Technical Report: Blue River Tantalum and Niobium Project (Preliminary Economic Assessment)

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Technical Report: Blue River Tantalum and Niobium Project (Preliminary Economic Assessment)

  1. 1. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Preliminary Economic AssessmentPrepared for:Commerce Resources CorporationPrepared by:Albert Chong, P.Geo.Tomasz Postolski, P.Eng.Ramon Mendoza Reyes, P.Eng.Tony Lipiec, P.Eng.Behrang Omidvar, P.Eng.Effective Date: 29 September 2011Project No. 162230
  2. 2. 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 Preliminary Economic Assessment” with an effectivedate of 29 September, 2011 (the “Technical Report”).I am a Professional Geoscientist in the Province of British Columbia (P.Geo. #23773). I graduated fromMcMaster University, Hamilton, Ontario with a B.Sc. degree in Geology, and from the University ofTasmania with a M.Sc. degree in Exploration Geoscience.I have practiced my profession for 26 years since graduation. I have been directly involved in green fieldsand brown fields exploration, mining operations, consulting, and resource estimation of base metal,precious metal and rare metal deposits.As a result of my experience and qualifications, I am a Qualified Person as defined in National Instrument43–101 Standards of Disclosure for Mineral Projects (NI 43–101).I visited the Blue River property from July 11 to 16, 2010, June 27 to 30, 2011, and September 6 to 14,2011.I am responsible for Sections 1 to 12, 20, and 23 to 27 of the Technical Report.I am independent of Commerce Resources Corporation as independence is described by Section 1.5 ofNI 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 Technical Reportcontains all scientific and technical information that is required to be disclosed to make the TechnicalReport not misleading.“signed and sealed”Albert Chong, P.Geo.Dated: 31 October, 2011
  3. 3. 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 Preliminary Economic Assessment” with an effectivedate of 29 September, 2011 (the “Technical Report”).I am a Professional Engineer in the Province of British Columbia (P.Eng. #34784). I have graduated fromThe University of Mining and Metallurgy, Krakow, Poland with a Magister Inzynier degree in GeologicalEngineering, and from the University of British Columbia with a Master of Applied Science degree also inGeological Engineering. I have completed the Citation Program in Applied Geostatistics at the Centre forComputational Geostatistics at the University of Alberta.I have 17 years of consulting, mine operations, and academic experience specializing in geostatisticalmineral resource estimation and geological evaluation of gold, copper, rare earth metals and othermineral deposits in Canada and abroad.As a result of my experience and qualifications, I am a Qualified Person as defined in National Instrument43–101 Standards of Disclosure for Mineral Projects (NI 43–101).I visited the Blue River property June 27 to 30, 2011.I am responsible for Section 14 and those portions of the Summary, Interpretation and Conclusions, andRecommendations that pertain to this Section of the Technical Report.I am independent of Commerce Resources Corporation as independence is described by Section 1.5 ofNI 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 Technical Reportcontains all scientific and technical information that is required to be disclosed to make the TechnicalReport not misleading.“signed and sealed”Tomasz Postolski, P.Eng.Dated: 31 October 2011
  4. 4. CERTIFICATE OF QUALIFIED PERSON Ramon Mendoza Reyes (P.Eng.) Suite 400, 111 Dunsmuir Street Vancouver, B.C., Canada Tel: +1 (604) 664-3075; Fax: +1 (6040 664-3057 email: ramon.mendoza@amec.comI, Ramon Mendoza Reyes (P.Eng.) am employed as a Principal Mining Engineer with AMEC AmericasLimited.This certificate applies to the Technical Report titled “Blue River Tantalum–Niobium Project, BritishColumbia, Canada, NI 43-101 Technical Report on Preliminary Economic Assessment” with an effectivedate of 29 September, 2011 (the “Technical Report”).I am a Professional Engineer in the province of British Columbia. I graduated in 1989 from the NationalAutonomous University of Mexico with a bachelor’s degree in Mining Engineering, and in 2003 completeda M.Sc. Degree in Mining & Earth Systems Engineering from the Colorado School of Mines in Golden,Colorado, USA. I have practiced my profession for 22 years, and have previously been involved withmine designs, mine planning and mine operations for base metal, disseminated sulphide and industrialmineral projects in North America and South America.As a result of my experience and qualifications, I am a Qualified Person as defined in National Instrument43–101 Standards of Disclosure for Mineral Projects (NI 43–101).I visited the Blue River property in British Columbia between the 12 and the 14 of July, 2010.I am 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 am independent of Commerce Resources Corporation as independence is described by Section 1.5 ofNI 43–101.I have been involved with the mining aspects of the Blue River Tantalum–Niobium Project since January2010.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 Technical Reportcontains all scientific and technical information that is required to be disclosed to make the TechnicalReport not misleading.“signed and sealed”Ramon Mendoza Reyes, P.Eng.Dated: 31 October 2011
  5. 5. CERTIFICATE OF QUALIFIED PERSON Ignacy (Tony) Lipiec (P.Eng.) Suite 400, 111 Dunsmuir St Vancouver, BC., Canada Tel: 604-664-3130; Fax: 604-664-3057 Email: tony.lipiec@amec.comI, Ignacy (Tony) Lipiec (P.Eng.) am employed as a Principal Metallurgical Engineer with AMEC AmericasLimited.This certificate applies to the Technical Report titled “Blue River Tantalum–Niobium Project, BritishColumbia, Canada, NI 43-101 Technical Report on Preliminary Economic Assessment” with an effectivedate of 29 September, 2011 (the “Technical Report”).I am a Professional Engineer in the province of British Columbia. I graduated from the University of BritishColumbia with a B.A.Sc. degree in Mining & Mineral Process Engineering, in 1985. I have practiced myprofession for 25 years, and have previously been involved with metallurgical design and processengineering for base metal and disseminated sulphide projects in North America and South America.As a result of my experience and qualifications, I am a Qualified Person as defined in National Instrument43–101 Standards of Disclosure for Mineral Projects (NI 43–101).I did not visit the Blue River property.I am responsible for Sections 13, 17, 18, 21 and those portions of the Summary, Interpretation andConclusions and Recommendations that pertain to those sections of the Technical Report.I am independent of Commerce Resources Corporation as independence is described by Section 1.5 ofNI 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 Technical Reportcontains all scientific and technical information that is required to be disclosed to make the TechnicalReport not misleading.“signed and sealed”Tony Lipiec, P.Eng.Dated: 31 October 2011
  6. 6. 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 Preliminary Economic Assessment” with an effectivedate 29 September, 2011 (the “Technical Report”).I am a Professional Engineer in the Province of British Columbia (P.Eng. #35500). I have graduated fromThe University of British Columbia with a Mechanical Engineering degree.I have seven years of experience in engineering, project management and financial analysis for miningand other projects. I have prepared cash-flow models and conducted financial and throughput analysesof 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 National Instrument43–101 Standards of Disclosure for Mineral Projects (NI 43–101).I have not visited the Blue River property.I am 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 am independent of Commerce Resources Corporation as independence is described by Section 1.5 ofNI 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 Technical Reportcontains all scientific and technical information that is required to be disclosed to make the TechnicalReport not misleading.“signed and sealed”Behrang Omidvar, P.Eng.Dated: 31 October 2011
  7. 7. IMPORTANT NOTICEThis report was prepared as a National Instrument 43-101 Technical Report for CommerceResources Corporation (Commerce) by AMEC Americas Limited (AMEC). The quality ofinformation, conclusions, and estimates contained herein is consistent with the level ofeffort involved in AMEC’s services, based on: i) information available at the time ofpreparation, ii) data supplied by outside sources, and iii) the assumptions, conditions, andqualifications set forth in this report. This report is intended for use by Commerce subjectto the terms and conditions of its contract with AMEC. Except for the purposes legislatedunder Canadian provincial securities law, any other uses of this report by any third party isat that party’s sole risk.
