| Tantalum and Niobium. Two mysterious sounding | | | | categories. How quickly can you upgrade these |
| metals to be sure, but what is not a mystery is the | | | | resources from inferred to indicated? |
| global shortage of supply for both metals. With few | | | | CG: The author of the new 43-101 on the Upper Fir |
| late stage exploration projects on the horizon for either | | | | expressed a very high degree of confidence that with |
| metal, and increased demand due to technological | | | | just a few infill holes we will be able to take the |
| applications such as cell phones and specialized steels, | | | | inferred resource tonnage into the indicated category |
| Commerce Resources (TSXV: CCE) continues to | | | | and that is one of our goals this coming year. |
| push toward feasibility on its Blue River project in | | | | RI: How much drilling have you done altogether? |
| British Columbia. Chris Grove, the Director of | | | | CG: The Upper Fir we've done 175 holes. We've drilled |
| Corporate Communications for Commerce | | | | fifteen holes on the Fir and five holes on the Verity. |
| Resources, explains what's tantalizing about the | | | | RI: What kind of permits are required to move this |
| company's prospects. | | | | project past feasibility? |
| Resource Intelligence: Lets talk about your Blue River | | | | CG: Once we've got positive economics in the |
| property in central BC. What you're looking for is | | | | feasibility study, then we would be applying for a mining |
| niobium and tantalum. First of all, why are these metals | | | | license in British Columbia. We had the two previous |
| important not just to your shareholders, but to the | | | | Minister of Mines up to our property in September |
| world in general? | | | | 2008. As well, we would need to have our |
| Chris Grove: Commerce Resources' economics are | | | | environmental impact certificate for the project. In |
| largely driven by the tantalum values on the project. | | | | terms of that we took the somewhat bold move of |
| Tantalum is essential for the continued manufacturing | | | | dedicating almost 50% of our treasury in 2006 to |
| and design of virtually all electronics. That history goes | | | | contracting out the task of collecting the required |
| back to the introduction of the first mobile phone by | | | | environmental baseline data. At this point, we have |
| Motorola in early 1980—the brick that weighed about | | | | collected this environmental data for over 40 months |
| 3 lbs. In the subsequent drive by Motorola and other | | | | so far and we will continue collecting that until we |
| electronics companies towards miniaturization, there | | | | submit our feasibility study and our application to |
| was a scouring of the periodic table to find minerals | | | | become a mine. |
| and metals that would allow for much smaller | | | | RI: You recently put out a press release talking about |
| components. Tantalum, number 73 on the periodic | | | | your Eldor project in Quebec. Quebec is one of the |
| table, became a big part of the solution and has quietly | | | | best mining jurisdictions in the world. You are doing |
| revolutionized the electronics industry. | | | | reconnaissance work here, but you are also expanding |
| Niobium has some fascinating applications as well. | | | | that work right now. What are you finding? |
| There is no other substance that is able to do what | | | | CG: The Eldor project is fascinating. One of our more |
| niobium is able to do. In the making of steel, a very low | | | | experienced geologists directed us to the Eldor |
| percentage of niobium actually makes the steel up to | | | | because he believed it to be potentially one of the |
| 3 times stronger. There is a significant upward swing | | | | richest polymetallic deposits he had ever seen. We did |
| on Niobium right now within the steel industry as part | | | | a sampling program in 2007 and followed that up with |
| of the stimulus packages in the US and China, in the | | | | more exploration in 2008 as well as a 26 hole drill |
| construction of buildings and bridges. Niobium goes into | | | | program from which we got great tantalum, niobium, |
| the chassis of cars, because it makes for a stronger | | | | uranium, phosphate and fluorite results. We then |
| steel product, and that steel product can actually then | | | | followed this work up in 2009 with a program directed |
| be made thinner or lighter to improve fuel efficiency, | | | | to the REE prospective areas. |
| too. | | | | What we're finding here is some high-grade REE |
| RI: You have a number of carbonatites at Blue River | | | | mineralization in outcropping over a fairly broad area. |
| and this is essential to your success. Can you explain | | | | We collected 70 rock samples as a follow-up to the |
| why? | | | | discovery made during the 2009 summer exploration |
| CG: A carbonatite is a volcanic deposit and there are | | | | program. A high value of 2.74% REE was returned |
| only about 500 known carbonatites on the planet. A | | | | from exposed outcrop, with values in excess of 1% |
