Technical Report: Blue River Resource Update

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On July 6, 2012, Commerce Resources Corp. (TSXv: CCE) released its National Instrument 43-101 Technical Report entitled "Technical Report on Mineral Resource Update" on its Blue River Tantalum-Niobium Project in British Columbia.

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Technical Report: Blue River Resource Update

  1. 1. Commerce Resources Corp.Blue River Tantalum-Niobium ProjectBritish Columbia, CanadaNI 43-101 Technical Report on Mineral Resource UpdatePrepared for:Commerce Resources Corp.Prepared by:Albert Chong, P.Geo.Tomasz Postolski, P.Eng.Ramon Reyes Mendoza, P.Eng.Tony Lipiec, P.Eng.Behrang Omidvar, P.Eng.Effective Date: 22 June 2012Project No. 168967
  2. 2. IMPORTANT NOTICEThis report was prepared as a National Instrument 43-101 TechnicalReport for Commerce Resources Corporation (Commerce) by AMECAmericas Limited (AMEC). The quality of information, conclusions,and estimates contained herein is consistent with the level of effortinvolved in AMEC’s services, based on: i) information available at thetime of preparation, ii) data supplied by outside sources, and iii) theassumptions, conditions, and qualifications set forth in this report. Thisreport is intended for use by Commerce subject to the terms andconditions of its contract with AMEC. Except for the purposeslegislated under Canadian provincial securities law, any other uses ofthis report by any third party is at that party’s sole risk.
  3. 3. CERTIFICATE OF QUALIFIED PERSON Albert Chong, P.Geo. AMEC Americas Limited 111 Dunsmuir Street, Suite 400 Vancouver, B.C. V6B 5W3 Phone: (604) 664-4116 E-mail: albert.chong@amec.comI, Albert Chong, P.Geo., am employed as a Principal Geologist with AMEC Americas Limited.This certificate applies to the Technical Report titled “Blue River Tantalum–Niobium Project, BritishColumbia, Canada, NI 43-101 Technical Report on Mineral Resource Update” with an effective dateof 22 June 2012 (the “Technical Report”).I am a Professional Geoscientist in the Province of British Columbia (P.Geo. #23773). I graduatedfrom McMaster University, Hamilton, Ontario with a B.Sc. degree in Geology, and from the Universityof Tasmania with a M.Sc. degree in Exploration Geoscience.I have practiced my profession for 27 years since graduation. I have been directly involved in greenfields and brown fields exploration, mining operations, consulting, and resource estimation of basemetal, precious metal and rare metal deposits.As a result of my experience and qualifications, I am a Qualified Person as defined in NationalInstrument 43–101 Standards of Disclosure for Mineral Projects (NI 43–101). I am the QualifiedPerson responsible for Sections 1 to 12, 20, and 23 to 27 of the Technical Report.I visited the Blue River property from 11 to 16 July 2010, 27 to 30 June 2011, and 6 to 14 September2011.I am independent of Commerce Resources Corporation as independence is described by Section1.5 of NI 43–101.I have been involved as an independent consultant on the Blue River Ta-Nb Project since 2010.I have read NI 43–101 and this report has been prepared in compliance with that Instrument.As of the date of this certificate, to the best of my knowledge, information and belief, the TechnicalReport contains all scientific and technical information that is required to be disclosed to make theTechnical Report not misleading.“signed and stamped”Albert Chong, P.Geo.Dated: 4 July 2012AMEC Americas Limited111 Dunsmuir Street, Suite 400Vancouver, B.C. V6B 5W3Tel (604) 664-4315Fax (604) 669-9516 www.amec.com
  4. 4. CERTIFICATE OF QUALIFIED PERSON Tomasz Postolski, P.Eng. AMEC Americas Limited 111 Dunsmuir Street, Suite 400 Vancouver, B.C. V6B 5W3 Phone: (604) 664-6096 E-mail: tomasz.postolski@amec.comI, Tomasz Postolski, P.Eng., am employed as a Senior Geostatistician with AMEC Americas Limited.This certificate applies to the Technical Report titled “Blue River Tantalum–Niobium Project, BritishColumbia, Canada, NI 43-101 Technical Report on Mineral Resource Update” with an effective dateof 22 June 2012 (the “Technical Report”).I am a Professional Engineer in the Province of British Columbia (P.Eng. #34784). I have graduatedfrom The University of Mining and Metallurgy, Krakow, Poland with a Magister Inzynier degree inGeological Engineering, and from the University of British Columbia with a Master of AppliedScience degree also in Geological Engineering. I have completed the Citation Program in AppliedGeostatistics at the Centre for Computational Geostatistics at the University of Alberta.I have 18 years of consulting, mine operations, and academic experience specializing ingeostatistical mineral resource estimation and geological evaluation of gold, copper, rare earthmetals and other mineral deposits in Canada and abroad.As a result of my experience and qualifications, I am a Qualified Person as defined in NationalInstrument 43–101 Standards of Disclosure for Mineral Projects (NI 43–101). I am the QualifiedPerson responsible for Section 14 and those portions of the Summary, Interpretation andConclusions, and Recommendations that pertain to this Section of the Technical Report.I visited the Blue River property 27 to 30 June 2011.I am independent of Commerce Resources Corporation as independence is described by Section1.5 of NI 43–101.I have been involved with mineral resource estimation on the Blue River Ta-Nb Project since 2010.I have read NI 43–101 and this report has been prepared in compliance with that Instrument.As of the date of this certificate, to the best of my knowledge, information and belief, the TechnicalReport contains all scientific and technical information that is required to be disclosed to make theTechnical Report not misleading.“signed and stamped”Tomasz Postolski, P.Eng.Dated: 4 July 2012AMEC Americas Limited111 Dunsmuir Street, Suite 400Vancouver, B.C. V6B 5W3Tel (604) 664-4315Fax (604) 669-9516 www.amec.com
  5. 5. CERTIFICATE OF QUALIFIED PERSON Ramon Mendoza Reyes (P.Eng.) AMEC Americas Limited 111 Dunsmuir Street, Suite 400 Vancouver, B.C. V6B 5W3 Phone: (604) 664-3075 E-mail: ramon.mendoza@amec.comI, Ramon Mendoza Reyes (P.Eng.) am employed as a Principal Mining Engineer with AMECAmericas Limited.This certificate applies to the Technical Report titled “Blue River Tantalum–Niobium Project, BritishColumbia, Canada, NI 43-101 Technical Report on Mineral Resource Update” with an effective dateof 22 June 2012 (the “Technical Report”).I am a Professional Engineer in the province of British Columbia. I graduated in 1989 from theNational Autonomous University of Mexico with a bachelor’s degree in Mining Engineering, and in2003 completed a M.Sc. Degree in Mining & Earth Systems Engineering from the Colorado Schoolof Mines in Golden, Colorado, USA. I have practiced my profession for 22 years, and havepreviously been involved with mine designs, mine planning and mine operations for base metal,disseminated sulphide and industrial mineral projects in North America and South America.As a result of my experience and qualifications, I am a Qualified Person as defined in NationalInstrument 43–101 Standards of Disclosure for Mineral Projects (NI 43–101). I am the QualifiedPerson responsible for Sections 15, 16, and 18 and those portions of the Summary, Cost EstimatesInterpretation and Conclusions, and Recommendations that pertain to the mining sections of theTechnical Report.I visited the Blue River property in British Columbia from 12 to 14 July 2010.I am independent of Commerce Resources Corporation as independence is described by Section1.5 of NI 43–101.I have been involved with the mining aspects of the Blue River Tantalum–Niobium Project sinceJanuary 2010.I have read NI 43–101 and this report has been prepared in compliance with that Instrument.As of the date of this certificate, to the best of my knowledge, information and belief, the TechnicalReport contains all scientific and technical information that is required to be disclosed to make theTechnical Report not misleading.“signed and stamped”Ramon Mendoza Reyes, P.Eng.Dated: 4 July 2012AMEC Americas Limited111 Dunsmuir Street, Suite 400Vancouver, B.C. V6B 5W3Tel (604) 664-4315Fax (604) 669-9516 www.amec.com
  6. 6. CERTIFICATE OF QUALIFIED PERSON Ignacy (Tony) Lipiec (P.Eng.) AMEC Americas Limited 111 Dunsmuir Street, Suite 400 Vancouver, B.C. V6B 5W3 Tel: 604-664-3130 E-mail: tony.lipiec@amec.comI, Ignacy (Tony) Lipiec (P.Eng.) am employed as a Principal Metallurgical Engineer with AMECAmericas Limited.This certificate applies to the Technical Report titled “Blue River Tantalum–Niobium Project, BritishColumbia, Canada, NI 43-101 Technical Report on Mineral Resource Update” with an effective dateof 22 June 2012 (the “Technical Report”).I am a Professional Engineer in the province of British Columbia. I graduated from the University ofBritish Columbia with a B.A.Sc. degree in Mining & Mineral Process Engineering, in 1985. I havepracticed my profession for 27 years, and have previously been involved with metallurgical designand process engineering for precious metal, base metal and specialty product projects in NorthAmerica and South America.As a result of my experience and qualifications, I am a Qualified Person as defined in NationalInstrument 43–101 Standards of Disclosure for Mineral Projects (NI 43–101). I am the QualifiedPerson responsible for Sections 13, 17, 18, 21 and those portions of the Summary, Interpretationand Conclusions and Recommendations that pertain to those sections of the Technical Report.I did not visit the Blue River property.I am independent of Commerce Resources Corporation as independence is described by Section1.5 of NI 43–101.I have been involved as an independent consultant with the Blue River Ta-Nb Project since 2010.I have read NI 43–101 and this report has been prepared in compliance with that Instrument.As of the date of this certificate, to the best of my knowledge, information and belief, the TechnicalReport contains all scientific and technical information that is required to be disclosed to make theTechnical Report not misleading.“signed and stamped”Tony Lipiec, P.Eng.Dated: 4 July 2012AMEC Americas Limited111 Dunsmuir Street, Suite 400Vancouver, B.C. V6B 5W3Tel (604) 664-4315Fax (604) 669-9516 www.amec.com
