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Blue River Tantalum–Niobium ProjectBritish Columbia, CanadaNI 43-101 Technical Report on Preliminary Economic Assessment
Prepared for:Commerce Resources Corporation
Prepared 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 2011
Project No. 162230
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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: [email protected]
I, 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, British Columbia, Canada, NI 43-101 Technical Report on Preliminary Economic Assessment” with an effective date of 29 September, 2011 (the “Technical Report”).
I am a Professional Geoscientist in the Province of British Columbia (P.Geo. #23773). I graduated from McMaster University, Hamilton, Ontario with a B.Sc. degree in Geology, and from the University of Tasmania 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 fields and 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 Instrument 43–101 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 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 Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
“signed and sealed”
Albert Chong, P.Geo.
Dated: 31 October, 2011
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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: [email protected]
I, 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, British Columbia, Canada, NI 43-101 Technical Report on Preliminary Economic Assessment” with an effective date of 29 September, 2011 (the “Technical Report”).
I am a Professional Engineer in the Province of British Columbia (P.Eng. #34784). I have graduated from The University of Mining and Metallurgy, Krakow, Poland with a Magister Inzynier degree in Geological Engineering, and from the University of British Columbia with a Master of Applied Science degree also in Geological Engineering. I have completed the Citation Program in Applied Geostatistics at the Centre for Computational Geostatistics at the University of Alberta.
I have 17 years of consulting, mine operations, and academic experience specializing in geostatistical mineral resource estimation and geological evaluation of gold, copper, rare earth metals and other mineral deposits in Canada and abroad.
As a result of my experience and qualifications, I am a Qualified Person as defined in National Instrument 43–101 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, and Recommendations that pertain to this Section of the Technical Report.
I am independent of Commerce Resources Corporation as independence is described by Section 1.5 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 Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
“signed and sealed”
Tomasz Postolski, P.Eng.
Dated: 31 October 2011
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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: [email protected]
I, Ramon Mendoza Reyes (P.Eng.) am employed as a Principal Mining Engineer with AMEC Americas Limited. This certificate applies to the Technical Report titled “Blue River Tantalum–Niobium Project, British Columbia, Canada, NI 43-101 Technical Report on Preliminary Economic Assessment” with an effective date of 29 September, 2011 (the “Technical Report”).
I am a Professional Engineer in the province of British Columbia. I graduated in 1989 from the National Autonomous University of Mexico with a bachelor’s degree in Mining Engineering, and in 2003 completed a 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 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 National Instrument 43–101 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 Estimates Interpretation and Conclusions, and Recommendations that pertain to the mining sections of the Technical Report.
I am independent of Commerce Resources Corporation as independence is described by Section 1.5 of NI 43–101.
I have been involved with the mining aspects of the Blue River Tantalum–Niobium Project since January 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 Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
“signed and sealed”
Ramon Mendoza Reyes, P.Eng.
Dated: 31 October 2011
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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: [email protected]
I, Ignacy (Tony) Lipiec (P.Eng.) am employed as a Principal Metallurgical Engineer with AMEC Americas Limited. This certificate applies to the Technical Report titled “Blue River Tantalum–Niobium Project, British Columbia, Canada, NI 43-101 Technical Report on Preliminary Economic Assessment” with an effective date of 29 September, 2011 (the “Technical Report”).
I am a Professional Engineer in the province of British Columbia. I graduated from the University of British Columbia with a B.A.Sc. degree in Mining & Mineral Process Engineering, in 1985. I have practiced my profession for 25 years, and have previously been involved with metallurgical design and process engineering 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 Instrument 43–101 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 and Conclusions 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 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 Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
“signed and sealed”
Tony Lipiec, P.Eng.
Dated: 31 October 2011
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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: [email protected]
I, 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, British Columbia, Canada, NI 43-101 Technical Report on Preliminary Economic Assessment” with an effective date 29 September, 2011 (the “Technical Report”).
I am a Professional Engineer in the Province of British Columbia (P.Eng. #35500). I have graduated from The University of British Columbia with a Mechanical Engineering degree.
I have seven years of experience in engineering, project management and financial analysis for mining and other projects. I have prepared cash-flow models and conducted financial and throughput 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 National Instrument 43–101 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 and Conclusions 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 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 Technical Report contains all scientific and technical information that is required to be disclosed to make the Technical Report not misleading.
“signed and sealed”
Behrang Omidvar, P.Eng.
Dated: 31 October 2011
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IMPORTANT NOTICE
This report was prepared as a National Instrument 43-101 Technical Report for Commerce
Resources Corporation (Commerce) by AMEC Americas Limited (AMEC). The quality of
information, conclusions, and estimates contained herein is consistent with the level of
effort involved in AMEC’s services, based on: i) information available at the time of
preparation, ii) data supplied by outside sources, and iii) the assumptions, conditions, and
qualifications set forth in this report. This report is intended for use by Commerce subject
to the terms and conditions of its contract with AMEC. Except for the purposes legislated
under Canadian provincial securities law, any other uses of this report by any third party is
at that party’s sole risk.
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Commerce Resources Corp.
Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230
29 September 2011 TOC i
C O N T E N T S
1.0 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 .................................................................................................. 1-23
2.0 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 ...................................................................................... 2-4
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Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230
29 September 2011 TOC ii
3.0 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 ..................................................................................................................... 3-2
4.0 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 ............................................................................................. 4-5
5.0 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 ............................................................................................. 5-3
6.0 HISTORY ..................................................................................................................... 6-1
6.1 Commerce Exploration ............................................................................................. 6-1
6.2 Commerce Mineral Resource Estimates ................................................................... 6-1
7.0 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 .......................................................................................... 7-17
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Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230
29 September 2011 TOC iii
8.0 DEPOSIT TYPES ......................................................................................................... 8-1
8.1 Comment on Section 8 ............................................................................................. 8-3
9.0 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 ............................................................................................. 9-4
10.0 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.......................................................................................... 10-5
11.0 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.......................................................................................... 11-8
12.0 DATA VERIFICATION ................................................................................................ 12-1
12.1 Comments on Section 12 ........................................................................................ 12-1
13.0 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 ............................................................. 13-8
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Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230
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13.5 Accuracy of Assaying .............................................................................................. 13-8
13.6 Comment on Section 13.......................................................................................... 13-9
14.0 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 .................................................................................... 14-11
15.0 Mineral Reserve Estimates ......................................................................................... 15-1
16.0 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 .................................................................................... 16-14
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Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230
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17.0 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.......................................................................................... 17-4
18.0 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 .................................................................................... 18-13
19.0 MARKET STUDIES AND CONTRACTS ..................................................................... 19-1
19.1 Comment on Section 19.......................................................................................... 19-1
20.0 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
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Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230
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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........................................................................................ 20-14
21.0 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........................................................................................ 21-10
22.0 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 ................................................................................................. 22-8
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Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230
29 September 2011 TOC vii
22.6 Comment on Section 22.......................................................................................... 22-9
23.0 ADJACENT PROPERTIES ......................................................................................... 23-1
24.0 OTHER RELEVANT DATA AND INFORMATION ...................................................... 24-1
25.0 INTERPRETATION AND CONCLUSIONS ................................................................. 25-1
26.0 RECOMMENDATIONS .............................................................................................. 26-1
26.1 Phase 1 .................................................................................................................. 26-1
26.2 Phase 2 .................................................................................................................. 26-1
27.0 REFERENCES ........................................................................................................... 27-1
T A B L E S
Table 1-1: Blue River Project Estimated Mineral Resources; Effective Date 29 September 2011,
Tomasz Postolski, P. Eng., Qualified Person ......................................................................... 1-8
Table 1-2: Conceptual Production Schedule ........................................................................................... 1-14
Table 1-3: Summary of Estimated Capital Costs ..................................................................................... 1-17
Table 1-4: Average Life-of-Mine Operating Cost Summary ..................................................................... 1-18
Table 1-5: Summary Financial Analysis at Various Discount Rates ........................................................ 1-19
Table 1-6: Life of Mine Cash Cost Summary ........................................................................................... 1-20
Table 1-7: Sensitivity Summary, 8% Discount Rate ................................................................................ 1-20
Table 2-1: Site Visit and Areas of Report Responsibilities ........................................................................ 2-2
Table 6-1: Blue River Exploration History Summary ................................................................................. 6-2
Table 10-1: Drill Campaign Summary ...................................................................................................... 10-3
Table 10-2: Upper Fir Deposit Trench and Bulk Samples ....................................................................... 10-3
Table 10-3: Example Drill Hole Intercept Summary Table ....................................................................... 10-7
Table 11-1: Specific Gravity Measurements for Blue River Rock Types ................................................. 11-4
Table 13-1: Head Assay Grades, Bulk Samples BS-2F and BS–2G ...................................................... 13-3
Table 13-2: Results from F81 .................................................................................................................. 13-7
Table 13-3: Results of a Sequential Hydrochloric Acid Leach of Flotation “Middling” ............................. 13-8
Table 14-1: Block Model Dimensions ...................................................................................................... 14-2
Table 14-2: Blue River Project Estimated Mineral Resources; Effective Date 29 September 2011,
Tomasz Postolski, P. Eng. .................................................................................................. 14-10
Table 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)... 14-10
Table 16-1: Minimum Stope Dimensions for Constraining the Subset of Mineral Resources within
Designed Stopes .................................................................................................................. 16-3
Table 16-2: Rock Mass Characteristics by Rock Group .......................................................................... 16-4
Table 16-3: Major Joint Sets .................................................................................................................... 16-5
Table 16-4: Stope Faces and Hydraulic Radius ...................................................................................... 16-7
Table 16-5: Mine Development and Production Forecasts .................................................................... 16-13
Table 16-6: Mining and Tailings Facility Equipment Requirements ....................................................... 16-15
Table 16-7: Mining Personnel Requirements ......................................................................................... 16-16
Table 20-1: Provincial Permits, Approvals, Licences and Authorizations .............................................. 20-11
Table 20-2: Federal Permits, Approvals, Licences and Authorizations ................................................. 20-11
Table 21-1: Summary of Estimated Capital Costs ................................................................................... 21-5
Table 21-2: Average Life-of-Mine Operating Cost Summary ................................................................... 21-8
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Commerce Resources Corp.
Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230
29 September 2011 TOC viii
Table 21-3: Operating Costs by Year ...................................................................................................... 21-9
Table 21-4: Operating Costs Per Milled Tonne........................................................................................ 21-9
Table 22-1: Project Cashflow Model ........................................................................................................ 22-5
Table 22-2: Summary Pre-Tax Financial Analysis ................................................................................... 22-7
Table 22-3: Life of Mine Cash Cost Summary ......................................................................................... 22-8
Table 22-4: Sensitivity Summary, Project Base Case NPV at 8% ........................................................... 22-9
F I G U R E S
Figure 1-1: Sensitivity Summary, 8% Discount Rate ............................................................................... 1-21
Figure 4-1: Project Location Map .............................................................................................................. 4-2
Figure 4-2: Blue River Mineral Tenure Map .............................................................................................. 4-3
Figure 7-1: Local Geology Map ................................................................................................................. 7-2
Figure 7-2: Deposit Area Surface Geology Map ....................................................................................... 7-4
Figure 7-3: Drill Collar and Vertical Section Locations ............................................................................. 7-6
Figure 7-4: Lower Road Longitudinal Section 352800 E .......................................................................... 7-7
Figure 7-5: Geology Section 5796737 N ................................................................................................... 7-8
Figure 7-6: Geology Section 5796425 N ................................................................................................... 7-9
Figure 7-7: Exploration Target Location Plan ......................................................................................... 7-15
Figure 10-1: Drill Collar Plan .................................................................................................................... 10-6
Figure 13-1: Sample BS-2F – Gravity Separation (Different Grinds) ....................................................... 13-4
Figure 13-2: Sample BS-2G – Gravity Separation (Different Grinds) ....................................................... 13-4
Figure 13-3: Rougher and Cleaners by Centrifugal Gravity Concentration .............................................. 13-5
Figure 13-4: Upgrading by Wilfley and Mozley Units ................................................................................ 13-6
Figure 16-1: Conceptual Mine Layout Plan (plan view projection) ........................................................ 16-10
Figure 16-2: Aerial View of the Mining Area from Upper Portal ............................................................. 16-11
Figure 17-1: Concentration and Refining of Blue River Mineralization ..................................................... 17-2
Figure 18-1: Proposed Site Layout Plan .................................................................................................. 18-2
Figure 21-1: Distribution of Capital Costs ................................................................................................ 21-5
Figure 21-2: LOM Operating Cost Summary ........................................................................................... 21-8
Figure 22-1: Sensitivity Summary NPV at 8% ......................................................................................... 22-9
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Commerce Resources Corp.
Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230 Page 1-1 29 September 2011
1.0 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 km2
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Commerce Resources Corp.
Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230 Page 1-2 29 September 2011
(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 field
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Commerce Resources Corp.
Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230 Page 1-3 29 September 2011
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 than
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Commerce Resources Corp.
Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230 Page 1-4 29 September 2011
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.
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Commerce Resources Corp.
Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230 Page 1-5 29 September 2011
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.
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Commerce Resources Corp.
Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230 Page 1-6 29 September 2011
1.10 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 produce
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Commerce Resources Corp.
Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230 Page 1-7 29 September 2011
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.
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Commerce Resources Corp.
Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230 Page 1-8 29 September 2011
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, Tomasz Postolski, 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.
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Commerce Resources Corp.
Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230 Page 1-9 29 September 2011
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.
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Commerce Resources Corp.
Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230 Page 1-10 29 September 2011
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.
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Commerce Resources Corp.
Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230 Page 1-11 29 September 2011
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.
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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.
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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.
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Table 1-2: Conceptual Production Schedule
Production Schedule Units Yr -1 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5
Nominal Production Rate tpd 7,500 7,500 7,500 7,500 7,500 7,500
Scheduled working days days/year 360 360 360 360 360 360
Production t/year 2,700,000 2,700,000 2,700,000 2,700,000 2,700,000
Ta2O5 Grade ppm 185 185 185 185 185
Nb2O5 Grade ppm 1,591 1,591 1,591 1,591 1,591
Lateral Development m/year 12,000 15,000 12,834 10,980 9,394 8,038
Capital Development m/year 12,000 5,000 1,216 1,040 890 761
Operational Development m/year 0 10,000 11,618 9,940 8,505 7,276
Production Schedule Units Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Total
Nominal Production Rate tpd 7,500 7,500 7,500 7,500 7,500
Scheduled working days days/year 360 360 360 360 360
Production t/year 2,700,000 2,700,000 2,700,000 2,700,000 700,000 25,000,000
Ta2O5 Grade ppm 185 185 185 185 185 185
Nb2O5 Grade ppm 1,591 1,591 1,591 1,591 1,591 1,591
Lateral Development m/year 6,877 5,884 5,034 4,307 2,153 92,500
Capital Development m/year 651 557 477 408 0 23,000
Operational Development m/year 6,225 5,326 4,557 3,899 2,153 69,500
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1.16 Tailings and Waste Management
A series of tailings storage location screening assessments were carried out during
2008, 2009, and 2010 focusing mainly on conventional tailings storage. Some
evaluation of potential waste rock storage sites and a tailings drystack facility was
undertaken during studies completed in 2009.
Site WSF3, about 8 km from the proposed plant site, and identified in 2009, was
selected as the preferred location for a tailings drystack. WSF3 has flatter slopes than
other site alternatives and therefore has less stability concerns. It is also located in
closer proximity to the proposed plant site, although uphill haulage will be required.
The facility was designed to hold a total storage volume of approximately 20.9 Mm3.
Surface water management systems will be required for the tailings drystack to divert
non-contact (clean) water around the facility, and to collect run-off water which had
been in contact with the tailings drystack area.
1.17 Planned Project Infrastructure
The planned Upper and Lower Portals will be located about 4 km from the plant site.
At the front of the Upper Portal sufficient space will be provided to accommodate the
required facilities for operation.
The plant service building will be a multi-purpose complex in a two-story building to be
located east of the process building. A 24 m by 36 m truck shop on the southwest end
of the site will be operated by a qualified contractor. The warehouse will be a 24 m by
50 m Coverall-type fabric building.
The potable water system and layout is designed to service buildings and a
process/administration workforce of 120 persons. Potable water for the mining area
will be constructed as part of the portal/underground works.
A modular sewage treatment system will be installed as part of the initial construction
infrastructure.
Waste-water treatment sludge will be trucked away to a nearby municipal facility or
approved landfill.
Waste lubrication and hydraulic oils from vehicle maintenance will be stored in
dedicated tanks and sent to a recycling facility offsite.
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Contractors and employees will commute from nearby towns such as Blue River and
Valemount during construction. No on-site permanent accommodation will be
provided for personnel. It is assumed that the workforce, including management staff,
will reside in the nearby communities and will commute, via buses on a daily basis.
The road access design includes a short new road with a 7.2 m wide gravel surface
from the existing road to plant site about 80 m in length and a 1.5 km new service road
from the existing road to the Upper Portal and upgrades to the current access road.
There are two main haul roads, one from the mine portal to site of about 4 km length,
and the other from the site to the co-disposal facility, with a length of about 8 km.
An existing 80 m-long bridge crossing over the Thompson River has a limited load
capacity and might not qualify for crossing heavy loads during construction or long-
term use during the life of the mine. Therefore a new bridge has been included in
capital cost estimate. Using the existing railway for shipment should be investigated in
the next phase of study.
Ammonium nitrate, blended emulsion, and explosives will be delivered to site on
demand by contractors. Fuel will be delivered to the mine site using tanker trucks. A
crushing and stockpiling facility will be required during construction to provide crushed
product for roads and surfacing. AMEC considers that there is no need to establish a
concrete batch plant, and that concrete supply from nearby towns will be more
economic.
1.18 Markets
Commerce has prepared assessments of the tantalum and niobium markets which
outline the supply and demand for tantalum and niobium. The tantalum assessment
was prepared by a tantalum market expert, although he is not independent of
Commerce. His analysis reflects the general consensus of other analysts regarding
the tantalum market expressed in publicly available information.
The niobium assessment was prepared by an independent niobium expert and also
reflects the general consensus of analysts in publicly-available information for the
niobium market.
As the Project is still at an early evaluation stage, Commerce has not initiated requests
from potential buyers for expression of interests from potential buyers of the proposed
Blue River products and has not negotiated any purchase or off-take agreements.
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1.19 Capital Costs
All costs are expressed in first quarter (Q1) 2011 Canadian dollars. No allowance has
been included for escalation, interest or financing fees, taxes or duties, or working
capital during construction. The level of accuracy for the estimate is +40/-20% of
estimated final costs, as per the Association of Advanced Cost Estimators (AACE)
Class 5 (scoping level) definition.
Contractor-mining is not envisaged for pre-production development. The estimate
covers the direct field costs of executing the project, plus the Owner’s indirect costs
associated with design, construction, and commissioning. The preproduction costs are
capitalized and include all the expenditures before Year 1 of production.
The total estimated capital cost to design and build the Blue River tantalum project at
7,500 t/d capacity is $379 million. The estimate is summarized in Table 1-3.
Table 1-3: Summary of Estimated Capital Costs
Calendar year Total
(x $1,000) 2011
(x $1,000) 2012
(x $1,000)
Project year 1 2
Production year -2 -1
Capital expenditure
Initial Capital Infrastructure 29,500 10,300 19,200
Process Initial Capital 116,200 40,700 75,600
Mining Initial Capital 89,400 89,400
Material Handling 8,000 8,000
Contingency 43,600 12,800 30,900
Indirect/Owner Costs 92,300 29,600 62,600
Total 379,000 93,400 285,600 Note: Summation discrepancy due to rounding.
1.20 Operating Costs
The operating costs for the Blue River project are based on an Owner-operated mining
fleet and process facility and have been prepared in first quarter 2011 Canadian
dollars.
Operating costs over the life-of-mine are estimated at $38.44/t milled.
Operating costs include the three key areas of mining, process, and overall general
and general and administrative costs. The estimates are based on the staffing level,
consumables, and expenditures detailed as part of the underground mine plan and
process design.
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Average operating costs are illustrated in Table 1-4.
Table 1-4: Average Life-of-Mine Operating Cost Summary
Summary of Average Production Costs LOM Total (x $1,000)
Cost per Tonne Milled ($/t)
Mining 528,900 21.16
Process 338,500 13.54
Material Handling 18,500 0.74
G&A 75,000 3.00
Sub-total 960,900 38.44
1.21 Financial Analysis
The financial analysis is partly based on Inferred Mineral Resources that are
considered too speculative geologically to have the economic considerations applied
to them that would enable them to be categorized as Mineral Reserves, and there is
no certainty that the Preliminary Assessment based on these Mineral Resources will
be realized. Approximately 15% of the Mineral Resources that support the financial
model have been classified as Inferred Mineral Resources.
The results of the economic analyses discussed in this section represent forward-
looking information as defined under Canadian securities law. The results depend on
inputs that are subject to a number of known and unknown risks, uncertainties and
other factors that may cause actual results to differ materially from those presented
here.
Information that is forward-looking includes:
• Mineral Resource estimates
• Assumed commodity prices and exchange rates
• The proposed mine production plan
• Projected recovery rates
• Infrastructure construction costs and schedules
• Assumptions that an EA will be approved by Provincial and Federal authorities.
The project has been evaluated using a discounted cash flow (DCF) analysis. Cash
inflows consist of annual revenue projections for the mine and two years of
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preproduction. Cash outflows such as capital and operating costs are subtracted from
the inflows to arrive at the annual cash flow projections.
The resulting net annual cash flows are discounted back to the date of valuation end-
of-year 2010 dollars and totalled to determine NPVs at the selected discount rates.
The IRR is calculated as the discount rate that yields a zero NPV. The payback period
is calculated as the time needed to recover the initial capital spent.
The Project Base Case (8% discount rate) returns an NPV of $18.5 M and an IRR of
9.1% before tax. Table 1-5 summarizes the NPV for the Project at a range of discount
rates, with the base case highlighted.
Table 1-5: Summary Financial Analysis at Various Discount Rates
Summary of Cash Flow Pre-tax
Cumulative net cash flow
Undiscounted CAD$000 236,631
Net present value
Discounted at 5% CAD$000 80,349
Discounted at 6% CAD$000 57,612
Discounted at 7% CAD$000 37,064
Discounted at 8% (Project Base Case) CAD$000 18,487
Discounted at 9% CAD$000 1,685
Discounted at 10% CAD$000 (13,514)
Internal rate of return % 9.1
Payback period Years 6.3 Note: base case is highlighted
1.22 Cash Costs
The cash cost value represents the cost incurred to produce 1 kg of primary product
after deducting the revenue from sales of secondary products. Since the price
analysis for the report is performed around Ta price variation, Ta is chosen as the
main product and Nb is treated as the secondary product for the assessment of cash
cost.
The tantalum cash cost is calculated to be approximately $24.91/kg contained in oxide
product (after credit for niobium contribution) as shown in Table 1-6.
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Table 1-6: Life of Mine Cash Cost Summary
Section LOM Total (x $1,000)
Cost per Tonne Milled ($/t)
Cost per Kg Ta Payable ($/kg)
Cash costs
Mining 528,900 21.16 220.13
Process 338,500 13.54 140.87
G&A 75,000 3.00 31.21
Material Handling 18,500 0.74 7.71
Sub-total 960,900 38.44 399.92
Credits
Nb (901,100) (36.04) (375.01)
Sub-total (901,100) (36.04) (375.01)
Adjusted cash costs
Total 59,800 2.40 24.91 Note: The figures in this table do not include considerations of working capital or royalty payments
1.23 Sensitivity Analysis
The sensitivity analysis shows that the project is more sensitive to changes in
operating expenditures than capital expenditures. The project is most sensitive, in
order, to changes in exchange rate, operating expenditure, niobium price, tantalum
price and capital expenditure. Since the sales currency is US dollars and operational
costs are in Canadian dollars, a rising US dollar value versus Canadian dollar value
improves the mine profitability.
The project IRR increases to 14.4% and the NPV increases to $125 M at an 8%
discount rate if a Ta price of US$380/kg (20% increase) is assumed.
Sensitivities are summarized in Table 1-7 and Figure 1-1 for the 8% discount base
case rate.