| very high percentage of these carbonatites are | | | | REE representing over 55% of the total rock samples |
| mineralized and many have gone into production as | | | | collected. |
| mines. Most of the world's REE deposits are | | | | Given the success of the reconnaissance work at |
| carbonatites. All of the worlds best niobium deposits | | | | Eldor, we intend to significantly expand the scope of |
| are carbonatites, so in that regard we would be | | | | exploration this year. |
| comparable to the world-class deposits of niobium | | | | We are also very excited about the Carbo claims, in |
| albeit with this additional high-grade tantalum. On our | | | | BC. They are also in the Rocky Mountain rare metal |
| claims there is an abundance of carbonatites and so | | | | belt. We've had these claims for a long time but really |
| far we've identified about 30 carbonatite showings | | | | got a boost of confidence last fall when Spectrum |
| across our 1,000 sq. km land holdings. We've only drilled | | | | Mining, a private company, drilled their carbonatites, |
| 5 of them, so far. | | | | which are contiguous with our claims. They got drill |
| RI: Meantime, you've actually proven three ore bodies | | | | assays back averaging about 3% rare earth elements. |
| on the project with resource estimates and these are | | | | That was spectacular news for them and arguably |
| called Fir, Upper Fir and Verity, and they are located | | | | spectacular news for Commerce Resources and our |
| quite close to one another. | | | | JV partner Canadian International Minerals. |
| CG: They are, however the Verity project is about 10 | | | | RI: How should investors evaluate Commerce |
| km north of the Fir and the Upper Fir projects. The Fir, | | | | Resources? |
| which has about 12 million tonnes of carbonatite in the | | | | CG: I would ask investors to evaluate Commerce |
| indicated and inferred categories, is ideally situated by | | | | Resources on the ground of it being one of the only |
| the railway. In our exploration program in 2005, we | | | | late-stage tantalum exploration projects in the world. |
| discovered Upper Fir up the side of the hill from Fir, so | | | | Investors also should consider that there is at least an |
| that's named appropriately. About 90% of our work | | | | 80% supply side deficit of ethically produced tantalum |
| since the fall of 2005 has been concentrated on this | | | | at this point in time. The ongoing loss of life and human |
| Upper Fir deposit. | | | | rights abuses that have been going on for over twelve |
| RI: What makes Upper Fir so attractive? | | | | years in the DRC are basically financed by the |
| CG: The Upper Fir has higher grades of both tantalum | | | | extraction and sale of conflict minerals—and tantalum |
| and niobium and is open pittable. The infrastructure | | | | is one of the most valuable of those conflict minerals. |
| there is outstanding, with logging roads already in place. | | | | RI: It sounds like the tantalum story is |
| We have drilled 175 holes on Upper Fir in the last four | | | | under-appreciated. |
| years. Additionally, we learned in 2008 drilling that the | | | | CG: Absolutely. Most investors aren't aware of the |
| Upper Fir also has about twelve high-grade layers that | | | | fundamentals for tantalum or niobium. Particularly in the |
| are more greatly enriched with tantalum and niobium. | | | | case of tantalum, demand has been growing at about |
| So now we've focused developing this part of the | | | | 5% per year since 1991. Tantalum values are currently |
| resources, which could turn this from an open pit | | | | at US$60/lb for concentrate and $140/lb as tantalum |
| deposit to a room and pillar operation. We should be | | | | oxide. |
| able to start mining straight into the side of the | | | | Meanwhile, supply side events compound this situation, |
| mountain, targeting these high-grade layers. | | | | with the potential of further pushing up the price for |
| RI: Lets talk about tonnages. Investors can see all your | | | | tantalum. Several of the world's major tantalum |
| updated resource info easily at and by searching for | | | | producers have ceased production. Within the past 13 |
| Commerce Resources. The Upper Fir deposit has 7.7 | | | | months, Talison Minerals of Australia, Noventa from |
| million pounds plus 3.5 million pounds tantalum in the | | | | Mozambique, and Tanco in Canada have all ceased |
| inferred and indicated categories respectively, with the | | | | production—these companies supplied at least 45% |
| 175 gram per tonne cut off. Then you add the niobium, | | | | of the world market. |
| which is 44.4 million pounds plus 19.5 million pounds | | | | So, we believe that with our high-grades and potential |
| inferred and indicated respectively. And these are | | | | for very high recovery rates, plus the solid |
| high-grade deposits, too, which means a smaller | | | | infrastructure near our deposits, we will be first to |
| footprint and possibly faster, cheaper extraction costs. | | | | market with an exceptional product in high demand. |
| Right now it is essential for you to upgrade these | | | | And for our investors, that spells upside. |