  7. 7. CERTIFICATE OF QUALIFIED PERSON Behrang Omidvar, P.Eng. AMEC Americas Limited 111 Dunsmuir Street, Suite 400 Vancouver, B.C. V6B 5W3 Phone: (604) 664-4522 E-mail: Behrang.omidvar@amec.comI, Behrang Omidvar, P.Eng., am employed as a Financial Analyst with AMEC Americas Limited.This certificate applies to the Technical Report titled “Blue River Tantalum–Niobium Project, BritishColumbia, Canada, NI 43-101 Technical Report on Mineral Resource Update” with an effective date22 June 2012 (the “Technical Report”).I am a Professional Engineer in the Province of British Columbia (P.Eng. #35500). I have graduatedfrom The University of British Columbia with a Mechanical Engineering degree.I have eight years of experience in engineering, project management and financial analysis formining and other projects. I have prepared cash-flow models and conducted financial andthroughput analyses of numerous mines and development properties in Canada and internationally.As a result of my experience and qualifications, I am a Qualified Person as defined in NationalInstrument 43–101 Standards of Disclosure for Mineral Projects (NI 43–101). I am the QualifiedPerson responsible for Sections 19, 21, 22 and those portions of the Summary, Interpretation andConclusions and Recommendations that pertain to those Sections of the Technical Report.I have not visited the Blue River property.I am independent of Commerce Resources Corporation as independence is described by Section1.5 of NI 43–101.I have been involved as an independent consultant with the Blue River Ta-Nb Project since 2010.I have read NI 43–101 and this report has been prepared in compliance with that Instrument.As of the date of this certificate, to the best of my knowledge, information and belief, the TechnicalReport contains all scientific and technical information that is required to be disclosed to make theTechnical Report not misleading.“signed and stamped”Behrang Omidvar, P.Eng.Dated: 4 July 2012AMEC Americas Limited111 Dunsmuir Street, Suite 400Vancouver, B.C. V6B 5W3Tel (604) 664-4315Fax (604) 669-9516 www.amec.com
  8. 8. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Mineral Resource UpdateCONTENTS1.0 SUMMARY ................................................................................................................................... 1-1 1.1 Terms of Reference ......................................................................................................... 1-1 1.2 Key Outcomes ................................................................................................................. 1-1 1.2.1 Mineral Resource Update ............................................................................... 1-1 1.2.2 2011 PEA Outcomes ...................................................................................... 1-2 1.3 Project Setting ................................................................................................................. 1-2 1.4 Tenure, Surface Rights, Royalties, and Agreements ...................................................... 1-2 1.5 Environment, Permitting, and Socio-Economics ............................................................. 1-3 1.6 Geology and Mineralization ............................................................................................. 1-3 1.7 Exploration ....................................................................................................................... 1-4 1.8 Exploration Potential........................................................................................................ 1-4 1.9 Drilling .............................................................................................................................. 1-4 1.10 Sample Preparation, Analysis, and Security ................................................................... 1-5 1.11 Data Verification .............................................................................................................. 1-6 1.12 Metallurgical Testwork ..................................................................................................... 1-7 1.13 Mineral Resource Estimation........................................................................................... 1-8 1.14 Mineral Resource Statement ........................................................................................... 1-9 1.15 Preliminary Economic Assessment ............................................................................... 1-10 1.15.1 2011 PEA...................................................................................................... 1-10 1.15.2 Proposed Mining Method.............................................................................. 1-10 1.15.3 Geotechnical Considerations........................................................................ 1-10 1.15.4 Dilution Considerations................................................................................. 1-11 1.15.5 Drilling and Blasting ...................................................................................... 1-11 1.15.6 Mine Development ........................................................................................ 1-11 1.15.7 Mineralized Material and Waste Haulage ..................................................... 1-12 1.15.8 Mine Services ............................................................................................... 1-12 1.15.9 Mine Production Forecasts ........................................................................... 1-13 1.15.10 Process Design ............................................................................................ 1-13 1.15.11 Tailings and Waste Management ................................................................. 1-14 1.15.12 Planned Project Infrastructure ...................................................................... 1-14 1.15.13 Markets ......................................................................................................... 1-15 1.15.14 Capital Costs ................................................................................................ 1-16 1.15.15 Operating Costs ............................................................................................ 1-17 1.15.16 Financial Analysis ......................................................................................... 1-18 1.15.17 Sensitivity Analysis ....................................................................................... 1-20 1.16 Interpretation and Conclusions ...................................................................................... 1-21 1.16.1 2012 Mineral Resource Estimate Update..................................................... 1-21 1.16.2 2011 PEA...................................................................................................... 1-22 1.16.3 Project Opportunities .................................................................................... 1-23 1.16.4 Project Risks ................................................................................................. 1-23 1.17 Recommendations......................................................................................................... 1-242.0 INTRODUCTION .......................................................................................................................... 2-1 2.1 Terms of Reference ......................................................................................................... 2-1 2.2 Qualified Persons ............................................................................................................ 2-1 2.3 Site Visits and Scope of Personal Inspection .................................................................. 2-1 2.4 Effective Dates ................................................................................................................ 2-2 2.5 Information Sources and References .............................................................................. 2-3Project No.: 168967 TOC i22 June 2012
  9. 9. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Mineral Resource Update 2.6 Previous Technical Reports............................................................................................. 2-43.0 RELIANCE ON OTHER EXPERTS .............................................................................................. 3-1 3.1 Mineral Tenure ................................................................................................................ 3-1 3.2 Surface Rights ................................................................................................................. 3-1 3.3 Royalties and Agreements .............................................................................................. 3-1 3.4 Environmental, Permitting, and Liability Issues ............................................................... 3-2 3.5 Markets ............................................................................................................................ 3-24.0 PROPERTY DESCRIPTION AND LOCATION ............................................................................ 4-1 4.1 Project Ownership ........................................................................................................... 4-1 4.2 Mineral Tenure ................................................................................................................ 4-1 4.3 Surface Rights ................................................................................................................. 4-4 4.4 Royalties and Agreements .............................................................................................. 4-4 4.5 Permits............................................................................................................................. 4-4 4.6 Environment .................................................................................................................... 4-4 4.7 Social and Community Impact ......................................................................................... 4-4 4.8 Comment on Section 4 .................................................................................................... 4-55.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE, AND PHYSIOGRAPHY ......................................................................................................................... 