Table 1-7: Sensitivity Summary, 8% Discount Rate
SENSITIVITY OF NPV @ 8% Change in Factor
-30% -20% -10% 0% 10% 20% 30%
Fa
cto
r
Exchange rate 448.7 269.5 130.0 18.5 (72.8) (148.8) (213.2)
Capital expenditure 117.9 84.8 51.6 18.5 (14.6) (47.8) (80.9)
Operating expenditure 190.5 133.1 75.8 18.5 (38.8) (96.2) (153.5)
Nb price (140.9) (87.8) (34.6) 18.5 71.6 124.7 177.9
Ta price (123.3) (76.1) (28.8) 18.5 65.8 113.0 160.3
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Figure 1-1: Sensitivity Summary, 8% Discount Rate
1.24 Interpretations and Conclusions
The Blue River project has a 10 year mine life and capital costs, at $379 M, could be
paid back in 6 years. The project is most sensitive to commodity price. Available
quotes on tantalum price through 2011 were significantly higher than the tantalum
price used to support the 2010 Mineral Resource estimate and the 2011 PEA. A
higher tantalum price could not only improve profitability but also increase the mine
life. Additional exploration potential could also provide additional mine life. A two or
more times capital payback is possible.
Environmental monitoring, baseline studies and site investigations have been ongoing
at the Blue River Project site since the summer season of 2006. First Nations
engagement began in 2007. Public consultation to date has included meetings with
local councils and informal discussions with local land-owners.
Opportunities to improve the project NPV include:
• Optimization of the mine plan to mine higher-grade zones early in the mine life
providing that a practical mining sequence can be implemented and the overall
recovery of the Mineral Resources is not negatively affected
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• Optimization of the mine layout to minimize development costs
• Advanced geotechnical studies to identify and understand ground conditions which
could allow an increase in the size of stopes and production drifts
• Optimization of the supply and pricing of reagents for the refining.
The risk factors are:
• The base case mineral resource estimate is supported by current tantalum and
niobium prices which are significantly higher than historic average prices and may
not reflect long term prices. Market analysts are in general agreement that current
political and market conditions support the probability of sustained higher prices,
but this may not occur.
• Commerce has not initiated requests from potential buyers for expression of
interests from potential buyers of the proposed Blue River products and has not
negotiated any purchase or off-take agreements.
• The proposed refining methods have been used in commercial applications but
have not been demonstrated in test work of Blue River material.
• Testwork to date has not considered factors such as water recycling. A water
treatment plant may be required and may result in increased capital costs.
• The financial analysis is partly based on Inferred Mineral Resources that are
considered too speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as Mineral Reserves,
and there is no certainty that the Preliminary Economic Assessment based on
these Mineral Resources will be realized
• 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 a project is a process that can take up to 18 months to complete.
• Traditional Knowledge/Traditional Use (TK/TU) studies, as well as a detailed
archaeological impact assessment will need to be undertaken.
The projects warrant additional work to examine the opportunities and mitigate the
risks. On completion of this work Commerce may consider proceeding with a pre-
feasibility study.
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1.25 Recommendations
AMEC has recommended a two-stage work program of $3 M. The first stage
comprises a re-estimation of Mineral Resources and incorporates results of the 2010
and 2011 drill programs. The second stage comprises completion of mining and
related studies that can be used to support an additional mineral resource update, and
conversion of Mineral Resources to Mineral Reserves through a pre-feasibility study.
Phase one consists of an update to the Mineral Resource estimate, and is budgeted at
$350,000 to $400,000. Phase 2 consists of completion of mining and related studies
so as to position Commerce to make a decision on completion of a pre-feasibility
study. This phase is estimated at $2.6 M.
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2.0 INTRODUCTION
2.1 Terms of Reference
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 are in Canadian dollars
unless otherwise indicated. Volumes, weights, and distances are metric unless
otherwise indicated.
2.2 Qualified Persons
The Qualified Persons (QPs) for the Report are AMEC employees, based out of
AMEC’s Vancouver office, as follows:
• Mr. Albert Chong, P.Geo., Principal Geologist
• Mr. Tomasz Postolski, P.Eng., Senior Geostatistician
• Mr. Ramon Mendoza Reyes, P.Eng., Principal Engineer
• Mr. Tony Lipiec, P.Eng., Principal Metallurgical Engineer
• Mr. Behrang Omidvar, P.Eng., Financial Analyst
2.3 Site Visits and Scope of Personal Inspection
Mr. Chong visited the property July 11 to 16, 2010, June 27 to 30, 2011, and
September 6 to 14, 2011. During the site visits Mr. Chong inspected outcrops, drill-
hole collars locations, and geologic interpretation. Mr. Chong reviewed procedures for
diamond drilling, logging, sampling, core storage, and sample shipment. In 2011 Mr.
Chong also completed an aerial inspection of proposed future infrastructure locations.
Mr. Mendoza Reyes conducted a site visit July 12 to 16, 2010. During the site visit Mr.
Mendoza inspected sites amenable for locating potential infrastructure.
Mr. Postolski conducted a site visit June 27 to 30, 2011. During the site visit Mr.
Postolski was unable to access the property due to a road wash-out but was able to
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complete an aerial inspection of proposed future infrastructure locations. The purpose
of the trip was to review the geology interpretation and resource model 3D solid which
was completed at the Commerce office in Blue River. During this visit Mr. Postolski
was able to visit the core logging facilities and observe core logging procedures.
Mr. Lipiec did not complete a site visit.
Mr. Omidvar did not complete a site visit.
A summary of QP site visits is shown in Table 2-1.
Table 2-1: Site Visit and Areas of Report Responsibilities
Qualified Person Site Visit Sections of Report Responsibility
Albert Chong, P.Geo. July 11 to 16, 2010
June 27 to 30, 2011
September 6 to 14, 2011
Sections 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12,
20, 23, 24, 25, 26, and 27
Tomasz Postolski, P.Eng. June 27 to 30, 2011
Section 14 and those portions of the
Summary, Interpretation and Conclusions,
and Recommendations that pertain to that
Section
Ramon Mendoza Reyes,
P.Eng
July 12 to 14, 2010 Sections 15, 16, 18, and those portions of
the Summary, Capital and Operating
Costs, Interpretation and Conclusions, and
Recommendations that pertain to those
Sections
Tony Lipiec, P.Eng No site visit Sections 13 17, 18, 21, and those portions
of the Summary, Interpretation and
Conclusions, and Recommendations that
pertain to those Sections
Behrang Omidvar, P.Eng No site visit Sections 19, 21, 22, and those portions of
the Summary, Interpretation and
Conclusions, and Recommendations that
pertain to those Sections
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2.4 Effective Dates
The Report has a number of effective dates, as follows:
• Effective date of the Mineral Resources: 29 September 2011
o The database closure includes all drill information up to the end of
2009.
o Results from the 54 holes drilled in 2010 were compared by AMEC to
the existing resource model and the results were found to be
reasonably consistent.
o The 2011 preliminary drill results were inspected at the Project site on
vertical cross-sections by AMEC during September 2011, and the
results were found to be consistent with the geological interpretation.
• Effective date of the Report: 29 September 2011.
The overall effective date of the Report is based on the date of the completion of the
Preliminary Economic Assessment and the financial analysis and review of the latest
available drilling information. There has been no material change to the Project
between the effective date of the Report, and the signature date.
2.5 Information Sources and References
The primary data source for this Report is the PEA, entitled:
AMEC, 2011: Commerce Resources Corporation, Blue River Tantalum–Niobium
Project, Blue River, British Columbia, Preliminary Economic Assessment: unpublished
report prepared by AMEC Americas Ltd. for Commerce Resources Corporation, dated
August 2011.
The PEA was prepared by AMEC. Information for the Report was obtained from work
completed by AMEC, and materials provided by, and discussions with, Commerce
personnel and third-party contractors retained by Commerce.
Additional information was provided by Commerce personnel in the areas of
environmental studies and permitting. This information was based on reports prepared
by third-party consultants retained by Commerce.
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Marketing studies were provided as confidential reports to AMEC. AMEC has
reviewed the information provided and considers that the studies support the
commodity prices used to constrain the Mineral Resource estimates and financial
evaluation.
Except where noted, figures were generated by AMEC.
Reports and documents listed in the Section 3, Reliance on Other Experts and Section
27, References sections of this Report were also used to support preparation of the
Report. Additional information was sought from Commerce personnel where required
to support preparation of this Report.
2.6 Previous Technical Reports
Commerce has previously submitted the following technical reports on the Project:
Chong, A., and Postolski, T., 2011: Commerce Resources Corporation, Blue River Ta-
Nb Project, Blue River, British Columbia, NI 43-101 Technical Report: unpublished
technical report prepared by AMEC Americas Ltd. for Commerce Resources
Corporation, effective date 31 January 2011
Stone, M., and Selway, J., 2010: Independent Technical Report, Blue River Property,
Blue River, British Columbia, Canada: unpublished technical report prepared by
Caracle Creek International Consulting Inc. for Commerce Resources Corporation,
effective date 24 August, 2009
Gorham, J., 2007: Technical Report on the Upper Fir Ta-Nb Bearing Carbonatite:
unpublished technical report prepared for Commerce Resources Corporation, effective
date 20 June 2007.
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3.0 RELIANCE ON OTHER EXPERTS
The QPs state that they are qualified persons for those areas as identified in the
appropriate QP “Certificate of Qualified Person” attached to this Report. The authors
have relied upon and disclaim responsibility for information derived from the following
reports pertaining to mineral tenure, surface rights, royalties, environment and
permitting, and marketing.
3.1 Mineral Tenure
The AMEC QPs have not reviewed the mineral tenure, nor independently verified the
legal status, ownership of the Project area or underlying property agreements. AMEC
has fully relied upon, and disclaims responsibility for, information derived from legal
experts for this information through the following document:
Letter from Clark Wilson LLP titled Commerce Resources Corp. – Mineral Claim Title
Opinion to Mr. Greg Kulla, dated 29 October 2010
Information from this letter has been used in Section 4.2 of this Report.
3.2 Surface Rights
The AMEC QPs have not reviewed the status of the Project surface rights, nor
independently verified the surface rights status of the Project area. AMEC has fully
relied upon, and disclaims responsibility for information derived from experts for this
information through the following document:
Letter from David Hodge, President Commerce Resources Corp. to Mr Greg Kulla,
entitled “Commerce Resources Corp – Blue River Property Encumbrances and
Surface Rights”, dated 14 October 2011
This information has been used in Section 4.3 of this Report.
3.3 Royalties and Agreements
The AMEC QPs have not reviewed the royalties and agreements for the Project, nor
independently verified the royalties and agreements status of the Project area. AMEC
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has fully relied upon, and disclaims responsibility for information derived from experts
for this information through the following document:
Letter from David Hodge, President Commerce Resources Corp. to Mr Greg Kulla,
entitled “Commerce Resources Corp – Blue River Property Encumbrances and
Surface Rights”, dated 14 October 2011
This information has been used in Section 4.4 of this Report.
3.4 Environmental, Permitting and Liability Issues
The AMEC QPs have not reviewed the permitting requirements, nor independently
verified the permitting status of the Project area. AMEC has fully relied upon, and
disclaims responsibility for information derived from experts for this information through
the following document:
Letter from Sage Resource Consultants Ltd. titled Commerce Resources Corp. Upper
Fir Deposit Preliminary Economic Assessment – Independent Professional Opinion on
Environmental Permitting and Liability Issues to Mr. Greg Kulla and dated 29
September 2010.
This information has been used in Section 20 of this Report.
3.5 Markets
The AMEC QPs have relied on tantalum and niobium market analyses derived from
experts for this information through the following documents:
Confidential memo from Dr. Axel Hoppe titled “Ap#6 Introduction to Tantalum
Markets_Finalpdf_2June09.pdf” received 18 October 2010
Confidential memo from Michel Robert titled “Niobium_v3jh.doc” received 18 October
2010
Confidential memo from Michel Robert titled “Niobium_v3jh.doc” received 19 October
2010
Dr. Hoppe is an internationally acknowledged leader in the tantalum field and is
Chairman of the Board of Directors for Commerce Resources.
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Mr. Robert has extensive experience in niobium markets and is independent of the
company.
This information has been used in Section 19 of this Report, and to assess reasonable
prospects of economic extraction in Section 14.10.
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4.0 PROPERTY DESCRIPTION AND LOCATION
The Project is located within the North Thompson River valley of east-central British
Columbia 25 km to 60 km north and northeast of the community of Blue River, British
Columbia (Figure 4-1).
The NTS sheets which cover the Project are: 83D.004-.006; 83D.014-.016; 83D.024-
.027; 83D.034-.037; 83D.045-.047.
The Project is centered at approximately 52° 19' N latitude and 119° 10' W longitude.
4.1 Project Ownership
The Project is wholly-owned by Commerce and held in the name of Commerce
Resources Corp.
4.2 Mineral Tenure
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. The claim boundaries are shown in
Figure 4-2.
A table listing claim details is included in Appendix A.
Currently, all but five of the mineral claims were valid until 31 March 2019. The
exceptions are the four “Wasted” claims tenure numbers 588427-30) which were to
expire on 31 July 2011 and the Join (tenure number 798362) which were to expire on
25 June 2011. Commerce filed a 2010 work program by the end of day on 25 June
2011 to group the two blocks of claims with the larger claims area. About $977,000
worth of eligible 2010 work will be filed for assessment credit at a filing cost of
approximately $42,000. When approved, this will bring all Blue River claims to a
common expiry date of 31 March 2021.
Property boundaries are established in accordance with the Mineral Tenure Act of
British Columbia. Commerce has staked the claims by a combination of ground and
on-line staking.
Two-post and four-post claims were established through a legacy system of ground
staking which involved physically establishing claim posts on the ground.
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Figure 4-1: Project Location Map
Figure courtesy Commerce Resources Corp.
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Figure 4-2: Blue River Mineral Tenure Map
Note: Figure courtesy Dahrouge Consulting Ltd. Grid is in metres for UTM NAD83 Zone 11.
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MCX claims are established using the Government of British Columbia’s Mineral Titles
Online (MTO) staking system. MTO is an Internet-based mineral titles administration
system that allows the mineral exploration industry to acquire and maintain mineral
titles by selecting the area on a seamless digital GIS map of British Columbia. The
electronic Internet map allows selection of single or multiple adjoining grid cells. Cells
range in size from approximately 21 ha (457 m x 463 m) in the south to approximately
16 ha at the north of the province. All boundaries are oriented north–south and east–
west.
4.3 Surface Rights
Commerce holds no surface rights on the property. Legal access to the property is
provided through the British Columbia Mineral Tenure Act. The Act provides for a
recorded claim holder to use, enter and occupy the surface of a claim or lease for the
exploration and development or production of minerals or placer minerals, including
the treatment of ore and concentrates, and all operations related to the exploration and
development or production of minerals or placer minerals and the business of mining.
Access to surface rights held by third parties typically requires compensation.
There are surveyed parcels with surface rights held by other parties which overlap the
property mineral tenure claims. These parcels occur along the western edge of the
property and most are tree farm licences. 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 claims do not host Mineral
Resources, and currently no carbonatites are known within the claims.
4.4 Royalties and Agreements
There are no royalties, back-in rights, payments, or other agreements or
encumbrances to which the Blue River property is subject to other than the annual
claim maintenance fees due to the government as set out by the British Columbia
Mineral Tenure Act and Regulations.
4.5 Permits
Permits required to support Project development are discussed in Section 20.
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4.6 Environment
Environmental studies are discussed in Section 20.
4.7 Social and Community Impact
The social and community impact assessments of the Project are discussed in Section
20.
4.8 Comment on Section 4
In the opinion of the AMEC QPs, the following conclusions are appropriate:
• The mineral tenure has been acquired in accordance with relevant BC regulations
• The mining tenure is valid and is sufficient to support declaration of Mineral
Resources
• Work filed in 2011 with relevant regulatory authority will bring all Blue River claims
to a common expiry date of 31 March 2021
• There are no known royalties, back-in rights, agreements, or encumbrances
attributed to the claims
• Exploration activities have been conducted within the regulatory framework
required by the BC Government
• Additional permits will be required for Project development.
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5.0 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES,
INFRASTRUCTURE AND PHYSIOGRAPHY
5.1 Accessibility
The Project is located 23 km north of the community of Blue River, British Columbia,
approximately 250 km north of the city Kamloops and approximately 90 km south of
the town of Valemount. The property is accessed from B.C. Highway 5 (Yellowhead
Highway) via a 4 km well groomed gravel road.
The Upper Fir and Bone Creek deposits can be reached from the Bone and Gum
Creek forestry service road which branches from Highway 5 approximately 23 km
north of Blue River. The east side of the property can be reached by forest service
roads along the west side of Kinbasket Lake and up Howard Creek. Logging roads on
Serpentine, Bone, Hellroar and Mud Creeks allow four-wheel drive and quad bike
access to most of the property. Access to remaining portions of the property is by
helicopter.
5.2 Climate
The local climate is typical of the interior of British Columbia. The area is part of a “wet
belt” that occupies part of eastern British Columbia. Heavy snow falls over almost
every winter, in which temperatures stay close to the freezing point when maritime air
dominates. Rain is frequent in other seasons. Summer days are typically warm or
occasionally hot, with thunderstorms often spawning over the nearby mountains.
In July, the average daily temperature is 16.4°C and the average rainfall accumulation
is 97.5 mm for Blue River (Environment Canada Climate Normals 1971–2000 web site:
http://climate.weatheroffice.gc.ca/climate_normals/index_e.html). In January, the
average daily temperature is -9°C and the average snowfall accumulation is 109 cm
for Blue River. The average snow depth is 83 cm in February. Local rainfall and
snowfall accumulations on parts of the property may be much higher due to elevation
and orographic effects.
Drilling is feasible from mid-May through early to mid-October. Snowfall can exceed
10 m making winter drilling very expensive and difficult, but not impracticable. It is
expected that any future mining activity could be conducted year-round.
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5.3 Local Resources and Infrastructure
There is no existing Project infrastructure. Exploration activities are currently supplied
out of Kamloops, Clearwater and Valemount.
The city of Kamloops currently supports mining operations at the New Afton and
Highland Valley mines, and mineral exploration for the surrounding area. Services for
mining operations are reasonably available at Prince George, Vancouver, or
Edmonton.
Power transmission lines, rail, paved, and gravel roads are all adjacent to the Project
near the Yellowhead Highway. The Yellowhead Highway runs sub-parallel to the
North Thompson River. The community of Blue River has a municipal airport for light
aircraft and helicopter support.
The main line of the Canadian National Railway passes through the western part of the
property. Sidings currently exist at Lempriere (16.5 km north) and Blue River (23.7 km
south of the Upper Fir deposit). The flat area immediately north of Bone Creek may be
suitable for a siding and is 4.9 km from the Upper Fir deposit.
The BC Hydro 136,000 volt supply line for the North Thompson valley passes through
the west side of the property adjacent to the rail line. The 20 megawatt Bone Creek
run-of-river hydroelectricity project owned by Transalta Corp was commissioned in
June 2011, and is adjacent to the Project area.
Infrastructure requirements as detailed within the PEA for Project development are
discussed in Section 18 of this Report.
5.4 Physiography
The Project topography ranges from 700 m to 3,100 m elevation above sea level and
is located largely along the steep, west-facing slopes of the Monashee Mountains, to
the east of the North Thompson River.
The highest peak, Mt. Lempriere, is 3,183 m. Ice fields and glaciers dominate the
higher elevations on the property. Significant major tributaries feeding into the North
Thompson River in the area include Serpentine Creek, Pyramid Creek, Gum Creek,
Bone Creek, Hellroar Creek and Mud Creek.
Mountain slopes are typically covered by thick undergrowth consisting of grasses,
buck brush, devil’s club, and shrubs of willow, alder, rhododendron, huckleberry,
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currants, gooseberry, thimbleberry, and raspberry. White spruce is common in
replanted logging areas. Former trails and flat wet areas are typically overgrown by
dense alder and willow. Areas not subjected to recent logging are covered by dense
stands of hemlock, cedar, fir and white pine. Within the area, the tree line is at
approximately 2,000 m elevation. Except for the Paradise Lake, Felix, Howard Creek
and Gum Creek localities, all other carbonatites are below the tree line, and outcrop
exposure is generally poor.
5.5 Comment on Section 5
The existing and planned infrastructure, availability of staff, the existing power, water,
and communications facilities, the methods whereby goods could be transported to
any proposed mine, and any planned modifications or supporting studies are
reasonably well-established. The requirements to establish such infrastructure are
reasonably well understood by Commerce. In the opinion of the QPs, the access,
physiography, local services, plus existing and planned infrastructure can support the
declaration of Mineral Resources.
It is expected that any future mining operations will be able to be conducted year-
round.
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6.0 HISTORY
The Blue River area has been the subject of intermittent exploration since the
discovery of vermiculite bearing carbonatite rock in 1949. A summary of exploration
activities on the Project is described below and summarized in Table 6-1.
6.1 Commerce Exploration
In 2000, Commerce acquired the Property, confirmed known tantalum mineralization at
the Fir and Verity carbonatites, and explored for new carbonatite deposits. During the
summer of 2002, the Upper Fir Carbonatite showing was discovered and defined by
core drilling between 2005 and 2008.
Additional work undertaken by Commerce included surface mapping, trenching, soil,
rock chip, grab and channel sampling, geophysics, metallurgical testing, bulk
sampling, and mineral resource estimation.
6.2 Commerce Mineral Resource Estimates
During 2001 and 2002, Commerce commissioned preliminary Mineral Resource
estimates on limited data for the Verity and Fir carbonatite deposits (McRae, 2001,
2002).
During 2009–2010, Commerce commissioned Caracle Creek International Consulting
Inc. (CCIC) to prepare a mineral resource estimate for the Upper Fir. This estimate
was based on the interpretation of 168 Upper Fir drill holes completed between during
2005 to 2008. As part of the estimate, the Verity and Fir Mineral Resource estimates
were audited. CCIC concluded the Verity and Fir estimates could not be verified, and
therefore should not be relied upon. An initial NI 43-101 compliant Mineral Resource
estimate for the Upper Fir tantalum and niobium rich carbonatite was completed in
early 2010 by CCIC (Stone and Selway, 2010).
During 2010, Commerce commissioned AMEC to complete a Preliminary Economic
Assessment (PEA). As part of the PEA, the Upper Fir Mineral Resources were
updated and initial Bone Creek Mineral Resources were established using drill holes
completed during 2005 to 2009 and new geological interpretations of the data. A
NI43-101 compliant Mineral Resource update for the Blue River project was completed
by AMEC in early 2011 (Chong and Postolski, 2011)
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Table 6-1: Blue River Exploration History Summary Year Company Exploration
1949–1951 Oliver E. French Staking and prospecting; discovered vermiculite-bearing carbonatite near
Blue River, discovered uranpyrochlore in dolomitic carbonatite
1952–1955 St. Eugene Optioned property, geological mapping, prospecting, stripping, trenching,
and sampling
1967-1968 Vestor Staking, reconnaissance surface mapping in the area south of Paradise
Lake
1976 J. Kruszewski Re-staked the area as the Verity and AR claims
1977–1978 J. Kruszewski / E.
Meyers Magnetometer and scintillometer surveys, trenching and sampling
1980 AMC Optioned property, discovery of Fir and Bone Creek carbonatites
1980–1982 AMC 3,954.2 m of NQ diamond drilling at Verity, Mill, Fir and Bone Creek
1989 Diegel et al. Government survey discovered two new carbonatite localities near
Serpentine Creek and Gum Creek
2000–Present Commerce Surface mapping, trenching, soil sampling, geophysics, diamond drilling,
metallurgical testing, bulk sampling
Abbreviations: St. Eugene = St. Eugene Mining Corporation Ltd.; Vestor = Vestor Exploration Ltd; AMC = Anschutz
(Canada) Mining Ltd.; Commerce = Commerce Resources Corp.
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7.0 GEOLOGICAL SETTING AND MINERALIZATION
7.1 Regional Geology
British Columbia is divided into three discrete areas hosting carbonatites and alkaline
rocks:
• Eastern Area: the Foreland Belt, east of the Rocky Mountain Trench
• Central Area: the eastern edge of the Omineca Belt
• Western Area: the core of the Omineca Belt.