  8. 8. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Preliminary Economic AssessmentCONTENTS1.0 SUMMARY ................................................................................................................... 1-1 1.1 Key Outcomes .......................................................................................................... 1-1 1.2 Location and Access ................................................................................................. 1-1 1.3 Mineral Tenure, Surface Rights, Royalties, and Agreements .................................... 1-1 1.4 Environment, Permitting and Socio-Economics......................................................... 1-2 1.5 Geology and Mineralization....................................................................................... 1-3 1.6 Exploration ................................................................................................................ 1-3 1.7 Exploration Potential ................................................................................................. 1-4 1.8 Drilling....................................................................................................................... 1-4 1.9 Sample Analysis and Security ................................................................................... 1-5 1.10 Data Verification ....................................................................................................... 1-6 1.11 Metallurgical Testwork .............................................................................................. 1-6 1.12 Mineral Resource Estimate ....................................................................................... 1-7 1.13 Proposed Mine Plan.................................................................................................. 1-9 1.13.1 Geotechnical Considerations ........................................................................... 1-10 1.13.2 Dilution Considerations .................................................................................... 1-10 1.13.3 Drilling and Blasting ......................................................................................... 1-10 1.13.4 Mine Development ........................................................................................... 1-10 1.13.5 Mineralized Material and Waste Haulage ......................................................... 1-11 1.13.6 Mine Services .................................................................................................. 1-11 1.14 Mine Production Forecasts ..................................................................................... 1-12 1.15 Process Design....................................................................................................... 1-12 1.16 Tailings and Waste Management ............................................................................ 1-15 1.17 Planned Project Infrastructure ................................................................................. 1-15 1.18 Markets ................................................................................................................... 1-16 1.19 Capital Costs .......................................................................................................... 1-17 1.20 Operating Costs ...................................................................................................... 1-17 1.21 Financial Analysis ................................................................................................... 1-18 1.22 Cash Costs ............................................................................................................. 1-19 1.23 Sensitivity Analysis ................................................................................................. 1-20 1.24 Interpretations and Conclusions .............................................................................. 1-21 1.25 Recommendations .................................................................................................. 1-232.0 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.......................................................................................................... 2-3 2.5 Information Sources and References ........................................................................ 2-3 2.6 Previous Technical Reports ...................................................................................... 2-4Project No.: 16223029 September 2011 TOC i
  9. 9. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Preliminary Economic Assessment3.0 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.............................................................................................................. 4-5 4.7 Social and Community Impact .................................................................................. 4-5 4.8 Comment on Section 4 ............................................................................................. 4-55.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE ANDPHYSIOGRAPHY ................................................................................................................... 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 Commerce Exploration ............................................................................................. 6-1 6.2 Commerce Mineral Resource Estimates ................................................................... 6-17.0 GEOLOGICAL SETTING AND MINERALIZATION ...................................................... 7-1 7.1 Regional Geology ..................................................................................................... 7-1 7.2 Project Geology ........................................................................................................ 7-1 7.2.1 Metasedimentary Rocks .................................................................................... 7-3 7.2.2 Gneisses and Schists ........................................................................................ 7-3 7.2.3 Amphibolites ...................................................................................................... 7-3 7.2.4 Intrusive Rocks .................................................................................................. 7-5 7.2.5 Pegmatite Dykes.............................................................................................. 7-10 7.3 Structural Geology and Metamorphism ................................................................... 7-10 7.4 Geochronology ....................................................................................................... 7-11 7.5 Carbonatites ........................................................................................................... 7-12 7.5.1 Fir Carbonatite ................................................................................................. 7-12 7.5.2 Verity Carbonatite ............................................................................................ 7-13 7.5.3 Exploration Targets .......................................................................................... 7-13 7.6 Mineralogy .............................................................................................................. 7-14 7.6.1 Ferrocolumbite ................................................................................................. 7-16 7.6.2 Pyrochlore ....................................................................................................... 7-16 7.6.3 Fersmite........................................................................................................... 7-16 7.6.4 Fenite Mineralization ........................................................................................ 7-17 7.6.5 Mineral Zoning ................................................................................................. 7-17 7.7 Comments on Section 7 .......................................................................................... 7-17Project No.: 16223029 September 2011 TOC ii
