Tuesday 12th November 2019

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Posts tagged ‘drc’

Towards a critical resource

June 13th, 2019

Saville Resources exceeds historic high grades for niobium-tantalum in Quebec

by Greg Klein

The project’s first drill campaign in nine years poses a big question: Why was this the project’s first drill campaign in nine years?

Saville Resources/Commerce Resources report best-yet niobium hole from Quebec critical minerals project

Saville president Mike Hodge examines
core at the Niobium Claim Group.

Even in the face of highly encouraging historic niobium-tantalum results, this program’s first hole exceeded expectations. More near-surface high grades and wide widths followed, culminating in a fourth hole that surpassed them all. Now Saville Resources TSXV:SRE looks forward to more drilling to build an inferred resource on the Niobium Claim Group in northern Quebec’s Labrador Trough.

But why the nine-year hiatus? The answer can be illustrated by Commerce Resources’ (TSXV:CCE) Ashram rare earths deposit, two kilometres away. Moving that project towards pre-feasibility took precedence, even when the company found strong niobium-tantalum intercepts on another part of its Eldor property. To give these other critical minerals their due, Commerce and Saville signed an agreement last year allowing the latter company to earn 75% of the 1,223-hectare niobium claims.

Additional high-grade boulder samples renewed interest in a number of prospective areas but Saville’s initial drill program in spring 2019 targeted Mallard, the most advanced zone with 17 historic holes totalling 4,328 metres. The new program added five holes (one hole was lost) and 1,049 metres.

“We were confident that we could improve on the historic drill results and we did that,” notes Saville president Mike Hodge.

Near-surface highlights from the best hole showed 0.8% Nb2O5 over 31.5 metres, 0.79% over 37 metres, 0.67% over 19.95 metres and 0.5% over 33.5 metres. Eleven individual samples from that hole exceeded 1%, with one sample reaching as high as 1.68% over 1.5 metres. (True widths were unknown.) Tantalum and phosphate also brought strong numbers.

A 50-metre step-out east of another of the campaign’s successful holes, 50 metres southeast of a second and 200 metres southeast of a third, EC19-174A was also proximal to impressive historic results.

Saville Resources exceeds historic high grades for niobium-tantalum in Quebec

In just a few of the recent highlights, however, EC19-173 featured 0.66% Nb2O5 over 14.5 metres. EC19-171 hit 0.7% over 38.28 metres, including 1.1% over 5.41 metres. EC19-172 reached 0.62% over 19 metres.

Among tantalum grades were 274 ppm Ta2O5 over 100.8 metres from EC19-172, and 267 ppm over 26 metres from EC19-171.

The step-outs extend Mallard’s strike 100 metres southeast and also suggest a possible northern extension towards the project’s Miranna and Spoke targets, as yet undrilled.

That’s despite very high-grade boulder samples from Miranna showing 2.75%, 4.24%, 4.3% and an exceptional 5.93% Nb2O5.

“These are still untested targets which we believe could have significantly higher grades than Mallard,” says Hodge. “But my first goal would be an inferred near-surface resource in the Mallard area.”

Contributing to that would be historic data, which includes intervals of 0.82% Nb2O5 over 21.9 metres, 0.9% over 4.8 metres and 1.09% over 5.8 metres.

In all, the Niobium Claim Group underwent 41 historic holes for 8,175 metres, with all field work since 2008 conducted by Dahrouge Geological Consulting. Saville has so far exceeded its first-year spending commitment of $750,000 out of a five-year, $5-million exploration agenda that would earn 75% of the project from Commerce.

But if Miranna’s 5.93% Nb2O5 sample looks outstanding, another boulder collected west of the project’s Northwest area soared up to 16.1%, also showing 7,540 ppm Ta2O5.

“That was the highest, but there were plenty in the 3% to 6% niobium range,” Hodge emphasizes.

Saville Resources exceeds historic high grades for niobium-tantalum in Quebec

With overlapping boulder trains on the property, “there are a few locations they could be coming from,” he adds. “But the likelihood of it coming from the Spoke or Miranna areas would be the highest probability.”

Other areas of interest include the Northwest zone, northwest of Miranna. Location of 11 historic holes totalling 2,257 metres, its results included 0.61% Nb2O5 over 12 metres.

South of Mallard, the Star Trench area has four historic holes for 664 metres, with results including 1.5% Nb2O5 and 1,810 ppm Ta2O5 over 0.52 metres, and 1.69% Nb2O5 and 2,220 ppm Ta2O5 over 0.31 metres.

Niobium and tantalum both rank on the U.S. list of 35 critical minerals. Heightened concern has brought concerted American efforts to develop reliable sources and create supply chains domestically and with allied countries. In early June the U.S. unveiled its Energy Resource Governance Initiative to work with allies as part of the president’s critical minerals strategy announced a few days earlier.

Imports provide America’s total supply of both niobium and tantalum. Niobium, used for alloys and super-alloys in jet engines, rockets and other manufactures, comes to the U.S. mostly from one company in Brazil. According to 2018 figures from the U.S. Geological Survey, Brazil mined 88.2% of global supply, while Canada extracted another 10.3%.

Tantalum finds widespread use in electronics as well as super-alloys for jet engine components. USGS numbers from last year attribute 39.5% of global supply to the Democratic Republic of Congo, 27.8% to Rwanda, 8.3% to Nigeria and 6.7% to China. Apart from security of supply, concerns about conflict minerals result from troubling conditions and murky supply routes in the DRC and Rwanda.