The age of emplacement for carbonatites and alkaline rocks of the Eastern and
Central Areas is Devonian–Mississippian (ca. 330–380 Ma). Some occurrences from
the core, or Western Area of the Omineca Belt might be older (ca. 570 to 770 Ma).
The Central Area carbonatite intrusions occur along the eastern edge of the Omineca
Belt. The carbonatites of the Omineca Belt commonly have high concentrations of
niobium but low rare earth element (REE) values. Known carbonatite complexes
include the Blue River and Mud Lake areas.
All of the alkaline and carbonatite complexes and their host rocks within the Omineca
Belt rocks were deformed and metamorphosed during the Jurassic-Cretaceous
Columbian Orogeny and have been subjected to upper amphibolite facies
metamorphism.
7.2 Project Geology
The Project is located in the Central Area within the north-eastern margin of the
Shuswap Metamorphic Complex. The area comprises polyfolded, metamorphosed
Late Proterozoic (ca. 700–550 Ma) supracrustal rocks and is bounded on the east and
west by steep, Eocene, west-side down normal faults in the southern Rocky Mountain
Trench to the east and the North Thompson valley to the west. The Malton gneissic
complex lies to the north.
The supracrustal rocks are part of a belt dominated by the Late Proterozoic Horsethief
Creek Group and the overlying Kaza Group. The belt is continuous from the northern
Selkirk Mountains in the southeast, through the Monashee Mountains, and into the
Cariboo Mountains in the northwest.
The Blue River carbonatites are hosted in the Mica Creek assemblage of the
Horsethief Creek Group (Figure 7-1).
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Figure 7-1: Local Geology Map
Note: Figure courtesy Dahrouge Consulting Ltd.
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7.2.1 Metasedimentary Rocks
Two units of the Mica Creek assemblage underlie much of the study area. The units
are at least 1,000 m thick and comprise the lower pelite unit, and the stratigraphically
overlying semipelite–amphibolite unit (Figure 7-2).
The Mica Creek metasedimentary rock types include biotite gneiss, muscovite–biotite
schist and gneiss, garnet–muscovite–biotite schist and gneiss, calc-silicate–biotite
gneiss, amphibolite, garnet amphibolite, and calc-amphibolite.
The high intensity of deformation precludes determination of tops in metasedimentary
rocks, thus relative ages of individual units are not clear. Layering in the gneiss is
interpreted as relict bedding, not metamorphic segregation.
7.2.2 Gneisses and Schists
Metamorphosed quartzo-feldspathic biotite gneiss is the most abundant lithology that
crops out at surface. Biotite gneiss is ubiquitous and is inter-layered with all other
lithologies on the property.
Outcrops are moderately weathered with characteristic 0.2 to >1 m thick layers of
uniform, massive, medium grained quartz–feldspar–-biotite ± muscovite divided by
recessive schistose bands or fine partings. Fresh surfaces have a uniform,
equigranular, salt and pepper texture of quartz, feldspar and biotite. Muscovite occurs
as thin schistose partings from trace to abundant amounts. Sub-one mm diameter red
garnet occurs in varying amounts. These units are interpreted to represent deformed
and moderately re-crystallized turbidite. Calc-silicate-bearing biotite gneiss has pale
green bands a few centimetres thick that may be related to microscopic traces of
actinolite ± diopside.
7.2.3 Amphibolites
The amphibolite units occur as lenses within all gneiss and schist units. They are
typically medium-grained, massive to moderately foliated amphibolites and can contain
red garnets (almandine) typically <1 cm in diameter. Plagioclase and hornblende
occur in varying proportions forming rocks ranging from tonalite to hornblendite
composition (<10% hornblende to >90% hornblende respectively). Weak mineral
lineations are present as observed by the alignment of hornblende. Rare banding is
observed at centimetre scale.
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Figure 7-2: Deposit Area Surface Geology Map
Note: Figure courtesy Dahrouge Consulting Ltd.
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Locally, calc-amphibolite units are distinguished by an increase in mineral grain size, a
strong contrasting black and white colour, local presence of garnets, and effervescent
reaction with dilute hydrochloric acid. The amphibolites units are interpreted as
metamorphosed mafic sills, dikes, and possibly subaqueous flows.
7.2.4 Intrusive Rocks
Ultramafic Rocks
Ultramafic rocks associated with the carbonatites include fine- to medium-grained
pyroxenites and cumulate pyroxene–hornblendites. The ultramafic units likely
represent a metamorphosed ultramafic intrusion associated with mafic volcanism
(amphibolite) roughly the same age as the intruded metasediments (Figure 7-2).
Carbonatite
The Blue River carbonatite is approximately 330 million years old (and possibly older)
based on U–Pb geochronology data. The carbonatite was emplaced as dikes or sills
into the metasedimentary rocks prior to the regional deformation and metamorphism
that occurred c.a. 200 Ma.
The carbonatite forms sill-like bodies with 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 (Figures 7-3 to 7-6).
Bedding-parallel foliation in metasedimentary gneisses and the contacts of carbonatite
intrusions generally strike 335° and 155° with shallow to moderate northeast and
southeast dips.
Both dolomitic carbonatite and calcitic carbonatite occur at Blue River. Dolomitic
carbonatite is often referred to as magnesio-carbonatite, rauhaugite, or beforsite.
Coarse-grained, calcitic carbonatite is also often referred to as calcio-carbonatite or
sövite.
Dolomitic and calcitic carbonatite usually form separate bodies but can occur together
within single intrusions. At Blue River, dolomitic carbonatite typically makes up the
cores of the carbonatite bodies. Crosscutting or gradational relationships can be
observed from one variety of carbonatite into another.
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Figure 7-3: Drill Collar and Vertical Section Locations
Note: See Figure 7-4 for the Lower Road longitudinal section; see Figure 7-5 for section 5796737 N; see Figure 7-6 for
section 5796425 N. Bulk sample locations are noted at BS1, BS2 and BS3. Figure courtesy Dahrouge Consulting Ltd.
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Figure 7-4: Lower Road Longitudinal Section 352800 E
100 m
North South
Fenite
Upper FirCarbonatite
Bone Creek
Carbonatite
Undifferentiatedmetasediments
Ta2O5
Note: The figure illustrates the carbonatite geometry and its north-south geological continuity. View is to the east. Section influence is +/- 25 m.
Carbonatite = blue coloured domains; fenite = dashed green outlines; undifferentiated metasediments = non-filled area below topography. Drill hole
2 m composites are colour-coded for Ta2O5 grade in ppm.
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Figure 7-5: Geology Section 5796737 N
West East
Bone CreekCarbonatite
Upper FirCarbonatite
Amphibolite
Fenite
Undifferentiatedmetasediments 100 m
Ta2O5
Note: Illustrates the carbonatite geometry, its east-west geological continuity, and relationship between drilled thickness versus true thickness. View
is to the north. Section influence is +/- 25 m. Carbonatite = blue coloured domains; fenite = dashed green outlines; undifferentiated metasediments =
non-filled area below topography. Drill hole 2 m composites are colour coded for Ta2O5 grade in ppm.
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Figure 7-6: Geology Section 5796425 N
West East
Upper FirCarbonatite
Fenite
Fenite
Undifferentiatedmetasediments 100 m
(A)
(B)
(C)
Ta2O5
Note: Illustrates the carbonatite geometry, east-west geological continuity, folding, and relationship between drilled thickness versus true thickness.
View is to the north. Section influence is +/- 25 m. Carbonatite = blue coloured domains; fenite = dashed green outlines; undifferentiated
metasediments = non-filled area below topography. Drill hole 2 m composites are colour coded for Ta2O5 grade in ppm.
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Dolomitic and calcitic carbonatites are medium to coarse-grained and have secondary
tectonically-imposed textures. A cataclastic (porphyroclastic) texture is common in all
the carbonatites. Most exposures display layering defined by varying quantities of
accessory minerals. Accessory minerals include amphibole, pyroxene, phlogopite,
olivine, magnetite, apatite, pyrite/pyrrhotite, ilmenite, zircon, and various tantalum and
niobium bearing minerals.
Contacts between carbonatite and the host metasediments are typically sharp and
mantled by zones of metasomatized host rock, known as fenite.
At Blue River, the fenite rocks commonly, but not always, envelope the carbonatite
rocks and can extend up to 50 m from the carbonatite intrusions. The
metasedimentary host rocks are characterized by foliated calcite-richterite-biotite
(± apatite, ± vermiculite) rock. Of lesser importance are contact metasomatic veins
commonly less than 1 m thick that comprise amphibole-pyroxene (± vermiculite
± carbonate).
7.2.5 Pegmatite Dykes
Pegmatite dykes and pods up to 500 m long and 15 m thick crosscut all lithologies
throughout the property. At least some of the pegmatites are folded. Among the
pegmatites, two mineralogically-distinct types exist:
• Two-mica (± garnet, ± tourmaline) granitic pegmatites
• Syenitic pegmatites with minor biotite (± amphibole, ± pyroxene).
7.3 Structural Geology and Metamorphism
The structural geology is summarized largely from Kraft (2010), Ghent et al. (1977),
Simony et al. (1980), and Raeside and Simony (1983).
The style of structural deformation at the Project directly impacts the carbonatite
geometry. A deformation model was developed on behalf of Commerce by J. Kraft
during 2009 and early 2010. The structural deformation model was confirmed and
enhanced by field work completed by J. Kraft during July and September of 2010. The
following descriptions include the 2010 supporting observations and interpretations.
Regionally, three phases of compressional deformation have been mapped throughout
most of the region, from the northern Selkirk Mountains into the Cariboo Mountains. At
the Project, at least two additional deformation events are observed.
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The first deformation event (D1) produced large recumbent folds (F1) with limbs
approximately 50 km long and an associated early foliation (S1). Features from F1 are
not observed within the immediate deposit area.
The second deformation event (D2) is associated with peak, mid-amphibolite facies
metamorphism with an associated foliation (S2). In general the S1 and S2 foliations
can rarely be distinguished from one another in the field and are mapped as S1+S2.
D2 has created boudinage, or pinch and swell features attributed to competency
contrasts between rock type layers.
The third deformation event (D3) is characterized by centimetre to decametre scale
recumbent folds (F3) that deform the S2 foliation. Axial planar schistosity that deforms
S1+S2, within micaceous lithologies such as fenite, is known as S3. The style and
attitude of F3 folds are variable, but axial planes are generally southwest-dipping.
The fourth deformation event (D4) is characterized by inclined, southwest trending
folds that re-fold larger F3 folds in the deposit area. Open to tight upright folds with
east to southeast hinges occur sporadically. D4 is suggested to include thrust faulting
with top to the southwest vergence.
The fifth deformation event (D5) is described as a brittle extensional event
characterized by normal faults with slickensides, weak quartz-pyrite alteration of wall
rocks, and cross-cutting relationships with D4 structures.
Folding is observed in waste rocks adjacent to the carbonatite in outcrop and in drill
core, and is interpreted for carbonatite intercepts on large scale geological sections.
Within carbonatite, compressional deformation with weak southeast elongation is
suggested by zones with cataclastic to mylonitic foliation (Chudy, pers. comm.) and
weakly to moderately developed mineral lineations defined by amphiboles.
Carbonatite bodies are folded at metres to deposit scale, however their thickness and
massive (non-layered) nature makes observation of folding indicators within the
carbonatite comparatively difficult to observe in outcrop or drill core.
7.4 Geochronology
The geochronology is summarized largely from Pell (1994), Simonetti (2008), and
Gervais (2009).
A uranium–lead date of about 325 Ma was obtained from zircons from the Verity
carbonatite. A lead–lead date of 332.5 ± 5.7 Ma age was obtained from zircons for the
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Upper Fir carbonatite. A preliminary uranium–lead date of 328 ± 30 Ma was obtained
from zircons from the Mud Lake area carbonatite.
Zircons separated from syenite at Paradise Lake yielded a uranium–lead age of about
340 Ma and lead-lead ages of about 351 and 363 Ma. Ongoing research on U/Th/Pb
dating of zircons and monazites from the property shows a complex thermal history,
indicating that the age of emplacement of the Blue River area carbonatites may be
older than initial results have shown.
7.5 Carbonatites
The Upper Fir and Bone Creek carbonatites are assessed in the mining plan
discussed in Section 16 of this report. However, for Report completeness purposes,
all of the significant carbonatite deposits are described in this subsection.
7.5.1 Fir Carbonatite
Information summarized in this subsection on the Fir deposit is from the British
Columbia Geological Survey website.
The Fir showing is located 1.25 km north of the Bone Creek carbonatite. Carbonatite
consisting of dolomitic and lesser calcitic carbonatite occurs as sills within the quartz-
hornblende-mica schist of the Semipelite Amphibolite division of the Horsethief Creek
Group. Other lithologies include amphibole-biotite schist, biotite-muscovite gneiss and
amphibole-biotite-garnet gneiss.
The Fir carbonatite likely strikes 400 m in a northerly direction based on outcrop
exposures. A 2 m exposure of dolomitic carbonatite was located 400 m north of the
discovery outcrops. Dolomitic outcrops are coarsely crystalline and typically weather
white. Accessory minerals in the carbonatites include apatite, amphibole, olivine,
magnetite, pyrite, pyrrhotite, pyrochlore, and columbite. The dolomitic carbonatite is
almost devoid of biotite and magnetite. Three distinct textures were observed:
breccias composed of tightly-packed dolomite fragments within a finely crystalline
dolomite groundmass; a porphyritic texture with ghost dolomitic crystals in a fine-
grained matrix; and a massive texture with local banding of accessory minerals.
Tantalum and niobium mineralization in the Fir carbonatite occurs in the minerals
pyrochlore and columbite. The Fir carbonatite has the highest background niobium
and tantalum values of all carbonatites in the area. Tantalum averages greater than
0.015 per cent. Sampling of the discovery outcrops returned assays of 1.02% Nb2O5,
0.06% Ta2O5, and 6.31% P2O5. A sample from drill hole BC19 returned values of
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0.18% tantalum and 8.51% phosphate from 119.0–119.6 m. The anomalous value
may be the result of a pyrochlore–apatite band in the sample.
7.5.2 Verity Carbonatite
The Verity carbonatite is located about 40 km north of the community of Blue River.
The Verity carbonatite has the most varied stratigraphy of all the carbonatites in the
area.
The Verity carbonatite consists of banded dolomitic and calcitic carbonatite that locally
intrude each other. It occurs as a 15 m to 30 m thick sill within quartz-hornblende-mica
schist of the Horsethief Creek Group. It can be traced up the hillside for 800 m to the
east–northeast.
A tectonic breccia showing hairline fractures is common in the dolomitic carbonatite. A
banded texture caused by layering of the accessory minerals apatite, amphibole,
olivine, magnetite, vermiculite, biotite, pyrite, pyrrhotite, pyrochlore, columbite, and
zircon is common in calcitic carbonatite and less developed in the dolomitic
carbonatite. Coarse olivine and apatite in calcitic dolomite form bands 1 cm to 5 cm
thick. Magnetite occurs as discontinuous lenses in calcitic carbonatite layers; the
lenses can be much as 20 cm in diameter.
Tantalum and niobium mineralization in the Verity carbonatite occurs in the minerals
pyrochlore and columbite. The pyrochlore and columbite crystals occur as
octahedrons that can reach 4 cm diameter. Calcitic carbonatite at the Verity
occurrence also contains greater than 10.8% phosphate and has abundant apatite
relative to other nearby carbonatites at the Project. Rare earth elements are
interpreted to be hosted in fluorine-rich carbonate.
7.5.3 Exploration Targets
Geochemical sampling has outlined a number of potential exploration targets,
including:
• Upper Fir Extension target: strong tantalum anomalies on four adjacent soil lines
north–northwest of Bulk Sample Pit #2 indicate that the carbonatite subcrop likely
extends to the north, past the current drill coverage
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• Bone Creek Extension target: strong tantalum-in-soil anomalies on two widely-
spaced lines centered at UTM 5,797,000 N indicate a near surface carbonatite
body that is on strike with the Bone Creek carbonatite
• Fir Exploration target: strong tantalum-in-soil anomalies on widely-spaced lines
located north, south and above the known Fir showing indicate possible extensions
of the Fir carbonatite
• Mt. Cheadle Exploration target: a large diffuse tantalum-in-soil anomaly, with
several spikes, stretching over 2 km, is located north of Gum Creek and along
strike from the Upper Fir carbonatite
• 3050 Road target: Strong tantalum anomalies on soil lines to the north and east of
current drilling on the Upper Fir deposit near 3050 Road indicate another
carbonatite body may be located above the known extents of the deposit.
Target locations are indicated on Figure 7-7.
Soil sample results indicate the Upper Fir carbonatite has exploration potential directly
northward of known deposit extents. Additional resource definition drilling is
warranted.
Soil sample results indicate 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.
7.6 Mineralogy
There are two principal and one minor niobium- or tantalum-bearing minerals known at
the Project.
The minerals, using generic end-member compositions, are:
• Ferrocolumbite: (Fe,Mn,Mg)(Nb,Ta)2O6
• Pyrochlore: (Ca,Na,U)2(Nb,Ti,Ta)2O6(OH,F)
• Fersmite: (Ca,Ce,Na)(Nb,Ta,Ti)2(O,OH,F)6.
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Figure 7-7: Exploration Target Location Plan
Note: Figure courtesy Dahrouge Consulting Ltd.
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7.6.1 Ferrocolumbite
Ferrocolumbite occurs predominantly in medium to coarse-grained, granoblastic
dolomitic carbonatites which typically form thin intervals (<6 m) or occur at margins of
thicker intervals of carbonatite. Ferrocolumbite forms subhedral to anhedral,
sometimes strongly poikilitic, individual grains or agglomerates of grains.
Mineral liberation analyses show that the majority (~80%) of liberated grains are less
than 110 µm in diameter. Locally, individual grains and agglomerates of
ferrocolumbite may exceed 2 cm in diameter.
Ferrocolumbite grains from marginal zones may contain large amounts of tiny
inclusions such as thorite (Th-silicate), monazite (La, Ce-phosphate) and pyrochlore.
Ferrocolumbite may also occur sporadically as inclusions in apatite and amphibole. It
is often associated with layers and micro-veins of apatite that fill the interstices
between anhedral ferroan-dolomite grains.
7.6.2 Pyrochlore
Pyrochlore occurs predominantly in the fine-grained and porphyroblastic dolomitic
carbonatite which is commonly developed in the central portions of carbonatite
intervals greater than 10 m thick. Such zones are less abundant or absent in thinner
carbonatite intersections. Pyrochlore is the only tantalum mineral in the calcitic
carbonatites that occurs in accessory amounts. Black and brownish-yellow coloured
varieties of pyrochlore are present.
The majority of the pyrochlore occurs as liberated grains in the dolomitic matrix. The
vast majority (~ 85%) of pyrochlore forms subhedral to anhedral, rounded grains less
than 200 µm in diameter. There are local larger grains and agglomerates, as well as
accumulations or veins less than a few tens of centimetres in width with high
pyrochlore abundance. This style of mineralization can result in high tantalum values
(> 450 ppm Ta).
Pyrochlore also occurs as inclusions in amphiboles (richterite), fluorapatite, and in
ferrocolumbite. In some rare cases the pyrochlore grains can be coated with a thin
film of pyrrhotite or pyrite.
7.6.3 Fersmite
Fersmite occurs as anhedral inclusions in apatite and is considered a minor economic
mineral at the Project.
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7.6.4 Fenite Mineralization
Mineralization in the fenite is dominantly ferrocolumbite, concentrated in apatite-rich
layers. Ilmenite, with ferrocolumbite inclusions, appears to be a subdominant source
of both niobium and tantalum. Niobium and tantalum grades within fenite at Blue River
are considered to be sub-economic, but locally fenite may provide grade-bearing
mining-dilution material.
7.6.5 Mineral Zoning
Mineral zoning, or distribution, of ferrocolumbite and pyrochlore within the carbonatites
is not clear due to the variable thicknesses and polyfolded geometry of the carbonatite.
Further work is required to improve the understanding of the mineral zoning and to
locate potential material types required to support metallurgical testwork.
7.7 Comments on Section 7
In the opinion of the QPs, knowledge of the deposit settings, lithologies, and structural
and alteration controls on mineralization is sufficient to support Mineral Resource
estimation.
In the opinion of the QPs, the mineralization style of the Project deposit is sufficiently
well understood to support Mineral Resource estimation.
Prospects and targets are at an earlier stage of exploration, and their lithologies,
structural, and alteration controls on mineralization are at present not well understood
and hence more work is required to support estimation of Mineral Resources.
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8.0 DEPOSIT TYPES The mineralization identified to date at the Project is consistent with magmatic,
carbonatite associated deposits. Carbonatite associated deposits are classified as
either magmatic, replacement, or residual. Global examples of magmatic carbonatite
complexes or deposits include Oka, Niobec, and St. Honore (Quebec), Kovdor
(Russia), Iron Hill (Colorado) and Gardiner (Greenland) (Mitchell, 2010). Examples of
replacement carbonatite deposits are Rock Canyon (B.C.), Bayan Obo (China), and
Palabora (South Africa). Araxa and Catalao (Brazil) are classified as residual
carbonatite deposits due to the degree of lateritic weathering. Carbonatites are the
main source of niobium +/- tantalum, and important sources of rare earth elements.
Magmatic carbonatite deposits have the following common features (Birkett and
Simandl, 1998).
• Commodities: niobium, tantalum, rare earth elements, phosphate, vermiculite,
copper, titanium, strontium, fluorine, thorium, uranium, magnetite.
• Geological setting: Carbonatites intrude all types of rocks and are emplaced at a
variety of depths. Carbonatites occur mainly in a continental environment, rarely in
oceanic environments (Canary Islands) and are generally related to large-scale,
intra-plate fractures, grabens or rifts that correlate with periods of extension and
may be associated with broad zones of uplift.
• Age of Mineralization: Carbonatite intrusions are early Precambrian to Recent in
age; they appear to be increasingly abundant with decreasing age. In British
Columbia, carbonatites are mostly upper Devonian, Mississippian or Eocambrian
in age.
• Host Rocks: Host rocks are varied, including calcite carbonatite (sövite), dolomite
carbonatite (beforsite), ferroan or ankeritic calcite-rich carbonatite
(ferrocarbonatite), magnetite-olivine-apatite ± phlogopite rock, nephelinite, syenite,
pyroxenite, peridotite and phonolite. Carbonatite lava flows and pyroclastic rocks
are not known to contain economic mineralization. Country rocks are of various
types and metamorphic grades.
• Deposit Form: Carbonatites are small, pipe-like bodies, dikes, sills, small plugs or
irregular masses. The typical pipe-like bodies have sub-circular or elliptical cross
sections and are up to 3-4 km in diameter. Magmatic mineralization within pipe-
like carbonatites is commonly found in crescent-shaped and steeply-dipping zones.
Metasomatic mineralization occurs as irregular forms or veins. Residual and other
weathering-related deposits are controlled by topography, depth of weathering and
drainage development.
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• Deposit Mineralogy:
Magmatic: bastnaesite, pyrochlore, columbite, apatite, anatase, zircon,
baddeleyite, magnetite, monazite, parisite, fersmite.
Replacement/Veins: fluorite, vermiculite, bornite, chalcopyrite and other sulphides,
hematite.
Residual: anatase, pyrochlore and apatite, locally crandallite-group minerals
containing rare earth elements.
• Gangue Mineralogy: Calcite, dolomite, siderite, ferroan calcite, ankerite, hematite,
biotite, titanite, olivine, quartz.
• Alteration: A fenite halo (alkali metasomatized country rocks) commonly surrounds
carbonatite intrusions; alteration mineralogy depends largely on the composition of
the host rock. Most fenites are zones of desilicification with addition of Fe3+, Na
and K.
• Ore Controls: Intrusive form and cooling history control primary igneous deposits
(fractional crystallization). Tectonic and local structural controls influence the
forms of metasomatic mineralization. The depth of weathering and drainage
patterns control residual pyrochlore and apatite deposits, and vermiculite deposits.
