Commerce Resources Corp. reported solid profitability in the preliminary economic assessment for the rare earth element deposit in northern Quebec Ashram

Commerce Resources Corp. reported solid profitability in the preliminary economic assessment for the rare earth element deposit in northern Quebec Ashram

The main points

the results of the study show a strong positive cash flow for a surface mining operation at Ashram (4.000 Tonnen pro Tag) with a life expectancy of the mine 25 Years, a net present value (Net Present Value, NPV) before tax and before financing in the amount of 2,32 Billion. CAD at a discount rate of 10 %, an internal rate of return (Internal Rate of Return) before tax / before financing 44 % and a payback period before tax / before financing 2,25 Years.

SGSS economic assessment based on the calculation of resources 6. March 2012, a cut-off grade of 1,25 % TREO used and a measured and indicated resource of 29,3 My. Tonnes and an inferred resource of 219,8 My. Tons with an average of 1,88 % TREO demarcated.

The rare earth elements (REE) Ashram to occur in a simple and well-understood mineralogy. The REE are housed primarily in the mineral monazite, and to a lesser extent in the minerals bastnaesite and xenotime. These minerals dominate the currently known economic extraction processes for REEs.

31.05.2012 – Commerce Resources Corp. (WKN0J2Q3;TSX-V: CCE; OTCQX: CMRZF) (short “The company”) gives the results of a positive, mit National Instrument 43-101 compliant Preliminary Economic Assessment (Preliminary Economic Assessment, “PEA”) for the rare earth element-(Rare Earth Element, “REE”)-Ashram on deposit the Eldor Project in northern Quebec known. Das PEA, the independent advice of the Office SGS Canada Inc. — Geostat (SGS Geostat) aus Montreal (Blainville) was made, suggests, that the deposit in the mining process can be economically developed and proposes to support a pre-feasibility and feasibility study for the project, further work. The Eldor property is located within the Labrador Trough, in northeastern Quebec, about 130 km south of the village of Kuujjuaq.

“The PEA shows a robust economy of the ashram deposit and recommends the next steps for the economic evaluation of this very large and very strategic resource. The high NPV is based in part on the value of the ore-Ashram, because it all 5 the critical REEs enriched, Neodymium, Europium, Dysprosium, Terbium Yttrium und,” said David Hodge, President und CEO von Commerce Resources Corp.. “The Management believes, that, given the simple mineralogy of the deposit and the history of successful economic treatment of the three host minerals occurring at the ashram during the next phase of metallurgy more significant results are realized based on the test work completed to date;. We look forward to the start of the pre-feasibility study, to demonstrate this.”

The main findings of the PEA

Surface mining operation (4.000 Tonnen pro Tag) with a strip ratio of 0,19:1 (Overburden:Ore) over the life of the mine 25 Years.

Net Present Value (Net Present Value, NPV) before tax of 2,32 Billion. CAD at a discount rate of 10 %.

Internal Rate of Return (Internal Rate of Return) of pre-tax 44 % and a payback period of pre-tax 2,25 Years.

estimated capital cost of 763 My. CAD (including 25 % Contingencies).

estimated operating costs of 95,20 CAD per ton of processed or approximately. 7,91 CAD per kg produced rare-earth oxides (Rare Earth Oxide, REO).

when using a cut-off levels (CoG) of 1,25 % TREO over 175 Years of recoverable ore (Open-cast mining + Underground mining).

Average annual production of approximately. 16.850 REO tons during the life of the mine, including 2.870 Tonnen Nd-Oxid, 96 Tonnen Eu-Oxid, 26 Tonnen Tb-Oxid, 106 Tons Dy oxide and 440 Tonnen Y-Oxid.

the host minerals of the rare earth elements (Monazite, Bastnaesite and xenotime) phases include, the preparation and the application of conventional and proven techniques is possible.

Basis for the Study: the Base Case Scenario

The base case used for the PEA provides for a mine with a production of 4.000 Tonnen pro Tag (350 Days per year) before. The mineralized material is on site to a mineral concentrate with at least 10 % Gesamtseltenerdelementoxid (Total Rare Earth Oxid, TREO) processed. This is done by conventional flotation techniques, leading to a reduction in mass of 87,3 % lead. The material is locally disrupted by sulfuric acid, to thereby provide a rare earth element-Mischkarbonat (Mixed Rare Earth Carbonate, REC) produce. The application rates in the mineral concentrate and acid digestion are expected to be at least 70 % or. 95 % for a final overall yield of 66,5 %. When using a Erzgehalts of 1,81 % TREO annually, according to expectations about. 16.850 REO tons are produced via the 25-year mine life.