Meanwhile Hodge wants to get back to the field. “We made a great first step in expanding on what we had,” he says. “All of these holes ended in a mineralized zone. The reason we stopped them there was to start a near-surface inferred resource. There’s carbonatite with mineralization in niobium, tantalum and phosphate open in all directions, so the results definitely call for more drilling.”

See more highlights from the Niobium Claim Group’s spring 2019 program.

DRC on the brink

January 3rd, 2019

The Congo’s increasing instability heightens critical minerals concern

by Greg Klein

Update: In what’s been called the DRC’s first peaceful transfer of power since 1960, Felix Tshisekedi was sworn in as president on January 24. That follows a controversial election in which two parts of the country had voting delayed until March and supporters of candidate Martin Fayulu accused the electoral commission of rigging the results in favour of Tshisekedi, who they say struck a pact with outgoing president Joseph Kabila. Catholic church observers had earlier disputed the outcome and Fayulu asked the Constitutional Court to order a recount. “The court, made up of nine judges, is considered by the opposition to be friendly to Kabila, and Fayulu has said he is not confident that it will rule in his favour,” Al Jazeera reported.

 

This is the place that inspired the term “crimes against humanity.” As a timely new book points out, American writer George Washington Williams coined that phrase in 1890 after witnessing the cruel rapaciousness of Belgian King Leopold II’s rubber plantations in the country now known as the Democratic Republic of Congo. After rubber, the land and its people were exploited for ivory, copper, uranium, diamonds, oil, ivory, timber, gold and—of increasing concern for Westerners remote from the humanitarian plight—cobalt, tin, tungsten and tantalum. Controversy over recent elections now threatens the DRC with even greater unrest, possibly full-scale war.

The Congo’s increasing instability heightens critical minerals concern

The country of 85 million people typically changes governments through coup, rebellion or sham elections. Outgoing president Joseph Kabila ruled unconstitutionally since December 2016, when his mandate ended. He belatedly scheduled an election for 2017, then postponed it to last December 23 before pushing that date back a week. The December 30 vote took place under chaotic conditions and with about 1.25 million voters excluded until March, a decision rationalized by the Ebola epidemic in the northeast and violence in a western city.

The epidemic marks the second-worst Ebola outbreak in history, the DRC’s tenth since 1976 and the country’s second this year. Although the government delayed regional voting on short notice, the health ministry officially recognized the current epidemic on August 1.

Responsible for hundreds of deaths so far, this outbreak takes place amid violence targeting aid workers as well as the local population. Like other parts of the country, the region has dozens of military groups fighting government forces for control, and each other over ethnic rivalries and natural resources. The resources are often mined with forced labour to fund more bloodshed.

With no say from two areas that reportedly support the opposition, a new president could take office by January 18. Already, incumbent and opposition parties have both claimed victory.

The Congo’s increasing instability heightens critical minerals concern

Voting in two regions has been delayed
until after the new president takes office.
(Map: U.S. Central Intelligence Agency)

Kabila chose Emmanuel Ramazani Shadary as his successor candidate but didn’t rule out a future bid to regain the president’s office himself.

Election controversy contributed to additional violent protests in a month that had already experienced over a hundred deaths through ethnic warfare as well as battles between police and protesters. Yet that casualty toll isn’t high by DRC standards.

Published just weeks before the election, Congo Stories by John Prendergast and Fidel Bafilemba relates a harrowing story of a country the size of Western Europe that’s fabulously rich in minerals but desperately poor thanks to home-grown kleptocracies and foreign opportunists. Forced labour, war and atrocities provide a deeply disturbing backdrop to the story of conflict minerals.

According to 2017 numbers from the U.S. Geological Survey, the DRC supplied about 58% of global cobalt, 34.5% of tin and 28.5% of tantalum. The U.S. has labelled all three as critical metals. Tin and tantalum, along with tungsten and gold, are currently the DRC’s chief conflict metals, Prendergast and Bafilemba note. In addition to Congo tantalum, the world got 30% of its supply from DRC neighbour Rwanda, another source of conflict minerals.

Prendergast and Bafilemba outline the horror of the 1990s Rwandan Tutsi-Hutu bloodshed pouring into the Congo, making the country the flashpoint of two African wars that involved up to 10 nations and 30 local militias. During that time armies turned “mass rape, child soldier recruitment, and village burnings into routine practice.”

For soldiers controlling vast swatches of mineral-rich turf, rising prices for gold and the 3Ts (tantalum, tungsten and tin) provided an opportunity “too lucrative to ignore.” Brutal mining and export operations drew in “war criminals, militias, smugglers, merchants, military officers, and government officials,” Prendergast and Bafilemba write. “Beyond the war zones, the networks involved mining corporations, front companies, traffickers, banks, arms dealers, and others in the international system that benefit from theft and money laundering.”

DRC leaders did well too. “Mobutu Sese Seko, who ruled Congo from 1965 to 1997, is seen as the ‘inventor of the modern kleptocracy, or government by theft,’” Prendergast and Bafilemba state. “At the time of our writing in mid-2018, President Joseph Kabila is perfecting the kleptocratic arts.”