Many features of the mineralization identified within the Project to date are analogous
to magmatic carbonatite deposits, in particular the Oka (Husereau Hill) and St. Honore
deposits, Quebec.
Key features of the Blue River deposits supporting a magmatic carbonatite model are:
• Commodities: niobium and tantalum
• Geological Setting: occurs along the eastern portion of the Omineca Crystalline
Belt and hence its tectonic setting is along a large scale zone with associated uplift
• Age of Mineralization: data yields results of about 330 Ma which is consistent with
other British Columbia carbonatite deposits
• Host Rocks: dolomite and calcite-rich carbonatite intrusion rocks
• Deposit Form: the Blue River carbonatites occur as sills and dykes
• Deposit Mineralogy: ferrocolumbite and pyrochlore
• Gangue Mineralogy: dolomite, calcite, amphibole (richterite), quartz, pyroxene,
phlogopite, olivine, magnetite, apatite, pyrite/pyrrhotite, ilmenite, and zircon
• Alteration: Fenite halos occur around most carbonatites at Blue River
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• Ore Controls: The Blue River carbonatites have been deformed by multiple episodes
of folding and faulting. The internal cooling history of the deposit is not clear.
8.1 Comment on Section 8
In the opinion of the QPs,
• A polyfolded sill-like carbonatite model suitably describes the Blue River deposits
• The deposit concepts being applied as the basis for exploration planning at the
Project are reasonable.
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9.0 EXPLORATION
The Blue River area has been the subject of intermittent exploration since the
discovery of vermiculite-bearing carbonatite rock in 1949.
Commerce acquired the property in 2000 and initiated exploration for new carbonatite
deposits which culminated in the discovery and delineation of the Upper Fir and Bone
Creek carbonatites.
9.1 Grids and Surveys
All surveys to date are in UTM NAD83 Zone 11 coordinates.
In 2007, orthophotography and Lidar surveys were flown to create a 1:2,000 base map
of the Upper Fir area. A topography map with 2 m contour intervals was created by
Eagle Mapping Ltd.
9.2 Geological Mapping
Geological and structural mapping has been completed at 1:2,500 scale on a
continuous basis since 2006. The mapping area coverage is between Bone and Gum
Creeks; and from the North Thompson River to the ridge top located about three km
east on the slope that is known locally as either Fir or Cedar Mountain. The mapping
area includes the Fir, Upper Fir and Gum carbonatites plus the nearby Hodgie Zone.
Mapping was used to determine the outcrop of carbonatite and provide geological and
structural data.
9.3 Geochemical Sampling
9.3.1 Stream Sediment Sampling
Reconnaissance stream sediment sampling was completed during 2001 to 2003, and
2006 to 2007. During 2008, 531 stream sediment samples were collected and
analysed for the streams throughout the entire property. The key exploration
pathfinder elements at Blue River are tantalum, niobium, and rare earth elements.
Detailed sample analysis using microscopic mineral characterization was utilized,
focusing on identifying pyrochlore, apatite, richterite, and monazite as pathfinder
minerals.
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During the 2009 field season, a total of 20 stream pan concentrate samples were
taken in the Fir and Mud Creek areas to follow up on creek-mouth areas inaccessible
during the 2008 field season. Samples were analyzed at Acme Laboratories in
Vancouver B.C. (Acme) primarily for tantalum, niobium, rare earth elements,
phosphate, and carbonate using Acme’s 4B02 package (lithium metaborate fusion-
ICP-MS technique).
Several samples anomalous in tantalum and niobium indicate that the Fir carbonatite
likely extends further south.
9.3.2 Soil Sampling
Soil sampling has proven the best way to follow up stream pan concentrate sampling
in the Blue River area as the niobium–tantalum-bearing ferrocolumbite and pyrochlore
are residual in soils. The key exploration pathfinder elements from soil sampling are
tantalum and niobium. During 2002, follow-up on an anomalous stream sediment
sample led to the discovery of the Upper Fir carbonatite.
Reconnaissance soil sampling was completed during 2001 to 2003, and 2006 to 2007.
During the 2008 season, 4,181 soil samples were collected from several area grids.
Sample grids typically have 200 m spaced lines and samples are taken at 25 m
intervals. Soil sampling in 2009 followed up on 2008 stream or soil sampling
anomalies. Sample grids were laid out at Switch Creek, and in the area of the Fir
deposit to test lateral extensions of known carbonatite showings. The Hellroar soil
sampling grid is located approximately 8 km south of the area of the Mineral Resource
estimate, near Hellroar Creek. Sampling on the Hellroar soil grid occurred during 2008
and 2009 to follow up on tantalum anomalies identified from stream sediment samples.
A total of 1,694 samples was taken by Dahrouge and analyzed by Acme using Acme’s
4B02 package (lithium metaborate fusion-ICP-MS technique).
9.3.3 Rock Chip, Grab, and Channel Sampling
Rock samples from various new and known localities were taken during 2009
prospecting to test for or verify the presence and abundance of tantalum–niobium
mineralization. A total of 100 in situ bedrock grab, chip, and channel samples were
taken at the Paradise, Roadside, Howard Creek, Gum Creek, and Mud Creek area
carbonatites.
Five continuous chip samples from the upper 5 m of the Roadside carbonatite
averaged 1,373 ppm Nb and 101 ppm Ta. At the Paradise carbonatite, the best
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channel sample assay result was 82 ppm Ta and 375 ppm Nb for one sample over a
1 m continuous interval.
Southeast of Mud Creek, a new carbonatite called the “RD” occurrence was
discovered during the 2009 regional prospecting program. This carbonatite is
approximately on strike with the Mud Creek carbonatite and may be part of the same
system. Grab samples from the RD carbonatite ranged up to a maximum of 118 ppm
Ta and 4,703 ppm Nb.
9.4 Bulk Sampling
A bulk sample program was undertaken in the fall of 2008 by Dahrouge as part of on-
going evaluation of the Upper Fir carbonatite. Approximately 2,000 t from a 10,000 t
permitted volume were extracted from three bulk sample pits (BS-1, BS-2, and BS-3;
refer to locations shown in Figure 7-3) and placed into 75 t to 150 t stockpiles that
were comprised largely of -50 cm carbonatite material. The stockpiles were stored on
a lined, well-drained pad at the Project site for later metallurgical testing.
For each pit area, geological mapping was completed along with sampling of blast-
hole material and channel samples of the bench walls. Both primary igneous and
metamorphic textures and structures were exposed in the sample pits. Microscopic
examination of oxide phases in the bulk sample material indicated that pyrochlore was
the dominant mineral in pit BS-1 with the exception of benches at the upper and lower
contacts.
Pit BS-1 was excavated in dominantly fine- to medium-grained, granular, apatite-
bearing, dolomitic carbonatite. Pits BS-2 and BS-3 were excavated in dominantly light-
grey, coarse-grained, porphyroclastic, apatite-bearing, dolomitic carbonatite.
Crosscutting veins of dark green actinolite–calcite–diopside that are as much as 20 cm
wide are common. Contacts in each pit are marked by approximately 1 m of fenite,
with contorted layers of dolomitic carbonatite up to 10 cm thick.
Material from the 2008 bulk sampling program appear to provide a sufficient range of
tantalum and niobium grades to represent the Upper Fir carbonatite mineralization for
initial metallurgical testing.
Both pits, BS-1 and BS-2, were stabilized. The bulk sampling permit expired on 31
December 2009 and has not been renewed.
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9.5 Research Programs
Doctoral and post-doctoral studies on the geology, petrology and microscopy of the
carbonatite mineralization at Blue River are underway at the University of British
Columbia.
9.6 Comment on Section 9
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.
The project retains significant exploration potential for carbonatite-hosted tantalum–
niobium mineralization.
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10.0 DRILLING Core (diamond) drilling is the most extensively used exploration tool at Blue River. As
of 30 June 2010, there were a total of 215 core drill holes within the Upper Fir, Bone
Creek and Fir (Lower) carbonatites comprising 41,115 m of HQ (63.5 mm) and NQ
(47.6 mm) diameter drill holes.
Table 10-1 lists the core drilling campaigns at the Upper Fir and Bone Creek deposits.
Core drilling by Commerce commenced in 2005 and continues to the present. Drill
locations were included in Figure 7-3.
Of the 215 core drill holes, 183 drill holes totalling 37,446 m of HQ diameter core, and
8,218 samples are used to support the Mineral Resource estimate. Of the 215 core
holes, Commerce drilled 11 holes in the Fir carbonatite area which are not part of this
Mineral Resource update. Of the 215 core holes, 21 legacy holes were drilled by
operators prior to Commerce’s involvement in the project. No sample intervals are
present in the database for the 21 legacy holes and hence these holes have not been
used to estimate grades in this Mineral Resource update, but they were used to
interpret geology.
An additional 54 core holes, totalling 12,949 m of HQ drill core were drilled in 2010 and
34 holes totalling 8715 m of HQ drill core were drilled in 2011. The 2010 and 2011
holes were not used in the preparation of the 2010 Mineral Resource estimate used to
support the 2011 PEA.
Preliminary results from 54 holes drilled in 2010 were reviewed by AMEC after
completion of the 2010 Mineral Resource estimate update. Core and logged lithology
information from these holes was available for review. The carbonatite intercepts from
these holes were compared on screen 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. Laboratory analysis of the 2010 drill-core samples has
been completed and quality control results are being reviewed.
Preliminary results from 30 holes drilled in 2011 were reviewed by AMEC in
September 2011. Core and logged lithology information from these holes was
available for review. The logged lithology was examined on lithology cross sections
prepared by Commerce. The drill holes intersected carbonatite where expected and
generally support the geologic interpretation. Laboratory analysis of the 2011 drill core
samples is in progress.
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Drill-collar locations are shown in Figure 10-1. The locations of the 2011 drill collars
are provisional, as some drill-collar locations may have been moved in response to
results from earlier 2011 holes.
Table 10-2 lists the three bulk sample pits (BS-1, BS-2, and BS-3) and four trenches
(TR0, 0A, 1, and 1A) which have been sampled. These were only used for geology
interpretation and domain modeling, not grade interpolation.
10.1 Core Drilling Strategy
The holes are collared on three primary drill roads (Upper, Middle, and Lower roads)
that are oriented sub-parallel to the Upper Fir carbonatite along the hillside. Set-ups
are spaced about 50 m apart along drill roads. The majority of the known portions of
the Upper Fir deposit are defined on 50 m centres. The at-depth Bone Creek
carbonatite has only been intersected by a limited number of drill holes.
The drill hole orientations appear to be oriented approximately sub-perpendicular to
the carbonatites. The relationship between sample length and true thickness varies
with the dip of holes. True thicknesses are slightly less than drilled intercepts.
10.1.1 Core Sizes
Core holes are typically HQ diameter (96 mm) producing core with a diameter of
(63.5 mm). Hole-diameter reductions due to poor ground conditions generally are not
an issue at the Project. 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.
10.1.2 Collar Surveys
The drill-hole collars are spotted in the field with a hand-held GPS and oriented with a
Brunton compass.
During 2008 and 2009, collars were surveyed using a laser theodolite system by Steve
Mosdell of Align Surveys of Louis Creek, B.C.
In 2010, McElhanney Associates of Vancouver undertook a differential GPS survey of
all 2010 drill collars, as well as all historic collars still visible, including all Steve
Mosdell’s work that could be verified, and all roads. Six reference markers were also
placed on the property to support future surveys. Commerce advised AMEC that
some earlier drill collar locations have been lost due to subsequent construction
activities.
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Table 10-1: Drill Campaign Summary Category Deposit Operator Year # Holes Series Type # Metres # Samples % Samples
Resource Bone
Creek
Commerce 2005 4 CF05-01 to CF05-04 HQ 300 14
0%
Resource Upper Fir Commerce 2005 4 CF0505 to CF0508 HQ 505 44 1%
Resource Upper Fir Commerce 2006 17 CF0601 to CF0617 HQ 3,021 1,139 14%
Resource Upper Fir Commerce 2007 18 F0718 to F0735 HQ 4,310 1,053 13%
Resource Upper Fir Commerce 2008 118 F08-36 to F08-153 HQ 23,723 5,126 62%
Resource Upper Fir Commerce 2009 22 F09-154 to F09-176 HQ 5,587 842 10%
Resource Subtotal 183 37,446 8,218 100%
Historical Bone
Creek
AMC 1980-1981 17 BC-1 to BC-17 NQ 697 na-
Historical Fir AMC 1981 4 BC1-18 to BC-21 NQ 829 na-
Target Fir
(twins)
Commerce 2001-2002 11 F-01 to F-11 HQ 2,144 na-
Target Subtotal 32 3,670
Total Drilling 215 41,115
Notes:
Abbreviations: AMC = Anschutz Mining Corp.
The Commerce 2010 campaign comprises 54 HQ diameter drill holes totalling 12,949 m. These holes were not completed during the database audit
or block modeling for this Mineral Resource estimate. Assay data for the 2010 sampling are still pending.
Table 10-2: Upper Fir Deposit Trench and Bulk Samples
Category Deposit Operator Year
Number Series Type
#
(m)
Metallurgy Upper Fir Commerce 3 BS01 to BS03 Bulk Sample 138
Exploration Upper Fir Commerce 4 TR0, 0A, 1, 1A Trench-Chip 73
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10.1.3 Down Hole Surveys
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. The instrumentation records magnetic inclination,
azimuth, temperature and magnetic susceptibility at each survey depth. The Flexit
instruments were calibrated at the start of each field season from 2005 to 2010.
10.1.4 Oriented Drill Core
Six drill holes consisting of 1,271 m of HQ diameter oriented core were completed in
2010. The drilling was performed for geotechnical purposes.
10.1.5 Core Handling
Core was obtained using wire-line methods and was washed prior to placement in
wooden core trays. Core trays were placed near the core barrel so that the core was
placed in the tray in the same orientation as it came out of the barrel. Rubble, which
was rarely encountered, was piled to about the length of the whole core that its volume
would represent. Trays were marked with drill-hole name and box number. The end
of every run is marked by a wooden block depth marker.
The core trays are transported by pick-up truck down to the core logging facility at the
community of Blue River, B.C.
10.1.6 Core Recovery
Core recovery was determined prior to sampling. Typically, recovery measurements
were completed before detailed logging was initiated. Standard core recovery forms
were usually completed for each hole by the field assistant or geologist.
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.
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10.2 Drill Intercepts
Table 10-3 contains examples of the types of drill intercepts that have been returned
for the Blue River deposit areas. Typical drill-hole orientations are indicated on the
cross-sections included in Section 7 of this Report. Due to the dip of the carbonatite,
drilled thicknesses reported in the table are slightly longer than true thicknesses.
10.3 Comment on Section 10
In the opinion of the QPs, the quantity and quality of the lithological, geotechnical,
collar location and down-hole survey data collected in the exploration and infill drill
programs completed by Commerce are sufficient to support Mineral Resource
estimation.
• Core logging meets industry standards for tantalum and niobium exploration within
a carbonatite setting
• Collar surveys have been performed using industry-standard instrumentation
• Down-hole surveys were performed using industry-standard instrumentation
• Recovery data from core drill programs are acceptable
• Drill-hole orientations are generally appropriate for the mineralization style, and
have been drilled at orientations that are optimal to the orientation of mineralization
for the bulk of the deposit area
• Drill-hole intercepts appropriately reflect the nature of the tantalum and niobium
mineralization. Sampling is representative of the grades in the deposits, reflecting
areas of higher and lower tantalum and niobium grades
• No material factors were identified with the data collection from the drill programs
that could affect Mineral Resource estimation.
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Figure 10-1: Drill Collar Plan
Note: Figure courtesy Commerce Resources Corp.
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Table 10-3: Example Drill Hole Intercept Summary Table
Drill Hole Easting Northing Elevation Azimuth Dip From To Length (m) Ta (ppm) Nb (ppm)
F0718 352817.7 5796722 1207.19 0 -90 34.5 76.4 41.9 158 2,488
F0718
113.5 141.7 28.2 153 1,266
F0718
210.9 215.9 5 199 1,396
F0718
218.4 221.5 3.1 148 1,173
F0719 352818.7 5796722 1207.19 94.8 -60 34.8 37.3 2.5 182 3,528
F0719
39.8 105 65.2 214 2,258
F0719
112.1 138.3 26.2 174 1,472
F0719
231.8 236.8 5 126 940
F0719
239.3 240.8 1.5 136 1,750
F0720 352816.7 5796722 1207.19 272.8 -60 38.4 86.4 48 120 2,032
F0720
146.7 158.5 11.8 129 1,456
F0720
244.1 248.8 4.7 150 1,240
F0727 352810.5 5796442 1214.98 0 -90 16.4 17.5 1.1 14 906
F0727
109.3 142.1 32.8 211 2,255
F0727
222.6 225.8 3.2 167 945
F0728 352811.4 5796442 1214.32 91.8 -60 27.3 30 2.7 13 745
F0728
93 150.4 57.4 188 1,417
F0729 352813.5 5796442 1214.14 271.8 -60 13.7 17.3 3.6 32 1,243
F0729
132.7 137.9 5.2 141 1,293
F0730 352905.3 5796762 1240.53 0 -90 75.1 149.5 74.4 163 1,583
F0731 352906.2 5796762 1240.4 91.8 -60 79.8 173.2 93.4 172 1,518
F08-064 352782.3 5796404 1211.64 0 -90 95.7 130.4 34.7 172 1,754
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11.0 SAMPLE PREPARATION, ANALYSES AND SECURITY
11.1 Sampling Methods
Samples were collected from an area approximately 1,600 m north–south by 1,000 m
east-west. Sampling is from a combination of vertical and inclined holes drilled from
common collar locations. This results in a drill hole or sample spacing which increases
with depth. Average spacing between drill-hole intercepts in the Mineral Resource
area is 50 m.
Core sampling method and approach has been consistent through the 2005 to 2010
drill programs. Core was boxed onsite and delivered each day to a core facility in Blue
River where the core was logged and sawn. Core logging involved both geotechnical
and geological information. Geotechnical logging involved measuring core recovery
per run, rock quality designation (RQD), fracture roughness and orientation. Core
recovery and RQD were generally good for most drill core, with typically greater than
95% recovery. The geological logging included observations of colour, lithology,
texture, structure, mineralization, and alteration. All drill core was photographed prior
to splitting.
The sampling procedure used to collect core at Blue River is as follows:
• The entire carbonatite intersection and shoulder samples on each side of the
intersection are sampled
• Samples intervals, generally 1 m in length, are marked on the core by a geologist
• Sample intervals are assigned a unique sample number
• The geological contacts are generally respected
• Specific gravity measurements for the carbonatite are collected approximately
once every 3 m
• Carbonatite samples are checked at regular intervals with a GR-130 miniSPEC
gamma ray spectrometer for the presence of U and Th
• Core is sawn in half by diamond saw
• Half of the core is sent for analysis
• Half of the core is retained for reference or further sampling.
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11.2 Metallurgical Sampling
The bulk sampling program conducted in 2008 to provide metallurgical samples is
discussed in Section 9.3. Additional information on the metallurgical sampling is
included in Section 13.1.
Metallurgical samples were collected from bulk sample material originating from BS-2
(approximately 173 t) during January 2009 and from BS-1 (approximately 6 t) during
November 2009. BS-2 samples were ferrocolumbite dominant and selected to best
average the tantalum-niobium grades for the carbonatite. BS-1 samples were selected
to best reflect pyrochlore dominant mineralization.
The two bulk samples were crushed to a particle size of <1 inch diameter. After
crushing, each group of samples was homogenized separately by a standard coning
and quartering procedure. The well-mixed samples were bagged into one tonne bags
and put into storage. One tonne of each sample was delivered to MetSolve Laboratory
(Metsolve) in Burnaby in BC to air dry and further reduce the size to -10 mesh for
bench testing.
11.3 Density Determinations
Commerce regularly collected density measurements using a water displacement
method. Five to 10 cm pieces of whole core were weighed with a balance beam scale
and then were placed into a beaker of water. The volume of water displaced was
measured with a clear plastic ruler to approximate the volume of the core. AMEC
recommended a check on the density data and additional measurements for waste
rock types. A water immersion specific gravity (SG) method was used in addition to
the water displacement method. No check samples were completed.
A total of 425 pieces of whole and half-sawn HQ diameter drill core measuring at least
10 to 20 cm long were checked. The samples chosen covered the spatial and time
aspects of the different Commerce drill campaigns.
Thirty-nine of the 425 samples were sent to Met-Solve Laboratories Inc. of Burnaby,
B.C. for measurement of SG by a wax coated water immersion method to assess for
possible water porosity. Original water displacement, check water displacement, and
check water immersion measurements were compared to the 39 MetSolve wax coated
water immersion SG measurements, with the following results:
• Original water displacement density measurements had poor correlation
• Check water displacement density measurements had adequate correlation
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• Check water immersion SG measurements had excellent correlation.
Based on this, the 425 water immersion check measurements were used to calculate
SG values for each major rock type at Blue River. The means are used as constants
to support the Mineral Resource estimate (Table 11-1).
11.4 Analytical and Test Laboratories
Acme Analytical Laboratories (Acme) in Vancouver were the primary laboratory for the
2005–2008 drill programs. Acme is independent of Commerce and is a recognized
analytical laboratory. Acme has implemented a quality system compliant with the
International Standards Organization (ISO) 9001 Model for Quality Assurance and
ISO/IEC 17025 General Requirements for the Competence of Testing and Calibration
Laboratories. The Vancouver hub laboratory is working toward ISO 17025:2005
accreditation, and Acme notes on its website that the laboratory is expected to
complete the accreditation process within the next year. Acme’s website notes:
Samples submitted are analyzed with the strictest quality control. Blanks (analytical
and method), duplicates and standard reference materials inserted in the sequences of
client samples provide a measure of background noise, accuracy and precision.
QA/QC protocol incorporates a granite or quartz sample-prep blank(s) carried through
all stages of preparation and analysis as the first sample(s) in the job. Typically an
analytical batch will be comprised of 34-36 client samples, a pulp duplicate to monitor
analytical precision, a -10 mesh reject duplicate to monitor sub-sampling variation (drill
core only), a reagent blank to measure background and an aliquot of Certified
Reference Material (CRM) or Inhouse Reference Material to monitor accuracy. In the
absence of suitable CRMs Inhouse Reference Materials are prepared and certified
against internationally certified reference materials such as CANMET and USGS
standards where possible and will be externally verified at a minimum of 3 other
commercial laboratories. Using these inserted quality control samples each analytical
batch and complete job is rigorously reviewed and validated prior to release.
PRA/Inspectorate Laboratories (Inspectorate) in Richmond, BC, was the primary
laboratory for sample preparation of the 2009 core drill program. Inspectorate is
independent of Commerce and is a recognized analytical laboratory that holds
ISO9001:2000 accreditation.
Global Discovery Laboratory (Global) in Vancouver, BC, was initially used for the 2009
drill program. Global was independent of Commerce and was a recognized analytical
laboratory. Global was subsequently purchased by Acme during the second quarter of
2009.
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Table 11-1: Specific Gravity Measurements for Blue River Rock Types
Domain Count Min Max Mean StDev CV
Gneiss 81 2.69 3.16 2.82 0.09 0.03
Amphibolite 30 2.93 3.19 3.05 0.07 0.02
Fenite+CalcAmphibolite 55 2.87 3.16 2.97 0.05 0.02
Carbonatite 168 2.85 3.24 3.01 0.08 0.03
Pegmatite 44 2.57 2.68 2.62 0.02 0.01
Other 29 2.81 3.20 3.03 0.10 0.03
Fault Zone (mixed) 17 2.54 3.06 2.85 0.15 0.05
Total 424 2.54 3.24 2.92 0.15 0.05
11.5 Sample Preparation and Analysis
Between 2005 and 2008 sawn core samples were shipped to Acme where the entire
sample was crushed in a jaw crusher to 70% passing 10 mesh (2 mm) and a 250 g
riffle split sample of the crushed material was pulverized in a ring-and-puck mill to 85%
passing -200 mesh (75 µm).
Split core samples from the 2009 drill program were shipped to PRA/Inspectorate
Laboratories in Richmond, B.C. where the entire sample was crushed to 80% passing
10 mesh and a 300 g split of the crushed material was pulverized to 100% passing -
200 mesh.