  10. 10. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Preliminary Economic Assessment8.0 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........................................................... 9-2 9.4 Bulk Sampling ........................................................................................................... 9-3 9.5 Research Programs .................................................................................................. 9-4 9.6 Comment on Section 9 ............................................................................................. 9-410.0 DRILLING................................................................................................................... 10-1 10.1 Core Drilling Strategy .............................................................................................. 10-2 10.1.1 Core Sizes ....................................................................................................... 10-2 10.1.2 Collar Surveys ................................................................................................. 10-2 10.1.3 Down Hole Surveys ......................................................................................... 10-4 10.1.4 Oriented Drill Core ........................................................................................... 10-4 10.1.5 Core Handling .................................................................................................. 10-4 10.1.6 Core Recovery ................................................................................................. 10-4 10.2 Drill Intercepts ......................................................................................................... 10-5 10.3 Comment on Section 10.......................................................................................... 10-511.0 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 11.4 Analytical and Test Laboratories ............................................................................. 11-3 11.5 Sample Preparation and Analysis ........................................................................... 11-4 11.6 Quality Assurance and Quality Control.................................................................... 11-4 11.6.1 Assessment of Accuracy with SRM Control Samples....................................... 11-5 11.6.2 Assessment of Accuracy with Secondary Laboratory Pulp Checks .................. 11-5 11.6.3 Assessment of Precision with Duplicates ......................................................... 11-6 11.6.4 Assessment of Contamination Using Blanks .................................................... 11-7 11.7 Databases .............................................................................................................. 11-7 11.8 Security................................................................................................................... 11-7 11.9 Comment on Section 11.......................................................................................... 11-812.0 DATA VERIFICATION ................................................................................................ 12-1 12.1 Comments on Section 12 ........................................................................................ 12-113.0 MINERAL PROCESSING AND METALLURGICAL TESTING.................................... 13-1 13.1 Head Samples for Initial Testing ............................................................................. 13-2 13.2 Phase I Testing ....................................................................................................... 13-2 13.2.1 Grinding Size ................................................................................................... 13-2 13.2.2 Roughing and Cleaning Gravity Concentration ................................................ 13-3 13.3 Phase II Testing ...................................................................................................... 13-5 13.3.1 Flotation Tests ................................................................................................. 13-5 13.4 Review of Concentrate Treatment Options ............................................................. 13-8Project No.: 16223029 September 2011 TOC iii
  11. 11. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Preliminary Economic Assessment 13.5 Accuracy of Assaying .............................................................................................. 13-8 13.6 Comment on Section 13.......................................................................................... 13-914.0 Mineral Resource Estimates ....................................................................................... 14-1 14.1 Geological Models .................................................................................................. 14-1 14.2 Exploratory Data Analysis ....................................................................................... 14-2 14.3 Density Assignment ................................................................................................ 14-2 14.4 Grade Capping/Outlier Restrictions ......................................................................... 14-3 14.5 Composites ............................................................................................................. 14-3 14.6 Variography ............................................................................................................ 14-3 14.7 Estimation/Interpolation Methods ............................................................................ 14-3 14.8 Block Model Validation ............................................................................................ 14-4 14.9 Classification of Mineral Resources ........................................................................ 14-4 14.10 Reasonable Prospects of Economic Extraction ................................................... 14-5 14.10.1 Tantalum Pricing .......................................................................................... 14-5 14.10.2 Niobium Pricing ............................................................................................ 14-6 14.10.3 Physical Assumptions .................................................................................. 14-6 14.10.4 Operational Considerations .......................................................................... 14-7 14.10.5 Economic Assumptions ................................................................................ 14-7 14.10.6 Economic Cut-off .......................................................................................... 14-7 14.11 Mineral Resource Statement ............................................................................... 14-8 14.12 Factors That May Affect the Mineral Resource Estimate ................................... 14-11 14.13 Comment on Section 14 .................................................................................... 14-1115.0 Mineral Reserve Estimates ......................................................................................... 15-116.0 MINING METHODS.................................................................................................... 16-1 16.1 Optimization ............................................................................................................ 16-1 16.1.1 Assumptions .................................................................................................... 16-1 16.1.2 Mining Method ................................................................................................. 16-2 16.1.3 Production Rate ............................................................................................... 16-3 16.1.4 Backfill Option .................................................................................................. 16-3 16.2 Geotechnical Conditions ......................................................................................... 16-3 16.3 Conceptual Mining Method ..................................................................................... 16-4 16.4 Stoping Design ....................................................................................................... 16-5 16.4.1 Stability Analysis and Ground Support ............................................................. 16-5 16.4.2 Stope Geometry............................................................................................... 16-7 16.4.3 Mining Sequence ............................................................................................. 16-7 16.4.4 Conceptual Mine Design .................................................................................. 16-7 16.4.5 Mining Dilution and Recovery .......................................................................... 16-7 16.5 Drilling and Blasting ................................................................................................ 16-8 16.6 Mine Development .................................................................................................. 16-8 16.7 Mineralized Material and Waste Rock Haulage ....................................................... 16-9 16.8 Mine Services ....................................................................................................... 16-12 16.9 Mine Development and Production Forecasts ....................................................... 16-12 16.10 Mine Equipment Requirements ......................................................................... 16-14 16.11 Mine Infrastructure ............................................................................................ 16-14 16.12 Mining Personnel............................................................................................... 16-14 16.13 Comment on Section 16 .................................................................................... 16-14Project No.: 16223029 September 2011 TOC iv