The Congo’s increasing instability heightens critical minerals concern

Westerners might be even more disturbed to learn of other beneficiaries: Consumers “who are usually completely unaware that our purchases of cell phones, computers, jewelry, video games, cameras, cars, and so many other products are helping fuel violence halfway around the world, not comprehending or appreciating the fact that our standard of living and modern conveniences are in some ways made possible and less expensive by the suffering of others.”

Not all DRC mines, even the artisanal operations, are considered conflict sources. But increasing instability could threaten legitimate supply, even the operations of major companies.

The example of Glencore subsidiary Katanga Mining TSX:KAT, furthermore, shows at least one major failing to rise above the country’s endemic problems. In mid-December Katanga and its officers agreed to pay the Ontario Securities Commission a settlement, penalties and costs totalling $36.25 million for a number of infractions between 2012 and 2017.

Katanga admitted to overstating copper production and inventories, and also failing to disclose the material risk of DRC corruption. That included “the nature and extent of Katanga’s reliance on individuals and entities associated with Dan Gertler, Gertler’s close relationship with Joseph Kabila, the president of the DRC, and allegations of Gertler’s possible involvement in corrupt activities in the DRC.”

In December 2017 the U.S. government imposed sanctions on Gertler, a member of a prominent Israeli diamond merchant family, describing him as a “billionaire who has amassed his fortune through hundreds of millions of dollars’ worth of opaque and corrupt mining and oil deals” in the DRC.

“As a result, between 2010 and 2012 alone, the DRC reportedly lost over $1.36 billion in revenues from the underpricing of mining assets that were sold to offshore companies linked to Gertler.”

Just one day before imposing sanctions, U.S. President Donald Trump signed an executive order calling for a “federal strategy to ensure secure and reliable supplies of critical minerals.” Approaches to be considered include amassing more geoscientific data, developing alternatives to critical minerals, recycling and reprocessing, as well as “options for accessing and developing critical minerals through investment and trade with our allies and partners.”

Unofficial DRC election results could arrive by January 6. Official standings are due January 15, with the new president scheduled to take office three days later. Should the Congo see a peaceful change of government, that would be the DRC’s first such event since the country gained independence in 1960.

 

January 7 update: The DRC’s electoral commission asked for patience as interim voting results, expected on January 6, were delayed. Internet and text-messaging services as well as two TV outlets remain out of service, having been shut down since the December 30 election ostensibly to prevent the spread of false results. On January 4 the U.S. sent 80 troops into nearby Gabon in readiness to move into the DRC should post-election violence threaten American diplomatic personnel and property. The United Nations reported that violence in the western DRC city of Yumbi over the last month has driven about 16,000 refugees across the border into the Republic of Congo, also known as Congo-Brazzaville.

Updated: DRC’s increasing instability heightens critical minerals concern

December 31st, 2018

This story has been updated, expanded and moved here.

Digital addictions reach new dimensions in British Columbia

September 27th, 2018

by Greg Klein | September 27, 2018

Maybe this represents a distinctly West Coast weirdness inapplicable to the real world. If not and the trend grows, however, the engagement diamond trade looks doomed, as does procreation. But while waiting for our species to die out, we should be heartened by increased demand for rare earths, tantalum and other necessities of the electronic age.

Digital addictions reach new dimensions in British Columbia

B.C. has long been liberal on issues of sexual preference.

A BC Hydro study found its customers devote an average of 4.7 hours a day, 33 hours a week and 132 hours a month—about a third of their waking time—with the electronic love of their lives, smartphones and tablets. So strong is the passion for smartphones that it can take precedence over human relationships.

“Over a quarter of British Columbians aged 25 to 54 would rather give up seeing their spouse or partner for a day than give up their smartphone or tablet for 24 hours,” the provincial utility reports. “This jumps to one-third for those aged 55 to 64.”

Nor does the preference preclude intimacy. “One-fifth of British Columbians admit to sleeping with their smartphone in bed—and 70% of those aged 18 to 24 at least occasionally sleep with their device.”

Not surprisingly, then, nearly a third of the province between 18 and 24 would give up home heating on a cold winter day rather than their smartphone. Same thing for a day’s pay in the 18-to-34 age bracket.

Maybe most startling of all, “two-thirds of British Columbians would be willing to forgo their morning coffee for two days than their smartphone or tablet for the same time frame.”

Although the BC Hydro report focuses on the implications of electronic devices for electricity consumption, there’s no mention of even greater demand from electric vehicles.

A separate subject, of course, concerns supply of the materials that make up electronic devices. Last year the U.S. Geological Survey broke down the smartphone’s ingredients to demonstrate society’s dependency on wide-ranging and often insecure supply chains. Among them are rare earths from China and tantalum from Rwanda and the Democratic Republic of Congo, both sources of conflict metals. Heightened supply concern has brought an increasing American government focus on critical minerals, while the potential effects of a U.S.-China trade war threaten to exacerbate the situation.

Streamers turn to cobalt as Vale extends Voisey’s Bay nickel operations

June 11th, 2018

by Greg Klein | June 11, 2018

It was a day of big moves for energy minerals as China bought into Ivanhoe, Vale lengthened Voisey’s and streaming companies went after the Labrador nickel mine’s cobalt.