Between 2005 and 2008 primary samples were analyzed at Acme by packages 4A
and 4B. Package 4A allows reporting of total abundances of the major oxides and
several minor elements using a 0.2 g sample analyzed by inductively-coupled plasma
(ICP)-emission spectrometry following a lithium metaborate/tetraborate fusion and
dilute nitric digestion. Package 4B provided reporting of rare earth and refractory
elements determined by ICP mass spectrometry (MS) following a lithium
metaborate/tetraborate fusion and nitric acid digestion of a 0.2 g pulp. Primary
samples from the 2009 drill program were initially analyzed at Global Discovery
Laboratory in Vancouver and later at Acme by packages 8X, 4A, and 4B. Package 8X
is an X-ray fluorescence (XRF) analysis following a lithium metaborate fusion.
11.6 Quality Assurance and Quality Control
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 (SRM) control samples.
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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 SRM control
samples. In 2009 control sample insertion rates were increased to an average of 5%
per control sample type and included pulp duplicates.
11.6.1 Assessment of Accuracy with SRM Control Samples
In 2005 a SRM control sample, BR-01, was prepared for Commerce by Acme, using
sample material from the nearby Verity Carbonatite. This SRM was inserted by Acme
into primary sample batches submitted between 2005 and 2008. Control sample
results were generally within ±5% of the best value. Less than 5% of the results
exceeded ±2 standard deviations
In 2008, fifteen SRMs were prepared for Commerce by Process Research Associates
(PRA) by pulverizing core samples from within the resource area to 100% passing
-200 mesh. Three samples of each standard were sent to six laboratories, for Ta, and
seven laboratories for Nb analysis. Analytical procedures included XRF/fusion and
XRF/pellet, ICP-AES, ICP-MS, ICP-M, and AA.
Results were compiled by PRA. The results indicate that, with the exception of a few
higher grade Nb samples, the Blue River SRMs do not achieve typical tolerance
thresholds for certified standards. This may be in part due to the difficulty in assessing
low-grade Ta and Nb.
SRMs 3, 4, 6, 7, 13, and 15 are considered suitable for use in assessment of Nb
grades greater than 900 ppm. SRMs 8, 9, 10, 12, and 14 are considered acceptable
for assessing Ta grades greater than 170 ppm.
All but two SRM Ta results returned for 2008 core analysis by Acme (ICP-MS) were
within ±10% of the best values. Only four out of 10 Nb results were within ±10% of the
best values. A negative bias was noted for SRM Ta values for 2009 core analysed by
Acme XRF (fusion) methods. No bias was observed for Nb.
11.6.2 Assessment of Accuracy with Secondary Laboratory Pulp Checks
Pulp checks were submitted to secondary laboratories by Commerce for all drill
campaigns. Secondary laboratory pulp checks are used to assess primary laboratory
accuracy by checking for biases between the laboratories.
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The 2005 pulp check samples were analyzed for Ta and Nb by Global Discovery
Laboratories in Vancouver using an XRF (fusion) method. An RMA chart of the
primary and check results shows a 44% negative bias and an 11% positive bias for
primary laboratory Ta and Nb respectively. There is no significant bias for samples
collected in 2008 after removal of outliers.
Pulp check sample analyses were not systematically performed between 2005 and
2008, and SRMs were not consistently included with the checks. Therefore the results
are considered an indicator of laboratory bias, but in isolation are not considered to be
definitive. The pulp check results indicate that there was improvement in agreement
between laboratories between 2005 and 2009.
11.6.3 Assessment of Precision with Duplicates
Between 2006 and 2009, 716 quarter-core field duplicates were submitted as control
samples to support primary assay results. Duplicates are used to assess for sampling
bias and the ability of the laboratory to reproduce their results. A duplicate result is
considered a failure if the absolute relative difference (ARD) between the pairs
exceeds a given threshold.
Field duplicate pairs sampled between 2006 and 2009 have a 7.2% and a 18.8%
failure rate for Ta and Nb respectively. All but the 2007 and 2008 Ta results are above
the acceptable 10% failure rate threshold. Ta precision failure rate increased in 2009,
which is coincident with a move to XRF (fusion) analysis. A better assessment of
precision would be to use pulp duplicate pairs.
In 2008, 268 pulps were resubmitted to Acme for ICP-MS analysis. Min-Max plots of
these data indicate excessive failure rates, suggesting analytical precision was not
under control for Ta or Nb.
ARD is commonly related to grade. As sample grades approach the lower detection
limits of the given analytical procedure, the ARD typically increases. A practical
detection limit (PDL) for an analytical procedure is the grade at which the ARD
exceeds 100%. The PDL is generally greater than the lower detection limits reported
by laboratories for a given analytical procedure. Based on the PDL for the 2008 pulp
duplicates the ARD generally exceeds the 10% threshold for both Ta and Nb at all
grades. However, there is no significant bias between the duplicate pairs for Ta or Nb.
In 2009 Commerce initiated an extensive re-assay program which culminated in a
decision to move to XRF (fusion) analysis for Ta and Nb. Analysis of pulp duplicates
from these tests showed that despite Ta and Nb detection limits being reported down
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to 5 and 10 ppm, the PDL was much higher. Forty-eight pulp duplicates were inserted
with the primary assay submission of 2009 core. There is an excessive failure rate for
Ta pairs but an acceptable failure rate for Nb. The PDL may be near 50 ppm for both
elements.
11.6.4 Assessment of Contamination Using Blanks
A total of 367 coarse blanks were submitted over the duration of the assay programs.
In general the Ta and Nb values returned for the blanks are at or near detection limits
suggesting little or no carry-over contamination. Sporadic carry-over contamination is
indicated and could be a result of sample swaps or poorly prepared blanks. The
abrupt jump in the Ta values in 2009 reflects a change in the lower detection limit as a
result of Commerce switching from ICP-MS to XRF(F).
11.7 Databases
Collar, down-hole survey, geology, specific gravity and assays were stored in a
Gems™ database format. Prior to GEMS™, data capture occurs in a variety of
formats from hand logs and Excel files.
Assay data is received from the laboratories via comma-separated value (CSV) data
files. These files are compiled and imported into the Gems database. After data are
imported, visual checks are done to ensure that data placement was correct within the
various database fields.
Commerce has migrated to a Century database during 2011 for all data captured
during 2011 exploration activity. Historic data is being migrated to the Century
database on an incremental basis with completed anticipated by 2012.
11.8 Security
Core is delivered by the drillers in the back of a pick-up truck to the Commerce field
office in Blue River. The boxes are laid out in order on saw horses and inspected by
the project manager. Core is logged by Dahrouge geologists. The core logging
supervisor completes spot checks for quality on a daily basis. The core storage,
logging and sampling facilities are not secured. Samples are placed in pails and
stored in the locked Quonset hut for security prior to shipping.
Core samples are commercially transported via Monashee Painting and Services of
Blue River, BC, to the preparatory laboratory. Sample sheet manifests are submitted
with the core samples. The manifests include information on the operator, sample
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preparation laboratory, and a sample list. Sample rejects returned from the laboratory
are stored in the onsite Quonset hut.
11.9 Comment on Section 11
Sample preparation for samples that support Mineral Resource estimation has
followed a similar procedure for all of Commerce’s drill programs. The preparation
procedure is in line with industry-standard methods for sampling within carbonatite
deposits.
Exploration and infill core samples were analysed by independent laboratories using
industry-standard methods for tantalum and niobium analysis. Delay in submitting
2010 samples for analyses was related to addressing precision and accuracy issues.
To ensure appropriate quality and consistency in pulp grind size, all 2010 drill program
samples are being prepared at an independent third-party laboratory prior to shipping
samples to primary lab where sieve checks are completed prior to preparation for
analysis. During preparation a sanding step is completed to ensure no sample
carryover; this is extremely important during sample preparation of hygroscopic
carbonatites for analysis.
Typically, drill programs included insertion of blank, duplicate and standard reference
material samples. QA/QC submission rates meet industry-accepted standards of
insertion rates.
During preparation of the Mineral Resource estimate reported in Section 14, AMEC
and Commerce examined the sample preparation and analysis of Blue River core.
The principal findings of this work were as follows:
• Significant inter-laboratory grade biases are evident for Ta and Nb in the initial
sampling
• Acceptable inter-laboratory biases were achieved through the remaining sampling
programs
• SRM control samples indicate acceptable levels of accuracy are occasionally
achieved for Ta and Nb. Where acceptable levels are not achieved the SRM
results suggest a low bias for the primary results may exist
• Poor precision is evident for Ta and Nb results collected in 2008 and 2009.
However no consistent bias is evident.
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AMEC concludes that the Blue River sample results show imprecision but no
consistent bias and that those analyses are suitable for use in Mineral Resource
estimation.
Data that were collected were subject to validation, using in-built program triggers that
automatically checked data on upload to the database. Verification is performed on all
digitally-collected data on upload to the main database, and includes checks on
surveys, collar co-ordinates, lithology data, and assay data. The checks are
appropriate, and consistent with industry standards. Independent data audits have
been conducted, and indicate that the sample collection and database entry
procedures are acceptable.
Sample security has relied upon the fact that the samples were always attended or
locked in appropriate storage facilities. Chain-of-custody procedures consist of filling
out sample submittal forms that are sent to the laboratory with sample shipments to
make certain that all samples are received by the laboratory;
Current sample storage procedures and storage areas are consistent with industry
standards.
The QPs are of the opinion that the quality of the 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. Caution should be applied in
assigning a high level of confidence to the results until precision and accuracy issues
are resolved.
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12.0 DATA VERIFICATION Commerce implemented an industry-acceptable quality control program to manage
logging, sampling, and analysis. Check samples for initial sample batches identified
discrepancies. In 2008 Commerce prepared matrix-matched standard reference
material control samples to monitor accuracy and initiated insertion of intra-laboratory
pulp duplicates in addition to secondary pulp check control samples. Primary
laboratory precision and accuracy has been poor but no significant biases are
apparent for the bulk of results.
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.
AMEC collected and submitted 15 quarter-core samples to Acme in Vancouver for
preparation and analysis by Package 4B ICP-MS methods. A comparison of AMEC
results with matched interval results reported in the resource database supported the
grades reported in the resource database.
12.1 Comments on Section 12
In the opinion of the QPs, and based on the database verification performed by AMEC,
the collar coordinates, down-hole surveys, lithologies, and assays are considered
sufficiently free of error and that the data are suitable to support Mineral Resource
estimation.
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13.0 MINERAL PROCESSING AND METALLURGICAL
TESTING 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.
Given the complexities with assaying for the tantalum, a fair amount of effort also went
into developing the appropriate routine for the assaying of samples.
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.
Process development work is continuing in this area, but for the purposes of the PEA,
the process suggested by Test F81 was selected as the basis of initial concentration
design because recoveries were good (approx. 70% for Ta) for this type of
mineralization and because a combined grade of 10% Ta–Nb was achieved. It is
expected that with further work, a combined grade of 30% Ta–Nb should be
achievable.
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
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the separation of Ta from Nb, allowing payment for both products. To this end, an in-
depth review was completed of those technologies for the production of high-value
intermediate products and final 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 produce high purity Nb and Ta chlorides. Tantalum chloride
is the precursor to capacitor grade Ta powder and can be marketed as such.
However, both Ta and Nb chlorides can also be hydrolyzed and calcined to generate
high purity oxide products for other applications.
13.1 Head Samples for Initial Testing
In 2009, two bulk samples, BS-2F and BS–2G, sourced from a small pit in the Upper
Fir zone, and weighing approximately 200 t in total, were contract-crushed to a particle
size of <1 inch diameter. After crushing, each group of samples was homogenized
separately by a standard coning and quartering procedure. The well-mixed samples
were bagged into one tonne bags and put into storage. One tonne of each sample
was delivered to Met-Solve Laboratory (Met-Solve) in Burnaby B.C to air dry and
further reduce the size to -10 mesh for bench testing.
Met-Solve is a commercial mineral and metallurgical testing facility that is independent
of Commerce, and specializes in mineral beneficiation and hydrometallurgical
testwork.
The mineralogical examinations of all the bulk samples taken during the 2009
exploration program are described by Chudy (2009). Additional mineralogical
examinations were performed on some of the test products during the mineral
processing investigations.
The head assays, established using X-ray fluorescence (XRF) analysis, for the two
bulk samples are tabulated in Table 13-1.
13.2 Phase I Testing
13.2.1 Grinding Size
Each sample was subjected to gravity separation tests at five different grind sizes of
80% passing 500 µm, 230 µm, 100 µm, 74 µm and 45 µm to determine the liberation
size using a centrifugal concentrator. A standard seven-pass procedure was used to
simulate continuous gravity concentrator action.
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Table 13-1: Head Assay Grades, Bulk Samples BS-2F and BS–2G Sample Ta (ppm) Nb (ppm)
BS-2F 194 1,300
BS -2G 114 764
This work indicates that the liberation size for both samples is coarser than P80 of
76 µm. The relative position of the curves (Figures 13-1 and 13-2) indicates that
effective liberation for gravity is likely achievable at a grind size slightly coarser than
120 µm. The results for niobium are similar.
Assaying of the individual size fractions of the tailings from the BS-2G tests indicate
that there are still a few locked particles between 74 µm and 106 µm when ground to
P80 112 µm but that material coarser than 150 µm does not contain any tantalum.
Given the natural size distribution obtained in grinding, this implies that effective
liberation for processing, is about P80 of 125 µm for gravity treatment and slightly
coarser for flotation (P80 up to 160 µm). These numbers are in line with independent
findings from the mineralogical examination of all bulk samples of the 2009 exploration
program.
13.2.2 Roughing and Cleaning Gravity Concentration
With the establishment of the grind size and initial gravity results, it was decided to
progress with the gravity concentration work. The two samples were treated with a
centrifugal concentrator, using 10 consecutive stages for rougher concentration
followed by three cleaning stages of the combined rougher concentrates. Four
different grind sizes were tested for each sample. All results were similar, with
recoveries falling off quickly in cleaning and inability to raise the grades any higher
than Ta 3,500 ppm (0.35% Ta). Results from sample BS-2G are shown on Figure 13-
3.
Large batch samples of 60 kg were tested using a Falcon Centrifugal Gravity
Concentrator in 10 consecutive stages to produce a rougher and a scavenger
concentrate at a grind size of P80 100 µm. The rougher concentrate only was
screened to produce three size fractions as follows:
• +74 µm
• 37 to 74 µm
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• -37 µm.
Figure 13-1: Sample BS-2F – Gravity Separation (Different Grinds)
Figure 13-2: Sample BS-2G – Gravity Separation (Different Grinds)
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Figure 13-3: Rougher and Cleaners by Centrifugal Gravity Concentration
Each fraction was then cleaned by gravity using a Wilfley shaking table, with a
medium-size deck. Results were similar to the gravity separation using centrifugal
separator only, with no improvement in recoveries or grades. These fractions were
also tested using a Mozley table concentrator to determine the upgrading
characteristics of the products. Results showed that while it would be possible to
increase the grades by up to six times at the laboratory level, the recoveries would
drop accordingly. The results are shown in Figure 13-4.
Tests were also performed to determine the benefits of additional steps, such as de-
sliming and de-sulphidization. These procedures were incorporated into the testwork
but essentially AMEC was of the opinion that concentration by gravity as the primary
method was not the optimum choice for Project development.
13.3 Phase II Testing
13.3.1 Flotation Tests
A series of tests were performed by Met-Solve using varying de-sliming procedures
followed by flotation with various combinations of reagents. Results were not
successful, with recoveries generally below 15%.
A few tests were then performed using the flotation procedures used at the Niobec
Mine, operated by Iamgold Corporation in Quebec.
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Figure 13-4: Upgrading by Wilfley and Mozley Units
The first tests were immediately successful with higher recoveries and grades in the
roughers than the gravity method. While the rougher stage gave good results, the
cleaning stage was problematic due primarily to non-optimized conditions at this
preliminary stage of testing. Cleaning tests were performed and it was shown that a
total oxide grade of more than 30% combined Nb2O5 and Ta2O5 is achievable although
not at high recoveries. Until such time as the procedures have been well established
and stabilized, and are reproducible on larger test weights, the recoveries indicated
should be considered semi-quantitative and indicative of the possibilities.
Once improved de-sliming equipment was purchased, a series of de-sliming tests were
performed to determine the best range of operating parameters which indicated
optimum ranges are similar to those obtained at Niobec. Tests were then performed to
optimize the kinetics of the rougher tantalum–niobium flotation. It has been shown that
control of the pH through the stages is critical. Also important is the formulation of the
main collector, a tallow diamine acetate. Previously available as a commercial
product, Duomac-T, it is no longer available and current practitioners such as the
Niobec Mine now purchase the two main reagents (the amine and acetic acid) and
prepare the collector at site.
Process development work is continuing in this area, but for this report, the process
suggested by Test F81 (see Table 13-2) has been chosen as the basis of initial
concentration design as recoveries were good (approx. 70% Ta) for this type of
mineralization and due to a combined grade of 10% Ta–Nb (equivalent to
approximately 14% combined oxides) being achieved. It is expected that with further
work, a combined grade of 30% combined oxides should be achievable.
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Table 13-2: Results from F81
Mass Assay Recovery
Products Ta Nb S Ta Nb S
% ppm ppm % % % %
Cyclone Overflow #1 16.5 49 338 0.35 6.9 7.4 9.0
Cyclone Overflow #2 7.1 73 410 0.41 4.4 3.8 4.5
Carbonate Concentrate 28.0 25 151 0.17 5.9 5.6 7.3
Pyrrhotite Concentrate 1.7 152 275 27.38 2.2 0.6 73.5
Magnetic product 0.1 56 395 21.59 0.0 0.0 2.3
Stage 5 Pyrochlore Cleaner Con 0.6 12839 86732 1.14 69.8 72.7 1.1
Stage 5 Pyrochlore Cleaner Tail 0.4 228 1816 0.15 0.7 0.9 0.1
Stage 4 Pyrochlore Cleaner Con 1.0 8121 54962 0.77 70.6 73.6 1.2
Stage 4 Pyrochlore Cleaner Tail 3.9 179 1397 0.06 6.0 7.3 0.4
Stage 3 Pyrochlore Cleaner Con 5.0 1806 12372 0.21 76.6 80.8 1.6
Stage 3 Pyrochlore Cleaner Tail 1.0 63 499 0.08 0.5 0.6 0.1
Stage 2 Pyrochlore Cleaner Con 5.9 1525 10459 0.19 77.1 81.5 1.7
Stage 2 Pyrochlore Cleaner Tail 5.3 10 96 0.02 0.5 0.7 0.2
Stage 1 Pyrochlore Cleaner Con 11.2 810 5570 0.11 77.6 82.1 1.9
Stage 1 Pyrochlore Cleaner Tail 13.9 10 10 0.04 1.2 0.2 0.9
Total Pyrochlore Rougher
Concentrate 25.1 367 2492 0.07 78.7 82.3 2.8
Flotation Tails 21.5 10 10 0.02 1.8 0.3 0.7
Calculated Feed 117 760 0.64 100 100 100
Assayed Feed 113 764
Results of preliminary dilute hydrochloric acid leaching tests indicated that low- to
intermediate-grade gravity and flotation products can be upgraded significantly with
negligible loss of Ta+Nb. The final upgrading flowsheet will be based on an economic
comparison between pay metal losses from physical beneficiation and the cost of acid
plus stabilization/disposal of the leach products.
Table 13-3 presents results of a four-stage hydrochloric acid (pH 2, pH 1.2,
6N/1h/100ºC, 6N/5h/100ºC) on a flotation middling product.
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Table 13-3: Results of a Sequential Hydrochloric Acid Leach of Flotation “Middling” Products Weight Assay (ppm) Distribution (%)
(g) Ta Nb Ta Nb
Stage 1 Filtrate 180.0 0.002 0.00 0.0001 0.000004
Stage 2 Filtrate 220.0 0.031 0.34 0.001 0.002
Stage 3 Filtrate 255.0 0.024 0.63 0.001 0.003
Stage 4 Filtrate 210.0 1.491 12.27 0.056 0.053
Filter Cake 10.7 51,813 453,168 99.9 99.9
Calculated Head 26,824 234,609 100.0 100.0
Assayed Head 20.0 27,663 245,813
Most of the weight loss (>80%) was achieved in the first two stages, clearly indicating
the technical feasibility of upgrading by acid leaching with negligible solution loss of
Ta + Nb. The final leach residue assay is >50% Ta + Nb. The stage 3 and 4 strong
acid leaches were designed to investigate the possibility of dissolving Ta + Nb, but the
minerals appear to be entirely resistant to this relatively aggressive leach.
13.4 Review of Concentrate Treatment Options
In both phases, the emphasis of concentration techniques is to create a material which
would be easily upgraded by hydrometallurgical methods, pyrometallurgical methods,
or a combination of both. This has led to an in-depth review of those technologies for
the production of high value intermediate products and final 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 produce high purity
Nb and Ta chlorides. Tantalum chloride is the precursor to capacitor-grade Ta
powder, so would be marketed in this form. Niobium chloride can be sold as a
chemical precursor. Both Ta and Nb chloride products can be readily converted and
marketed as high purity Ta2O5 and Nb2O5 oxides respectively.
13.5 Accuracy of Assaying
A review of all calculated and measured feed assay results for tests using bulk sample
BS-2G was performed to check on the accuracy of the chemical analysis and the tests
results. It was decided to continue the assaying of low values, such as tailings, in
duplicate on separate aliquots; this procedure will continue as these assays could
introduce variations to results.
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13.6 Comment on Section 13
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 filtration process will have
a 97% recovery for both Ta and Nb
• 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. These results are suitable to support estimation of Mineral Resources for
the deposits.
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14.0 Mineral Resource Estimates 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 an 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, 8,218 sawn core samples, and 8,434 lithology records 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 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.
The new effective date of the mineral resource estimates, based on the review of
recent drill results, is now 29 September 2011. There has been no change to the
closure date of the database used in the estimate, which is confined to all drilling that
was completed up to the end of December 2009.
14.1 Geological Models
The resource block model was constructed inside carbonatite only using 183 diamond
drill holes. All surrounding lithologies including fenite carry fairly low Ta2O5 and Nb2O5
grade and are considered sub-economic. Generally assay data exists only for
carbonatite. There are some assay values for fenite and adjacent wall rocks but not in
sufficient numbers to create a block model for these lithologies.
Geological interpretations were provided by Commerce to AMEC as 2D vertical
sections and 3D solids in DXF format. The solids were created by Dahrouge
geologists for the major lithologies with the exception of gneiss which was left as a
default. The carbonatite solids were provided as 39 structural (different strike, dip
and/or pitch) domains. AMEC reviewed the geological interpretations and 3D solids.
Minor modifications were made to the solids to provide a better agreement with the
drilling and geological interpretation.
The block model consists of regular blocks and no rotation was used. The block
model framework parameters are listed in Table 14-1.
Blocks in the block model were coded by lithology solids, and the volume of each
lithology solid was compared with the volume of the blocks inside a particular solid. A
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block was tagged by a particular solid code if at least 50% of the block volume
belonged to this solid. The block model and corresponding lithology solid volumes
compare within ±1%.
Table 14-1: Block Model Dimensions Axis Origin* Block Size (m) No. of Blocks Model Extension (m)
X 352,350 5 250 1,250
Y 5,795,850 5 390 1,950
Z 925 2.5 244 610
Note: *Origin is defined as the bottom southwest corner of the model, located at the lowest combined northing and
easting coordinates and the lowest elevation
14.2 Exploratory Data Analysis
Exploratory data analysis (EDA) was performed on the composites to better
understand the data used in the resource estimation. Arithmetic and log histograms
and probability plots of Ta2O5 and Nb2O5 composites in carbonatite were constructed.
The distributions are skewed, and Nb2O5 distribution is approximately lognormal. The
coefficients of variation are low and support the use of linear grade interpolation
methods such as kriging or inverse distance methods.
