal Pricing

The processes proposed for the Blue River Project will produce 99.9% pure tantalum and niobium oxides. These products are generally sold under contract and the prices are carefully guarded to provide competitive advantages.

Tantalum

Tantalum is commonly quoted in two separate forms:

  • Ta2O5 in tantalite concentrate: a non-refined, tantalum-bearing concentrate of variable composition and trace element content
  • Tantalum metal scrap (99.9% pure Ta): this form of tantalum product receives a premium price in the market relative to tantalite concentrate

Over the last six years,  tantalite concentrate prices ranged from US$75/kg contained Ta2O5 to US$100/kg contained Ta2O5 (US$34/lb to US$45/lb). In the same period tantalum metal scrap prices ranged from US$110/kg Ta to US$180/kg Ta metal (US$50/lb to US$82/lb).

In 2010, prices rose dramatically in response to numerous conditions including reduced production, increased concerns about conflict-tantalum production in Africa, depletion of known strategic stockpiles and curtailed exports from China. In mid-October 2010 the price for Ta2O5 in tantalite concentrate was US$195/kg (US$89/lb) and for tantalum metal scrap was US$280/kg (US$127/lb).

The higher price for tantalum metal scrap compared to the price for Ta2O5 in concentrate is considered a proxy to the added value Commerce should recognize by refining the Blue River concentrate to high purity Ta2O5.

In AMEC's opinion, the base case price for tantalum metal scrap is reasonable for constraining mineral resources based on recent market conditions, but notes it is significantly higher than historical prices. There is a risk that using current price assumptions at, or near the peak of the commodity cycle may overstate the long-term value of the Mineral Resources.

Niobium

Niobium generally trades as Nb metal or ferroalloy and the price has remained relatively constant at US$44.08/kg (US$20/lb) Nb over the last several years.  A base case price of US$46/kg Nb (US$21/lb) metal was assumed. 

AMEC's Comment on Price Assumptions

The cut-off grade assumptions at US$317/kg (US$144/lb) tantalum metal and US$46/kg (US$21/lb) niobium metal are slightly more optimistic than current price assumptions of US$280/kg (US$127/lb) tantalum metal price and US$44/kg (US$20/lb) Nb metal price. This allows for the capture of mineral resources that would likely be excluded in reserve estimation.

2011 Work Program

Based on project-related activities and cash on hand, Commerce is fully funded to complete all studies recommended in 2011. For this year, Commerce intends to further expand the knowledge of the deposit with additional closer-spaced diamond drilling.  A program of advanced metallurgical testing and more detailed engineering is also planned. Details will follow based on recommendations arising from AMEC's PEA.

"The AMEC Resource Estimate for the Upper Fir Tantalum-Niobium Deposit reported today is further confirmation of Commerce's belief that we are in the process of building a very important long-term source of ethical tantalum," said Dave Hodge, Commerce's President. "Results remain pending for additional drilling completed in 2010, and we are eagerly awaiting the results of AMEC's PEA, which is based on drilling to the end of the 2009 field season.  All indications are that we will be able to enhance even further the quality of the resource. Of necessity, the impending PEA is based on conservative pricing. However, recent developments in global tantalum and niobium markets suggest significant near term upside".

NI 43-101 Disclosure

Albert Chong, Senior Geologist, P.Geo and Tomasz Postolski, Senior Geostatistician, P.Eng are the employees of AMEC Americas Limited and are Qualified Persons responsible for the mineral resource estimate above. Mr. Chong completed a site visit during the 11-16th of July 2010, and Mr. Chong and Mr. Postolski have read and approved the contents of this news release with respect to the resource estimate.  Jody Dahrouge, B.Sc., P.Geol., 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 describing the resource estimation and providing details of the 2009 drilling and sampling as well as the associated QAQC review 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 is also exploring its Eldor Project in northern Quebec and the Carbo Project in northern British Columbia.

On Behalf of the Board of Directors

COMMERCE RESOURCES CORP.

David Hodge
President and Director
Tel: 604 484 2700
TF: 866.484.2700
Email: info@commerceresources.com
Web: http://www.commerceresources.com


Forward-Looking Statements

This news release may contain forward-looking information and 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 information is based on the opinions and estimates of management and its consultants at the date the information is given. It is 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. Information is based on reasonable assumptions which include but are not limited to those regarding actual costs for mining and processing and their impact on the cut off grade established, actual capital costs, forecasts of mine production rates, the timing and content of upcoming work programs, geological interpretations, potential process methods and mineral recoveries, the availability of markets for the products produced, market pricing for the products produced, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. 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 further information:

For more information please visit the corporate website at http://www.commerceresources.com or contact Investor Relations at 1.866.484.2700 or info@commerceresources.com.  

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