On June 11 Robert Friedland announced CITIC Metal would pay $723 million for a 19.9% interest in Ivanhoe Mines TSX:IVN, surpassing the boss’ own 17% stake to make the Chinese state-owned company Ivanhoe’s largest single shareholder. Another $78 million might also materialize, should China’s Zijin Mining Group decide to exercise its anti-dilution rights to increase its current 9.9% piece of Ivanhoe.

Streamers turn to cobalt as Vale extends Voisey’s Bay nickel operations

At peak production, Voisey’s underground operations are expected to
ship about 45,000 tonnes of nickel concentrate annually to Vale’s
processing plant at Long Harbour, Newfoundland.

Proceeds would help develop the flagship Kamoa-Kakula copper-cobalt mine in the Democratic Republic of Congo and the Platreef platinum-palladium-nickel-copper-gold mine in South Africa, as well as upgrade the DRC’s historic Kipushi zinc-copper-silver-germanium mine. Ivanhoe and Zijin each hold a 39.6% share in the Kamoa-Kakula joint venture.

Even bigger news came from St. John’s, where Newfoundland and Labrador Premier Dwight Ball joined Vale NYSE:VALE brass to herald the company’s decision to extend Voisey’s Bay operations by building an underground mine.

The announcement marked the 16th anniversary of Vale’s original decision to put Voisey (a Friedland company discovery) into production. Mining began in 2005, producing about $15 billion worth of nickel, copper and cobalt so far. Open pit operations were expected to end by 2022. Although a 2013 decision to go ahead with underground development was confirmed in 2015, the commitment seemed uncertain as nickel prices fell. That changed dramatically over the last 12 months.

With construction beginning this summer, nearly $2 billion in new investment should have underground operations running by April 2021, adding at least 15 years to Voisey’s life. The company estimates 16,000 person-years of employment during five years of construction, followed by 1,700 jobs at the underground mine and Long Harbour processing plant, with 2,135 person-years in indirect and induced employment annually.

Nickel’s 75% price improvement over the last year must have prodded Vale’s decision. But streaming companies were quick to go after Voisey’s cobalt. In separate deals Wheaton Precious Metals TSX:WPM and Cobalt 27 Capital TSXV:KBLT have agreed to buy a total of 75% of the mine’s cobalt beginning in 2021, paying US$390 million and US$300 million respectively. They foresee an average 2.6 million pounds of cobalt per year for the first 10 years, with a life-of-mine average of 2.4 million pounds annually.

Both companies attribute cobalt’s attraction to clean energy demand and a decided lack of DRC-style jurisdictional risk. But Vale also emphasizes nickel’s promise as a battery metal. Last month spokesperson Robert Morris told Metal Bulletin that nickel demand for EVs could rise 10-fold by 2025, reaching 350,000 to 500,000 tonnes.

Total nickel demand currently sits at slightly more than two million tonnes, Morris said. New supply would call for price increases well above the record levels set this year, he added.

Inmates caught tunnelling below prison were miners, not escapees

May 8th, 2018

by Greg Klein | May 8, 2018

Illicit diamonds and metals, often from conflict sources, plague the Democratic Republic of Congo’s mineral-rich reputation. But in a new twist on illegal mining, authorities have discovered a covert diamond operation run by prisoners right underneath their prison. And while the country’s notorious conflict operations often use forced labour, this mine was popular enough with its workers to retain some of them after their sentences finished.

Inmates caught tunnelling below prison were miners, not escapees

According to a UN report, the DRC’s Osio Prison was
on its way to “becoming a model of self-sustainability.”
(Photo: UN Stabilization Mission in the
Democratic Republic of Congo)

The mine was discovered under the Osio Prison in the country’s north, DRC radio Okapi reported. A raid found over 30 people, including a prison guard, working underground or toiling in their cells at mining-related tasks.

Some prisoners had refused to leave the institution after finishing their sentences. Non-prisoners built temporary homes nearby to join the operation.

Miners said they extracted and sold gems weighing between half and three-quarters of a carat.

The prison guard or a police officer involved was sentenced to 15 days, Okapi added. Others were expelled from the site.

A 2011 United Nations report described Osio as a “high-security prison that houses 191 inmates, including 30 sentenced to capital punishment, 18 to life and 143 to prison terms ranging from three to 20 years.” The UN stated the prison’s agricultural and stock-raising projects had put it “on path to becoming a model of self-sustainability.”

Some companies that have recently run afoul of the DRC government include Glencore, its majority-held Katanga Mining TSX:KAT, AngloGold Ashanti NYSE:AU, Ivanhoe Mines TSX:IVN and Rangold Resources. Among the issues are a new mining code and tax structure, along with increased national ownership.

By far the world’s largest supplier of cobalt and a major source of copper along with diamonds, zinc, tin and gold, the DRC faces political instability and possible civil war after President Joseph Kabila refused to step down when his term ended in November 2016.

Proven provenance

April 20th, 2018

B.C. tantalum-niobium enhance Commerce Resources’ essential metals portfolio

by Greg Klein

Not just inadequate reserves but dubious origins threaten security of supply for strategic commodities. A prime example is niobium, a largely single-source product from CBMM in Brazil that gives one company and one country enormous potential power. Tantalum raises further concerns as it passes through shadowy supply lines that could obscure conflict sources. Both metals appear on the recent U.S. draft list of 35 critical minerals. And both appear in substantial quantities in one east-central British Columbia deposit.