AMEC calculated contact profiles on assay data in MineSight® software to analyze
grade behaviour at lithology boundaries. There were sharp differences in grade for
each of the variables on the carbonatite and fenite boundary, meaning that values from
outside the carbonatite should be disregarded in the interpolation process of Ta2O5
and Nb2O5 grade inside the carbonatite.
14.3 Density Assignment
Resource block model specific gravity was not estimated; instead it was assigned to all
blocks in the block model (including blocks outside of carbonatite) as follows:
• 3.01 value was assigned to all blocks in carbonatite
• 2.97 value was assigned to all blocks in fenite
• 2.82 value was assigned to all blocks in gneiss
• 3.05 value was assigned to all blocks in amphibolites
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• 2.62 value was assigned to all blocks in pegmatite.
14.4 Grade Capping/Outlier Restrictions
AMEC conducted grade capping on original samples that are mostly 1 m long.
Capping was required to limit the influence of outliers. The choice of capping was
based on visual inspection of histograms and probability plots. The amount of capping
was small; top-cuts of 1,000 ppm Ta2O5 and 10,000 ppm Nb2O5 were used in
carbonatite. Only four Ta2O5 samples and eight Nb2O5 samples were capped resulting
in an expected metal removal of 0.12% Ta2O5 and 0.26% Nb2O5.
14.5 Composites
Capped drill core assays were composited down the hole to a fixed length of 2.5 m.
Compositing of Ta2O5 and Nb2O5 was performed in MineSight® software honouring
geologic boundaries. Composites with length less than 1.25 m were merged with the
previous composite.
14.6 Variography
AMEC used both in-house software and commercially-available Sage2001 software to
produce variogram maps and to construct down-the-hole and directional correlograms
for carbonatite composites. Ta2O5 and Nb2O5 correlograms were created within the
entire carbonatite zone. Two spherical models were used to fit the experimental
correlograms.
14.7 Estimation/Interpolation Methods
Ta2O5 and Nb2O5 grade was estimated in the carbonatite using both Ordinary Kriging
(OK) and inverse distance to the third power (ID3) interpolation methods. 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. Estimation was done separately
within each limb of the carbonatite folds. A total of 39 different limbs / structural
domains were identified and used in the estimation process. The limbs differ in the
orientation of the search ellipse.
The rotation angles of the search ellipse are the same for each pass, but they are
different for each of the 39 structural domains. They reflect average strike, dip, and
pitch of each fold limb/domain.
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14.8 Block Model Validation
AMEC completed a visual inspection of composites and blocks in vertical sections and
plan views. The model generally honours both Ta2O5 and Nb2O5 data well, and grade
extrapolation is well-controlled where sufficient data exists.
The OK and ID3 block models were checked for global bias by comparing the average
grade (with no cut-off) from these models with that obtained from nearest-neighbour
(NN) model estimates. Global biases are well below the recommended AMEC
guidelines of ±5% (relative difference).
AMEC also estimated the impact of outlier capping on the estimated global mean of
the model. A comparison of global means of capped and uncapped OK and ID3
models showed the amount of metal removed by capping is minor (0.1% for Ta2O5 and
0.3% Nb2O5).
Checks for local biases were performed for Ta2O5 and Nb2O5 by creating and
analyzing local trends in the grade estimates using swath plots. Swath plot checks,
conducted by AMEC, show that there are no local biases between ID3 / OK and NN
models for estimated Ta2O5 and Nb2O5 in carbonatite.
Selectivity analysis for Ta2O5 and Nb2O5 was completed using the Discrete Gaussian
Model for change of support from composite size units to an SMU size. This was done
using AMEC in-house software (Herco). The aim of this analysis is to assess if the
estimated resource reasonably represents the recoverable resources (represented by
Herco curves) relative to the proposed mining method. The selectivity analysis
assumed a 10 m by 10 m by 5 m block as the smallest selective mining unit (SMU) for
Blue River. The Herco selectivity analyses show that the Ta2O5 and Nb2O5 ID3
models are properly smoothed. The ID3 model produces slightly higher average
grades of Ta2O5 and Nb2O5 compared to the OK models above cut-off grades of 140
ppm Ta and 900 ppm Nb. The ID3 model was chosen for tabulating the Blue River
Mineral Resources as the OK model is considered too smooth.
14.9 Classification of Mineral Resources
The Mineral Resources were defined taking into account the CIM Definition Standards
(2010).
Based on a grade drill-hole spacing study AMEC established the following criteria for
classification of Mineral Resources at Blue River:
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Inferred Mineral Resources:
• Minimum one hole
• Distance to the closest composite less than 110 m
Indicated Mineral Resources:
• Minimum two holes
• Distance to the closest composite less than 50 m
• Distance to the second closest composite less than 70 m
Measured Mineral Resources:
• Minimum three holes
• Distance to the closest composite less than 30 m
• Distance to the second closest composite less than 40 m
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.
Eighty percent of the carbonatite blocks are classified as Indicated. Fourteen percent
of the carbonatite blocks are classified as Inferred. Six percent of the block model in
carbonatite is unclassified. Blocks that fall into the unclassified category are within
carbonatite solids that were intersected typically by one isolated drill hole. The
geological continuity and volume of those solids cannot be reasonably assumed.
14.10 Reasonable Prospects of Economic Extraction
14.10.1 Tantalum Pricing
Tantalum is quoted as a number of different forms, but the two most common are:
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• Ta2O5 in tantalite concentrate: a non-refined, tantalum-bearing concentrate of
variable composition and trace element content
• Tantalum metal scrap (99.9% pure Ta): this form of tantalum product receives a
premium price in the market relative to tantalite concentrate.
Over the last six years tantalite concentrate prices ranged from US$75/kg contained in
Ta2O5 to US$100/kg contained in Ta2O5 (US$35/lb to US$45/lb). In the same period
tantalum metal scrap prices ranged from US$110/kg Ta to US$180/kg Ta metal
(US$50/lb to US$80/lb). In 2010, prices rose dramatically in response to changing
market conditions including reduced production, increased concerns about conflict-
tantalum production in Africa and depletion of known strategic stockpiles. In mid-
October 2010 the price for Ta2O5 in tantalite concentrate was US$195/kg and for
tantalum metal scrap was US$280/kg.
The higher price for tantalum metal scrap compared to the price for Ta2O5 in
concentrate is considered a proxy for the added value Commerce should recognize by
refining the Blue River concentrate to high-purity Ta2O5.
In AMEC’s opinion, the base case price for tantalum metal scrap is reasonable for
constraining Mineral Resources based on recent market conditions, but notes it is
significantly higher than historical prices. There is a risk that using current price
assumptions may not reflect the long-term price of Ta and Nb, particularly in the
present volatile market conditions.
14.10.2 Niobium Pricing
Niobium generally trades as Nb oxide, metal, or ferroalloy, and the price has remained
relatively constant at US$44.08/kg Nb metal in oxide (US$20/lb Nb) over the last
several years. A base case price of US$46/kg Nb metal in oxide was assumed.
14.10.3 Physical Assumptions
• Tantalum–niobium mineralization is hosted in carbonatite
• Continuous mineralization is found in moderately flat and wide carbonatite bodies
with modest dips
• Mineralized areas 20 m to 70 m in height are expected in several zones
• Steep topography provides access to the mineralized areas in the form of adits on
the hillsides
• Fair to good rock conditions are expected in the majority of the deposit
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• Identified faulted zones may require wider pillars to avoid unstable mining conditions.
14.10.4 Operational Considerations
• The underground mining method used to constrain the mineral resources is room
and pillar
• 70% of the resources could be recovered by mining with 30% of the resource
expected to remain as unrecoverable pillars for stability considerations
• A minimum stope size of 10 m x 10 m rooms with heights from 5 m to 15 m is
assumed
• An external dilution factor was not considered during this estimation
• The concentration method considered is flotation followed by a refining process on site;
global recoveries to obtain metal grade products were assumed to be 65% for tantalum
and 68% for niobium.
14.10.5 Economic Assumptions
Most of the operating cost assumptions were extrapolated from previous studies
prepared by AMEC:
• Mining and backfilling cost US$32.00/t
• Processing and refining cost US$17.00/t
• General and Administration (G&A) US$2.70/t
• Base case scenario price of tantalum US$317/kg Ta in oxide product
• Price of niobium US$46/kg Nb in oxide product
14.10.6 Economic Cut-off
Block Unit Value
The block model was adapted to represent the two payable metal contents in terms of
block unit value (BUV) in US$/t using the following formula:
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BUV = (Ta2O5 grade in ppm * Ta recovery factor * Ta price in US$/g *
proportion of 2Ta:Ta2O5) + (Nb2O5 grade in ppm * Nb recovery factor * Nb
price in US$/g * proportion of 2Nb:Nb2O5)1
For the base case scenario:
BUV = (Ta2O5 * 0.654 * 0.317 * 0.819) + (Nb2O5 * 0.682 * 0.046 * 0.699)
Considering the direct operating costs, a cut-off value of US$52/t was assumed for the
material susceptible to be mined by bulk methods and a cut-off value of US$59/t for
material to be mined by the selective methods.
The tool “Stope Analyzer” from Vulcan® was utilized to identify the blocks that exceed
the cut-off value while complying with the aggregation constraint of the specified
minimum stope size. This tool “floats” a stope with the specified dimensions and flags
each block when the average block unit value of the contained blocks within a stope
exceeds the designated cut-off value.
For constraining Mineral Resources deemed to be mined by underground methods,
the use of this tool as an alternative to a conventional economic grade-shell provides
an advantage based on the ability to aggregate blocks into the minimum stope
dimensions and the automatic elimination of outliers that do not comply with this
condition.
14.11 Mineral Resource Statement
The Mineral Resources were classified in accordance with 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.
The Indicated Mineral Resources are 36.35 Mt containing 195 ppm Ta2O5 and
1,700 ppm Nb2O5. Inferred Mineral Resources are 6.40 million tonnes containing 199
ppm Ta2O5 and 1,890 ppm Nb2O5.
Table 14-2 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.
1 Note: Ta2O5 = 1.2211 * Ta; Nb2O5 = 1.4305 * Nb
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Table 14-3 shows the sensitivity of the Blue River Mineral Resources to tantalum metal
price. Sensitivities are based on a fluctuating metal price.
The PEA is 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 an effective date 31 January 2011). AMEC used the drill results up to the
end of 2009.
Results from the 54 holes drilled in 2010 were compared to the existing resource
model and were found to be reasonably consistent with the 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 consistent with the predicted geology model.
The effective date of the Mineral Resource estimate has been updated to 29
September 2011 reflecting reviews of the latest drill information.
The Mineral Resource estimate is supported by base case price assumptions for Ta
and Nb which reflect current market prices, but are higher than historic average prices.
A review of publicly-available market analysts’ opinions shows a general agreement
that current market conditions support the probability of sustained higher prices. There
is no assurance the higher prices will be realized over the life of the Project.
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Table 14-2: Blue River Project Estimated Mineral Resources; Effective Date 29 September 2011, Tomasz Postolski, P. Eng.
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 US$52 to US$59.
4. Discrepancies in contained oxide values are due to rounding.
5. In situ contained oxide reported.
Table 14-3: Blue River Project Sensitivity of Estimated Mineral Resources to Tantalum Price; Effective Date 29 September, 2011, Tomasz Postolski, P.Eng, (Base Case is bolded)
Ta price
(US$/kg)
Confidence
Category
Mass
(tonnes)
Ta2O5
(ppm)
Nb2O5
(ppm)
Contained
Ta2O5
(1000s of kg)
Contained
Nb2O5
(1000s of kg)
470 Indicated 51,130,000 188 1,410 9,610 72,300
Inferred 8,100,000 192 1,700 1,600 13,800
381 Indicated 44,430,000 192 1,530 8,530 68,020
Inferred 7,300,000 196 1,780 1,400 13,000
317 Indicated 36,350,000 195 1,700 7,090 61,650
Inferred 6,400,000 199 1,890 1,300 12,100
272 Indicated 29,990,000 197 1,850 5,910 55,480
Inferred 5,500,000 201 2,010 1,100 11,100
238 Indicated 25,130,000 197 2,000 4,950 50,240
Inferred 4,900,000 202 2,110 1,000 10,400
Notes:
1. Ta price was varied and all other assumptions remain the same as base case.
2. Base case is in bold.
3. Mineral resources are amenable to underground mining methods and have been constrained using a “Stope
Analyser”.
4. Discrepancies in contained oxide values are due to rounding.
5. In-situ contained oxide reported
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14.12 Factors That May Affect the Mineral Resource Estimate
Factors which may affect the Mineral Resource estimates include:
• Commodity price assumptions
• Metallurgical recovery assumptions
• Cut-off criteria used to report the Mineral Resource estimates
• Stope dimensions and mining and recovery assumptions used to constrain the
estimates.
14.13 Comment on Section 14
The QPs are of the opinion that the Mineral Resources for the Project, which have
been estimated using core drill data, have been completed using industry best
practices, and conform to the requirements of CIM (2010).
Mining assumptions may have an impact on the contained metal uncertainty and as
such on the Mineral Resource classification. The mining cost and method assumptions
used to constrain the Mineral Resource estimate in 2010 differ from those used in the
2011 PEA. During the next Mineral Resource update the PEA parameters should be
considered when classification and reasonable prospects criteria are evaluated.
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15.0 Mineral Reserve Estimates No Mineral Reserves have been estimated for the Project.
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16.0 MINING METHODS The mining section is partly based on Inferred Mineral Resources that are considered
too speculative geologically to have the economic considerations applied to them that
would enable them to be categorized as Mineral Reserves, and there is no certainty
that the Preliminary Economic Assessment based on these Mineral Resources will be
realized.
16.1 Optimization
16.1.1 Assumptions
Mining assumptions used to define the Mineral Resource estimate in Section 14 were
modified during development of the mine plan.
The block model consists of regular blocks with dimensions of 5 m x 5 m in the
horizontal plane and 2.5 m vertically; no rotation was adopted.
The block model was adapted to represent the unit value per tonne of material
considering two payable metal contents. This value was named the block unit value
(BUV) in US$/t and was estimated using the following formula:
BUV = (Ta2O5 grade in ppm * Ta recovery factor * Ta price in US$/g *
proportion of 2Ta: Ta2O5) + (Nb2O5 grade in ppm * Nb recovery factor *
Nb price in US$/g * proportion of 2Nb:Nb2O5)
Price assumptions were US$317/kg tantalum metal and US$46/kg niobium metal,
contained in oxide product.
Tantalum and niobium mineral occurrences are amenable to conventional flotation and
refining processes with estimated overall recoveries of 65.4% and 68.2%.
The block model unit was valued using the following formula:
BUV = (Ta2O5 * 0.654 * 0.317 * 0.819) + (Nb2O5 * 0.682 * 0.046 * 0.699)
For purposes of estimating the Mineral Resources, an underground mining cut-off
grade of US$52/t was established for the material susceptible to be mined by bulk
methods and a cut-off value of US$59/t for material to be mined by the selective
methods. These figures were based on conceptual preliminary direct operating costs
prior to developing the PEA’s mine plan and its associated costs.
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Mineral Resources considered in the preliminary mine plan are those tabulated in
Table 14-2.
The “Stope Analyzer” tool from commercially-available Vulcan® software was utilized to
identify blocks within the resource model for which the block unit value (BUV)
exceeded the cut-off value while complying with an aggregation constraint of a
specified minimum stope size. This tool “floats” a stope with previously specified
dimensions and flags each block when the average block unit value of the contained
blocks within a stope exceeds the designated cut-off value.
The use of this tool is an alternative to a conventional economic grade-shell for
constraining Mineral Resources deemed to be mined by underground methods, and
provides an advantage based on the ability to aggregate blocks into the minimum
stope dimensions and the automatic elimination of outliers that do not comply with this
condition. Stope dimensions are detailed in Table 16-1.
16.1.2 Mining Method
Blue River Project is located largely along the steep, west-facing slopes of the
Monashee Mountains and it is closely positioned to, and just east of, the North
Thompson River. As mineralization is close to surface, extraction of the mineralized
material could potentially be by either open pit or underground methods, or a
combination of both.
The open pit method offers a potentially higher mining recovery and the opportunity for
extracting the mineralized material with lower operating and capital costs. On the
other hand, it presents technical challenges for:
• Placement of large volumes of waste rock in limited amenable areas in the vicinity
of the project
• Exposure to heavy snow loads on the dumps and excavations and the associated
risk of avalanches
• Need for surface water diversion and groundwater control infrastructure as well as
the mitigation of these impacts
Initial assessment identified technical challenges and increased costs for tailings and
waste rock disposition related to local topography, stream courses and climate. For
this reason a decision was made to consider an underground mining scenario for PEA
purposes.
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Table 16-1: Minimum Stope Dimensions for Constraining the Subset of Mineral Resources within Designed Stopes
Mining Method Width (m) Length (m) Height (m)
Sub-level Open Stoping 10 10 15
16.1.3 Production Rate
In 2009, AMEC carried out an “order of magnitude” financial analysis to evaluate a
range of processing throughput rates. This analysis indicated that the Project required
processing rates of greater than 5,000 t/d to provide a reasonable economic return on
investment.
A processing rate of 7,500 t/d was assumed for Mineral Resource estimation and for
the conceptual design of an underground mine for the Project.
It is AMEC’s opinion that this mining rate is reasonable based on the geometry of the
deposit and the mining method selected.
16.1.4 Backfill Option
Topography, drainage and precipitation aspects limit the options for surface tailings
storage facility locations. AMEC visited the Project site in July 2010 when potential
areas for infrastructure and tailings storage were identified. Due to the limited options
available for tailings storage, Commerce and AMEC agreed that underground mining
should consider the ability to dispose of filtered tailings in the mined-out areas, but that
this would not be the preferred option for the Base Case.
16.2 Geotechnical Conditions
In the second half of 2010 AMEC carried out a geotechnical program to provide design
guidelines for the Blue River Project. This program included:
• A geotechnical site investigation program
• Training for site geologists and geological technicians in oriented core logging
• QA/QC site visits during the geotechnical drilling program
• Engineering analysis and recommendations applicable to the underground mining
method.
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Rock types have been grouped into two main geotechnical domains: Intrusive and
Layered Rocks. The Intrusive group encompasses carbonatite and fenite rocks while
the Layered Rocks group encompasses gneiss and amphibolite.
Based on rock strength analysis and assessment of rock quality designation (RQD),
joint spacing, joint condition and groundwater condition assumptions, the rock mass
characteristics detailed in Table 16-2 were obtained for each rock group.
Table 16-2: Rock Mass Characteristics by Rock Group
A structural set analysis showed similarities between the Intrusive and Layered Rock
groups with a strong concentration of flat joints dipping between 0º to 30º to the
east/northeast and sub-vertical joints striking northwest/southeast. The major joint
sets were identified as shown in Table 16-3.
16.3 Conceptual Mining Method
The major items governing the selection of underground mining methods include the
geology and geometry of the deposit and geotechnical properties of the mineralized
material and country rock.
AMEC followed the technique proposed by Nicholas (1992) to rank the underground
mining methods suitable for the Blue River deposit. AMEC classified the deposit as a
thick, tabular, and flat deposit with relatively uniform low grades and moderate
geotechnical conditions in the deposit as well as in the host rock. The three methods
with higher ranking are:
• Sub-level stoping
• Cut-and-fill
• Sub-level caving.
The first two methods were considered for this study. The first was evaluated for
areas where the carbonatite is greater than 15 m in thickness and the second for
thinner areas towards the edges of the carbonatite folds.
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During economic analysis it was found that the cut-and-fill method was likely to prove
uneconomic and it was excluded from the mine plan.
The assumed mining method is sub level open stoping with no backfill and no pillar
recovery.
Table 16-3: Major Joint Sets
16.4 Stoping Design
The Upper Fir deposit geological model shows thicknesses between 20 m to 80 m and
strike lengths between 50 m to 200 m in the east–west direction. Transverse
dimensions in the north–south direction range between 100 m to 500 m. Vertical
stopes oriented east–west with maximum dimensions of 30 m high, 15 m wide and
60 m long were selected for preliminary analysis.
Based on these stope dimensions, the following stope faces and hydraulic radius are
defined (Table 16-4).
16.4.1 Stability Analysis and Ground Support
As part of geotechnical analysis, AMEC carried out stability analysis based on the
empirical Mathews/Potvin Stability Graph method.
Results of the analysis indicated:
• Face A – Longwall: This wall is expected to be composed by competent Intact to
Blocky rock mass. The main jointing is sub-horizontal crosscut by two sub-vertical
joint sets. The stope wall is vertical and should be inherently stable unless
disturbed by over-blasting. Sloughing up to 0.5 m thick is expected. Cable bolting
may be required in certain places.
• Face B – Endwall: Numerical modeling suggests that the stress is relatively high
compared with the rock strength and the joint set configuration favours sliding
failure. Cable bolts are required to provide stability. A square cable pattern of 2 m
by 2 m is recommended and will be installed from the sill drift fanning upwards to
cover the unsupported span between level drifts.
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• Face C – Back: This face is horizontal and as such is expected to be in a relaxed
stress state. Gravity driven rock fall is likely the dominant failure mode. Face
reinforcement is required with the development of a self supporting rock arch over
the back face. A 15 m wide face requires cable bolting in square pattern of 2 m by
2 m and cable bolts of 9 m long.
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Table 16-4: Stope Faces and Hydraulic Radius Face A Face B Face C
Longwall Endwall Back
Height (m) 30 30
Width (m) 15 15
Length (m) 60 60
Hydraulic radius (m) 10 5 6
16.4.2 Stope Geometry
AMEC made adjustments to the preliminary stope design to reduce the demand for
cable bolting; specifically the Back was reduced to a 5 m-wide entry. This requires the
stope drilling pattern to be changed from vertical to fanned holes.
16.4.3 Mining Sequence
The stope face will advance from the east end of each block to the west in a retreat
manner. Once the maximum unsupported stable length of the stope has been
reached, a pillar will be established, and mining will resume from a new stope.
16.4.4 Conceptual Mine Design
AMEC developed a conceptual design for one of the potential areas to be mined,
geological domain A110. This domain was selected because it was one of the thicker
areas within the deposit and represented a reasonable test area for mine design.
16.4.5 Mining Dilution and Recovery
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 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.
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16.5 Drilling and Blasting
AMEC assumed conventional drilling methods: electro-hydraulic jumbos for face drift
rounds and electro-hydraulic long-hole drills for stoping drilling.
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 requiring the
use of emulsion type explosives.
AMEC assumed the utilization of specifically-designed tanks to store emulsion
explosives in trucks delivering and loading explosives at development faces and
stopes. A centralized blasting system where all blasts are initiated sequentially from a
single location at the end of each shift will be used to reduce potential safety and
ventilation risks.
16.6 Mine Development
The deposit will be accessed through two main portals, the Upper and Lower Portals,
located in where the deposit outcrops on the hillside. The Upper Portal will be located
at Elevation 1,150 m. It will be used as the main entry and will have most of the mine
services. The Lower Portal will be located at Elevation 1,030 m and will be used for
haulage trucks access. Access to the portals will be by a road upgraded from existing
exploration roads. Location plans for the portals are included in Section 18.
The mine will be accessed by adits driven in pairs from the portals. All entries, ramps,
drifts and crosscuts will be 5 m wide by 5 m high with semi-arched back to
accommodate the haulage trucks plus mine services, including pipelines for
compressed air, drill and drainage water, for ventilation duct and electric and
communication cables.
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 ventilation.
Top access crosscuts are driven from the main ramps to each level on vertical
intervals between 20 m to 30 m. Stope access crosscuts are driven along the levels
from west to east. Bottom-access crosscuts are driven to function as mucking drifts.
Ground support will be by grouted bolts in all man-entry drifts with steel mats, wire
mesh and plates assumed to be installed in 20% of the areas.
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The length of development necessary was calculated by designing centrelines of
ramps and drifts to provide access to all potentially mineable areas of the mine.
Additional development for re-mucking cut-outs, sumps, substation rooms, storage and
any other excavation needed for infrastructure was included as an allowance of 20% of
the semi-permanent development entries. The total development was estimated at
92,500 m during the life-of-mine.
A conceptual preliminary overall mine plan is included as Figure 16-1. Figure 16-2
displays an aerial view of the mining area from the Upper Portal.
