🕐03.11.11 - 17:54 Uhr
COMMERCE RESOURCES CORP. ANNOUNCES POSITIVE PRELIMINARY ECONOMIC ASSESSMENT FOR
UPPER FIR TANTALUM AND NIOBIUM DEPOSIT, BLUE RIVER, B.C.
Commerce Resources Corp. Announces Positive Preliminary Economic Assessment
for Upper Fir Tantalum and Niobium Deposit, Blue River, B.C.
Click Here for a Free Real-time Stock Quote on TSX-V: CCE
Highlights
AMECs PEA Technical Report on the Blue River Tantalum-Niobium Project dated 29-September-2011 will be filed shortly for public disclosure (
Study results show a positive cash flow for a potential 7500 tonnes per day underground operation at the Upper Fir, with cash costs of $C24.91 per kilogram of tantalum metal (net of niobium metal credits) in a technical grade oxide product.
AMECs economic evaluation was based on the September 29, 2011 mineral resource base of 36.4 million tonnes of Indicated mineral resource containing 195 ppm (gpt) Ta2O5 and 1,700 ppm (gpt) Nb2O5 plus 6.4 million tonnes of Inferred mineral resource containing 199 ppm (gpt) Ta2O5 and 1890 ppm (gpt) Nb2O5.
The PEA identified opportunities for optimization in the geology and mining areas with the key risks for project development lying in the sensitivity of the project to fluctuations in commodity prices and the United States dollar to Canadian dollar exchange rates.
With the milestone of the PEA completed, AMEC has commenced work on an updated mineral resource estimate that will include the results of drilling completed to the end of 2010 and assays received as of September 29, 2011. This will be followed by a technical report that will incorporate drilling, assaying, geological mapping and other work completed on the Upper Fir to the end of Commerces 2010 field program. A subsequent update to this technical report is also planned that will include results of the 2011 drilling and metallurgical test programs.
Results of the PEA represent forward-looking information. The preliminary economic assessment is preliminary in nature and it includes Inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the preliminary economic assessment will be realized. Mineral resources are not mineral reserves as they do not have demonstrated economic viability.
VANCOUVER, Nov. 3, 2011 /CNW/ - Commerce Resources Corp. (TSXv: CCE; FSE: D7H; OTCQX: CMRZF) is pleased to announce completion of a positive National Instrument 43-101 compliant Preliminary Economic Assessment ("PEA") for the Upper Fir Tantalum-Niobium Deposit at Blue River, B.C. The PEA, prepared by independent consultants, AMEC Americas Limited ("AMEC"), indicates that the deposit can be developed economically as an underground mine and recommends future studies to support a pre-feasibility level assessment of the project. The Blue River Project is located near the village of Blue River, which is approximately 250 km north of the city of Kamloops and approximately 90 km south of the town of Valemount.
The PEA was prepared to define an overall proof of concept for further development of the Blue River project. It includes geological and mineral resource modelling, preliminary mine planning, a description of metallurgical test work and process design, a summary of environmental baseline work to date, and estimates for capital and operating costs. As well it determines the economics to develop the project as an underground mine with process facility. Included also is an estimate of the direct cash costs to produce tantalum contained in a technical grade oxide product. Readers are encouraged to review the entire PEA Technical Report which is available for viewing at A link will also be provided on the Company web site at
Key Findings of the PEA
The Indicated mineral resources totaled 36.35 million tonnes containing 195 ppm Ta2O5 and 1,700 ppm Nb2O5 and Inferred mineral resources totaled 6.40 million tonnes containing 199 ppm Ta2O5 and 1,890 ppm Nb2O5 (see news release dated 02-February-2011).
Underground mining at 7500 tpd using bulk mining with a variation of sublevel open stoping.
Production estimated at 2.7M t/a of mineralized material, over 10 years.
Mineral processing using a standard grind-flotation procedure to produce a concentrate of ferrocolumbite-pyrochlore.
Metallurgical testing indicates that a mineral concentrate assaying about 30% combined Nb-Ta pentoxide with a Ta-Nb recovery of 65-70% is possible.
