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CANADA VENTURE: Big Tantalum Plans For Commerce Re
martinishaker2
1/7/2009 1:59:31 PM | | 2 reads | Post
#25728963 VANCOUVER (Dow Jones)--Global machinations could end up being beneficial to Commerce Resources Corp. (CCE.V), a late-stage tantalum and nobium explorer, with its flagship property, Upper Fir, near Kamloops in British Columbia.
Open-pit mining could start as soon as 2010, pushing supply into a global market that's losing suppliers and being hit by black-market production in war-torn Democratic Republic of Congo, which, by some estimates, is supplying the world with some 30% of required supply.
What's more, the U.S. Defense Logistics Agency stopped selling into the market during the past year because its inventory had been sold down.
And Australia's Talison, the world's leading supplier of tantalum, has ceased production indefinitely, citing the adverse effect of the black market as well as intense pricing pressure.
Tantalum has, by the way, the greatest capacity to hold electricity per gram of any material, meaning it has become the darling of the electronics market. It's used to make capacitors found in everything from digital cameras to pacemakers.
The hope now is that the governments-based Kimberley Process Certification Scheme, which imposes extensive requirements on members to enable them to certify shipments of rough diamonds as "conflict-free," will be extended to other minerals such as tantalum.
And this brings us to Commerce Resources.
"Ultimately, we could potentially end up being one of the largest suppliers of tantalum in the market," said Chris Grove, the company's corporate communications director. "We did our most expansive (exploration) program of all time during 2008."
The company completed 131 drill holes on three key sites, with 118 infill and step-out holes carried out on its Upper Fir property. All of that amounted to some 26,281 meters of drilling.
There was also a bulk sample of about 2,000 metric tons collected from the Upper Fir deposit and prepared for processing in a pilot plant.
Assays from the 2008 program are expected within the next couple of months, Grove said.
Indicated Category Expected To Grow In Coming Months
At the moment, Upper Fir has 14.6 million tons in the indicated category and 19.8 million tons in the inferred category.
"We understood that when we undertook this year's drilling program, so, with Upper Fir, about half of the holes were infill and half were step-out holes," Grove said. "Going forward, I would suggest that the 19.8 million tons in the inferred category will move to indicated and that we should also add a significant chunk to the resource itself."
He said three years of environmental studies coupled with the metallurgical studies to be done on that bulk sample will lead to the completion of a pre-feasibility study.
"At this point, there is no other tantalum project that is well-financed. We have access to over C$22 million in capital right now and it will likely only take us a couple of million dollars to take us through prefeasibility in the next six months. And by that time, we should be entering the regulatory process," Grove said. "Commerce Resources is basically the only potential new source of tantalum in the world."
While a number of Venture-based exploration companies look to establish an asset and then sell it to a mid-tier or senior operator, Commerce Resources intends to convert to an operator, he said.
"Part and parcel of this plan is to also to set up a hydro-metallurgical facility," he said.
In the beginning, the company only plans to ask the B.C. government for a mining permit. Metallurgical processing will be carried out off-site, likely by the services of two main processors - Cabot and H.C. Stark.
"Essentially, we will be shipping by rail the tantalum/niobium concentrate produced on-site to a lab off-site for a few years," he said. "After a few years and once we have the cash flow, we will underwrite our own hydro-metallurgical facility."
Currently, global contracts are signed at US$60 a pound for tantalum concentrate and US$140 a pound for tantalum oxide.
"It's our intention to be sellers of oxide," he said.
Company Web Site: www.commerceresources.com