16.7 Mineralized Material and Waste Rock Haulage
The PEA envisages that tailings material will be dry-stacked and waste rock will be
stored in the same general area. For convenience, the combined storage area is
referred to as the “co-disposal facility”.
Radio remote-controlled load-haul-dumps (LHDs) will be used to extract the
mineralized material from beyond the safety of the stope brow. This material will then
be loaded directly into the haulage trucks that will be spotted at the end of each stope
crosscut.
Underground trucks will haul the mined material through the access drifts and ramps,
unloading into the primary crusher surface stockpile located close to the Lower Portal.
Crushed material will be transferred to the process plant by a belt conveyor.
Waste from development will initially be utilized for construction of a structural shell for
the tailings co-disposal site located between Elevations 1400 m and 1600 m in an area
east of the process plant. The conveyor will be used to transport this material in
batches from the mine to a stockpile by the plant site.
A road developed at +10% grade will connect the plant with the co-disposal site.
Surface trucks will haul waste from the plant to the co-disposal site.
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Figure 16-1: Conceptual Mine Layout Plan (plan view projection)
Note: image figure colours may appear darker than reference key colours due to over-plotting of design layers
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Figure 16-2: Aerial View of the Mining Area from Upper Portal
Note: image figure colours may appear darker than reference key colours due to over-plotting of design layers. Light brown blocks in background of
figure are the potentially-mineable blocks.
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16.8 Mine Services
Underground mine services such as ventilation and air heating, compressed air, water
for drilling and electric power supply will be provided to the mine via adits from the
portals. The main power substation and the air compressors will be installed in
facilities located adjacent to the Upper Portal.
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 a mine equipment underground maintenance facility.
Portable self-contained refuge stations will be provided for the mine and will be located
at convenient locations. Refuge stations provide a common assembly area in the
event of a mine fire or other emergency and are portable so they can be easily
relocated to the next active area.
16.9 Mine Development and Production Forecasts
The forecast preproduction development is 12,000 m and the annual development
over the ten-year mine life is forecast to decrease from 15,000 m in the first full
production year to about 2,150 m in the final year.
Production was estimated at 2.7 Mt/a of mineralized material. Following the
preproduction development year full production is maintained for nine years followed
by decreased production in Year 10 as the subset of the Mineral Resources
considered in the mine plan are exhausted.
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 (NPV) 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 development and production forecasts are shown in Table 16-5.
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Table 16-5: Mine Development and Production Forecasts
Production Schedule Units Yr -1 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5
Nominal production rate tpd
7,500 7,500 7,500 7,500 7,500
Scheduled working days days/year 360 360 360 360 360 360
Production of mineralized material t/year
2,700,000 2,700,000 2,700,000 2,700,000 2,700,000
Ta2O5 Grade ppm
185 185 185 185 185
Nb2O5 Grade ppm
1,591 1,591 1,591 1,591 1,591
Development (total) m/year 12,000 15,000 12,834 10,980 9,394 8,038
Capital development m/year 12,000 5,000 1,216 1,040 890 761
Operational development m/year 0 10,000 11,618 9,940 8,505 7,276
Production Schedule Units Yr 6 Yr 7 Yr 8 Yr 9 Yr 10 Total
Nominal production rate tpd 7,500 7,500 7,500 7,500 7,500
Scheduled working days days/year 360 360 360 360 360
Production of mineralized material t/year 2,700,000 2,700,000 2,700,000 2,700,000 700,000 25,000,000
Ta2O5 Grade ppm 185 185 185 185 185 185
Nb2O5 Grade ppm 1,591 1,591 1,591 1,591 1,591 1,591
Development (total) m/year 6,877 5,884 5,034 4,307 2,153 92,500
Capital development m/year 651 557 477 408 0 23,000
Operational development m/year 6,225 5,326 4,557 3,899 2,153 69,500
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16.10 Mine Equipment Requirements
Table 16-6 shows the major mining equipment and the support equipment required
each year for the life of mine and includes allowances for equipment utilization and
availability due to maintenance downtime. The table includes equipment required for
the tailings and waste co-disposal facility.
The “Equipment additions” reflect additional requirements based on increased activity
levels and replacements assuming typical useful operating lives for the units.
16.11 Mine Infrastructure
The mine infrastructure planned for the Project is listed in the capital costs section of
this report and includes establishment of mine portals, access roads to portals
underground maintenance bays, ventilation and heating systems, air compressors, fuel
tanks, explosives magazines, pumps, electrical transformers and ancillary equipment.
16.12 Mining Personnel
The mine is scheduled for three 8-hour shifts per day, 360 days per year. This will
require an equivalent of 4.5 mine crews working a rotating schedule for activities
scheduled seven days a week and three crews for activities scheduled five days a
week. The annual personnel requirements are shown in Table 16-7. This includes
management and supervisory personnel and personnel to operate and maintain
equipment used to service the surface roads and the tailings disposal site.
16.13 Comment on Section 16
In the opinion of the QPs, the following conclusions are appropriate:
• The deposits are amenable to underground mining, and the PEA has been
developed assuming a Base Case sub-level open stoping mining method with no
backfill
• Material deemed to be mined by bulk mining methods represents 84% of the
Mineral Resources; within the stopeable shape, an additional 2% of waste was
identified as internal dilution.
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Table 16-6: Mining and Tailings Facility Equipment Requirements
Yr -1 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10
Major Equipment Units Required
Jumbo - 2 boom 4 4 4 4 3 3 3 3 2 2 2
Longhole dri ll - 5 5 5 5 5 5 6 6 6 4
Bolter 3 3 3 3 3 2 2 2 2 1 2
Emulsion Truck 3 4 4 3 3 3 3 3 2 2 3
Scissor Lift 4 4 4 4 3 3 3 3 2 2 2
LHD - Ejector - 7 m3 3 5 5 5 5 5 5 5 4 4 4
Trucks 3 9 9 9 8 8 8 8 8 8 7
Major Equipment Purchases
Jumbo - 2 boom 4 - - - - 2 1 - - - -
Longhole dri ll - 5 - - - 3 2 - - - -
Bolter 3 - - - - 1 1 - - - -
Emulsion Truck 3 1 - - - 2 1 - - - -
Scissor Lift 4 - - - - 2 1 - - - -
LHD - Ejector - 7 m3 3 2 - - - 3 2 - - - -
Trucks 3 6 - - - 4 4 - - - -
Support Equipment Purchases
Low profi le U/G Motor Grader 1 - - - - 1 - - - - -
Crane truck 1 - - - - 1 - - - - -
Fuel/lube vehicle 2 - - - - 2 - - - - -
Service truck w/ scissor l ift 2 - - - - 2 - - - - -
Forklift/Cable reeler 1 - - - - 1 - - - - -
Mancarrier - 16 person 2 - - - 2 - - - 2 - -
Shotcrete Machine 2 - - - 2 - - - 2 - -
Mechanics truck w/ flat deck 2 - - - 2 - - - 2 - -
Supply truck w/ flat deck 2 - - - 2 - - - 2 - -
Crew cab 4 - - - 4 - - - 4 - -
Mine rescue van 1 - - - 1 - - - 1 - -
Surface Equipment Required
Grader 2 2 2 2 2 2 2 2 2 2 2
Water Truck 1 1 1 1 1 1 1 1 1 1 1
Compactor 1 1 1 1 1 1 1 1 1 1 1
Dozer 3 4 4 4 3 3 3 3 3 3 3
Excavator 1 2 2 2 2 2 2 2 2 2 1
Haul Truck 5 13 13 13 13 13 13 13 13 13 10
Surface Equipment Purchases
Grader 2 - - - - - 1 - - - -
Water Truck 1 - - - - - - - - - -
Compactor 1 - - - - - - - - - -
Dozer 3 1 - - - - 2 1 - - -
Excavator 1 1 - - - - 1 - - - -
Haul Truck 5 8 - - - - - - - - -
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Table 16-7: Mining Personnel Requirements Mine Operations Personnel Yr -1 Yr 1 Yr 2 Yr 3 Yr 4 Yr 5 Yr 6 Yr 7 Yr 8 Yr 9 Yr 10
Operators for Major Equipment
Jumbo - 2 boom 14 17 15 13 11 9 8 7 6 5 8
Longhole drill 0 14 14 14 15 15 15 15 16 16 13
Bolter 21 26 22 19 16 14 12 11 9 8 10
Emulsion Truck 9 13 11 10 9 8 8 7 6 6 7
Scissor Lift 14 17 15 13 11 9 8 7 6 5 8
LHD - Ejector - 7 m3 9 20 19 18 17 16 16 15 15 14 14
Trucks 9 34 32 31 31 30 30 30 29 29 26
Operators for Support Equipment
Low profile U/G Motor Grader 5 5 5 5 5 5 5 5 5 5 5
Service truck w/ scissor lift 9 9 9 9 9 9 9 9 9 9 9
Forklift/Cable reeler 3 3 3 3 3 3 3 3 3 3 3
Operators for Surface Equipment
Grader 9 10 9 9 9 9 9 9 9 9 9
Water Truck 5 5 5 5 5 5 5 5 5 5 5
Compactor 3 6 3 3 3 3 3 3 3 3 3
Dozer 14 23 23 18 14 14 14 14 14 14 14
Excavator 3 6 6 6 6 6 6 6 6 6 3
Haul Truck 23 59 59 59 59 59 59 59 59 59 50
Maintenance
Crane truck 3 3 3 3 3 3 3 3 3 3 3
Fuel/lube vehicle 5 9 9 9 9 9 9 9 9 9 7
Mechanics truck w/ flat deck 10 18 18 18 18 15 15 15 15 15 10
Supply truck w/ flat deck 10 18 18 18 18 15 15 15 15 15 10
Maintenance Shop 13 20 14 9 5 8 7 5 3 2 6
Mine Services
Services installations 5 5 5 5 5 5 5 5 5 5 3
Grouting/shotcrete 5 5 5 5 5 5 5 5 5 5 3
Construction 5 5 5 5 5 5 5 5 5 5 3
Level maintenance 2 2 2 2 2 2 2 2 2 2 2
Nipper 2 2 2 2 2 2 2 2 2 2 2
General Mine Administration, Technical and Services Mine Administration 19 19 19 19 19 19 19 19 19 19 15
Maintenance 11 11 11 11 11 11 11 11 11 11 8
Technical Services 23 23 23 23 23 23 23 23 23 23 20
Subtotal Mine Operations 263 407 384 364 348 336 331 324 317 312 279
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• The geotechnical investigation indicates that an extraction of 67.5% can be
achieved, resulting in an overall mining recovery of 58%. It was assumed that an
additional 2% of waste material would be added as external dilution and 2% of
mineralization losses were incurred due to operating conditions. An overall mining
recovery factor of 58% of the estimated Mineral Resources was considered in this
study; this accounts for 25.0 Mt of mineralized material as run-of-mine (ROM)
production to be processed inclusive of diluting material
• Considering waste inside stopes and external dilution, the overall Mineral
Resource estimate grades were diluted to 185 ppm of Ta2O5 and 1,591 ppm of
Nb2O5 for the ROM estimates
• 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.
• Developments were modeled following a decreasing activity level from the
beginning to the end of the life of mine. A total of 92,500 m of development was
estimated.
• The deposit will be accessed through two main portals, Upper and Lower, and a
series of adits from the portals. Top access crosscuts will be driven from the main
ramps to each level on vertical intervals between 20 to 30 m. Stope access
crosscuts will be driven at level from west to east. Bottom access crosscuts will be
driven to function as mucking drifts. Underground mine services such as
ventilation and air heating, compressed air, water for drilling and power supply will
be provided to the mine via the adits.
• Radio remote-controlled load-haul-dump units (LHDs) will be used to extract the
mineralized material from 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. The trucks will drive down the ramps and
will exit the mine at the Lower Portal. The trucks will deliver the mined material to
a surface stockpile at the primary crusher close to the portal. Crushed material will
be transferred to the process plant by a belt conveyor.
• Waste from development will be initially utilized for construction of a structural shell
of the tailings co-disposal site on surface, which is located in an area east of the
processing plant site. This material will be transferred to the plant site in batches
on the conveyor system.
• Several areas of investigation are required to support a detailed mine plan. These
include underground geotechnical and geo-hydrological conditions for mine design,
the possible use of mining methods utilizing backfill, and handling systems for
mineralized material and waste rock. Opportunities include possible better ground
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conditions than assumed. With improved ground conditions the size of stopes and
production drifts could be increased.
• There is opportunity to increase the net present value (NPV) of the Project by
mining higher-grade zones early in the mine life providing that a practical mining
sequence can be implemented and the overall recovery of the Mineral Resources
is not negatively affected.
• There is opportunity to increase the net present value (NPV) of the Project by
optimising the mine layout to minimize development costs.
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17.0 RECOVERY METHODS
17.1 Plant 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.
Run-of-mine (ROM) mineralized material from the underground will be crushed and
conveyed to the concentrator where the mineralization will be ground to liberate the
mineral values from the host rock and then separated by flotation. The bulk tantalum–
niobium concentrate produced will be filtered, dried and introduced into the refining
plant. There the concentrate will undergo a thermal reduction which will remove most
of the gangue material and create a smaller, higher purity material for chlorine
processing. The distillation of the anhydrous metal chloride products will produce
high-purity Nb and Ta chlorides.
Tantalum chloride is the precursor to capacitor grade Ta powder, so would be
marketed in this form. Niobium chloride can be sold as a chemical precursor. Both Ta
and Nb chloride products can be readily converted and marketed as high-purity
technical grade Ta2O5 and Nb2O5 oxides respectively. The simplified flowsheet is
shown in Figure 17-1.
17.2 Comminution (Crushing, Storage and Grinding)
The primary crushing station will be a fixed jaw crusher. Mine haul trucks will dump
ROM mineralized material into the ROM surface stockpile located close to the Lower
Portal. Mineralized material will be fed to the crusher using an apron feeder. Crushed
mineralized material will fall onto a conveyor and be fed to a fine crushing circuit which
will further reduce the material to –8 mm. The material will be stored in a fine ore silo.
It will be withdrawn by feeder into a rod mill. The discharge from the rod mill will flow
into the cyclone feed pumpbox. The cyclone feed pump will transfer the material to the
cyclone circuit which will produce finished product in the overflow (a P80 size of
100 µm). The cyclone underflow will report to a ball mill for additional grinding. The
discharge from the ball mill will join the rod mill discharge as feed to the cyclone
pumpbox.
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Figure 17-1: Concentration and Refining of Blue River Mineralization
17.3 De-sliming and Flotation
After grinding, the flotation feed will be first de-slimed using high-frequency fine
screens or cyclones or a combination of the two. The fine product from the first de-
sliming step will be sent to tailings for disposal while the coarse product will undergo a
second step of de-sliming. The fine product of this second de-sliming step will also go
to tailings for disposal while the coarse product will be sent to flotation.
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The flotation area will consist of four steps; pyrrhotite flotation, carbonate flotation,
magnetite separation, and finally pyrochlore flotation. Each of the flotation steps will
include a conditioning step prior to the onset of flotation.
Pyrrhotite flotation will occur at a pH of 9.7 and will be performed with a promoter
(copper sulphate), a collector (Xanthate) and a frother (MIBC) to float off the contained
iron sulphides. Carbonate flotation will also occur at a pH of 9.7 and will involve a
dispersant (sodium silicate), a carbonate collector (oleic acid) and a frother (MIBC). In
both cases, the pyrrhotite and carbonate concentrates will join the de-sliming fines in
the tailings filtration system.
After carbonate flotation, the carbonate tails will be processed through a magnetite
separator to pull off any magnetite. The water will be exchanged at this point to allow
a higher level of control in the pyrochlore flotation.
Flotation of Nb-Ta-bearing minerals will occur at a pH of 7.0 employing a pH
modifier/promoter (fluorosilicic acid), a collector (a Duomac-T equivalent) and a frother
(MIBC) as required. The pyrochlore tails will pass to the tailings filtration system. The
pyrochlore rougher concentrate will be reground and cleaned in five stages with the
same reagents. The mass of material will be reduced substantially, to less than 1% of
the feed into the plant. All cleaner tails will be sent directly to the tailings filtration
system.
17.4 Filtration
After de-sliming, magnetic separation, and flotation, the combined tailings will be
pumped to two separate tailings thickeners for water recovery. After thickening, the
material will be pumped into one of four tailings pressure filters. These filters will
reduce the moisture to a level for disposal to drystacked tails.
Should a paste backfill option be considered during future studies, material after
filtration could be sent to a paste silo feed thickener. In this latter case, the material
could be withdrawn for use as required and transported to the underground mine portal
where it would be mixed with cement prior to use underground as backfill.
The pyrochlore concentrate product will be a much smaller mass and is first sent to a
small concentrate thickener and filtered.
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17.5 Concentrate Pre-Treatment
There are two options to pre-treat the flotation concentrate. If the concentrate grade is
between 10% and 30% Ta and Nb, then it is possible to perform a pre-leach with
strong acid to dissolve some of the gangue after which the material would be sent for
filtration. If the concentrate is more than 30% the non-acidified material would be sent
directly to filtration. After filtration, the concentrate would be dried and send to the
concentrate receiving bin.
Material would be recovered from the concentrate bin to a blender where flux (calcium
fluoride, quicklime), iron oxide, scrap aluminum and fuse mix would be added. After
blending the material is charged to burn pits. The aluminothermic reduction occurs in
these pits. After smelting and solidification, the alloy ingot (with adhering slag) is
removed from the burn pit by crane. After further cooling, the alloy ingot and adhering
slag would be broken, crushed and separated through the use of magnetic separation.
The slag material would be disposed of to tailings while the alloy material containing
the tantalum and niobium would be charged to the chlorination system.
17.6 Chlorination and Distillation
The material, which is charged into the chlorination system, will be set into fixed
charge pots where chlorine will be added and the mixture will be heated to 350º C.
The mixed chloride product from chlorination of the ferroalloy smelting product will then
be distilled to achieve high purity Ta and Nb chlorides. These distillation products will
be captured by separate condensers. The fumes will undergo hydrolysis to recover
chlorine.
17.7 Product/Materials Handling
A short conveyor is planned to transport materials from the portal to the plant.
17.8 Energy, Water and Process Materials Requirements
Power for the proposed operation may be sourced from B.C. Hydro. Power needs will
be investigated during more detailed Project studies.
17.9 Comment on Section 17
In the opinion of the QPs, metallurgical programs completed on the Blue River Project
have met their objective of identifying a processing method allowing for the extraction
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of tantalum and niobium mineralization that has reasonable prospects of being
economic. Additional work is required to confirm the process, produce the target
flotation concentrate grade and examine the response of the process to variability of
mineralization within the deposit and process conditions. The following interpretations
apply to the plant design and metallurgical testwork results:
• 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 refining process will have a
97% recovery for both Ta and Nb
• Optimization of the supply and pricing of reagents for the refining process may
support lower operating cost assumptions.
• Metallurgical testing has not yet attempted to demonstrate that a 30% combined
oxided concentrate grade as a feed for the refining stage is achievable
• The proposed refining methods have been used in commercial applications but
have not been demonstrated in test work of Blue River material.
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18.0 PROJECT INFRASTRUCTURE
18.1 Site Layout
The overall Project site layout plan is included as Figure 18-1. The planned Upper and
Lower Portals will be located about 4 km from the plant site. At the front of the Upper
Portal (service portal) sufficient space will be provided to accommodate the required
facilities for operation.
18.2 Buildings
18.2.1 Mine Service Building
The plant service building will be a multi-purpose complex in a two story building east
of the process building. The first floor (18 m by 40 m) will be a maintenance bay for
minor repairs and maintenance of the mobile equipment and will have an office for the
maintenance foreman, a small parts area, a tool crib, and a storage area for safety
equipment.
Part of the first floor will contain the men’s and women’s dry. The second floor will be
the administration offices. The complex will be connected to the process building by a
covered walkway.
18.2.2 Truck shop
A 24 m by 36 m truck shop on the southwest end of the site will be operated by a
qualified contractor. The required equipment and tools for regular maintenance and
possible repair of the haul trucks are assumed to be supplied by the contractor.
18.2.3 Warehouse
To save cost and construction time, the warehouse will be a 24 m by 50 m Coverall-
type fabric building. One third or more of the building will be dedicated to warehouse
cold storage, and the remainder allocated to fire water and potable water tanks and a
fire pump skid. The building will be equipped with an interior liner as an insulation
layer to minimize the potential of freezing inside the warehouse. This will save the
cost of insulation and heat tracing of the tanks, pipes and all equipment and is easier
for operation and maintenance.
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Figure 18-1: Proposed Site Layout Plan
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Forklifts, pallet racking, bins, and carousels will be provided for handling materials.
Flammable products such as solvents and paints will be stored separately.
The Coverall-type building life expectancy is 15 years and it will withstand design snow
and wind loads.
18.2.4 Process Building
The process building will be a 22 m by 52 m steel structure building sitting on a
concrete foundation. The mill foundation will be on bed rock; a geotechnical
investigation is required prior to determination of the final location of the mill.
A 15 m diameter tailing thickener will be located to the south of the process building
with a walkway/pipe rack connection to the building.
18.2.5 Crushing and Screening Circuit
The preliminary site layout is designed to take advantage of the topography to
minimize earthworks. The secondary crusher will be located in the northeast corner of
the site at a higher elevation.
The conveyor span from the secondary crusher discharge will rise at 12º (an access
safety constraint) to reach the height of the screen above the fine ore bin.
Screen oversize will pass via a return conveyor to the tertiary crusher.
18.2.6 Portal Infrastructure
A yard will be constructed in front of the Upper Portal, which will accommodate an
electrical substation and generator set, and office building, provision for storage,
ventilation infrastructure, and heater, air compressor, diesel storage, a first aid rescue
vehicle bay and a water tank.
The buildings and related facilities will be pre-engineered as much as possible.
Drinking water will be provided from the plant site water treatment plant by containers.
A portable wash room will be provided for workers. Sewage will trucked to the site
wastewater treatment plant.
18.2.7 Explosives Storage
Ammonium nitrate, blended emulsion, and explosives will be delivered to site on
demand by contractors. A small storage magazine will be constructed at a distance of
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about 200 m from the Upper Portal. Room for explosive storage will be provided by
excavating into the rock. The walls and roof will be reinforced and a lockable door will
be provided, as per the requirements of the Quantity-Distance Principles User’s
Manual published by the Explosives Regulatory Division of NRCan. The magazine will
hold boosters, delays, detonating cords, detonating caps, and other explosive
accessories.
18.2.8 Aggregate Crushing and Concrete Batch Plants
A crushing and stockpiling facility will be required during construction to provide
crushed product for roads and surfacing. The mobile plant assembly will include a jaw
crusher, screening plant, closed-circuit secondary crushing unit, and washing plant.
Concrete supply from nearby towns is assumed adequate for construction purposes.
An on-site concrete batch plant is not proposed for the project. Availability of existing
concrete supply should be examined in the next phase of study.
18.3 Roads and Logistics
18.3.1 Access Road
The road access design includes a short new road with a 7.2 m wide gravel surface
from the existing road to plant site about 80 m in length and a 1.5 km new service road
from the existing road to the Upper Portal and upgrades to the current access road.
An existing 80 m-long bridge crossing over the Thompson River has a limited load
capacity and might not qualify for crossing heavy loads during construction or long-
term use during the life of the mine. Therefore a new bridge has been included in
capital cost estimate. Using the existing railway for shipment should be investigated in
next phase of study.
18.3.2 Haul Road
Dual-lane traffic requires a travel width (16.2 m) of not less than three times the width
of the widest haulage vehicle used on the road (assumed to be trucks of the size of
CAT 775F with 5.4 m of overall width).
Single-lane traffic requires a travel width (11 m) of not less than two times the width of
the widest haulage vehicle used on the road.
Shoulder barriers should be at least three-quarters of the height of the largest tire on
any vehicle hauling on the road wherever a drop-off greater than 3 m exists. The
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shoulder barriers are designed at 1.5:1 (H:V). The width of the barrier is excluded
from the travel width.
There is one main haul road, from the site to the waste rock stock pile, that will have a
length of about 8 km (refer to Figure 18-1). The road from the upper portal to the plant
will be a service road for personnel and supplies.