5-1 5.1 Accessibility ..................................................................................................................... 5-1 5.2 Climate............................................................................................................................. 5-1 5.3 Local Resources and Infrastructure ................................................................................ 5-2 5.4 Physiography ................................................................................................................... 5-2 5.5 Comment on Section 5 .................................................................................................... 5-36.0 HISTORY ...................................................................................................................................... 6-1 6.1 Pre-Commerce Exploration ............................................................................................. 6-1 6.2 Commerce Exploration .................................................................................................... 6-1 6.3 Commerce Mineral Resource Estimates ......................................................................... 6-27.0 GEOLOGICAL SETTING AND MINERALIZATION ..................................................................... 7-1 7.1 Regional Geology ............................................................................................................ 7-1 7.2 Project Geology ............................................................................................................... 7-3 7.2.1 Metasedimentary Rocks ................................................................................. 7-3 7.2.2 Gneisses and Schists ..................................................................................... 7-5 7.2.3 Amphibolites ................................................................................................... 7-6 7.2.4 Intrusive Rocks ............................................................................................... 7-6 7.2.5 Pegmatite Dykes .......................................................................................... 7-14 7.3 Structural Geology and Metamorphism ......................................................................... 7-14 7.4 Geochronology .............................................................................................................. 7-16 7.5 Carbonatites .................................................................................................................. 7-16 7.5.1 Fir Carbonatite .............................................................................................. 7-16 7.5.2 Verity Carbonatite ......................................................................................... 7-17 7.5.3 Exploration Targets ...................................................................................... 7-18 7.6 Mineralogy ..................................................................................................................... 7-20 7.6.1 Ferrocolumbite .............................................................................................. 7-20 7.6.2 Pyrochlore..................................................................................................... 7-21 7.6.3 Fersmite ........................................................................................................ 7-21 7.6.4 Fenite Mineralization .................................................................................... 7-21 7.6.5 Mineral Zoning .............................................................................................. 7-21Project No.: 168967 TOC ii22 June 2012
  10. 10. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Mineral Resource Update 7.7 Comment on Section 7 .................................................................................................. 7-228.0 DEPOSIT TYPES ......................................................................................................................... 8-1 8.1 Comment on Section 8 .................................................................................................... 8-39.0 EXPLORATION ............................................................................................................................ 9-1 9.1 Grids and Surveys ........................................................................................................... 9-1 9.2 Geological Mapping ......................................................................................................... 9-1 9.3 Geochemical Sampling.................................................................................................... 9-1 9.3.1 Stream Sediment Sampling ............................................................................ 9-1 9.3.2 Soil Sampling .................................................................................................. 9-2 9.3.3 Rock Chip, Grab, and Channel Sampling ...................................................... 9-3 9.4 Bulk Sampling .................................................................................................................. 9-4 9.5 Research Programs......................................................................................................... 9-4 9.6 Comment on Section 9 .................................................................................................... 9-510.0 DRILLING ................................................................................................................................... 10-1 10.1 Core Drilling Strategy .................................................................................................... 10-4 10.1.1 Core Sizes .................................................................................................... 10-4 10.1.2 Collar Surveys .............................................................................................. 10-4 10.1.3 Down-Hole Surveys ...................................................................................... 10-5 10.1.4 Oriented Drill Core ........................................................................................ 10-5 10.1.5 Core Handling ............................................................................................... 10-5 10.1.6 Core Recovery .............................................................................................. 10-5 10.2 Drill Intercepts ................................................................................................................ 10-6 10.3 Comment on Section 10 ................................................................................................ 10-611.0 SAMPLE PREPARATION, ANALYSES, AND SECURITY ........................................................ 11-1 11.1 Sampling Methods ......................................................................................................... 11-1 11.2 Metallurgical Sampling .................................................................................................. 11-2 11.3 Density Determinations ................................................................................................. 11-2 11.3.1 Density Check Program................................................................................ 11-4 11.4 Analytical Laboratories .................................................................................................. 11-4 11.5 Sample Preparation and Analysis ................................................................................. 11-5 11.6 Quality Assurance and Quality Control ......................................................................... 11-5 11.6.1 Assessment of Precision .............................................................................. 11-6 11.6.2 Assessment of Accuracy ............................................................................ 11-12 11.6.3 Assessment of Laboratory Bias .................................................................. 11-16 11.6.4 Assessment of Contamination .................................................................... 11-18 11.6.5 Assay QA/QC Conclusions......................................................................... 11-24 11.7 Databases ................................................................................................................... 11-25 11.8 Security ........................................................................................................................ 11-25 11.9 Comment on Section 11 .............................................................................................. 11-2612.0 DATA VERIFICATION ................................................................................................................ 12-1 12.1 Database Verification .................................................................................................... 12-1 12.2 Site Visits ....................................................................................................................... 12-1 12.2.1 Drill Collar Location Check ........................................................................... 12-2 12.2.2 Inspection of Drill Core and Verification of Mineralization ............................ 12-2 12.3 Comment on Section 12 ................................................................................................ 12-413.0 MINERAL PROCESSING AND METALLURGICAL TESTING .................................................. 13-1 13.1 Head Samples for Initial Testing ................................................................................... 13-2Project No.: 168967 TOC iii22 June 2012