  12. 12. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Preliminary Economic Assessment17.0 RECOVERY METHODS ............................................................................................ 17-1 17.1 Plant Design ........................................................................................................... 17-1 17.2 Comminution (Crushing, Storage and Grinding)...................................................... 17-1 17.3 De-sliming and Flotation ......................................................................................... 17-2 17.4 Filtration .................................................................................................................. 17-3 17.5 Concentrate Pre-Treatment .................................................................................... 17-4 17.6 Chlorination and Distillation..................................................................................... 17-4 17.7 Product/Materials Handling ..................................................................................... 17-4 17.8 Energy, Water and Process Materials Requirements .............................................. 17-4 17.9 Comment on Section 17.......................................................................................... 17-418.0 PROJECT INFRASTRUCTURE ................................................................................. 18-1 18.1 Site Layout .............................................................................................................. 18-1 18.2 Buildings ................................................................................................................. 18-1 18.2.1 Mine Service Building ...................................................................................... 18-1 18.2.2 Truck shop ....................................................................................................... 18-1 18.2.3 Warehouse ...................................................................................................... 18-1 18.2.4 Process Building .............................................................................................. 18-3 18.2.5 Crushing and Screening Circuit ....................................................................... 18-3 18.2.6 Portal Infrastructure ......................................................................................... 18-3 18.2.7 Explosives Storage .......................................................................................... 18-3 18.2.8 Aggregate Crushing and Concrete Batch Plants .............................................. 18-4 18.3 Roads and Logistics................................................................................................ 18-4 18.3.1 Access Road.................................................................................................... 18-4 18.3.2 Haul Road ........................................................................................................ 18-4 18.4 Co-Disposal Storage Facilities ................................................................................ 18-5 18.4.1 Drystack Considerations .................................................................................. 18-5 18.4.2 Evaluation of Potential Sites ............................................................................ 18-6 18.4.3 Site Selection ................................................................................................... 18-7 18.4.4 Facility Design ................................................................................................. 18-7 18.4.5 Co-Disposal Facility Geohazards Considerations ............................................ 18-8 18.4.6 Co-Disposal Facility Stability Considerations ................................................... 18-8 18.4.7 Co-Disposal Facility Surface Water Run-off Considerations............................. 18-9 18.4.8 Co-Disposal Facility Closure Considerations.................................................. 18-10 18.5 Avalanche Hazard................................................................................................. 18-11 18.6 Water Supply, Distribution, and Treatment Systems ............................................. 18-11 18.7 Waste Considerations ........................................................................................... 18-11 18.8 Accommodation .................................................................................................... 18-12 18.9 Power and Electrical ............................................................................................. 18-12 18.10 Fuel ................................................................................................................... 18-12 18.11 Comment on Section 18 .................................................................................... 18-1319.0 MARKET STUDIES AND CONTRACTS..................................................................... 19-1 19.1 Comment on Section 19.......................................................................................... 19-120.0 ENVIRONMENTAL STUDIES, PERMITTING, AND SOCIAL OR COMMUNITY IMPACT 20-1 20.1 Environmental Assessment for Mining Projects ...................................................... 20-1 20.2 Project Studies........................................................................................................ 20-2Project No.: 16223029 September 2011 TOC v
  13. 13. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Preliminary Economic Assessment 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 Closure Plan ......................................................................................................... 20-10 20.7 Permitting ............................................................................................................. 20-10 20.8 Considerations of Social and Community Impacts ................................................ 20-10 20.8.1 First Nations .................................................................................................. 20-12 20.8.2 Local Communities ........................................................................................ 20-13 20.9 Comment on Section 20........................................................................................ 20-1421.0 CAPITAL AND OPERATING COSTS ......................................................................... 21-1 21.1 Capital Cost Estimates ............................................................................................ 21-1 21.1.1 Basis of Estimate ............................................................................................. 21-1 21.1.2 Infrastructure.................................................................................................... 21-1 21.1.3 Material Handling ............................................................................................. 21-2 21.1.4 Process Plant................................................................................................... 21-2 21.1.5 Mining .............................................................................................................. 21-2 21.1.6 Contingency Costs ........................................................................................... 21-3 21.1.7 Indirect Costs ................................................................................................... 21-3 21.1.8 Sustaining Capital ............................................................................................ 21-4 21.1.9 Mine Closure.................................................................................................... 21-4 21.1.10 Capital Cost Estimate Summary ................................................................... 21-4 21.2 Operating Cost Estimates ....................................................................................... 21-5 21.2.1 Basis of Estimate ............................................................................................. 21-6 21.2.2 Mine Operating Costs ...................................................................................... 21-6 21.2.3 Process Operating Costs ................................................................................. 21-7 21.2.4 Infrastructure Operating Costs ......................................................................... 21-7 21.2.5 General and Administrative Operating Costs ................................................... 21-7 21.2.6 Operating Cost Summary................................................................................. 21-7 21.3 Comment on Section 21........................................................................................ 21-1022.0 ECONOMIC ANALYSIS ............................................................................................. 22-1 22.1 Valuation Methodology ........................................................................................... 22-1 22.2 Financial Model Parameters ................................................................................... 22-2 22.2.1 Mineral Resources and Mine Life ..................................................................... 22-2 22.2.2 Metallurgical Process ....................................................................................... 22-2 22.2.3 Commodity Prices and Foreign Exchange ....................................................... 22-2 22.2.4 Taxes ............................................................................................................... 22-3 22.2.5 Depreciation/Salvage Value ............................................................................. 22-3 22.2.6 Financing ......................................................................................................... 22-4 22.2.7 Capital Costs ................................................................................................... 22-4 22.2.8 Operating Costs ............................................................................................... 22-4 22.2.9 Working Capital ............................................................................................... 22-4 22.2.10 Inflation ........................................................................................................ 22-4 22.2.11 Royalty ......................................................................................................... 22-4 22.3 Financial Results .................................................................................................... 22-4 22.4 Cash Costs ............................................................................................................. 22-7 22.5 Sensitivity Analysis ................................................................................................. 22-8Project No.: 16223029 September 2011 TOC vi
