Tuesday 25th October 2016

Resource Clips

The Contender

Commerce Releases Quebec REE PEA, Moves to Prefeas

Robert Owen

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The bubble burst with such force that it blew away dozens of fledgling projects. That’s what happened to rare earths in 2011. Since then, the sector has seen a race to production which further separates the contenders from the pretenders. Last week’s preliminary economic assessment from Commerce Resources TSXV:CCE puts the Ashram Deposit at its northeast Quebec Eldor Project “in an advantageous position,” says Chris Grove, Corporate Communications.

Grove continues, “We have been rapidly advancing exploration at the project to be able to demonstrate this resource. Now, with this PEA, we have shown the robust economics of the Ashram Deposit, and we are excited about the next stages of development of it.”

Commerce Releases Quebec REE PEA, Moves to Prefeas

Commerce's Eldor Project: Mineralization from surface.

The study focuses solely on Eldor’s Ashram Deposit, projecting a 4,000-tonne-per-day open pit with a waste-to-ore strip ratio of 0.19:1, a pretax/prefinance payback period of 2.25 years, a CAPEX of $763 million (including a 25% contingency amount), a pretax/prefinance internal rate of return (IRR) of 44% and a pretax/prefinance net present value (NPV) of $2.32 billion (at a 10% discount rate).

Operating costs come to $95.20 per tonne treated or around $7.91 per kilogram of rare earth oxide produced. Production would average 16,850 tonnes REO per year over a 25-year mine life.

Some 3,538 tonnes of that annual total represent the five critical elements of the 17 rare earths: 2,870 tonnes neodymium oxide, 96 tonnes europium oxide, 26 tonnes terbium oxide, 106 tonnes dysprosium oxide and 440 tonnes yttrium oxide. That quintet is crucial to manufacturing phosphors and the high-powered permanent magnets prevalent in electric and hybrid drive systems.

Ashram’s March 2012 resource estimate results from 45 holes totalling 15,692 metres. The measured category comprises 1.59 million tonnes grading 1.77 total rare earth oxides (comprising 1.6% light rare earth oxides, 0.089% middle rare earth oxides and 0.085% heavy rare earth oxides). The indicated category comprises 27.67 million tonnes grading 1.9% TREO (comprising 1.77% LREO, 0.073% MREO and 0.056% HREO). The inferred category comprises 219.8 million tonnes grading 1.88% TREO (comprising 1.77% LREO, 0.068% MREO and 0.045% HREO). The estimate uses a cutoff of 1.25% TREO.

The medium and heavy rare-earths zone starts at surface and shows a resource of 6.55 million tonnes grading 1.63% TREO measured and indicated and 2.79 million tonnes grading 1.57% inferred.

Ashram’s mineralization extends about 700 metres along strike, over 500 metres across and over 600 metres at depth, remaining open at depth and on three sides.

“One of the most significant things about the deposit is that the rare-earths occur in well-understood mineralogy, being primarily in the minerals monazite, bastnaesite and xenotime,” Grove says. “Those three minerals have all been commercially processed before and are processed now. We will continue to advance our metallurgical investigations and look forward to the next set of results.”

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