  11. 11. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Mineral Resource Update 13.2 Phase I Testing .............................................................................................................. 13-3 13.2.1 Grinding Size ................................................................................................ 13-3 13.2.2 Roughing and Cleaning Gravity Concentration ............................................ 13-3 13.3 Phase II Testing ............................................................................................................. 13-6 13.3.1 Flotation Tests .............................................................................................. 13-6 13.4 Phase III Testing............................................................................................................ 13-8 13.4.1 2011 and 2012 Work .................................................................................... 13-8 13.4.2 Review of Concentrate Treatment Options .................................................. 13-8 13.5 Accuracy of Assaying .................................................................................................... 13-9 13.6 Comment on Section 13 ................................................................................................ 13-914.0 MINERAL RESOURCE ESTIMATES ......................................................................................... 14-1 14.1 Introduction .................................................................................................................... 14-1 14.2 Assay Data and Capping ............................................................................................... 14-1 14.3 Composites .................................................................................................................... 14-1 14.4 Exploratory Data Analysis ............................................................................................. 14-2 14.5 Contact Analysis ............................................................................................................ 14-4 14.6 Variography ................................................................................................................... 14-7 14.7 Carbonatite Solid Modeling ........................................................................................... 14-7 14.8 Block Model Dimensions ............................................................................................... 14-7 14.9 Assignment of Lithology and Specific Gravity to Blocks ............................................... 14-8 14.10 Block Model Grade Estimate ......................................................................................... 14-8 14.11 Block Model Validation .................................................................................................. 14-9 14.11.1 Visual Validation ........................................................................................... 14-9 14.11.2 Global Grade Bias Check ........................................................................... 14-12 14.11.3 Local Grade Bias Check (Swath Plots) ...................................................... 14-12 14.11.4 Selectivity Check ........................................................................................ 14-14 14.12 In Situ Block Model Carbonatite Reconciliation........................................................... 14-16 14.13 Mineral Resource Classification .................................................................................. 14-16 14.14 Reasonable Prospects for Economic Extraction ......................................................... 14-19 14.14.1 Market Study............................................................................................... 14-19 14.14.2 Commodity Price ........................................................................................ 14-19 14.14.3 Physical Assumptions................................................................................. 14-19 14.14.4 Operational Considerations ........................................................................ 14-19 14.14.5 Economic Assumptions .............................................................................. 14-20 14.14.6 Economic Cut-Off ....................................................................................... 14-20 14.15 Mineral Resource Statement ....................................................................................... 14-21 14.16 Comparison of Mineral Resources .............................................................................. 14-23 14.17 Comment on Section 14 .............................................................................................. 14-2415.0 MINERAL RESERVE ESTIMATE .............................................................................................. 15-116.0 MINING METHODS .................................................................................................................... 16-1 16.1 Introduction .................................................................................................................... 16-1 16.2 Optimization ................................................................................................................... 16-1 16.2.1 Assumptions ................................................................................................. 16-1 16.2.2 Mining Method .............................................................................................. 16-2 16.2.3 Mineral Resources considered for the 2011 PEA ........................................ 16-3 16.2.4 Production Rate ............................................................................................ 16-4 16.3 Geotechnical Conditions................................................................................................ 16-4 16.4 Conceptual Mining Method ............................................................................................ 16-5Project No.: 168967 TOC iv22 June 2012
  12. 12. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Mineral Resource Update 16.4.1 Backfill Considerations ................................................................................. 16-5 16.5 Stoping Design .............................................................................................................. 16-6 16.5.1 Stability Analysis and Ground Support ......................................................... 16-6 16.5.2 Stope Geometry ........................................................................................... 16-7 16.5.3 Mining Sequence .......................................................................................... 16-7 16.5.4 Conceptual Mine Design .............................................................................. 16-7 16.5.5 Mining Dilution and Recovery ....................................................................... 16-7 16.6 Drilling and Blasting ....................................................................................................... 16-7 16.7 Mine Development......................................................................................................... 16-8 16.8 Mineralized Material and Waste Rock Haulage ............................................................ 16-9 16.9 Mine Services .............................................................................................................. 16-12 16.10 Mine Development and Production Forecasts ............................................................ 16-12 16.11 Mine Equipment Requirements ................................................................................... 16-14 16.12 Mine Infrastructure....................................................................................................... 16-14 16.13 Mining Personnel ......................................................................................................... 16-14 16.14 Comment on Section 16 .............................................................................................. 16-1417.0 RECOVERY METHODS ............................................................................................................ 17-1 17.1 Introduction .................................................................................................................... 17-1 17.2 Plant Design .................................................................................................................. 17-1 17.3 Comminution (Crushing, Storage, and Grinding) .......................................................... 17-2 17.4 De-Sliming and Flotation ............................................................................................... 17-3 17.5 Filtration ......................................................................................................................... 17-3 17.6 Concentrate Pre-Treatment ........................................................................................... 17-3 17.7 Chlorination and Distillation ........................................................................................... 17-4 17.8 Product / Materials Handling ......................................................................................... 17-4 17.9 Energy, Water, and Process Materials Requirements .................................................. 17-4 17.10 Comment on Section 17 ................................................................................................ 17-418.0 PROJECT INFRASTRUCTURE ................................................................................................. 18-1 18.1 Introduction .................................................................................................................... 18-1 18.2 Site Layout ..................................................................................................................... 18-1 18.3 Buildings ........................................................................................................................ 18-1 18.3.1 Mine Service Building ................................................................................... 18-1 18.3.2 Truck Shop ................................................................................................... 18-3 18.3.3 Warehouse ................................................................................................... 18-3 18.3.4 Process Building ........................................................................................... 18-3 18.3.5 Crushing and Screening Circuit .................................................................... 18-3 18.3.6 Portal Infrastructure ...................................................................................... 18-4 18.3.7 Explosives Storage ....................................................................................... 18-4 18.3.8 Aggregate Crushing and Concrete Batch Plants.......................................... 18-4 18.4 Roads and Logistics ...................................................................................................... 18-4 18.4.1 Access Road................................................................................................. 18-4 18.4.2 Haul Road ..................................................................................................... 18-5 18.5 Co-Disposal Storage Facilities ...................................................................................... 18-5 18.5.1 Drystack Considerations............................................................................... 18-5 18.5.2 Evaluation of Potential Sites ......................................................................... 18-6 18.5.3 Site Selection ................................................................................................ 18-7 18.5.4 Facility Design .............................................................................................. 18-8 18.5.5 Co-Disposal Facility Geohazards Considerations ........................................ 18-9 18.5.6 Co-Disposal Facility Stability Considerations ............................................... 18-9Project No.: 168967 TOC v22 June 2012