  14. 14. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Preliminary Economic Assessment 22.6 Comment on Section 22.......................................................................................... 22-923.0 ADJACENT PROPERTIES......................................................................................... 23-124.0 OTHER RELEVANT DATA AND INFORMATION ...................................................... 24-125.0 INTERPRETATION AND CONCLUSIONS ................................................................. 25-126.0 RECOMMENDATIONS .............................................................................................. 26-1 26.1 Phase 1 .................................................................................................................. 26-1 26.2 Phase 2 .................................................................................................................. 26-127.0 REFERENCES ........................................................................................................... 27-1T ABLE STable 1-1: Blue River Project Estimated Mineral Resources; Effective Date 29 September 2011, Tomasz Postolski, P. Eng., Qualified Person ......................................................................... 1-8Table 1-2: Conceptual Production Schedule ........................................................................................... 1-14Table 1-3: Summary of Estimated Capital Costs ..................................................................................... 1-17Table 1-4: Average Life-of-Mine Operating Cost Summary..................................................................... 1-18Table 1-5: Summary Financial Analysis at Various Discount Rates ........................................................ 1-19Table 1-6: Life of Mine Cash Cost Summary ........................................................................................... 1-20Table 1-7: Sensitivity Summary, 8% Discount Rate ................................................................................ 1-20Table 2-1: Site Visit and Areas of Report Responsibilities ........................................................................ 2-2Table 6-1: Blue River Exploration History Summary ................................................................................. 6-2Table 10-1: Drill Campaign Summary ...................................................................................................... 10-3Table 10-2: Upper Fir Deposit Trench and Bulk Samples ....................................................................... 10-3Table 10-3: Example Drill Hole Intercept Summary Table ....................................................................... 10-7Table 11-1: Specific Gravity Measurements for Blue River Rock Types ................................................. 11-4Table 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” ............................. 13-8Table 14-1: Block Model Dimensions ...................................................................................................... 14-2Table 14-2: Blue River Project Estimated Mineral Resources; Effective Date 29 September 2011, Tomasz Postolski, P. Eng................................................................................................... 14-10Table 14-3: Blue River Project Sensitivity of Estimated Mineral Resources to Tantalum Price; Effective Date 29 September, 2011, Tomasz Postolski, P.Eng, (Base Case is bolded)... 14-10Table 16-1: Minimum Stope Dimensions for Constraining the Subset of Mineral Resources within Designed Stopes .................................................................................................................. 16-3Table 16-2: Rock Mass Characteristics by Rock Group .......................................................................... 16-4Table 16-3: Major Joint Sets .................................................................................................................... 16-5Table 16-4: Stope Faces and Hydraulic Radius ...................................................................................... 16-7Table 16-5: Mine Development and Production Forecasts .................................................................... 16-13Table 16-6: Mining and Tailings Facility Equipment Requirements ....................................................... 16-15Table 16-7: Mining Personnel Requirements......................................................................................... 16-16Table 20-1: Provincial Permits, Approvals, Licences and Authorizations .............................................. 20-11Table 20-2: Federal Permits, Approvals, Licences and Authorizations ................................................. 20-11Table 21-1: Summary of Estimated Capital Costs ................................................................................... 21-5Table 21-2: Average Life-of-Mine Operating Cost Summary................................................................... 21-8Project No.: 16223029 September 2011 TOC vii
  15. 15. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Preliminary Economic AssessmentTable 21-3: Operating Costs by Year ...................................................................................................... 21-9Table 21-4: Operating Costs Per Milled Tonne........................................................................................ 21-9Table 22-1: Project Cashflow Model ........................................................................................................ 22-5Table 22-2: Summary Pre-Tax Financial Analysis ................................................................................... 22-7Table 22-3: Life of Mine Cash Cost Summary ......................................................................................... 22-8Table 22-4: Sensitivity Summary, Project Base Case NPV at 8%........................................................... 22-9FIGURESFigure 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: Local Geology Map ................................................................................................................. 7-2Figure 7-2: Deposit Area Surface Geology Map ....................................................................................... 7-4Figure 7-3: Drill Collar and Vertical Section Locations ............................................................................. 7-6Figure 7-4: Lower Road Longitudinal Section 352800 E .......................................................................... 7-7Figure 7-5: Geology Section 5796737 N................................................................................................... 7-8Figure 7-6: Geology Section 5796425 N................................................................................................... 7-9Figure 7-7: Exploration Target Location Plan ......................................................................................... 7-15Figure 10-1: Drill Collar Plan .................................................................................................................... 10-6Figure 13-1:Sample BS-2F – Gravity Separation (Different Grinds) ....................................................... 13-4Figure 13-2:Sample BS-2G – Gravity Separation (Different Grinds) ....................................................... 13-4Figure 13-3:Rougher and Cleaners by Centrifugal Gravity Concentration .............................................. 13-5Figure 13-4:Upgrading by Wilfley and Mozley Units ................................................................................ 13-6Figure 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 21-1: Distribution of Capital Costs ................................................................................................ 21-5Figure 21-2: LOM Operating Cost Summary ........................................................................................... 21-8Figure 22-1: Sensitivity Summary NPV at 8% ......................................................................................... 22-9Project No.: 16223029 September 2011 TOC viii