The Mischkarbonatprodukt is on a all-weather road, Commerce will build the, 185 km to the north to the storage and port facilities at Mackay's Iceland, north of Kuujjuaq on Ungava Bay, be transported. The product is stored and then during the 3 or 4 ice-free months of the year to be shipped.

Mineral resource calculation and geological framework

The PEA uses the updated for the Ashram Deposit Mineral Resource Calculation (SGS Geostat 2012), on 6. March 2012 was published. This calculation shows from the initial calculation of an inferred mineral resource is an increase in tonnage 100 %. This resource estimate includes all holes, To date, the deposit at the Ashram (45 Holes with total length of 15.691,74 m) were drilled. Following the mineral resource estimate:

The TREO cut-off grade (CoG) The base case for the 2012 mineral resource estimate is from the 2011-based case-CoG, 1,25 % TREO. Using the ashram basket price of 35,02 USD pro kg, is the marginal (Mill) CoG von 0,51 % TREO calculated. Although all of the material over 0,51 % TREO is considered economic, it was for the removal of a CoG 1,25 TREO elected, to maximize the content of the feed ore.

LREO (Light Rare Earth Oxides, light rare earth oxides) = La2O3 + Ce2O3 + Pr2O3 + Nd2O3

MREO (Middle Rare Earth Oxides, medium rare earth oxides) = Sm2O3 + Eu2O3 + Gd2O3

HREO (Heavy Rare Earth Oxides, heavy rare earth oxides) = Tb2O3 + Dy2O3 + Ho2O3 + Er2O3 + Tm2O3 + Yb2O3 + Lu2O3 + Y2O3

MHREO (Middle and Heavy Rare Earth Oxides, medium and heavy rare earth oxides) = MREO + HREO

MHREO / TREO, expressed as a percentage

The Ashram deposit has a balanced distribution of REE in addition to a significant enrichment of all 5 as “critical” observed REE (Nd, Eu, Tb, Dy und Y). Within the total resource comes from a zone with higher concentration of MHREO, called the “MHREO-Zone”. This type of MHREO enrichment is unique to the ashram and extends from the surface with significant tonnage and content (6,55 My. Tonnes 1,63 % TREO and explored in the category indicated and 2,79 My. Tonnes 1,57 % TREO concluded in the category). Overall, the ashram-deposit spreads enriched with MHREOs, MHREO the zone an area with stronger enrichment is, extending from the surface to a depth of about 175 m extends.

The REE mineralization extends to the ashram with a width of about 500 m about. 700 m along strike and extends to a depth of about 600 m. The mineralization remains to the north, South and at depth and is open to the west and east are not completely separated.

Mine design and operation

For the open pit mining is a (4.000 Tonnen pro Tag) provided, of an initial mine life of 25 Support years. In the current CoG of 1,25 % TREO contains enough material to deposit, a mining operation in excess of 175 Years (Open-cast mining + Underground mining) to support. Applying the calculated CoG of economic 0,51 % TREO could be the mining of 300 Years (Open-cast mining + Underground mining) operated and there is the possibility for a significant expansion, because the deposit is still open.

The infrastructure of the mine site will be a camp, an airfield, a power plant, Fuel- and acid tanks, an emulsion system and Aufbereitungs-/Tailings-Anlagen to produce the product include REC.

The initial open pit is almost fully contained within the ore in the center of the degradable MHREO zone and is composed of three “Push-Back-Phasen” assemble. There are at 5 m wide terraces conventional mining mining equipment, such as z. B. Trucks, Loaders and hydraulic excavators are used. The material in the pit 35 My. Tonnes of ore grading 1,81 % TREO with only 6,7 My. Tons of tailings. The deposit has a low coverage, leading to an almost negligible proportion of overburden 0,19:1 (Overburden:Ore) leads. The ore grade is set to increase over time even. The waste rock and overburden in 0 be used as a construction material, including the reclamation of the northern part of the Centre Pond, where the location of future mining at present 0,5 to 3 m below the water is.

The degradation is at 350 Days of the year made. This is to reduce 1.400.000 Tonnes of ore per year result. During the initial mine life of 25 Years, each year approximately. 16.850 Are tons of REO in the form of a REC product generated. The pit is a depth of about. 175 m reach. This will allow, the mine for many years after the initial 25 Years to carry out. The proposed SGS production schedule in the tables 1 and 2 to see.

Table 1: Proposed production during the mine life

Table 2: Production of individual REO

Metallurgy and processing

The metallurgical test work on a representative sample of the deposit will be present at the ashram Hazen Research Inc. (Hazen) conducted in Colorado. After initial experiments with different separation procedure was identified as the flotation of the most promising method and has been used until now as the main enrichment process. To date, the test work focuses on the initial grinding and the determination of the best collectors and rare earth carbonate buffer.