That brings additional interest to Commerce Resources TSXV:CCE, best-known for its Ashram rare earths deposit in northern Quebec. While that project moves towards pre-feasibility, the company’s Blue River property in B.C. offers advantageous resources, metallurgy, infrastructure and economics for the rare metals age, says company president Chris Grove.

Industry has noticed, evident in the inquiries he’s received from end-users.

“We’re very excited about the new interest in Blue River,” he says. “Companies are looking at the provenance of these commodities and the new executive order signed by President Trump focuses on the origin of these critical commodities, so I think there’s a lot of opportunity to be seen for Blue River.”

The property’s Upper Fir deposit boasts a resource effective February 2015 based on 271 holes totalling 59,100 metres:

  • indicated: 48.41 million tonnes averaging 197 ppm Ta2O5 and 1,610 ppm Nb2O5 for 9,560 tonnes Ta2O5 and 77,810 tonnes Nb2O5

  • inferred: 5.4 million tonnes averaging 191 ppm Ta2O5 and 1,760 ppm Nb2O5 for 1,000 tonnes Ta2O5 and 9,600 tonnes Nb2O5

At this stage, processing looks good. Tantalum and niobium “occur within the minerals pyrochlore and ferrocolumbite and are amenable to conventional flotation and proven refining processes with estimated recoveries of 65% to 70%,” the 43-101 stated. “The industrial processes proposed for the production of high-quality tantalum and niobium products from the concentrates have not been tested using material from the Blue River project but are known processes that are not expected to be difficult to develop for the project.”

Tantalum and niobium enhance Commerce Resources’ essential metals portfolio

Those qualities alone encourage optimism for production costs, Grove points out. But a more recent development suggests even greater potential savings to both capex and opex. In February the company announced successful processing through a patented method called the Krupin Process. That followed months of work on a 1,300-kilogram sample of Blue River material at the Estonian lab of Alexander Krupin. An expert in tantalum and niobium recovery, his CV shows more than 35 years’ experience, including over 15 years processing high-grade concentrates of those two metals.

But it took another expert to confirm the results. To that end Commerce dispatched chairperson Axel Hoppe to Krupin’s lab. Formerly president of the Tantalum-Niobium International Study Center and a senior manager at H.C. Starck, a global producer of tantalum and niobium products, Hoppe “confirmed a very significant new development in processing that should save significantly on costs,” Grove says.

As a result, Commerce is now working on a definitive agreement to incorporate the Krupin Process at Blue River and also acquire worldwide rights to the method.

Covering 105,373 hectares, the property sits about 250 highway kilometres north of Kamloops, with access from another four klicks of gravel road. CN rail tracks and a parallel high-voltage transmission line cross the property’s western side, while a 20 MW run-of-river hydro plant operates adjacent to Blue River.

With niobium in a location like that, Blue River has attracted “huge interest from the steel sector,” Grove says. As electronics manufacturers take a closer look at some of the Democratic Republic of Congo mines that supply their cobalt, tantalum’s due for similar scrutiny, he adds.

Meanwhile, highly impressive niobium-tantalum assays from Commerce’s Quebec property have spawned an early-stage exploration project. Samples have graded as high as 4.24%, 4.3% and even 5.93% Nb2O5, as well as 1,040 ppm, 1,060 ppm and 1,220 ppm Ta2O5. The exceptional grades prompted Saville Resources TSXV:SRE to sign a 75% earn-in for the Niobium Claim Group on the Eldor property that also hosts Commerce’s advanced-stage Ashram rare earths deposit. Saville now has a 43-101 technical report underway. Dependent on TSXV approval of the deal and subsequent funding, the company plans drilling this year.

Interestingly it was Saville president Mike Hodge who staked the Blue River claims, after Dahrouge Geological Consulting brought the property to the attention of Commerce. Now a former Dahrouge geologist currently with the B.C. Geological Survey plans a public site visit to Blue River. Alexei Rukhlov will co-lead the June 22-24 field trip, an event open to participants of Resources for Future Generations 2018. Click here for more info.

Read more about Commerce Resources.

Read more about Saville Resources.

Critical Quebec commodities

January 11th, 2018

Saville Resources moves into Commerce Resources’ niobium-tantalum target

by Greg Klein

A rare metal find on a property hosting a rare earths deposit becomes a project of its own under a new agreement between two companies. With a 75% earn-in, Saville Resources TSXV:SRE can now explore the niobium claims on Commerce Resources’ (TSXV:CCE) Eldor property in northern Quebec, where the latter company advances its Ashram rare earths deposit towards pre-feasibility.

Saville Resources moves into Commerce Resources’ niobium-tantalum target

A map illustrates the mineralized boulder
train’s progress, showing its presumed source.

Grab samples collected by Commerce on a boulder train about a kilometre from the deposit brought assays up to 5.9% Nb2O5. “That’s right off the charts,” enthuses Saville president Mike Hodge. “People in the niobium space hope for 1%—5.9% is excellent.”

He’s no newcomer to the space or even to the property. Hodge helped stake Commerce’s tantalum-niobium deposit on southern British Columbia’s Blue River property, which reached PEA in 2011.

“I did a lot of the groundwork for Commerce in the Valemount-Blue River area and I was one of the first guys on the ground at the camp that now supports Ashram,” he points out. “I’ve been involved with these two properties since 1999.” That’s part of a career including field experience on over 25 projects as well as raising money for junior explorers.