Final products will be technical grade oxides of tantalum and niobium totaling 2,400 metric tonnes and 18,610 metric tonnes of the respective metals over the life of the mine.
Total estimated capital cost to design and build is CAD$379M.
Operating costs over the life of mine are estimated at CAD$38.44/t milled.
Before tax, the net present value (NPV) for the project at an 8% discount rate is CAD$18.5M, with an IRR of 9.1% and a 6.3 year payback period applying a discounted cash flow valuation method.
Cash costs of tantalum metal of CAD$24.91/kg contained in a technical grade oxide product (after credit for the niobium contribution).
SUMMARY OF BEFORE TAX ECONOMIC MODELLING (Exchange rate: $1US=$C1.05)
METALS PRICING
NPV @8% (000s)
Ta price/kg1
Nb price/kg1
BASE CASE
$CAD18,500
$US317
$US46
+10% Ta price (Base Case Nb)
$CAD65,800
$US349
$US46
+20% Ta price (Base Case Nb)
$CAD113,000
$US380
$US46
+30% Ta price (Base Case Nb)
$CAD160,300
$US412
$US46
+10% Nb price (Base Case Ta)
$CAD71,600
$US317
$US50.60
+20% Nb price (Base Case Ta)
$CAD124,700
$US317
$US55.20
+30% Nb price (Base Case Ta)
$CAD177,900
$US317
$US59.80
of metal in technical grade oxide product
Summary of Estimated Capital Costs
Total (x $CAD1,000)
Capital expenditure
Initial Capital Infrastructure
29,500
Process Initial Capital
116,200
Mining Initial Capital
89,400
Material Handling
8,000
Contingency
43,600
Indirect/Owner Costs
92,300
Total
379,000
Summary of Average
Production Costs
LOM Total
(x $CAD1,000)
Cost per Tonne
Milled ($CAD/t)
Mining
528,900
21.16
Process
338,500
13.54
Material Handling
18,500
0.74
G&A
75,000
3.00
Sub-total
960,900
38.44
Life of Mine Cash Cost Summary1
Summary of Cash Costs
LOM Total
(CAD$ X $1000)
Cost per Tonne
Milled
(CAD$/t)
Cost per Kg Ta Payable
(CAD$/Kg)
Cash costs
Mining
528,900
21.16
220.13
Process
338,500
13.54
140.87
G&A
75,000
3.00
31.21
Material Handling
18,500
0.74
7.71
Sub-total
960,900
38.44
399.92
Credits
Nb
(901,100)
(36.04)
(375.01)
Sub-total
(901,100)
(36.04)
(375.01)
Adjusted cash costs
Total
59,800
2.40
24.91
1. The revenue gained from niobium is significant and even slightly exceeds the tantalum portion of revenue. Market analysts generally agree that based on the existing demand and supply structure of tantalum markets prices for tantalum are likely to increase strongly in the near term. For this reason, although tantalum and niobium values in the mineral resource estimate are approximately equal at present pricing assumptions, AMEC elected to provide cash costs for tantalum net of niobium credits.
Property
The Blue River Project property covers 105,373 hectares (1,000 km2). Power transmission lines, rail, and paved and gravel roads are all adjacent to, or within the property boundaries. Transalta Corp.s 18 MW Bone Creek run-of-river hydroelectricity project near the project was commissioned in June 2011.
Resource Estimate
The resource comprises a series of sill-like carbonatite bodies with up to 91.2m in estimated cumulated true thickness. The composite body extends more than 1,450m in a north-south direction and as much as 800m in an east-west direction. Tantalum and niobium are contained in the minerals ferrocolumbite and pyrochlore.
The PEA conducted was based on a mineral resource estimate announced in February 2011 ("Blue River Ta-Nb Project NI 43-101 Technical Report, Blue River, British Columbia" by AMEC with effective date 31-January-2011). AMEC used the drill results up to the end of 2009, which includes 183 drill holes comprising 37,446 metres of HQ drill core and 8,218 sawn core samples to develop the mineral resource estimate. Most drill holes were at a nominal spacing of 50m with dips typically between -60 to sub-vertical. Results from the 54 holes drilled in 2010 were compared to the existing resource model and were found to be reasonably consistent with the geology predicted by the model. As well, the 2011 preliminary drill results were inspected at site on vertical cross-sections and were also found to be consistent with the predicted geological model.