  13. 13. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Mineral Resource Update 18.5.7 Co-Disposal Facility Surface Water Run-Off Considerations ..................... 18-10 18.5.8 Co-Disposal Facility Closure Considerations ............................................. 18-11 18.6 Avalanche Hazard ....................................................................................................... 18-11 18.7 Water Supply, Distribution, and Treatment Systems .................................................. 18-11 18.8 Waste Considerations ................................................................................................. 18-12 18.9 Accommodation ........................................................................................................... 18-12 18.10 Power and Electrical .................................................................................................... 18-12 18.11 Fuel .............................................................................................................................. 18-13 18.12 Comment on Section 18 .............................................................................................. 18-1319.0 MARKET STUDIES AND CONTRACTS .................................................................................... 19-1 19.1 Introduction .................................................................................................................... 19-1 19.2 2011 PEA Market Studies ............................................................................................. 19-1 19.3 2011 PEA Commodity Price .......................................................................................... 19-1 19.3.1 Tantalum ....................................................................................................... 19-1 19.3.2 Niobium......................................................................................................... 19-2 19.4 Price Assumption Discussion ........................................................................................ 19-2 19.5 Comment on Section 19 ................................................................................................ 19-420.0 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT ....... 20-1 20.1 Environmental Assessment for Mining Projects ............................................................ 20-1 20.2 Project Studies .............................................................................................................. 20-2 20.3 Environmental Setting and Review of Environmental Baseline .................................... 20-3 20.4 Closure Considerations ................................................................................................. 20-9 20.5 Current Environmental Liabilities ................................................................................. 20-10 20.6 2011 PEA Closure Plan ............................................................................................... 20-10 20.7 Permitting..................................................................................................................... 20-10 20.8 Considerations of Social and Community Impacts ...................................................... 20-12 20.8.1 First Nations................................................................................................ 20-13 20.8.2 Local Communities ..................................................................................... 20-14 20.9 Comment on Section 20 .............................................................................................. 20-1421.0 2011 PEA CAPITAL AND OPERATING COSTS ....................................................................... 21-1 21.1 2011 PEA Basis of Estimate ......................................................................................... 21-1 21.2 2011 PEA Capital Costs ................................................................................................ 21-1 21.2.1 Infrastructure................................................................................................. 21-1 21.2.2 Material Handling .......................................................................................... 21-2 21.2.3 Process Plant................................................................................................ 21-2 21.2.4 Mining ........................................................................................................... 21-2 21.2.5 Contingency Costs ....................................................................................... 21-3 21.2.6 Indirect Costs ................................................................................................ 21-3 21.2.7 Sustaining Capital ......................................................................................... 21-4 21.2.8 Mine Closure................................................................................................. 21-4 21.2.9 Capital Cost Estimate Summary................................................................... 21-4 21.2.10 2011 PEA Operating Costs .......................................................................... 21-5 21.2.11 Capital and Operating Cost Discussion ........................................................ 21-6 21.3 Comment on Section 21 ................................................................................................ 21-622.0 2011 PEA ECONOMIC ANALYSIS ............................................................................................ 22-1 22.1 2011 PEA Valuation Method ......................................................................................... 22-1 22.2 2011 PEA Financial Model Parameters ........................................................................ 22-2 22.2.1 Mineral Resources and Mine Life ................................................................. 22-2Project No.: 168967 TOC vi22 June 2012
  14. 14. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Mineral Resource Update 22.2.2 Metallurgical Process ................................................................................... 22-2 22.2.3 Commodity Prices and Foreign Exchange ................................................... 22-2 22.2.4 Taxes ............................................................................................................ 22-2 22.2.5 PEA Financial Results .................................................................................. 22-4 22.2.6 2011 PEA Cash Costs .................................................................................. 22-4 22.2.7 2011 PEA Sensitivity Analysis ...................................................................... 22-6 22.2.8 Financial Analysis Discussion ...................................................................... 22-7 22.3 Comment on Section 22 ................................................................................................ 22-723.0 ADJACENT PROPERTIES ........................................................................................................ 23-124.0 OTHER RELEVANT DATA AND INFORMATION ..................................................................... 24-125.0 INTERPRETATION AND CONCLUSIONS ................................................................................ 25-1 25.1 Mineral Resource Update (Effective Date 22 June 2012) ............................................. 25-1 25.2 2011 PEA ...................................................................................................................... 25-2 25.2.1 Opportunities ................................................................................................ 25-3 25.2.2 Risks ............................................................................................................. 25-426.0 RECOMMENDATIONS .............................................................................................................. 26-127.0 REFERENCES ........................................................................................................................... 27-1TABLESTable 1-1: Blue River Project Estimated Mineral Resources; Effective Date 22 June 2012, Tomasz Postolski, P.Eng, Qualified Person ...................................................................... 1-9Table 1-2: Summary of Estimated Capital Costs .............................................................................. 1-17Table 1-4: Summary Financial Analysis at Various Discount Rates (base case is highlighted) ....... 1-19Table 2-1: Site Visit and Areas of Report Responsibilities .................................................................. 2-2Table 6-1: Blue River Exploration History Summary ........................................................................... 6-1Table 9-1: Soil Sample Campaigns ..................................................................................................... 9-2Table 9-2: Rock Sample Campaigns................................................................................................... 