Miranna’s grab samples brought tantalum too, with a significant 1,220 ppm Ta2O5. Forty of the 65 samples graded over 0.5% Nb2O5, with 16 of them surpassing 1%.

The company describes the sampling area as a “strongly mineralized boulder train with a distinct geophysical anomaly at its apex.”

The 980-hectare Eldor Niobium claims have also undergone drilling on the Northwest and Southeast zones, where some wide intervals gave up 0.46% Nb2O5 over 46.88 metres and 0.55% over 26.1 metres (including 0.78% over 10.64 metres).

Samples from Miranna and the Southeast zone also show that niobium-tantalum occurs within pyrochlore, described by Saville as the dominant source mineral for niobium and tantalum in global mining. That’s the case, for example, at Quebec’s Niobec mine, one of the world’s three main niobium producers, with 8% to 10% of global production. Moreover, pyrochlore on the Saville project “is commonly visible to the naked eye, thus indicating a relatively course grain size, which is a favourable attribute for metallurgical recovery,” the company added.

Hodge already has a prospective drill target in mind. “I pulled the rig around with a Cat for a lot of the holes on Ashram itself so I’m very familiar with the ground. We’d of course do more prospecting and try to prove up some more numbers while we’re drilling.”

Saville Resources moves into Commerce Resources’ niobium-tantalum target

Should Saville find success, a ready market would be waiting. The company cites niobium demand growth forecasts of 7.66% CAGR from 2017 to 2021. A December U.S. Geological Survey report lists niobium and tantalum among 23 minerals critical to American security and well-being.

The country relies on foreign exports for its entire supply of both minerals, according to an earlier USGS study. From 2012 to 2015, 80% of America’s total niobium imports came from Brazil, where one mine alone produces 85% to 90% of global supply. Looking at tantalum imports during that period, the U.S. relied on China for 37% and Kazakhstan for another 25%. A troubling source of tantalum remains the Democratic Republic of Congo, from where conflict minerals reach Western markets through murky supply chains.

Days after the USGS released its December study, American president Donald Trump ordered a federal strategy “to ensure secure and reliable supplies of critical minerals.” Although he emphasized the need for domestic deposits and supply chains, Trump also called for “options for accessing and developing critical minerals through investment and trade with our allies and partners.”

Meanwhile Saville also sees potential in Covette, the company’s other northern Quebec property. Historic, non-43-101 grab samples reported up to 4.7% molybdenum, with some bismuth, lead, silver and copper. A 1,402-line-kilometre VTEM survey in late 2016 found prospectivity for base and precious metals. “The VTEM and some sampling that we did indicates that drilling could find something valuable,” Hodge says. “Although it is early-stage, the Geotech guys that did the VTEM survey said they hadn’t seen targets like that all year.”

Still, “the niobium claims are my first priority,” Hodge emphasizes. “I’m very excited about this. I believe we can have a winning project here.”

Subject to approvals, a 75% interest in the new property would call for $25,000 on signing, another $225,000 on closing and $5 million in work over five years. Commerce retains a 1% or 2% NSR, depending on the claim, with Saville holding a buyback option.

Last month the company offered private placements totalling up to $500,000, with insiders intending to participate.

Read more about the U.S. critical minerals strategy.

Crucial commodities

September 8th, 2017

Price/supply concerns draw end-users to Commerce Resources’ rare earths-tantalum-niobium projects

by Greg Klein

“One of the things that really galls me is that the F-35 is flying around with over 900 pounds of Chinese REEs in it.”

That typifies some of the remarks Commerce Resources TSXV:CCE president Chris Grove hears from end-users of rare earths and rare metals. Steeply rising prices for magnet feed REEs and critical minerals like tantalum—not to mention concern about stable, geopolitically friendly sources—have brought even greater interest in the company’s two advanced projects, the Ashram rare earths deposit in northern Quebec and the Blue River tantalum-niobium deposit in southeastern British Columbia. Now Commerce has a list of potential customers and processors waiting for samples from both properties.

XXXX

F-35 fighter jets alongside the USS America:
Chinese rare earths in action.
(Photo: Lockheed Martin)

Of course with China supplying over 90% of the world’s REEs, governments and industries in many countries have cause for concern. Tantalum moves to market through sometimes disturbingly vague supply lines, with about 37% of last year’s production coming from the Democratic Republic of Congo and 32% from Rwanda, according to the U.S. Geological Survey. One company in Brazil, Companhia Brasileira de Metalurgia e Mineração (CBMM), produces about 85% of the world’s niobium, another critical mineral.

As Ashram moves towards pre-feasibility, Commerce has a team busy getting a backlog of core to the assay lab. But tantalum and niobium, the original metals of interest for Commerce, have returned to the fore as well, with early-stage exploration on the Quebec property and metallurgical studies on the B.C. deposit.

The upcoming assays will come from 14 holes totalling 2,014 metres sunk last year, mostly definition drilling. Initial geological review and XRF data suggest significant intervals in several holes, including a large stepout to the southeast, Grove’s team reports.

“We’re always excited to see this project’s drilling results,” he says. “We know we’re in carbonatite basically all of the time and over the last five years, in all the 9,200 metres we’ve done since the last resource calculation, we’ve basically always hit more material than was modelled in the original resource—i.e. we’ve always found less waste rock at surface, we’ve always hit material in the condemnation holes and we’ve always had intersections of higher-grade material. So all those things look exciting for this program.”

