Saturday 23rd September 2017

Resource Clips


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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.

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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, 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.

Commerce Resources signs MOU for tantalum-niobium processing

July 11th, 2017

by Greg Klein | July 11, 2017

While focused on its Ashram rare earths deposit in Quebec, Commerce Resources TSXV:CCE has plans for its other critical minerals project. Under a memorandum of understanding announced July 11, a one-tonne sample from the company’s Upper Fir tantalum-niobium deposit in British Columbia would be tested for suitability under a proprietary separation process developed in Estonia by Alexander Krupin.

Commerce Resources signs MOU for tantalum-niobium processing

Previous drilling has established a resource estimate for two
critical minerals on Commerce Resources’ Upper Fir deposit.

The sample should arrive within the next several weeks, with tests expected to begin immediately afterward. The goal would be to process Upper Fir feed stock into independent tantalum and niobium products.

Krupin’s background includes over 35 years in this area, including more than 15 years processing high-grade tantalum and niobium ore concentrates, Commerce stated. “His research activities have developed new technologies for the chemical upgrading of low-grade tantalum and niobium ore concentrates.”

Based on a tantalum price of $381 a kilo, Upper Fir has a 2013 resource showing:

  • 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

The road-accessible east-central B.C. project has transmission lines and CN Rail crossing the western part of the 105,373-hectare property, and a 20-MW run-of-river electricity facility situated adjacently.

Commerce has found niobium in Quebec too, where samples showed very high grades up to 5.9% Nb2O5 on the company’s property about a kilometre from Ashram. Nevertheless the advanced-stage rare earths deposit remains the company’s priority, as it advances towards pre-feasibility. Among Ashram’s features are high grades, an impressive distribution of magnet feed elements and, crucial to the REE space, relatively simple mineralogy amenable to commercial processing. The deposit shows potential for a fluorspar byproduct as well.

Last month Commerce signed an MOU with Ucore Rare Metals TSXV:UCU to assess the suitability of Ashram concentrate for a proprietary method of REE processing at a plant Ucore plans to build in Utah. A Colorado pilot plant has already produced an Ashram concentrate exceeding 45% rare earth oxides at about 75% recovery.

The U.S. Geological Survey lists tantalum, niobium and rare earths among the critical minerals that the United States depends entirely on imports.

Read more about Commerce Resources’ Ashram rare earths deposit.

U.S. increases its dependence on critical mineral imports

January 31st, 2017

by Greg Klein | January 31, 2017

U.S. increases its dependence on critical mineral imports

China stands out in a map showing major sources of non-fuel mineral
commodities of which the U.S. imported more than 50% of its supply in 2016.
(Graphic: U.S. Geological Survey)

 

Lacking any domestic sources at all, the United States imported 100% of its supply of 20 minerals last year, the USGS reports. That number increased from 19 the previous year and 11 in 1984. Included in the 2016 list were rare earths, manganese and niobium, “which are among a suite of materials often designated as ‘critical’ or ‘strategic’ because they are essential to the economy and their supply may be disrupted.”

U.S. increases its dependence on critical mineral imports

Imports of rare earth compounds and metals increased 6% over 2015, although the value dropped from $160 million to $120 million. China supplied 72% directly, with other imports coming from Estonia (7%), France (5%), Japan (5%) and other countries (11%).

But the Estonian, French and Japanese material was derived from concentrates produced in China and elsewhere, the USGS added.

American imports of tantalum increased about 40% over 2015. The USGS attributed about 37% of 2016 global production to the Democratic Republic of Congo and 32% to Rwanda. Estimates reverse those numbers for the previous year.

An alphabetical list of the 20 minerals follows, with rare earths, scandium and yttrium each comprising a separate category:

  • arsenic
  • asbestos
  • cesium
  • fluorspar
  • gallium
  • graphite
  • indium
  • manganese
  • mica
  • niobium
  • quartz crystal
  • rare earths
  • rubidium
  • scandium
  • strontium
  • tantalum
  • thallium
  • thorium
  • vanadium
  • yttrium

The report listed 50 minerals for which the U.S. imported over half of its supply. Overall China was the largest exporter, with Canada running second.