  16. 16. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Preliminary Economic Assessment1.0 SUMMARY AMEC Americas Limited (AMEC) was commissioned by Commerce Resources Corporation (Commerce) to prepare a Preliminary Economic Assessment (PEA) on the wholly-owned Blue River tantalum–niobium Project (the Project), located within the North Thompson River valley of east–central British Columbia (BC), Canada. This technical report supports the findings of the PEA. Commodity prices are quoted in US dollars. All other costs, unless otherwise indicated, are in Canadian dollars.1.1 Key Outcomes The key findings of the PEA are summarized below: • Internal rate of return 9.1% (before tax) • Net present value $18.5 million at 8% discount rate (before tax) • Payback 6.3 years • Average grade in mine plan 185 ppm of Ta2O5 and 1,591 ppm of Nb2O5 • Operating cost $38.44/t milled • Capital cost $379 million • Proposed product Technical-grade tantalum and niobium oxides.1.2 Location and Access 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.1.3 Mineral 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 km2Project No.: 162230 Page 1-129 September 2011
  17. 17. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Preliminary Economic Assessment (105,195 ha) within the Kamloops Mining Division. These claims are wholly-owned by Commerce. There are no known royalties, back-in rights, agreements, or encumbrances attributed to the claims.1.4 Environment, Permitting and Socio-Economics The Blue River Project will require approval under the federal and provincial environmental assessment (EA) processes prior to receiving the necessary permits and authorizations for construction and mine operation. Overall the environmental review of the project is a process that will take up to 18 months to complete. The process will include the development of several important documents by Commerce, including the Project Description, Assessment Information Requirements and an Environmental Impact Assessment application, followed by the review of these documents by the public, interested stakeholders, First Nations and regulators. Environmental monitoring, baseline studies and site investigations have been ongoing at the Blue River Project site since the summer season of 2006, and will continue for the duration of the Project. Field studies completed by specialist consultants independent of Commerce include: site hydrology, snow course depths, fisheries and aquatics, soils, flora and fauna and terrestrial ecosystem mapping, wildlife studies and habitat suitability mapping, geochemistry, mineralized material and waste rock characterization, surface water and sediment quality, groundwater, and terrain stability assessment. No significant concerns have been identified. A preliminary list of the Federal and Provincial permits required for operation of a mine has been developed. The permit requirements will be reviewed and updated as the Project advances. Socioeconomic and cultural heritage studies have not yet been initiated for the Blue River Project. Basic community profiling has been completed of the individual nearby communities and relevant regional government and planning organizations. 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, and will continue for the duration of the Project. Engagement activities have included presentations and discussions with Chief and Council, one-on- one meetings and a site visit by elders. Members of the Simpcw First Nation completed Archaeological Overview Assessments (AOA) over all areas of proposed disturbance related to Commerce’s exploration activities, as well as over key areas of potential project infrastructure. No concerns were noted by the archaeology fieldProject No.: 162230 Page 1-229 September 2011
  18. 18. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Preliminary Economic Assessment technicians and exploration activities were approved to proceed by the Simpcw archaeologist with no further recommendations for work necessary in the areas surveyed. Traditional Knowledge/Traditional Use studies, as well as a detailed archaeological impact assessment, will need to be undertaken and will also involve Simpcw First Nation participation. On 25 October 2010, Simpcw First Nation and Commerce signed an Exploration Agreement with respect to exploration activities on the Blue River project. Amongst other aspects, this agreement formalized a process for ongoing discussion regarding all exploration activities, recognizes the traditional cultural, heritage, and environmental interest of the Simpcw, and ensures that benefits from the project are realized by Simpcw First Nation. Commerce has also committed to involve the Simpcw in environmental plans to gain from their knowledge of the region, as well as to keep them informed of project goals. Public consultation to date has included meetings with local councils (e.g., Valemount, Barriere) and informal discussions with local land-owners.1.5 Geology and Mineralization The Blue River deposit is hosted within a carbonatite sill swarm with an average thickness of 30 m and a strike length of 1,000 m. The carbonatite swarm is part of 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 and comprise the lower pelite unit, and the stratigraphically overlying semipelite– amphibolite unit. Both dolomitic carbonatites and calcitic carbonatite occur at Blue River. Contacts between carbonatite and the host metasediments are typically sharp and mantled by zones of metasomatized host rock, known as fenite. 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)).1.6 Exploration The Blue River area has been the subject of intermittent exploration since the discovery of vermiculite-bearing carbonatite rock in 1949. Work by parties other thanProject No.: 162230 Page 1-329 September 2011
  19. 19. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Preliminary Economic Assessment Commerce has included claim staking, magnetometer and scintillometer geophysical surveys, trenching, sampling, and 3,954.2 m of NQ core drilling at the Verity, Mill, Fir and Bone Creek carbonatite occurrences. Since Project acquisition in 2000, Commerce has completed surface mapping, trenching, soil, rock chip, grab and channel sampling, core drilling, metallurgical testing, bulk sampling, and Mineral Resource estimation.1.7 Exploration Potential The Upper Fir carbonatite has exploration potential directly northward of known deposit extents based. Additional resource definition drilling is warranted. The Bone Creek and Fir carbonatites have additional exploration potential along, and across, strike. 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.1.8 Drilling Core drilling is the most extensively used exploration tool at Blue River. As of the 2010 Mineral Resource estimate there were 215 core drill holes within the Upper Fir, Bone Creek and Fir (Lower) carbonatites comprising 41,115 m of HQ and NQ diameter drill holes. Commerce completed 54 holes in 2010 and 34 holes in 2011. These holes were not used for the 2010 Mineral Resource estimate and have not been used in the 2011 PEA. Drill core and logged lithology information from the 2010 and 2011 holes was available for review by AMEC. The carbonatite intercepts from these holes were compared on screen and paper cross sections against the 3D carbonatite model used in the resource estimation and generally support the geologic interpretation. Some discrepancies were observed which warrant local re-interpretation. Some holes expand carbonatite volume and some holes reduce it where the carbonatite/wall rock contact is off by 5 m to 10 m. In 2010, McElhanney Associates of Vancouver undertook a differential GPS survey of all 2010 drill collar locations and several pre-2010 collar locations. Some drill collar locations have been lost due to subsequent construction activities.Project No.: 162230 Page 1-429 September 2011