Carbonatite comprises a key Ashram distinction. The deposit sits within carbonatite host rock and the minerals monazite, bastnasite and xenotime, which are well understood in commercial REE processing. That advantage distinguishes Ashram from REE hopefuls that foundered over mineralogical challenges. Along with resource size, mineralogy has Grove confident of Ashram’s potential as a low-cost producer competing with China.

As for size, a 2012 resource used a 1.25% cutoff to show:

  • measured: 1.59 million tonnes averaging 1.77% total rare earth oxides

  • indicated: 27.67 million tonnes averaging 1.9% TREO

  • inferred: 219.8 million tonnes averaging 1.88% TREO

A near-surface—sometimes at-surface—deposit, Ashram also features strong distribution of neodymium, europium, terbium, dysprosium and yttrium, all critical elements and some especially costly. Neodymium and dysprosium prices have shot up 80% this year.

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Commerce Resources’ field crew poses at the Eldor property,
home to the Ashram deposit and Miranna prospect.

Comparing Ashram’s inferred gross tonnage of nearly 220 million tonnes with the measured and indicated total of less than 30 million tonnes, Grove sees considerable potential to bolster the M&I as well as increase the resource’s overall size and average grade.

This season’s field program includes prospecting in the Miranna area about a kilometre from the deposit. Miranna was the site of 2015 boulder sampling that brought “spectacular” niobium grades up to 5.9% Nb2O5, nearly twice the average grade of the world’s largest producer, CBMM’s Araxá mine, Grove says. Some tantalum standouts showed 1,220 ppm and 1,040 ppm Ta2O5. Significant results for phosphate and rare earth oxides were also apparent.

Should Miranna prove drill-worthy, the synergies with Ashram would be obvious.

That’s the early-stage aspect of Commerce’s tantalum-niobium work. In B.C. the company’s Blue River deposit reached PEA in 2011, with a resource update in 2013. Based on a tantalum price of $381 per kilo, the estimate showed:

  • indicated: 48.41 million tonnes averaging 197 ppm Ta2O5 and 1,610 ppm Nb2O5 for 9.56 million kilograms Ta2O5 and 77.81 kilograms Nb2O5

  • inferred: 5.4 million tonnes averaging 191 ppm Ta2O5 and 1,760 ppm Nb2O5 for 1 million kilograms Ta2O5 and 9.6 million kilograms Nb2O5

Actually that should be 1,300 kilograms less. That’s the size of a sample on its way to Estonia for evaluation by Alexander Krupin, an expert in processing high-grade tantalum and niobium concentrates. “As with Ashram, we’ve already found that standard processing works well for Blue River,” Grove points out. “However, if Krupin’s proprietary method proves even more efficient, why wouldn’t we look at it?”

We’re always excited to see this project’s drilling results. We know we’re in carbonatite basically all of the time and over the last five years, in all the 9,200 metres we’ve done since the last resource calculation, we’ve basically always hit more material than was modelled in the original resource.—Chris Grove,
president of Commerce Resources

Back to rare earths, Commerce signed an MOU with Ucore Rare Metals TSXV:UCU to assess Ashram material for a proprietary method of selective processing. Others planning to test proprietary techniques on Ashram include Texas Mineral Resources and K-Technologies, Rare Earth Salts, Innovation Metals Corp, the University of Tennessee and NanoScience Solutions at Tufts University in Massachusetts.

Should proprietary methods work, all the better, Grove states. But he emphasizes that standard metallurgical tests have already succeeded, making a cheaper process unnecessary for both Blue River and Ashram.

Potential customers show interest too. Concentrate sample requests have come from Solvay, Mitsubishi, Treibacher, BASF, DKK, Albemarle, Blue Line and others covered by non-disclosure agreements. Requests have also come for samples of fluorspar, a potential Ashram byproduct and another mineral subject to rising prices and Chinese supply dominance.

A solid expression of interest came from the province too, as Ressources Québec invested $1 million in a February private placement. The provincial government corporation describes itself as focusing “on projects that have good return prospects and foster Quebec’s economic development.”

Also fostering the mining-friendly jurisdiction’s economic development is Plan Nord, which has pledged $1.3 billion to infrastructure over five years. The provincial road to Renard helped make Stornoway Diamond’s (TSX:SWY) mine a reality. Other projects that would benefit from a road extension towards Ashram would be Lac Otelnuk, located 80 kilometres south. The Sprott Resource Holdings TSX:SRHI/WISCO JV holds Canada’s largest iron ore deposit. Some projects north of Ashram include the Kan gold-base metals project of Barrick Gold TSX:ABX and Osisko Mining TSX:OSK, as well as properties held by Midland Exploration TSXV:MD.

But, Grove says, it’s rising prices and security of supply that have processors and end-users metaphorically beating a path to his company’s door. And maybe nothing demonstrates the criticality of critical minerals better than a nearby superpower that relies on a geopolitical rival for commodities essential to national defence.

Robert Friedland’s favourites

July 28th, 2017

Unprecedented demand calls for unparalleled grades, the industry legend says

by Greg Klein

For all that’s being said about lithium and cobalt, Robert Friedland argues that the energy revolution also depends on copper and platinum group elements. Of course he has a stake in them himself, with Kamoa-Kakula and Platreef among his current enthusiasms. Still, whether motivated by self-interest or not, the mining titan whom Rick Rule calls “serially successful” presented a compelling case for his favourite metals at the Sprott Natural Resource Symposium in Vancouver on July 25.