The flotation results obtained to date show a significant enrichment of a rare earth mineral concentrate. Currently, the best results obtained in the laboratory a mineral concentrate with approximately. 10,37 % TREO at a recovery rate of 73,4 % and another with 11,18 % TREO at a recovery rate of 68,5 %. For conventional flotation techniques were used with no attempt at optimization. This corresponds to an enrichment of TREO almost six times the original content in favorable yield with corresponding reduction 85 to 90 % the original starting weight. It was also demonstrated, that all three leading REE minerals (Monazite, Bastnäsite and xenotime) the REEs release together and sharing traditional preparation techniques.

The PEA base case, a physical enrichment on the mine site by conventional Zermahlungs- and flotation to produce a mineral concentrate 10prozentigen TREO with an output of 70 % (12,7 % the initial mass) before.

The treatment plant, as provided, is a rare earth mineral concentrate produced by conventional froth flotation. It will include the following areas: Camp for the Fördererz, a single-stage crushing plant, Camp for the shredded material, SAG mill with sieve, followed by a single stage ball mill with air separator, Flotation of the rare earth minerals, Konzentrateindickung and Filtering, Tailings Processing, Water- and distribution of reagents.

According to Mr. Roland Schmidt, Head of Hazen Mineralogy Laboratory, The ashram also conducts test work:

“There are no technical obstacles, a current target of achieving 20 % TREO (Concentrate) at an output of 60 to 70 % would prevent. It is expected, that an improvement of this magnitude in view of the simple, although fine-grained mineralization should be possible, and also because the Flotationschemie to separate the mineral types occurring in the Karbonatmatrix an established, commercially proven technology.”

The digestion of the mineral concentrate is on the mine site by using standard techniques, for the rare earth minerals monazite, Bastnaesite and xenotime are common, completed. The acid digestion with concentrated sulfuric acid, the impurities (of. B. As, F, P, Th, Faith) Remove and separate out the rare earth carbonates as, which are sold on the market. The method and the cost for producing a mixed REO final product as a possible alternative to a REC product will be examined in a preliminary feasibility.

Economic analysis

Investment expenses (CAPEX)

The total investment required for the ashram are on deposit 763 My. CAD appreciated and include a contingency of 25 % in . The costs were in Table 3 broken.

Table 3: Breakdown of investment expenses

The largest expenditure for the project is the construction of a 185 km, all-weather road from the minesite to the port facilities at Mackay's Iceland north of Kuujjuaq. The PEA to include 100 % the cost of construction and maintenance of street. The Quebec government has however recently her ambitious plan for infrastructure and sustainable development in the northern part of province, plan called the North, announced. Part of the plan is the completion of a road or railway line and a power line, The Kuujjuaq to the south via the Labrador Trough connects. The current proposed route would deposit at the Ashram at a distance of 35 km past lead. The Quebec government has the flexible and dynamic nature of the plan and stressed the need for a northern industrial participation, to support the financing and development of the final route. Commerce intends to cooperate with the government, shipped out to include our planned route and transport infrastructure in the government plan. These efforts could design- and the associated maintenance costs offset.

Operating Expenses (OPEX)

The Ashram will deposit the total estimated operating expenses for 95,20 CAD per ton of processed or 7,91 CAD produced per kg of REO are. Operating expenses are negligible due to the overlap, the mining method and the simple mineralogy, suitable for conventional processing techniques, relatively low. The expenses were in Table 4 broken.

Table 4: Breakdown of operating expenses

Much of the G&A costs resulting from the transport of acid and other consumables. Compensation studies are necessary to evaluate the economic savings from the construction of some of these systems remain in place south. However, this was beyond the scope of the PEA.

Price forecasting and market analysis

The selected Oxidwerte, were used to estimate the economic potential of the Ashram Project, are a combination of several analysts' forecasts to the year 2017, how they were compiled by Delotte. Many recent analysts- and market reports were consulted, including Roskill Information Services, CIBC, MetalPages.com, IMCOA, Mackie Research Capital Corporation, Dundee Securities Corporation, and Cormark Securities Inc., the next revision of the values, the youngest in the PEA / PFS studies of comparable companies.

The scenario used in the PEA evaluated the sale of a pure mixed REC product instead of the separate oxides. Therefore, a discount of 25 % applied to the price forecast, because commerce is not expected to benefit fully from the single Oxidpreisen. This discount is calculated based on an assessment of the cost of the separation system at similar projects in addition to a contingency. The REO-price forecast, the next to the 25 % reduced prices used in the PEA, is shown in Table 5 shown.