  20. 20. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Preliminary Economic Assessment Drill-hole orientations have typical azimuths of vertical, 090° or 270° and inclinations , that range from vertical to -60° Drill hole depths range from a minimum of 32 m and a . maximum of 388 m, averaging about 200 m. Vertical holes were generally not surveyed down hole. The dip and azimuth of inclined drill holes were typically tested at three points in each hole using Flexit Single Shot down-hole orientation tools. Core recovery is very good within the waste and carbonatite rocks (typically >95%). Drill-core 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 resource area is 50 m. Sample spacing increases with depth Core sampling methods have been consistent through the 2005 to 2011 drill programs. Core logging involved collection of both geotechnical and geological information. All drill core was photographed prior to splitting. Commerce regularly collected density measurements using a water displacement method.1.9 Sample Analysis and Security Sampling was on average 1 m length half core, logged and sawn at a facility in the community of Blue River. Samples were shipped to Acme Analytical Laboratories or PRA/Inspectorate Laboratories for preparation. 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 was by X-Ray fluorescence methods following a lithium metaborate fusion. Analysis in 2010 and 2011 includes both X-Ray fluorescence and ICP methods Quality control procedures used by Commerce to monitor laboratory results have evolved over the life of the project. Between 2005 and 2007 there was minimal insertion of blank, duplicate, or standard reference material control samples. During this period, analysis of several pulp check samples was completed at six different laboratories. In 2008 the control sample insertion rate was increased to an average of 3% for each of blanks, quarter core field duplicates, and standard reference material control samples. In 2009 control sample insertion rates were increased to an average of 5% per control sample type and included pulp duplicates. Laboratory analysis of the 2010 drill-core samples has been completed and quality control results are being reviewed. Laboratory analysis of the 2011 drill core samples is in progress. Ta and Nb results for the 2010 and 2011 samples are expected to be similar to the pre 2010 results.Project No.: 162230 Page 1-529 September 2011
  21. 21. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Preliminary Economic Assessment1.10 Data Verification AMEC completed a database verification check and concluded the collar coordinates, down-hole surveys, lithologies, and assay databases were sufficiently free of error and that the data are suitable to support Mineral Resource estimation.1.11 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 primarily took place in two phases: • Phase I – concentrated on the recovery of the tantalum–niobium minerals by gravity although grinding and mineralogy investigations were also performed. • Phase II – concentrated on the recovery and upgrading of the tantalum–niobium minerals by flotation. A large amount of work was performed in Phase I that showed gravity could concentrate the material to a low-grade product, but that upgrading increasingly gave lower levels of benefit as grade was sought. Mineralogical work completed before and during this phase of work showed that the tantalum was not present as tantalite but rather as the minerals ferrocolumbite and pyrochlore, which limits recovery by the gravity route due to the low differential specific gravity between pyrochlore and gangue minerals. 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 both work phases, the emphasis of concentration techniques was to create a material which would be easily upgraded by hydrometallurgical methods, pyrometallurgical methods, or a combination of both. These processes would permit the separation of tantalum from niobium, allowing payment for both products. There is confidence that the concentrate could be reduced to metal by the aluminothermic process. Subsequently there would be chlorination of the granulated metal alloy product and distillation of the anhydrous metal chloride products to produceProject No.: 162230 Page 1-629 September 2011
  22. 22. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Preliminary Economic Assessment high purity niobium and tantalum chlorides. Tantalum chloride is the precursor to capacitor grade tantalum powder and can be marketed as such. Both tantalum and niobium chlorides can be hydrolyzed and calcined to generate high-purity technical grade oxide products for other applications. The metallurgical testwork has shown that it is possible to concentrate 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. The secondary treatment or metal extraction of the material is possible by an existing method such as aluminothermic reduction followed by chlorine refining. 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, it was assumed that the process plant will have a 65% recovery for tantalum and 69% recovery for niobium in the flotation stage. The refining process will have a 97% recovery for both tantalum and niobium.1.12 Mineral Resource Estimate The PEA conducted was based on a mineral resource estimate announced in February 2011 (“Blue River Ta-Nb Project NI 43-101 Technical Report, Blue River, British Columbia” by AMEC with effective date 31 January 2011). AMEC used the drill results up to the end of 2009, which includes 183 drill holes comprising 37,446 metres of HQ drill core and 8,218 sawn core samples to develop the mineral resource estimate. Results from the 54 holes drilled in 2010 were compared to the existing resource model and were found to be reasonably consistent with the predicted geology predicted by the model. As well, the 2011 preliminary drill results were inspected at site on vertical cross-sections and were also found to be reasonably consistent with the predicted geology model. Ta2O5 and Nb2O5 were estimated using an inverse distance to the power of 3 method for the carbonatite domains. Capped drill core assays were composited down the hole to a fixed length of 2.5 m honouring geology boundaries. A four pass interpolation approach was used with each successive pass having greater search distances. A hard boundary was used, meaning that composites from outside the carbonatite were ignored in the interpolation process.Project No.: 162230 Page 1-729 September 2011
  23. 23. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Preliminary Economic Assessment The model was validated by comparing composites to block grades on screen, declustered global statistics checks, local bias checks using swath plots, and finally model selectivity checks. The Mineral Resources were classified in accordance with the definitions in the Canadian Institute of Mining, Metallurgy, and Petroleum (CIM) Definition Standards for Mineral Resources and Mineral Reserves (2010), incorporated by reference into NI 43- 101. Table 1-1 shows the estimated mineral resources for the Project. AMEC cautions that Mineral Resources are not Mineral Reserves as they do not have demonstrated economic viability.Table 1-1: Blue River Project Estimated Mineral Resources; Effective Date 29 September 2011, TomaszPostolski, P. Eng., Qualified Person Ta Price Confidence Mass Ta2O5 Nb2O5 Ta2O5 Nb2O5 [US$/kg] Category [tonnes] [ppm] [ppm] [1000s of kg] [1000s of kg] 317 Indicated 36,350,000 195 1,700 7,090 61,650 Inferred 6,400,000 199 1,890 1,300 12,100 Notes: 1. Assumptions include US$317/kg Ta, US$46/kg Nb, 65.4% Ta2O5 recovery, 68.2% Nb2O5 recovery, US$32/tonne mining cost, US$17/tonne process and refining cost. Mining losses = 0% and dilution = 0%. 2. Mineral resources are amenable to underground mining methods and have been constrained using a “Stope Analyzer” 3. An economic cut-off was based on the Ta and Nb values per block which is variable based on the location of blocks used in the mineral resource estimate. A block unit value cut-off ranged from $52 to $59. 4. Discrepancies in contained oxide values are due to rounding. 5. In situ contained oxides reported. The mineral resource estimate is supported by base case price assumptions for Ta and Nb which are higher than historic average prices. A review of publicly available market analysts’ opinion shows a general agreement that current political and market conditions support the probability of sustained higher prices. The base case price for tantalum is reasonable for constraining mineral resources based on current market conditions, but is higher than historical prices. There is a risk that using current price assumptions may not reflect the long term price of Ta and Nb over the life of the Project, particularly in the present volatile market conditions. To support the 2010 Mineral Resource estimate underground mining methods were envisioned (room and pillar or variants), with mining recovery assumed to vary from 65 to 85% depending on the success in which pillars could be mined on retreat and/or fill is utilized.Project No.: 162230 Page 1-829 September 2011
  24. 24. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Preliminary Economic Assessment The Mineral Resource classification at Blue River was restricted to Indicated or Inferred, based on the following: • Confidence limits resulting from drill hole spacing studies • Concerns of analytical precision and accuracy for the sample dataset • Local discrepancies in the model identified with the 2010 drilling • Lack of metallurgical testwork on the final stage of the proposed metallurgical process. The assumptions used for assessment of reasonable prospects of economic extraction used to support the 2010 Mineral Resource estimate were modified for the 2011 PEA mine plan or in the financial analysis based on that mine plan.1.13 Proposed Mine Plan The Blue River deposit is defined by the following physical conditions: • Tantalum–niobium mineralization is hosted in carbonatite • Continuous mineralization is found in moderately flat and wide carbonatite bodies with moderate dips • Mineralized areas whose thickness can range from 20 m to 80 m in height are expected in several zones • Steep topography provides access to the mineralized areas in the form of hillside adits • Fair to good rock conditions are expected in the majority of the deposit • At least two faulted zones have been identified. As mineralization is close to surface, extraction of the mineralized material can occur by open pit or underground methods, or a combination of both. Initial assessment identified technical challenges and increased costs for tailings and waste rock disposition related to local topography, stream courses, and prevailing climate conditions. For these reasons, a decision was made to consider an underground mining scenario for PEA purposes. The assumed mining method is sub level open stoping with no backfill and no pillar recovery. A processing rate of 7,500 t/d was assumed for the conceptual design of an underground mine for the Blue River Project.Project No.: 162230 Page 1-929 September 2011