We’re living in “an era of unprecedented change,” said Ivanhoe Mines’ TSX:IVN founding chairperson. China’s the main cause. That country’s “breeding mega-cities prodigiously.” But one result is “incredibly toxic air… with a whole suite of health effects” from heart attacks to stroke, asthma to Alzheimer’s.

Unprecedented demand calls for unparalleled grades, the industry legend says

A crew operates jumbo rigs to bring
Ivanhoe’s Platreef mine into PGM production.

China’s not alone. Friedland pegs current global population growth at 83 million a year, with a projected 8.5 billion people populating the planet by 2030. Five billion will inhabit urban areas. Forecasts for 2050 show 6.3 billion city-dwellers. But China, notorious for its poisoned atmosphere, “is on an air pollution jihad.” It’s an all-out effort to turn back the “airpocalypse” and, with a command economy, a goal that shall be achieved.

The main target will be the internal combustion engine, responsible for about 60% of urban air pollution, Friedland said. China now manufactures 19 million cars annually, he adds. The country plans to increase output to 60 million, a goal obviously contrary to the war on pollution unless it emphasizes electric vehicles.

Like others, Friedland sees massive disruption as the economics of EVs overtake those of internal combustion engines, a scenario he expects by 2022 or 2023.

Demand for lithium-ion batteries (comprising 4% lithium, 80% nickel sulphate and 15% cobalt) has sent cobalt prices soaring. But bigger EVs will likely rely on hydrogen fuel cells, he pointed out. They’re already used in electric SUVs, pickup trucks, double-decker buses in London, trains in Germany and China, and, expected imminently, autonomous air taxis in Dubai.

Hydrogen fuel cells need PGMs. If only one-tenth of China’s planned EV output used the technology, demand would call for the world’s entire platinum supply, Friedland said.

“I would rather own platinum than gold,” he declared. Additionally, “there’s no platinum central reserve bank to puke out platinum.”

Ivanhoe just happens to have PGMs, about 42 million ounces indicated and 52.8 million ounces inferred, at its 64%-held Platreef project in South Africa.

Unprecedented demand calls for unparalleled grades, the industry legend says

Underground development progresses at the Kansoko mine,
part of the Kamoa copper deposit and adjacent to Kakula.

Electricity for the grid also ranks high among China’s airpocalyptic priorities. A study produced for the United Nations Environment Programme credits the country with a 17% increase in renewable electricity investment last year, most of it going to wind and solar. Almost $103 billion, China’s renewables investment comes to 36% of the world total.

Just as EVs remain more copper-dependent than internal combustion, wind and solar call for much more of the conductive commodity than do other types of electricity generation. Friedland sees additional disruptive demand in easily cleaned copper surfaces now increasingly used in hospitals, care homes, cruise ships and other places where infectious diseases might lurk.

He sees a modest copper supply deficit now, with a crisis possibly starting as soon as 2019. The world needs a new generation of copper mines, he said, repeating his unkind comparison of today’s low-grade, depleting mines to “little old ladies waiting to die.” The world’s largest producer, the BHP Billiton NYSE:BHP/Rio Tinto NYSE:RIO Escondida mine in Chile, is down to a 0.52% grade.

Copper recently hit a two-year high of about $6,400 a tonne. But, citing Bernstein data, Friedland said new mines would require a $12,000 price.

Not Kamoa-Kakula, though. He proudly noted that, with an indicated resource grading 6.09%, it hosts “the richest conceivable copper deposit on this planet.”

I’ve never been as bullish in my 35 years on a project.—Robert Friedland

A JV with Ivanhoe and Zjin Mining Group each holding 39.6% and the DRC 20%, Kamoa-Kakula inspires “a plethora of superlatives.” The veteran of Voisey’s Bay and Oyu Tolgoi added, “I’ve never been as bullish in my 35 years on a project.”

The zillionaire likes zinc too, which his company also has in the DRC at the 68%-held Kipushi project. With a measured and indicated grade of 34.89%, the Big Zinc zone more than doubles the world’s next-highest-grade zinc project, according to Ivanhoe. There’s copper too, with three other zones averaging an M&I grade of 4.01%.

“Everything good in the Congo starts with a ‘K’,” he said enthusiastically.

But recklessly, in light of the DRC’s controversial Kabila family. In June Ivanhoe was hit by reports that the company has done deals with businesses held by the president’s brother, Zoe Kabila, although no allegations were made of wrongdoing.

The family has run the country, one of Africa’s poorest, since 1997. Current president Joseph Kabila has been ruling unconstitutionally since November, a cause of sometimes violent protest that threatens to further destabilize the DRC.

As the New York Times reported earlier this month:

An implosion of the Democratic Republic of Congo, a country almost the size of western Europe, could spill into and involve some of the nine countries it borders. In the late 1990s, neighbouring countries were sucked into what became known as the Great War of Africa, which resulted in several million deaths.

Friedland’s nearly hour-long address made no mention of jurisdictional risk. But the audience of hundreds, presumably most of them retail investors, responded warmly to the serial success story. He’s the one who, after Ivanhoe languished at five-year lows in early 2016, propelled the stock more than 300% over the last 12 months.