The new effective date of the mineral resource estimate, based on the review of recent drill results, is now 29 September 2011 (Table 1). There has been no change to the closure date of the database used in the estimate, which is confined to all drilling that was completed up to the end of December 2009.
Table 1:
Blue River Project Estimated Mineral Resources. Effective Date September 29, 2011.
Tomasz Postolski, P.Eng, Qualified Person
Confidence
Category
Tonnes
Ta2O5
[ppm]
Nb2O5
[ppm]
ContainedTa2O5
[1000s of kg]
ContainedNb2O5
[1000s of kg]
Indicated
36,350,000
195
1,700
7,090
61,650
Inferred
6,400,000
199
1,890
1,300
12,100
Assumptions include US$317/kg Ta, US$46/kg Nb, 65.4% Ta2O5 recovery, 68.2% Nb2O5 recovery, US$32/tonne mining cost, US$17/tonne process and refining cost. Mining losses = 0% and dilution = 0%.
Mineral resources are amenable to underground mining methods and have been constrained using a "Stope Analyzer".
An economic cut-off was based on the Ta and Nb values per block which is variable based on the location of blocks used in the mineral resource estimate. A block unit value cut-off ranged from $52 to $59.
Discrepancies in contained metal values are due to rounding.
In situ contained oxide reported.
The mineral resource estimate, on which the PEA is based, uses base case price assumptions of US$317/kg Ta, and $US46/kg Nb which reflect current market prices. These are higher than historic average prices, but reflect the general views of market analysts that current market conditions support the probability of sustained higher prices. There is no assurance the higher prices will be realized over the life of the project.
Table 2 below shows the sensitivity of the Blue River mineral resources to tantalum metal price.
Table 2:
Blue River Project Sensitivity of Estimated Mineral Resources to Tantalum Price:
Effective Date September 29, 2011, Tomasz Postolski, P.Eng, Qualified Person. Base case is bolded.
Ta price
[US$/kg]
Confidence
Category
Tonnes
Ta2O5
[ppm]
Nb2O5
[ppm]
ContainedTa2O5
[1000s of kg]
ContainedNb2O5
[1000s of kg]
470
Indicated
51,130,000
188
1,410
9,610
72,300
Inferred
8,100,000
192
1,700
1,600
13,800
381
Indicated
44,430,000
192
1,530
8,530
68,020
Inferred
7,300,000
196
1,780
1,400
13,000
317
Indicated
36,350,000
195
1,700
7,090
61,650
Inferred
6,400,000
199
1,890
1,300
12,100
272
Indicated
29,990,000
197
1,850
5,910
55,480
Inferred
5,500,000
201
2,010
1,100
11,100
238
Indicated
25,130,000
197
2,000
4,950
50,240
Inferred
4,900,000
202
2,110
1,000
10,400
Ta price was varied and all other assumptions remain the same as base case.
Base case is in bold.
Mineral resources are amenable to underground mining methods and have been constrained using a "Stope Analyser".
Discrepancies in contained metal values are due to rounding.
In situ contained oxide reported.
Mining and Mineral Processing
AMEC believes the preferred concept for mining the Blue River Deposit is by underground methods using variations of sublevel stoping under a conceptual scenario that considers mining and processing at a rate of 7,500 tonnes per day. The deposit will be accessed via two main portals located in places where the deposit outcrops on the hillside at a distance of about 4km from the proposed plant site. Material to be mined by bulk mining methods represents 84% of the mineral resource. An additional 2% of waste was identified as internal dilution. Geotechnical studies indicate that an extraction ratio of 67.5% can be achieved, providing an overall mining recovery of 58%. Considering waste inside stopes and external dilution the overall resource grades were diluted to 185 ppm Ta2&
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