by Greg Klein | March 14, 2014
A fresh infusion of cash moves Commerce Resources’ (TSXV:CCE) Ashram deposit closer to pre-feasibility. On March 14 the company announced completion of a $2.54-million private placement first announced five days earlier. The placement consists of 8.42 million flow-through units at $0.23 and 3.01 million units at $0.20. Each flow-through unit consists of one flow-through share and one-half non-flow-through warrant, with each whole warrant exercisable at $0.35 for 18 months. Each unit consists of one share and one-half warrant.
Proceeds go to the company’s Ashram rare earth deposit, part of the 19,000-hectare Eldor property in Quebec’s Labrador Trough, and for general working capital.
One of the world’s largest REE projects, Ashram currently has pre-feasibility studies underway. Last year’s drilling focused on upgrading Ashram’s 2012 resource estimate as well as expanding the deposit. Results released in January showed “several unexpected outcomes, including the expansion of the deposit to the northwest and the encountering of mineralized REE material at surface and within the pit, where waste rock had been expected and modelled in the PEA. Additionally, high-grade zones were encountered and all holes were collared in mineralized material ranging from 0.94% to 2.48% TREO.”
Ashram’s 2012 preliminary economic assessment used a 10% discount rate to project a pre-tax, pre-finance net present value of $2.32 billion and a 44% internal rate of return for a 4,000-tonne-per-day open pit with a 25-year mine life. The capex, including contingency, came to $763 million with payback in 2.25 years.
Using a cutoff of 1.25% total rare earth oxide, the resource estimate shows 29.3 million tonnes measured and indicated, and another 219.8 million tonnes inferred averaging 1.88% TREO. More recent drilling shows “the deposit remains open to the north, south, at depth, and is not fully constrained to the east and west,” the company states.
Commerce says the project’s REEs “occur in simple and well-understood mineralogy, being primarily in the mineral monazite and to a lesser extent in bastnaesite and xenotime. These minerals dominate the currently known commercial extraction processes for rare earths.”
Meanwhile prospecting and sampling on Eldor’s Miranna area found a boulder train with niobium and tantalum, the latter showing grades among the world’s highest, Commerce stated. The company also sees exploration potential for phosphate, copper and nickel.
In southeastern British Columbia Commerce holds the Upper Fir tantalum-niobium deposit, which reached PEA in 2011.
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