9-3Table 10-1: Drill Campaign Summary ................................................................................................. 10-2Table 10-2: Upper Fir Deposit Trench and Bulk Samples................................................................... 10-2Table 10-3: Example Drill Hole Intercept Summary Table .................................................................. 10-7Table 11-1: 2005 – 2010 Specific Gravity Determinations by Campaign ........................................... 11-3Table 11-2: 2005 – 2010 Specific Gravity Constants .......................................................................... 11-3Table 11-3 Control Sample Insertion Rate Summary ........................................................................ 11-7Table 11-4: Cumulative Frequency ARD Summary for Tantalum ....................................................... 11-8Table 11-5: Cumulative Frequency ARD Summary for Niobium ........................................................ 11-9Table 11-6: Cumulative Frequency ARD Summary for Tantalum (Mean > than 50 ppm Ta) ............. 11-9Table 11-7: 2010 Nb XRF(F) Blue River SRM Control Chart Summary ........................................... 11-16Table 11-8: 2010 Ta XRF(F) Blue River SRM Control Chart Summary ........................................... 11-16Table 11-9: Pulp Check Between-Laboratory Bias ........................................................................... 11-17Table 12-1: AMEC Site Visit Confirmation of Mineralization ............................................................... 12-3Table 13-1: Head Assay Grades, Bulk Samples BS-2F and BS-2G................................................... 13-3Table 13-2: Results from F81 .............................................................................................................. 13-7Table 13-3: Results of a Sequential Hydrochloric Acid Leach of Flotation “Middling” ........................ 13-8Project No.: 168967 TOC vii22 June 2012
  15. 15. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Mineral Resource UpdateTable 14-1: Capped Assays vs. 2.5 m Composites Statistics inside Carbonatites ............................. 14-1Table 14-2: Composite Statistics in Carbonatite ................................................................................. 14-2Table 14-3: Ta2O5 and Nb2O5 Correlogram Parameters in Carbonatite ............................................. 14-7Table 14-4: Block Model Dimensions .................................................................................................. 14-8Table 14-5: Estimation Parameters for Ta2O5 and Nb2O5 ................................................................... 14-9Table 14-6: Mean Grades for NN and ID3 Models............................................................................ 14-12Table 14-7: Blue River Project Estimated Mineral Resources; Effective Date 22 June, 2012, Tomasz Postolski, P.Eng, Qualified Person .................................................................. 14-22Table 14-8: Blue River Project Sensitivity of Estimated Mineral Resources to Tantalum Price; Effective Date 22 June 2012, Tomasz Postolski, P.Eng, Qualified Person ................... 14-23Table 16-1: Minimum Stope Dimensions for Constraining the Subset of Mineral Resources within Designed Stopes .............................................................................................................. 16-2Table 16-2: Blue River Project Estimated Mineral Resources Supporting 2011 PEA; Effective Date 29 September 2011, Tomasz Postolski, P.Eng., Qualified Person.................................. 16-3Table 16-3: Rock Mass Characteristics by Rock Group ..................................................................... 16-4Table 16-4: Major Joint Sets ............................................................................................................... 16-5Table 16-5: Stope Faces and Hydraulic Radius .................................................................................. 16-6Table 16-6: Mine Development and Production Forecasts ............................................................... 16-13Table 16-7: Mining and Tailings Facility Equipment Requirements .................................................. 16-15Table 16-8: Mining Personnel Requirements .................................................................................... 16-16Table 20-1: Provincial Permits, Approvals, Licences, and Authorizations ........................................ 20-11Table 20-2: Federal Permits, Approval, Licences, and Authorizations ............................................. 20-11Table 21-1: Summary of Estimated Capital Costs (CAD, 2011 constant dollars) ............................... 21-5Table 21-2: Average Life-of-Mine Operating Cost Summary (CAD, 2011 constant dollars) .............. 21-5Table 22-1: Summary Financial Analysis at Various Discount Rates ................................................. 22-4Table 22-3: Sensitivity Summary in CAD, 8% Discount Rate ............................................................. 22-6Table 26-1: Recommendations Summary ........................................................................................... 26-1FIGURESFigure 1-1: Sensitivity Summary, 8% Discount Rate.......................................................................... 1-21Figure 4-1: Project Location Map ......................................................................................................... 4-2Figure 4-2: Blue River Mineral Tenure Map ......................................................................................... 4-3Figure 7-1: Tectonic Belts of British Columbia and Carbonatite Occurrences ..................................... 7-2Figure 7-2: Blue River Project Local Geology Map .............................................................................. 7-4Figure 7-3: Blue River Local Geology Legend (for Figure 7-2) ............................................................ 7-5Figure 7-4: Deposit Area Surface Geology Map .................................................................................. 7-7Figure 7-5: Drill Collar and Vertical Section Locations ......................................................................... 7-8Figure 7-6: Longitudinal Section A – A’ (view SE)................................................................................ 7-9Figure 7-7: Geology Section 5796740 N ............................................................................................ 7-10Figure 7-8: Geology Section 5796425 N ............................................................................................ 7-11Figure 7-9: Fold Indicators (Hole F08-150: 121.8 m to 129.8 m) ....................................................... 7-13Figure 7-10: Fold Indicators (Hole F08-150: 143.5 m and 147.0 m) .................................................... 7-13Figure 7-11: Fold Indicators (Hole F08-151: 204.0 m to 204.5 m) ....................................................... 7-14Figure 7-12: Exploration Target Location Surface Map........................................................................ 7-19Project No.: 168967 TOC viii22 June 2012
  16. 16. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Mineral Resource UpdateFigure 10-1: Drill Collar Plan ................................................................................................................ 10-3Figure 11-1: 2005 to 2008 Quarter-Core Duplicate Pair Cumulative Frequency ARD Chart............... 11-8Figure 11-2: 2010 Drill Core Assay Program Cumulative Frequency ARD Chart .............................. 11-10Figure 11-3: 2009 Re-assay Program Ta XRF(F) Cumulative Frequency ARD Chart ...................... 11-11Figure 11-4: 2009 Re-assay Program Nb XRF(F) Cumulative Frequency ARD Chart ...................... 11-11Figure 11-5: 2005 to 2008 Ta ICP-MS BR-01 SRM Control Chart .................................................... 11-13Figure 11-6: 2005 to 2008 Nb ICP-MS BR-01 SRM Control Chart .................................................... 11-13Figure 11-7: 2009 Ta XRF(F) Blue River SRMs Control Chart ......................................................... 11-14Figure 11-8: 2009 Nb XRF(F) Blue River SRMs Control Chart .......................................................... 11-15Figure 11-9: 2010 Acme versus Stark Nb XRF(F) Check Pair RMA Chart ........................................ 11-18Figure 11-10: 2005 – 2008 Blank Ta ICP-MS Performance Chart ...................................................... 11-19Figure 11-11: 2005 - 2008 Blank Nb ICP-MS Performance Chart .................................................... 11-20Figure 11-12: 2009 Ta XRF(F) Blank Performance Chart.................................................................... 11-21Figure 11-13: 2009 Nb XRF(F) Blank Performance Chart ................................................................... 11-22Figure 11-14: 2010 Ta XRF(F) Blank Performance Chart.................................................................... 11-23Figure 11-15: 2010 Nb XRF(F) Blank Performance Chart ................................................................... 11-24Figure 13-1: Sample BS-2F – Gravity Separation (Different Grinds) ................................................... 13-4Figure 13-2: Sample BS-2G – Gravity Separation (Different Grinds) .................................................. 13-5Figure 13-3: Overall Rougher and Cleaner Recovery vs Grade by Centrifugal Gravity Concentration 13-5Figure 13-4: Upgrading by Wilfley and Mozley Units ........................................................................... 13-6Figure 14-1: Ta2O5 Histograms and Probability Plot within Carbonatite .............................................. 14-3Figure 14-2: Nb2O5 Histograms and Probability Plot within Carbonatite .............................................. 14-4Figure 14-3: Ta2O5 Contact Plots between Carbonatite and Fenite ..................................................... 14-5Figure 14-4: Nb2O5 Contact Plots between Carbonatite and Fenite .................................................... 14-6Figure 14-5: Ta2O5 ID3 Model within Carbonatite – Plan 1,146.25 .................................................... 14-10Figure 14-6: Ta2O5 ID3 Model within Carbonatite – Section N 5,796,932.5 ...................................... 