‘The Rare Metal Age’

December 23rd, 2015

Our high-tech society doesn’t understand its dependency on critical elements

by Greg Klein

Read this book and you might want to renounce technology to live in a cave—provided it’s equipped with battery rechargers. Author David S. Abraham brings out some of the paradoxes of our dependency on increasingly elusive minerals while explaining the complicated but murky background of interconnected economic, social and geopolitical forces. It might take an event comparable to OPEC’s 1973 oil embargo to jolt Western society out of its ignorance. Abraham tries to protect us from such a rude awakening with The Elements of Power: Gadgets, Guns, and the Struggle for a Sustainable Future in the Rare Metal Age.

“This book comes at a defining time when rare metals are increasingly critical for high-tech, green and military applications,” he declares. “Yet despite their prevalence, they are not understood.”

Our high-tech society doesn’t understand its dependency on critical elements

By rare metals he means rare earths, tantalum, niobium, lithium, cobalt, graphite and more. Having examined a decade’s worth of reports, he finds “more than half the elements on the periodic table are ‘critical’ to one country or another.”

Resources can be limited and the route from mine-to-market complex. As a case study he presents the electric toothbrush, comprised of roughly 35 metals and relying on “an extensive supply chain: miners like China’s Xiamen Tungsten to supply the metal; a plant in Estonia to process it; and metal traders in New York to provide the alloys to component manufacturers, who sell their wares to the toothbrush manufacturer. It is a web that spans six continents.”

That’s just one example. As the “electronification of everything” coincides with the growing aspirations of emerging economies, “the future of our high-tech goods may lie not in the limitations of our minds, but in our ability to secure the ingredients to produce them…. At no point in human history have we used more elements, in more combinations and in increasingly refined amounts. Our ingenuity will soon outpace our material supplies.”

Our high-tech society doesn’t understand its dependency on critical elements

Hardly limited to consumer luxuries, the metals are essential to uses ranging from green technology to medical instruments to the weapons systems behind a country’s national defence.

Yet sources of production can be frighteningly limited. Some 85% of the world’s niobium comes from Brazil’s Araxa mine, Abraham points out. “Relying on one country and one mine in particular is a risky proposition. A natural disaster, political changes or conflict such as we have seen in Congo can quickly create shortages.”

Then there’s the geopolitical power of countries holding scarce resources. That’s a lesson Japan learned quickly when it challenged China in a territorial dispute, only to lose access to rare earths.

In fact manufacturers from Japan and elsewhere have been relocating their operations to China to ensure supply. One academic tells Abraham that “over the next several decades, every high-tech system—from cars to solar panels—could very well be produced in China.”

Moving to another disturbing topic, Abraham looks at some conflict minerals.

In Colombia, FARC rebels, who have been fighting an insurgency against the government since 1987, produce tungsten from the depths of the Amazon jungle. In Democratic Republic of Congo, anti-government forces and rebel gangs make millions producing tungsten, tin and tantalum. In 2011, about 21% of the world’s tantalum supply came from regions in conflict and almost all of it was processed in China. On the twin Indonesian islands of Bangka and Belitung, bands of small-scale illegal miners dig up more than a third of the world’s tin from jet-black cassiterite minerals, and unknown amounts of other minerals like xenotime and monazite, which hold rare earth elements.

Even Apple notes that it does not have enough information to conclusively determine which country the minerals it uses come from.—David S. Abraham

Where’s that stuff going? Often into products we take for granted. Due to long, baffling supply lines, “a lot of companies have no idea whether or not they’re using conflict minerals,” MetalMiner publisher Lisa Reisman tells Abraham. The author adds, “Even Apple notes that it does not have enough information to conclusively determine which country the minerals it uses come from.”

Abraham tackles other topics as well, including the appalling environmental practices in mining regions like China’s Jiangxi province. Our footprint is there, he says, because “nearly all of your electronics contain specks of metals from those mines.”

Here in the West, our efforts to produce cleaner energy and more energy-efficient machines call for additional metals. “Mining is not antithetical to a green economy; it’s a necessity.”

People who follow resource-related topics will certainly appreciate Abraham’s insights. But other readers might find his book an especial eye-opener. It could make a suitable Christmas gift for any high-tech consumers or green activists who not only disdain mining but deludedly think they abjure the industry.

Unless they live in caves—without battery rechargers—they’re as much a part of the Rare Metal Age as anyone else.