Commerce Resources Corp. (‘Commerce’, CCE.V) has released the results of a NI 43-101 compliant Preliminary Economic Assessment (PEA) for the Ashram Rare Earth Element, (AREE) from its property in Eldor, Quebec. The PEA has validated Commerce’s enthusiasm for the project and confirmed that the deposit presents four significant advantages which make the Ashram deposit one of the most economically sound REE projects in North America. The deposit is very large – one of the largest in the world and certainly one of the largest outside China; the deposit presents high mineralization grades; the deposit offers ideal distribution featuring the presence of all five critical rare earth elements (REE) which are dysprosium, terbium, europium, neodymium and yttrium at near-surface zone. Moreover, and this especially relevant from an economic viability perspective, the REE’s are hosted in “simple and well-understood mineralogy, being primarily in the mineral monazite and to a lesser extent in bastnaesite and xenotime”.
The presence of monazite is especially welcome, in commercial terms, as it is the most common host for rare earths for which extraction processes are highly developed. Bastnaesite and xenotime have also been processed commercially. The study highlights include a healthy cash flow from a 4,000 ton/day open-pit operation at Ashram with a 25-year mine life, a pre-tax and pre-finance Net Present Value at a 10% discount rate of $2.32 billion according to the evaluation performed by SGS Geostat based on the March 6, 2012 resource estimate. The measured and indicated resource amounts to 29.3 million tons while the inferred resource at an average 1.88% Total Rare Earth Oxides (TREO) is 219.8 million tons. SGS estimated a USD$ 12 .06 billion in revenue over a minimum 25 year mine life with a below average operating cost of USD$ 7.91/kg of rare earth oxide produced.
Producers focusing on the five most critical REEs should be the ones to attract most interest from investors as these are the companies with the ability to address demand from producers of magnets, oil refiners, phosphors, lighting, fuel catalysts and superconductors, which will become ever more important as demand for electric vehicle batteries increases. The fact that the mineralization occurs in well known hosts makes Ashram all the more attractive. Commerce has shown that it meets both conditions; in addition, given that the resource is located in an area formerly used by the logging industry, there is ample infrastructure to support production operations.
In 2012, Commerce intends to continue exploring the property to determine the full extent of the mineralization through further drilling including diamond drilling in the middle and heavy rare earth oxidation (MHREO) zone.
(Disclaimer: Commerce Resources is a RareMetalBlog sponsor.)