14-10Figure 14-7: Nb2O5 ID3 Model within Carbonatite – Plan 1,146.25 ................................................... 14-11Figure 14-8: Nb2O5 ID3 Model within Carbonatite – Section N 5,796,932.5 ...................................... 14-11Figure 14-9: Swath Plot for Ta2O5 ID3 Model ..................................................................................... 14-13Figure 14-10: Swath Plot for Nb2O5 ID3 Model..................................................................................... 14-13Figure 14-11: Herco Grade – Tonnage Curves for Ta2O5 ID3 Model ................................................... 14-15Figure 14-12: Herco Grade – Tonnage Curves for Nb2O5 ID3 Model .................................................. 14-15Figure 14-13: Resource Classification – Plan 1,161.25 ....................................................................... 14-18Figure 14-14: Resource Classification – Section N 5,796,882.5 .......................................................... 14-18Figure 16-1: Conceptual Mine Layout Plan (plan view projection) ..................................................... 16-10Figure 16-2: Aerial View of the Mining Area from Upper Portal ......................................................... 16-11Figure 17-1: Concentration and Refining of Blue River Mineralization ................................................ 17-2Figure 18-1: Proposed Site Layout Plan............................................................................................... 18-2Figure 19-1: Ta Price Trend ................................................................................................................. 19-3Figure 19-2: Nb Price Trend ................................................................................................................. 19-4Figure 22-1: Sensitivity Summary in CAD, 8% Discount Rate ............................................................. 22-7Project No.: 168967 TOC ix22 June 2012
  17. 17. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Mineral Resource UpdateAPPENDICESA p p e n d i x A : List of ClaimsProject No.: 168967 TOC x22 June 2012
  18. 18. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Mineral Resource Update1.0 SUMMARY1.1 Terms of Reference AMEC Americas Limited (AMEC) was commissioned by Commerce Resources Corporation (Commerce) to prepare a NI 43-101 compliant Mineral Resource update and technical report (the Report) on the wholly-owned Blue River tantalum–niobium Project (the Project), located within the North Thompson River valley of east–central British Columbia (B.C.), Canada. This technical report supports the findings of the Mineral Resource update and also includes summaries from a Preliminary Economic Assessment study completed on the Blue River Project with an effective date 29 September 2011 (2011 PEA). Results from the 2011 PEA mining studies have not changed in terms of their outcomes as their underlying assumptions remain reasonable.1.2 Key Outcomes1.2.1 Mineral Resource Update The key findings of the Mineral Resource update (effective date 22 June 2012) are summarized as follows:  Indicated Category: 51.8 million tonnes @ 192 ppm Ta2O5 and 1,490 ppm Nb2O5  Inferred Category: 8.8 million tonnes @ 186 ppm Ta2O5 and 1,660 ppm Nb2O5 The Mineral Resource update uses the same assumptions from the 2011 PEA for the following items:  Ta and Nb metal prices  Mining method and mining extraction factor  Processing method and recovery factor  CAPEX and OPEX costs  Block Unit Value cut-off values of US$40/t for the bulk mining method and US$58/t for the selective mining method. The Mineral Resources have significantly increased in tonnage mostly due to a reduction in the block unit value cut-off by eliminating back-fill costs and, to a lesser extent, additional infill diamond drilling.Project No.: 168967 Page 1-122 June 2012
  19. 19. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Mineral Resource Update1.2.2 2011 PEA Outcomes From the 2011 PEA, the following work and outcomes are considered to remain reasonable as their underlying assumptions have not changed.  Estimated Internal rate of return: 9.1% (before tax)  Estimated Net present value: CAD$18.5 million at 8% discount rate (before tax)  Estimated Payback: 6.3 years  Average diluted grade in the conceptual mine plan to the mill: 185 ppm Ta2O5 and 1,591 ppm Nb2O5  Conceptual Operating cost: CAD$38.44/t milled (mining ~ 55% of operating cost)  Conceptual Capital cost: CAD$379 million (process ~ 31% of initial capital cost)  Proposed product: High purity Ta and Nb chloride product that is suitable for several markets  Conceptual Mine Life: 10 years based upon the mineral resources (effective date 29 September 2011) defined using information to the end of 2009 drilling  NPV Sensitivity: The Upper Fir deposit is most sensitive to changes in exchange rate, commodity prices, and mining costs The above key outcomes contain forward looking information. The assumptions and risks regarding those assumptions are summarized and explained in more detail in Sections 1.15, and 1.16 of the Report.1.3 Project Setting The Blue River Project is situated 250 km north of the city of Kamloops, approximately 90 km south of the town of Valemount and 23 km north of the community of Blue River, in the North Thompson River valley of east–central British Columbia. The property is accessed from BC Highway 5 (Yellowhead Highway) via a 4 km well-groomed gravel road. Within the Project area, access is by forestry service and logging roads or by helicopter.1.4 Tenure, Surface Rights, Royalties, and Agreements The Project comprises 249 two-post claim, four-post claim, and mineral cell title submission (MCX) claims in good standing that encompass just over 1,000 km2 (105,195 ha) within the Kamloops Mining Division. These claims are wholly-owned by Commerce. Currently, all of the mineral claims are valid until 31 March 2021. All but two of the mineral claims are on Crown land.Project No.: 168967 Page 1-222 June 2012
  20. 20. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Mineral Resource Update There are surveyed parcels along the western edge of the property with surface rights held by other parties which overlap the property mineral tenure claims. Commerce is not aware of any material issues that would prevent negotiation for access or surface rights of these surveyed parcels should they be required in the future. The overlapped claims do not host mineral resources, and currently no carbonatites are known within these claims. There are no known royalties, back-in rights, agreements, or encumbrances attributed to the claims.1.5 Environment, Permitting, and Socio-Economics Commerce has been pro-active with regard to environmental and socioeconomic issues. Environmental monitoring, baseline studies and site investigations have been ongoing at the Blue River Project site since the summer season of 2006. Kinetic test work for acid rock drainage and metals leaching was initiated in 2010. Additional environmental baseline programs are expected to continue, as required through 2012. First Nations engagement, with respect to exploration activities, began in 2007, and will continue for the duration of the Project. The Blue River Project lies on lands which comprise part of the traditional territory of the Simpcw First Nation. First Nations engagement, with respect to exploration activities, began in 2007. Public engagement to date has included meetings with local councils and informal discussions with local land-owners.1.6 Geology and Mineralization The Blue River deposit is hosted within polyfolded carbonatite rocks. The carbonatites intrude Late Proterozoic supracrustal rocks which lie on the north-eastern margin of the Shuswap Metamorphic Complex within the Omineca terrane. The Blue River carbonatites are hosted in the Mica Creek assemblage of the Horsethief Creek Group. Two units of the Mica Creek assemblage underlie much of the Project area. Carbonatites were emplaced as dikes or sills into the metasedimentary host rocks prior to regional deformation and metamorphism. Regional deformation has folded the carbonatite and its host rocks. Contacts between carbonatite and the host metasediments are typically sharp and mantled by zones of metasomatized host rock, known as fenite. The carbonatite has average thicknesses of 30 m, ranging between 5 m to about 90 m thick, and with strike lengths ranging between 50 m to 1,100 m. Both dolomitic carbonatites and calcitic carbonatite occur at Blue River.Project No.: 168967 Page 1-322 June 2012
  21. 21. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Mineral Resource Update Mineralization comprises niobium- and tantalum-bearing minerals that have crystallized in carbonatite by primary magmatic concentration and in fenite. Primary economic minerals, with their generic end-member formulae, are ferrocolumbite ((Fe,Mn,Mg)(Nb,Ta)2O6,) and pyrochlore ((Ca,Na,U)2(Nb,Ti,Ta)2O6(OH,F)). In the opinion of the QPs, knowledge of the deposit setting, lithologies, structural and alteration controls on mineralization, and mineralization style are sufficient to support mineral resource estimation.1.7 Exploration The Blue River area has been the subject of intermittent exploration since the discovery of vermiculite-bearing carbonatite rock in 1949. Since Project acquisition in 2000, Commerce has completed surface mapping, trenching, soil, rock chip, grab and channel sampling, core drilling, metallurgical testing, bulk sampling, environmental baseline studies, mineral resource estimation, and a PEA on the Project. In the opinion of the QPs, the exploration programs completed to date are appropriate to the style of the deposits and prospects within the Project. The exploration and research work supports the genetic and affinity interpretations.1.8 Exploration Potential The Upper Fir carbonatite has exploration potential directly northward of known deposit extents based on soil sample results. Additional resource definition drilling is warranted. The Bone Creek and Fir carbonatites have additional exploration potential along and across strike, based on soil sample anomalies. Additional in-fill soil sampling is warranted prior to diamond drilling to assess for potential connections with the Upper Fir carbonatite. In addition, Commerce has identified numerous tantalum-in-soil anomalies from geochemical programs that require follow up. In the opinion of the QPs, the Project retains significant exploration potential for additional carbonatite-hosted tantalum–niobium mineralization.1.9 Drilling AMEC received a drilling database from Commerce that had a database closure date of 29 September 2011. The database comprises a total of 269 core drill holes withinProject No.: 168967 Page 1-422 June 2012