Table 5: Price forecast for the rare earth PEA

It should be noted, that a large uncertainty remains with respect to future rare-earth prices and forecasts for a period of more than 5 Years must be made with caution. The predictions of the offer vary considerably and create the basis for the drastic difference in price forecasts in the industry, during the past 12 Months were seen. With the real possibility, China will continue to reduce exports and limit the production of its REE producers will, because it seeks to consolidate the industry, are new producers, the operating record, not automatically lead to lower prices in the rare earth sector lead. The economics of the PEA shows, that the ashram deposit can absorb a significant decrease in the values, were used for this price forecast and still be profitable.

Discounted cash flow analysis

The combined cash flow model for the ashram in Table 6 watch. The project has a capital value (Net Present Value, NPV) before tax of 2.318.000.000 CAD and internal rate of return (Internal Rate of Return) of pre-tax 44 % and a payback period of 2,25 Years at a discount rate of 10%.

Table 6: discounted cash flow for the base case

The total cost of the project on 3.331.850.000 CAD estimated, the total revenue on 12.059.196.450 CAD can be estimated. Pre-tax profit would be at 8.727.346.450 CAD are. As part of the PEA was not possible fluorite- or phosphate-product contemplated.

Sensitivity analysis

For the base case, a sensitivity analysis performed. For this important variable sizes were used, the greatest impact on the overall economics of the project have: Reduction of Oxidwertes, BasketPrice (or total revenue yield), Investment expenses (CAPEX) and operating expenses (OPEX). The analysis indicates, that the cost of the project most affected by the Oxidpreise and total revenue will yield, what's for these projects is generally the case. The results are shown in Table 7 to see

Table 7: Sensitivity analysis at a discount rate of 10 %

Opportunities for improvement

In several areas, possibilities for improving the economy identified. These include:

further enrichment of the mineral concentrate, where there are no technical obstacles have been observed, and after further optimization of the appropriate buffer and collectors have been identified;

improved recovery rates based on past trends and favorable results;

additional digestion information needed to determine the exact amounts of acid (According Erwertungen less than 1 Säure pro ton 1 Tonne of concentrate as used in the PEA);

economic studies, comparative information for the concentrate in southern Quebec (of. B. near Montreal);

economic studies, comparative information for the concentrate to produce a mixed REO instead of a REC;

possible partnership with the Government of Quebec to the ongoing infrastructure plan of the North;

Potential for richer ore to the surface just north of the current open pit, which are trapped in the pit during a PFS could; and

Potential for fluorspar- phosphate and by-products.

NI 43-101 Notice

The following, laut National Instrument 43-101 qualified persons, who participated in the report, are employees of SGS Geostat, based in Montreal (Blainville): Gaston Gagnon, Chief Mining Engineer, Ing. and Gilbert Rousseau, Chef-Metallurge, Ing. All of these qualified persons have read the contents of this press release and released.

Herr Jody Dahrouge, B.Sc., P.Geol., Commerce Resources Corporation, as defined in NI 43-101 qualified person has read the notice of technical information regarding exploration and approved.

A technical report on the preliminary economic assessment on the Eldor project is within 45 Days and completed on SEDAR (www.sedar.com) be submitted. He is then on the company's website to read.

The results of the PEA are forward-looking information. This economic assessment is preliminary and only of its kind, includes inferred mineral resources, a, which are considered too speculative because of the geology, to be regarded as economically, what they would put in the category of mineral reserves. It is also uncertain, whether the preliminary economic assessment will be implemented. The conditions and parameters of the project are subject to change, the final on the shelves of the PEA on SEDAR within 45 Days of publication of this press release are based. Mineral resources are not mineral reserves, because they have not demonstrated economic viability.

Über Commerce Resources Corp..

Commerce Resources Corp. is an exploration- and development company with a particular focus on tantalum, Niobium- and rare metal deposits, the potential for economic grades and large tonnage have. The company is specifically focused on the development of its rare earth project in northern Quebec and the Eldor Upper Fir tantalum- and niobium deposit in British Columbia, Canada.

For more information, please visit the corporate website at http://www.commerceresources.de or contact Investor Relations at +1.604.484.2700 or info@commerceresources.com

For more information, please contact:

Commerce Resources Corp.
David Hodge, President und Chief
Suite 1450 – 789 West Pender Street
Vancouver, BC, V6C 1H2 Canada
Such. +1 (604) 484-2700
Fax +1 (604) 681-8240

This is a translation of the original British press release. Only the original English press release is binding. A liability for the accuracy of the translation is excluded.

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