  25. 25. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Preliminary Economic Assessment Price assumptions used in mine planning were US$317/kg tantalum metal and US$46/kg niobium metal contained in oxide product.1.13.1 Geotechnical Considerations Rock types of the Blue River Project have been grouped into two main geotechnical domains: Intrusive and Layered Rocks. The Intrusive group encompass carbonatite and fenite rocks while the Layered Rocks group encompass gneiss and amphibolites. Generally the rock mass ratings (RMR) indicated rock that can be considered to be “good” in RMR terms.1.13.2 Dilution Considerations Material deemed to be mined by bulk mining methods represents 84% of the resources. Within the mineable shapes there was internal dilution of 2% waste rock. It was assumed that during mining 2% of waste material would be added as external dilution and 2% of the broken material would not be recovered from the stopes due to operational conditions. The geotechnical investigation indicates that an extraction ratio of 67.5% is reasonable. Applying this to the subset of the Mineral Resources considered in the mine plan results in an overall mining extraction of 58% and provides 25.0 Mt of material as run-of-mine (ROM) production to be processed. Applying internal and external mining dilution, the overall subset Mineral Resource grades were diluted to 185 ppm of Ta2O5 and 1,591 ppm of Nb2O5 for mine planning purposes.1.13.3 Drilling and Blasting AMEC considered the implementation of conventional drilling methods. Due to the high precipitation in the region and water continuity along fractures and rock layers, wet conditions were assumed for development and stoping areas. The use of bulk- blasting systems based on emulsion type explosives was assumed.1.13.4 Mine Development The deposit will be accessed through two main portals, the Upper and Lower Portals; these portals are located in places where the deposit crops out on the hillside. The Upper Portal will be used as the main entry and will have most of the mine services; the Lower Portal will be used for haulage trucks access. Access to the portals will be by a road upgraded from existing exploration roads.Project No.: 162230 Page 1-1029 September 2011
  26. 26. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Preliminary Economic Assessment The mine will be accessed by adits driven in pairs from the portals. For this study, all entries, ramps, drifts and crosscuts are considered to be 5 m wide by 5 m high with semi-arched backs. Ramps will be driven at grades to a maximum of 15% to provide access to the production areas. Two ramps or adits will be driven to each area to provide single-way traffic of haulage trucks and to facilitate the implementation of ventilation circuits. Top access crosscuts are driven from the main ramps to each level on vertical intervals between 20 to 30 m. Stope access crosscuts are driven at level from west to east. Bottom access crosscuts are driven to function as mucking drifts. The total underground development was estimated as 92,500 m for the life-of-mine.1.13.5 Mineralized Material and Waste Haulage Radio remote-controlled load-haul-dump units will be used to extract the mineralized material out in the stope beyond the safety of the brow. The mineralized material from stopes will be loaded directly to the haulage trucks that will be spotted at the end of the crosscut. Underground trucks will haul the mined material through the access drifts and ramps, unloading into the primary crusher surface stockpile near the Lower Portal. The mine plan envisages that tailings material will be dry-stacked, and waste material will be stored in the same general area. For convenience, the combined tails and waste rock storage area is referred to as the “co-disposal facility”. Waste from development will be initially utilized for construction of a structural shell for the co-disposal site on surface, which will be located in an area east of the processing plant site. A conveyor will be used to transport this material from the mine to a stockpile by the plant site. A surface road developed at +10% grade will connect the plant with the co- disposal site. Trucks will haul waste from the plant to the co-disposal site when required.1.13.6 Mine Services Underground mine services such as ventilation and air heating, compressed air, water for drilling and power supply will be provided to the mine via adits from the portals. The sub-station for the main power distribution system and the air compressors will be installed in facilities located adjacent to the Upper Portal.Project No.: 162230 Page 1-1129 September 2011
  27. 27. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Preliminary Economic Assessment Other mine services will include all the systems and supplies needed for the mining operations, including: explosives storage, communications, monitoring and control systems, road maintenance and mine equipment maintenance. Portable self-contained refuge stations will be provided for the mine and will be located at convenient locations.1.14 Mine Production Forecasts Production was estimated at 2.7 Mt/a of mineralized material to be extracted over 10 years. The first year was considered as preproduction, leaving nine years of full- scale production. At this preliminary level of study the stope mining sequence was not defined and therefore average grades were used for each year in the mine plan. There is opportunity to increase the net present value of the project by mining higher- grade zones early in the mine life providing that the sequence and overall recovery of the stopes is not negatively affected. The proposed production schedule is presented in Table 1-2. Mine equipment and personnel requirements were defined and are appropriate to the proposed production plan.1.15 Process Design The design for the process facilities considered a nominal processing capacity of 7,500 t/d. Where data were not available at the time of flowsheet development, AMEC developed criteria for sizing and selection of equipment based on comparable industry applications, benchmarking, and the use of modern modelling and simulation techniques. The mineral processing and the refining are based on conventional technology and industry-proven equipment. A mineral processing method using a standard grind- flotation procedure to make a concentrate of ferrocolumbite-pyrochlore is assumed for Blue River material. Metallurgical testing indicates a mineral concentrate assaying about 30% combined Nb–Ta pentoxide within the recovery range of 65% to 70% is possible.Project No.: 162230 Page 1-1229 September 2011
  28. 28. Commerce Resources Corp. Blue River Tantalum–Niobium Project British Columbia, Canada NI 43-101 Technical Report on Preliminary Economic Assessment Run of mine mineralized material will be crushed to minus 5/8” and fed into a comminution circuit comprised of a rod and ball mill using cycloning for classification. After grinding, the flotation feed will be first de-slimed using high frequency fine screens and cyclones. The coarse product resulting from de-sliming will be sent to four concentration steps that will include pyrrhotite flotation, carbonate flotation, and magnetite separation with all three concentrates from these processes reporting to tailings. The fourth step, pyrochlore flotation, will recover a concentrate which is reground and cleaned in five stages of cleaning. The mass of material will be reduced substantially, to less than 1% of the feed into the plant. This concentrate would be further processed to produce marketable separate Ta and Nb products. The proposed processes are mature, are already used industrially, and consist of reducing the concentrate to metals as ferroalloys in a standard aluminothermic furnace followed by chlorinating the alloys and distilling the product to separate high purity metal chlorides, TaCl5 and NbCl5. Recoveries from concentrate to pure chlorides are expected to be 97%. Both Ta and Nb chloride products are then readily converted and marketed as high purity oxides Ta2O5 and Nb2O5 respectively.Project No.: 162230 Page 1-1329 September 2011

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