  22. 22. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Mineral Resource Update the Upper Fir, Bone Creek and Fir (Lower) carbonatites consisting of 54,065 m of HQ (63.5 mm) diameter core. Of the 269 core drill holes, 237 drill holes totalling 50,395 m of HQ diameter core, and 12,736 samples are used to support the Mineral Resource update. Six geotechnical drill holes comprising 1,271 m of HQ diameter oriented core were completed during 2010. In addition, optical and acoustic televiewer oriented core surveys were completed for two 2010 holes, four pre-2010 holes, and eighteen 2011 campaign holes during 2010 and 2011. Core recovery is very good within the waste and carbonatite rocks (typically >95%). The only area that may have core recovery issues would be within the fenite rocks located in the immediate hanging wall to the carbonatite. Core sampling methods and approaches have been consistent through the 2005 to 2011 drill programs and the protocols are consistent with industry standard. In the opinion of the QPs, the quantity and quality of the collar, down-hole survey, lithology, and geotechnical data collected in the exploration and infill drill programs completed by Commerce are sufficient to support mineral resource estimation.1.10 Sample Preparation, Analysis, and Security Drill hole samples were collected from an area approximately 1,600 m north–south by 1,000 m east-west. Average spacing between drill-hole intercepts in the Mineral Resource area varies from 40 to 50 m. Commerce regularly collected specific gravity measurements at 3 m core intervals using a water immersion method. Check sampling from field-collected core samples was completed by Met Solve Laboratories of Burnaby, B.C. for the 2005 – 2009 campaigns with good correlation to the field measurements recorded in the exploration database. Check specific gravity determinations for the 2010 campaign have yet to be completed. The entire carbonatite intersection and shoulder samples on each side of the intersection are sampled; samples are typically 1 m in length and geological contacts are generally respected. Half core is sent for analysis. Acme Analytical Laboratories (Acme) in Vancouver was the primary laboratory for sample preparation of the 2005 to 2008 drill core samples. Acme is an independent mineral testing laboratory registered under ISO 9001.Project No.: 168967 Page 1-522 June 2012
  23. 23. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Mineral Resource Update PRA / Inspectorate Laboratories (Inspectorate) in Richmond, B.C., is the primary sample preparation laboratory for the 2009 to 2011 drill core samples. Inspectorate is also an independent mineral testing laboratory that reportedly works to internationally- recognized standards such as ISO and ASTM. The Inspectorate-Vancouver laboratory received ISO9001:2000 accreditation in 2006 and 2009. Acme has been the primary analytical laboratory since 2005 up to and including 2011 drill core samples. In October 2011 the Acme-Vancouver laboratory received formal approval of its ISO/IEC 17025:2005 accreditation. Sample preparation for samples that support the Mineral Resource estimate has followed a similar procedure for all of Commerce’s drill programs. The preparation procedure is consistent with industry-standard methods for sampling within carbonatite deposits. Analyses were completed at Acme Analytical Laboratories. Between 2005 and 2008, Ta and Nb were analysed by ICP-MS following a lithium metaborate / tetraborate fusion and nitric acid digestion. Analysis in 2009 and 2010 was by X-Ray fluorescence methods following a lithium metaborate fusion XRF(F) and ICP methods. Overall, the drill programs included insertion of blank, duplicate and standard reference material samples at a rate that meets industry-accepted standards of insertion rates. AMEC concludes the Blue River sample results show imprecision but no consistent bias and that the ICP-MS results from 2005 to 2008, and the XRF(F) results supporting the 2009 and 2010 drilling are suitable for use in mineral resource estimation. Caution should be applied in assigning a high level of confidence to the pre-2010 tantalum and niobium analytical results until precision and accuracy issues are resolved. Independent data audits have been conducted, and indicate that the sample collection and database entry procedures are acceptable. Sample security, storage facilities, and chain of custody procedures are consistent with industry standards. The QPs are of the opinion that the quality of the specific gravity, tantalum and niobium analytical data are sufficiently reliable to support mineral resource estimation and that sample preparation, analysis, and security are generally performed in accordance with exploration best practices and industry standards.1.11 Data Verification Based on site visit inspections, data quality checks, and a minimum 5% database verification completed by AMEC, the QPs are of the opinion that the collar coordinates,Project No.: 168967 Page 1-622 June 2012
  24. 24. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Mineral Resource Update down-hole surveys, lithologies, and assay data are considered sufficiently free of error and that the data quality are suitable to support mineral resource estimation.1.12 Metallurgical Testwork Testwork began in 2009 and continued into 2010 to develop a process flowsheet for the Blue River Project. The testwork was based on material produced from two bulk samples, BS-2F and BS–2G. Mineralogical analysis was performed to obtain knowledge regarding the occurrence of the tantalum and niobium within the material. The testwork to date has primarily taken place in three phases:  Phase I – focused on the recovery of the tantalum–niobium minerals by gravity although grinding and mineralogy investigations were also performed.  Phase II – focused on the recovery and upgrading of the tantalum–niobium minerals by flotation.  Phase III – continued optimization of the process flowsheet for the production of a tantalum-niobium mineral concentrate. Phase I that showed gravity could concentrate the material to a low-grade product, but that upgrading increasingly gave lower levels of metallurgical recovery as grade was sought. Work in Phase II saw the use of flotation concentration technology similar to that being used for niobium-bearing carbonatites at Iamgold’s Niobec Mine in Quebec, Canada. There was immediate success in the first phases of the work. Although there are several stages to the concentration, the overall level of equipment, risk, and complexity to produce a saleable or treatable concentrate is lower than the gravity route. In the opinion of the QPs, the following conclusions are applicable:  Tantalum and niobium occur as ferrocolumbite and pyrochlore, which are amenable to conventional flotation and proven refining processes with estimated recoveries of 65% to 70%. For the purposes of the financial analysis in Section 22 of this Report, it was assumed that the process plant will have a 65% recovery for Ta and 69% recovery for Nb in the flotation stage.  The metallurgical testwork has shown that it is possible to collect the tantalum and niobium minerals into a concentrate suitable for extraction of the metals into saleable products. The first step of the process uses typical grinding followed by flotation. There is confidence that the secondary treatment or metal extraction ofProject No.: 168967 Page 1-722 June 2012
  25. 25. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Mineral Resource Update the material is possible by an existing method such as aluminothermic reduction followed by chlorine refining. These results are suitable to support estimation of mineral resources for the deposits.1.13 Mineral Resource Estimation The resource model was constructed inside carbonatite using 237 diamond drill holes totalling 50,395 m of HQ diameter core and 12,736 samples. Geological interpretations were provided by Commerce to AMEC in the form of electronic 3D solid wireframes. Capped drill core assays were composited down the hole to a fixed length of 2.5 m respecting lithological boundaries. Exploratory data analysis (EDA) was performed on the composites. The coefficients of variation are low and support the use of linear grade interpolation methods such as inverse distance methods. Blocks within in the model were coded by lithology solids. Specific gravity values were assigned by lithological unit. Ta2O5 and Nb2O5 grades were estimated in the carbonatite using an inverse distance to the power of 3 (ID3) interpolation method. A four-pass interpolation approach was used with each successive pass having greater search distances. The block model grades were validated by visual inspection comparing composites to block grades on-screen, declustered global statistics checks, local biases checks using swath plots, and finally model selectivity checks. No issues were identified that would materially affect the Mineral Resource update. The current mineral resource classification at Blue River is restricted to Indicated or Inferred based on the following:  Confidence limits drill hole spacing studies  Concerns over analytical precision and provisional accuracy for the sample dataset from 2005 to 2009  Required metallurgical testwork on the final stage of the proposed metallurgical process is still ongoing to support proof-of–concept. To assess reasonable prospects for economic extraction, the updated Mineral Resources have been constrained using a “Stope Analyzer”. AMEC assumed that the Blue River deposit would be mined utilizing self-supported, underground bulk mining methods under a conceptual scenario that considers mining and processing at a rate of 7,500 tonnes per day. Mining and economic parameters applied were based on theProject No.: 168967 Page 1-822 June 2012

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