Saturday 3rd December 2016

Resource Clips


On the road to rare earths

Secutor Capital Management updates Commerce Resources’ two-pronged progress on the Ashram REE deposit

by Greg Klein

Secutor Capital Management updates Commerce Resources’ two-pronged progress on the Ashram REE deposit

A simplified flowsheet outlines Commerce Resources’ model to produce a rare earth concentrate.

 

While there’s nothing simple about rare earths, the challenges aren’t insurmountable to the right geology and expertise. With the Ashram deposit in northern Quebec, Commerce Resources TSXV:CCE continues to make progress on two fronts—resource delineation and metallurgy. Now working towards pre-feasibility, Ashram could, if it meets all requirements, potentially become “one of the world’s largest REE-producing mines,” according to a February 18 analyst update from Secutor Capital Management.

Recent news from Commerce shows the company’s two-pronged progress. A campaign of at least 4,000 metres began earlier this month, focusing on infill drilling. With a mini-pilot plant that started up last week, Commerce hopes to confirm previous bench scale testing and produce a concentrate for third-party processors and potential end users.

Secutor Capital Management updates Commerce Resources’ two-pronged progress on the Ashram REE deposit

Commerce Resources began winter drilling earlier this month,
followed by start-up of the project’s mini-pilot plant.

The deposit already boasts a resource using a cutoff of 1.25% total rare earth oxide to estimate measured and indicated categories totalling 29.3 million tonnes averaging 1.9% TREO. The inferred category brings another 219.8 million tonnes averaging 1.88% TREO. Through delineation drilling, the company hopes to increase the M&I numbers prior to a reserve estimate coinciding with the pre-feas.

As the 2012 preliminary economic assessment stated, the extent of five critical elements—neodymium, europium, terbium, dysprosium and yttrium—is “unusual in carbonatite deposits and especially those of such tonnage and grade.”

The resource, based on 45 holes totalling 15,692 metres, traced Ashram “over 700 metres along strike, over a width of 500 metres, to a depth of 600 metres, [remaining] open to the north, south and to depth,” Secutor analyst Maria Kalbarczyk points out.

Only 15% of that resource was factored into the PEA, which used a 10% discount rate to outline an open pit operation with a 25-year lifespan. The pre-tax, pre-finance net present value came to $2.32 billion, with a 44% internal rate of return. A $763-million capex included contingency, with payback estimated at 2.25 years.

“Importantly, the project’s mineralogy is simple (relative to other REE deposits) due to the presence of the minerals monazite, bastnaesite and xenotime, which dominate commercial processing in the REE space,” explains Kalbarczyk. “Consequently, Commerce should be able to use standard processing techniques for Ashram, with bench scale and pilot scale testing thus far demonstrating that it can be done.”

She notes the company made metallurgical strides last year confirming “a mineral processing flowsheet that included a grinding circuit, a flotation circuit, a weak hydrochloric acid (HCl) leach to remove carbonate and wet high-intensity magnetic separation (WHIMS) to remove fluorite. The resultant mineral concentrate assayed 43.6% total rare earth oxide with recoveries of 70.7%.”

Importantly, the project’s mineralogy is simple (relative to other REE deposits) due to the presence of the minerals monazite, bastnaesite and xenotime, which dominate commercial processing in the REE space.—Maria Kalbarczyk,
Secutor Capital Management

Because the high-grade TREO surpasses 40%, the results could allow Commerce “to achieve much lower processing costs than many other projects,” Kalbarczyk states. Meanwhile additional optimization—potentially including even higher grades and a recovery boost above 90%—could further improve the project’s economics.

The mini-pilot plant now in operation marks “the next step to substantiate the company’s flowsheet and the viability of its rare earth concentrate products.”

Commerce also plans to study the economic potential of fluorite, a byproduct of the WHIMS stage that “may be marketable without any further cleaning [while] any upgrading required is likely to be very low-cost,” Kalbarczyk relates.

By August or September the company hopes to produce around 3.5 kilograms of marketable rare earth carbonate concentrate and rare earth chloride concentrate products “to demonstrate the viability of its products to third party processors and potential end users, as well as its versatility,” Kalbarczyk adds.

In November the company retained Deloitte Global Metals & Mining Advisory Group to identify and evaluate possible processing partnerships, joint ventures and offtake arrangements.

Secutor acted as exclusive finder in Commerce private placements that raised $8.5 million late last year.

Commerce also holds the Upper Fir tantalum-niobium deposit, part of the company’s Blue River property in southeastern British Columbia, which reached PEA in 2011 and a resource update in 2013.

Download the Secutor Capital Management analyst update.

Read about rare earths in Canada.

Disclaimer: Commerce Resources Corp is a client of OnPage Media Corp, the publisher of ResourceClips.com. The principals of OnPage Media may hold shares in Commerce Resources.


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