18.4 Co-Disposal Storage Facilities
The PEA design for tailings and waste management is to construct a co-disposal
drystack facility.
18.4.1 Drystack Considerations
Filtered tailings stacks are often referred to as “drystacks” and that nomenclature is
used in this chapter. However, these facilities are not “dry” per se as the tailings, while
placed in an unsaturated state, do have moisture contents that are typically 70% to
85% of saturation. Generally the tailings are filtered to within a few percent of optimum
standard Proctor moisture content, which is typically on the order of 15 % (wt water :
wt solids). The main distinguishing feature from other tailings deposits is that filtered
tailings stacks are a solid rather than the more typical slurry and need to be
transported using mechanical means versus hydraulic methods.
Tailings drystacks are particularly suited to locations with flat or gently sloping storage
sites and arid environments where it is relatively easy to place and compact filtered
tailings into a stable geometry. However, unlike conventional slurried tailings, tailings
drystacks can also be placed on relatively steep terrain in a similar manner to
conventional waste rock facilities. Placement practices and drystack design can be
adapted to different environments and drystacks have been successfully constructed
in cold climates.
The Blue River site is expected to have about 1.5 m of precipitation annually (KCB
2009a). The site experiences a cold winter and steep topography which can present
challenges for construction of a tailings drystack. AMEC notes, however, there are
operating drystacks in even wetter environments.
The general drystack concept for the Blue River site is to have an outer shell zone with
a general tailings placement area located upstream of the shell. The shell zone would
consist of well-compacted tailings placed only when it can be assured that such
compaction can be achieved. The waste rock could be placed inter-layered or mixed
with the tailings in the shell or could be used as armour on the face of the shell to
prevent erosion of the tailings surface. The outer shell would support a general tailings
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placement area where tailings could be placed in poor weather and with less ability to
achieve compaction during winter months. The same operating attempts at
compaction would be made in winter/wet weather conditions but it is more difficult to
get assured densities. As a consequence, having a general placement area for such
materials where structural integrity of the overall stack is not at jeopardy if lower
densities are achieved is sound tailings management. It would also be possible to
store waste rock in the general placement area where it could be encapsulated within
the tailings. In order to effectively co-dispose of waste rock in the general fill area,
waste rock and tailings disposal would have to be appropriately timed and managed.
Typically, slopes of tailings drystacks are designed to be 3H:1V or less to minimize
erosion of the tailings on the downstream slope. This is particularly a consideration for
closure.
Steeper slopes will be required at the Blue River site due to topographical constraints.
The steeper slopes are achievable but require a potentially wider shell zone of good
compaction, confirmed foundation conditions for the shell and the slopes will require
erosion protection.
18.4.2 Evaluation of Potential Sites
A series of tailings storage location screening assessments were carried out during
2008, 2009, and 2010 (KCB 2009a, 2009b, AMEC 2010a, 2010b, 2010c), focusing
mainly on conventional tailings storage. Some evaluation of potential waste rock
storage sites and a tailings drystack facility was undertaken in the 2009 studies
The initial 2009 study (KCB 2009a) focused on the area in the immediate vicinity of the
deposits and was based on a desk study using available topography and other
information. Five conventional storage sites, using containment dams, were assessed.
The potential tailings drystack locations identified by KCB in 2009 are located on valley
sidehills and in flatter areas adjacent to the North Thompson River The tailings storage
facilities (TSFs) were assumed to be constructed of local borrow with slopes of
2.5H:1V and a settled density of 1.3 t/m3 was assumed for the tailings.
The second study carried out in 2009 (KCB 2009b) reviewed a number of alternative
sites for TSF storage away from the proposed mine site. The main focus of the study
was an industrial land parcel near Valemount, BC, and consideration was given to
construction of a 40 Mt TSF, a plant, 30 kt of rock storage, and a rail-siding facility on
the property. Four other areas around Valemount were also considered as TSF
alternatives.
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None of the options were considered ideal and additional studies were carried out over
an increasingly large area and with varying constraints to identify potential tailings
storage areas (AMEC 2010a, b, and c). Generally topographic and climatic conditions
are challenging for surface storage of tailings and no ideal location has been identified.
Given the current stage of project development and the constraints imposed, the input
provided should be considered as conceptual. Tailings storage site locations
determined by Klohn Crippen Berger (KCB) in 2009 were visually identified by AMEC
staff during a reconnaissance flight in July 2010 and were visited on foot by AMEC
personnel.
However, the proposed tailings storage sites have not been visited by geotechnical
personnel, there have been no site investigations and there have been no specific
technical analyses in support of facility layout. The suggestions presented in the PEA
for tailings storage were based on engineering judgment, AMEC’s experience with
filtered tailings, and standard industry practice for similar facilities.
18.4.3 Site Selection
Additional review for the PEA indicated that a site identified by KCB in 2009, termed
WSF3 and shown in Figure 18-1 as the co-disposal site, could be utilized, since the
volume of tailings storage had been revised downward from about 30 Mt as
conceptualized in 2009 to 22 Mt in the PEA. The facility was moved uphill slightly
relative to the 2009 study to take advantage of locally flatter areas and reduce the
footprint of the facility in steeper areas.
Additional optimization of the facility layout could be carried out in consideration of
local topography and stability; however the volumes and areas would not be expected
to be significantly altered.
18.4.4 Facility Design
The facility was laid out with 2H:1V slopes. Attempts were made to use flatter slopes;
however, due to the topography, they were not feasible. If the project is advanced to a
later stage, the slopes could potentially be locally flattened in specific areas of flatter
topography. The facility will have the following dimensions:
• Total storage volume: 20.9 Mm3
• Total footprint area: 534,000 m2
• Total surface area of drystack: 559,000 m2
• Volume of sloped (shell) portion of facility (shell portion of facility): 13.2 Mm3
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• Footprint surface area under slope (shell): 385,000 m2
• Surface area of sloped (shell) portion of tailings: 416,000 m2.
Conceptually, the sloped portion of the drystack would form a structural shell,
supporting the general tailings placement area behind it. The shell zone would consist
of compacted filtered tailings possibly interlayered or mixed with waste rock. Stringent
placement control and compaction would be required in the shell. It is possible that
the limits of the shell zone could be optimized at a later stage. The general tailings
placement zone would allow for placement in wet and cold weather with less assured
compaction though identical operating practices to those required in the shell area
would be prescribed and followed.
Depending on the timing of any mine start-up and the tailings production schedule, it
may be necessary to construct a starter berm out of non-tailings material to provide
sufficient storage for the first winter of tailings placement. The starter berm could be
constructed of non acid generating waste rock, general rockfill or granular overburden
obtained from a local borrow source.
Based on the volumetric proportions of the shell and general placement areas and
assuming a six-month period available for shell construction, there may be a deficit
with respect to the amount of tailings and waste rock available to construct the shell
zone at certain points during operation. It is likely that the configuration of the facility
could be optimized during design to overcome this deficit. If supplemental fill material
were required in the shell, it could consist of general rock fill or granular overburden.
The option of storing some of the tailings produced during the winter for placement in
the drystack during the summer construction season could also be considered.
18.4.5 Co-Disposal Facility Geohazards Considerations
The area in the vicinity of the deposits has steep-sided valleys with glaciers located in
the upper portions of many of the catchments and visible avalanche tracks. The
WSF3 site is located on a side-hill near the mouth of the valley, away from the glaciers
located farther up the valley. It is also located on a spur minimizing the risk of
avalanches. A site-specific geohazards evaluation for the site has not been
completed, however, and should be carried out as the Project is advanced.
18.4.6 Co-Disposal Facility Stability Considerations
The 2H:1V slope required because the topography at the Blue River site is steep
compared to typical tailings drystacks. However, in such situations, flatter slopes are
often developed to minimize operating and closure erosion concerns. From a purely
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structural stability perspective, provided the shell zone can be developed of
appropriate size while meeting compaction criteria, the use of 2H:1V slopes is
acceptable. Additionally, the general fill zone behind the shell is intended to allow
placement of tailings during poor weather and will potentially have lower strength and
likely areas of wetter tailings. The shell zone is therefore necessary to support the
facility and will require significant compaction and placement control to provide
sufficient resistance.
The foundation is expected to consist of colluvium and/or silty to sandy tills which
should not be a concern with regards to overall stability, although this will require
confirmation as the project is advanced. A toe berm or shear key may be required for
stability of the drystack depending on specific foundation conditions. This should be
assessed in future design stages.
The Project is located in a moderately seismic area (KCB 2009a) and stability under
seismic loading will have to be considered during design of the facility. Because of
their unsaturated nature, the general placement tailings are considered unlikely to
liquefy and the shell tailings will not present a concern because the compacted nature
of the downstream shell will result in dilative behaviour under shear further improving
liquefaction resistance. Rain, ice and snow may potentially create isolated areas in the
general placement area that are saturated and poorly compacted, and therefore locally
susceptible to liquefaction. It is highly unlikely that the entire zone would liquefy and
over time the pore water in any saturated zones would seep out of the stack, leaving it
unsaturated and resistant to liquefaction in the long term. Although liquefaction is not
considered a concern, deformations due to increased loading during seismic events
will occur and should be quantified during detailed design phases.
For the Project base case it is assumed that the tailings facility does not require lining.
A requirement to line the facility would involve clearing and stripping the entire footprint
at start up, placing and compacting a bedding layer over the entire footprint, installing
the liner system over the entire footprint, and placing a protective cover layer over the
entire liner.
18.4.7 Co-Disposal Facility Surface Water Run-off Considerations
Two surface water management systems will likely be required for the tailings
drystack.
• The first system would divert non-contact (clean) water around the facility.
• The second would collect run-off water which had been in contact with the tailings
drystack area.
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Contact run-off water would have to be collected and potentially treated prior to
release, whereas the clean water would be diverted around the facility and into the
creeks downstream of the tailings facility.
The non-contact water diversion system would consist of a ditch located beyond the
final footprint of the drystack and would be a long-term structure. The contact water
collection system would consist of a ditch around the perimeter of the drystack
footprint and would be reconstructed annually, so as to be located slightly ahead of the
advancing drystack footprint. The perimeter ditch would require sediment-control
structures within it to help contain any tailings mobilized from the drystack. The
perimeter ditch would direct the contact run-off water to a collection and sedimentation
pond where eroded tailings could settle out and water treatment could be carried out if
required.
Located as it is on a side-slope and near the nose of the ridge, there is little catchment
area uphill of the drystack facility and it may be feasible to combine the two water
management systems, particularly upon closure. Combining the two systems would
increase the volume of water collected and potentially requiring treatment, however,
the increased water volume may also contribute to dilution of the contact water.
18.4.8 Co-Disposal Facility Closure Considerations
At mine closure, the surface of the drystack would be sloped/contoured for drainage,
covered with an appropriate material and vegetated to enhance erosion protection.
The shell face will require armouring to reduce erosion. The perimeter ditches will be
increased in size and lined with rip-rap following mine closure to minimize the amount
of run-off water that comes into contact with the stack, further reducing the potential for
erosion. Depending on the chemistry and flows, it may be possible to combine the
water diversion ditch with the closure perimeter ditch.
The Project base case is that the uranium and thorium levels are sufficiently low to not
be a concern. If the levels were found to be an issue, however, it would affect closure
requirements. In addition to the potential difficulty of treating any seepage, if radon
gas emission was above regulatory levels, the cover system would have to be
designed to contain radon gas. Specific details of the cover would be based on
applicable regulations but it may well require that the cover last for a very long period
of time necessitating rock armouring among other considerations.
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18.5 Avalanche Hazard
No allowance for avalanche protection for any infrastructure has been considered at
this stage, but considering the steep slope and possible heavy snow at the area an
avalanche study is recommended during more detailed studies.
18.6 Water Supply, Distribution, and Treatment Systems
The potable water system and layout for the process and administrative area is
designed to service buildings and a workforce of 120 persons. Potable water for the
mining section will be constructed as part of the portal and underground infrastructure.
Raw water will be provided from a well and a prefabricated water treatment module will
treat water to standard drinking water requirements. Treated water will be stored in a
potable water tank.
Fire protection water for the construction camp and later for all buildings will be
provided by a prefabricated diesel-driven fire and electric jockey pump on a skid that
will be located in the coverall building.
Both the potable and the dedicated fire water tanks will be located under the coverall
building adjacent to the fire pump skid and the water treatment module.
Potable and fire water will be distributed to the plant buildings through separate pipes.
All water mains will be buried to a depth in excess of 3 m, or will be insulated providing
an equivalent degree of cover to prevent freezing.
18.7 Waste Considerations
Waste-water treatment sludge will be trucked away to a nearby municipal facility or
approved landfill.
Waste lubrication and hydraulic oils from vehicle maintenance will be stored in
dedicated tanks and sent to a recycling facility offsite. Their disposal will be contracted
to an approved contractor.
A modular sewage treatment system will be installed as part of the initial construction
infrastructure. A small package treatment plant will provide treatment to the domestic
sewage at the site. Effluent from this plant will meet specified water discharge
guidelines prior to discharge into the environment.
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Buried gravity sewer lines and manholes will collect and direct sewage from the
service building and truck shop to an equalization tank adjacent to the wastewater
treatment module for treatment.
18.8 Accommodation
Contractors and employees will commute from the nearby towns, such as Blue River
and Valemount, during construction.
No on-site permanent accommodation will be provided for personnel. It is assumed
that the workforce, including management staff, will reside in the nearby communities
and will commute, via buses, on a daily basis. For safety reasons, no private vehicles
will be permitted on the site access road or at the site.
18.9 Power and Electrical
Power supplies in the region have been assumed to be sufficient for Project
requirements, and no allocation for additional power line construction has been
included.
The BC Hydro 136,000 volt supply line for the North Thompson valley passes through
the west side of the property adjacent to the rail line. The 20 megawatt Bone Creek
run-of-river hydroelectricity project, owned by Transalta Corp., was commissioned in
June 2011, and is adjacent to the Project area its powerhouse is located approximately
4.4 km south of the Lower Portal.
The mill will be the greatest consumer of power. The high voltage line from the grid
would go to a main substation close to the mill. From this sub-station, lower voltage
power will be distributed to the mill, offices, maintenance shop, and other
infrastructure, and to the proposed mine substation. The PEA assumes power will be
supplied to the mine via 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.
18.10 Fuel
Fuel will be delivered to the mine site using tanker trucks. The fuel storage tanks will
be single-walled within a lined containment berm. Tank design will comply with the
appropriate regulatory requirements.
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18.11 Comment on Section 18
In the opinion of the QPs, the following conclusions are appropriate:
• Facilities to support mine operations will require construction
• Infrastructure envisaged includes a plant, plant service building, truckshop, potable
and process water systems, a sewerage system, co-disposal site, underground
mining operation, conveyor system, and various haul and access roads. The
planned Upper and Lower Portals will be located about 4 km from the plant site.
The co-disposal facility will be about 8 km from the plant site
• The infrastructure contemplated in the PEA is appropriate to planned throughput
rate, treatment plant, and mining method
• No on-site permanent accommodation will be provided for personnel. It is
assumed that the workforce, including management staff, will reside in the nearby
communities and will commute, via buses, on a daily basis
• Geohazards are present in the area, and will require careful consideration in future
studies
• Water management studies, in particular for the co-disposal site, will be required.
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19.0 MARKET STUDIES AND CONTRACTS Commerce has prepared assessments of the tantalum and niobium markets which
outline the supply and demand for tantalum and niobium. The tantalum assessment
was prepared by a tantalum market expert, although he is not independent of
Commerce. His analysis reflects the general consensus of other analysts regarding
the tantalum market expressed in publicly-available information.
The niobium assessment was prepared by an independent niobium expert and also
reflects the general consensus of analysts in publicly-available information for the
niobium market.
As the Project is still at an early evaluation stage, Commerce has not initiated requests
from potential buyers for expression of interests from potential buyers of the proposed
Blue River products and has not negotiated any purchase or off-take agreements.
19.1 Comment on Section 19
In the opinion of the QPs, the following conclusions can be drawn from the marketing
strategy used to support the PEA:
• Commerce has prepared assessments of the tantalum and niobium markets which
outline the supply and demand for tantalum and niobium
• As the Project is still at an early evaluation stage, Commerce has not initiated
requests from potential buyers for expression of interests from potential buyers of
the proposed Blue River products and has not negotiated any purchase or off-take
agreements
• Contracts that will be negotiated are expected to be within industry norms.
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20.0 ENVIRONMENTAL STUDIES, PERMITTING, AND
SOCIAL OR COMMUNITY IMPACT
20.1 Environmental Assessment for Mining Projects
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. This section discusses the
environmental assessment and permitting process as it stands today, and describes
the principal licences and permits which would be required for the Blue River Project.
The British Columbia Environmental Assessment Office (BCEAO) and the Canadian
Environmental Assessment Agency (CEAA) would both conduct an environmental
review of the Upper Fir Project, as defined respectively under the BC Environmental
Management Act and the Canadian Environmental Assessment Act.
Overall the environmental review of a project is a process that will take up to
18 months to complete. The process would 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.
Both the Provincial and Federal processes have defined timelines for project review
though these timelines are not currently harmonized and past attempts to do so have
not been overly successful. The Federal timeline is the longer of the two at 365 days
to review the Environmental Assessment application and make a decision, while the
provincial application review stage is 180 days plus 45 days for decision. Additionally,
the Federal clock is stopped each time CEAA submits comments to the proponent for
review, to respond to, or revise; this can possibly extend the time line.
There is also a need for additional time on the front end of the process to develop the
Project Description. This document must first be accepted by the regulators, and then
will be used to develop Assessment Information Requirements or Terms of Reference
which must be put out for public review prior to acceptance. These Information
Requirements will define the content required for the Environmental Assessment. The
Federal government allows 90 days for this, while the Provincial government has no
timeline on this process.
The environmental review and assessment process results in a decision with respect
to whether or not the Project should be issued an Environmental Assessment
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Certificate by the Provincial government, as well as receive Federal Ministerial
approval based on the recommendations put forth to the Minister of Environment in a
Comprehensive Study Report prepared by the Major Projects Management Office.
Both are required for a project to proceed to permitting and development.
20.2 Project Studies
Environmental monitoring, baseline studies and site investigations have been ongoing
at the Blue River Project site since the summer season of 2006 with the selection of
local and regional studies areas for each biophysical discipline.
Field studies completed by specialist consultants independent of Commerce
Resources include:
• Site hydrology (2006–present)
• Snow course depths (2007, 2008)
• Fisheries and aquatics (2006–2008)
• Soils, flora and fauna assessments (2006, 2007), including studies of rare,
threatened and endangered plants (2007), breeding birds (2007) and terrestrial
ecosystem mapping (2006, 2007), wildlife studies and habitat suitability mapping
(2006–2008);
• Geochemistry, mineralized material and waste rock characterization with baseline
ABA and metals analyses (2007, 2008)
• Surface water and sediment quality (2006–present)
• Groundwater (2007–2009)
• Terrain stability assessment for roads (2007–present).
Kinetic test work for ARD/ML was initiated in June 2010 and is ongoing; results of this
work will give an indication of the type of management strategies required for handling
PAG waste rock.
Additional environmental baseline programs are expected to continue, as required
through 2011.
Monitoring of meteorology, air quality, hydrology, and water quality will continue
throughout the construction, operation, closure and post-closure phases.
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It is anticipated that with this work and the results of the PEA in hand, Commerce will
have the necessary information to start development of a draft Project Description
which is a prerequisite to entering the Environmental Assessment process. These
data will provide a strong base to initiate meetings with the BCEAO and CEAA, as well
as with key provincial regulators such as Ministries of Energy and Mines, Forests
Lands and Natural Resource Operations, and Environment, to discuss specific project
requirements under the Provincial and Federal environmental assessment processes.
Summaries will be prepared of baseline data collected and work plans as appropriate
for submission, review and input by Federal and Provincial regulators.
20.3 Environmental Setting and Review of Environmental Baseline
Characterization of existing environmental conditions, which began in 2006, is an
important component of the risk management and permitting process for the Blue
River Project.
The Blue River Project area is located within the B.C. Ministry of Environment
Thompson-Nicola Region (Region 3), the Ministry of Forests and Range Headwaters
Forest District and Fisheries and Oceans Canada Sub-district 29J (Clearwater). It falls
towards the northern end of the Kamloops Land Resource Management Plan (LRMP)
which was approved by the province in 1995. This LRMP is the first plan of its kind in
British Columbia in that it is a locally-developed plan that is designed to guide land and
resource management decisions in a way to balance community needs, environmental
concerns and economic values. This LRMP is termed a sub-regional integrated land
use plan in that it establishes the framework for land use and resource management
objectives and strategies. The Plan requires that more detailed operational plans
which are subsequently developed be consistent with the management strategies and
objectives defined in the LRMP.
Following implementation of the BC Mountain Caribou Recovery Strategy, site-specific
objectives and strategies for caribou management were developed (first in 2006, then
updated in 2009) which included objectives pertaining to mineral exploration. The Blue
River Project area falls within the Wells Gray-Thompson caribou planning unit (unit
4A). In this case, the relevant portion of the LRMP was repealed and replaced under a
Government Actions Regulation (GAR) by a caribou-management strategy, specifically
the identification of Ungulate Winter Range (UWR) zones. The GAR order states that
exploration and mine development activities within the UWR are considered by the
government to be an acceptable risk to caribou, and are allowed to proceed without
requiring an exemption from the Ministry of Environment.
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The bulk of the infrastructure proposed for the Blue River Project falls within an area
identified as a Modified Harvest Zone. In such zones, operational activity is expected
to be considerate of caribou habitat and disturbance in caribou areas. Commerce is
committed to seeking specialized professional advice to minimize or eliminate
disturbances to caribou using best management or other practices. Wildlife studies to
date suggest that caribou are recorded only rarely in the area of the proposed Project.
The larger Blue River Project area lies on the eastern side of the south-flowing North
Thompson River where claims held encompass portions of the Bone, Gum,
Moonbeam, Paradise Lake, Pyramid, and Serpentine Creek watersheds. The overall
relief is moderate to steep, with an average elevation of 1,625 m, a maximum elevation
of 3,225 m, and a minimum elevation of 580 m. Some small glaciers exist in the
easternmost part of the Project area, and moderate to steep forested slopes rise
above the North Thompson River valley. The North Thompson River drainage
continues south to join the South Thompson River at Kamloops, BC.
Proposed Project infrastructure is located along a western-facing slope immediately
above a gravelly part of the North Thompson River valley, and includes portions of the
Bone and Gum Creek watersheds as well as residual areas draining directly into the
North Thompson River. The tree line is located at approximately 2,000 m elevation,
and the Upper Fir deposit centre is located at 1,180 m elevation along a network of
previously-constructed logging and skid roads. Much of the area of the proposed
Project infrastructure, including the Upper Fir deposit had been logged prior to the
commencement of mineral exploration. Naturally-occurring outcrop is generally poor,
with limited exposure of underlying country rocks along road cuts and locally in
streams.
The area has a continental climate which is subject to frequent modification by
maritime air masses from the Pacific Ocean. The area is part of a "wet belt" which
occupies part of eastern British Columbia. Heavy snow falls occur almost every
winter, in which temperatures stay close to the freezing point when maritime air
dominates. The most severe cold spells may send thermometer readings below -
40°C/F. Rain is frequent in other seasons. Summer days are warm or occasionally
hot, with thunderstorms often spawning over the nearby mountains. The optimal field
exploration season is mid-June through mid-September.
Streams within the Project Area are generally characterized by a snowmelt-dominated
peak rising in April or May and peaking sometime between June and July. Rain-on-
snow events occasionally occur in this region and these can enhance both winter flows
and spring peaks. In addition, late fall rainstorms are common, recharging soil
moisture heading into winter and producing short-duration peak flows. Low flows
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occur generally from the end of November to March, and in hot summer months, with
the lowest flows commonly occurring in January or February. No wetlands have been
identified within areas of proposed Project infrastructure.
Surficial materials were typed for texture, drainage, moisture and nutrient regime, and
parent material. This not only supports ecosystem classification, but also provides
baseline soils data for eventual environmental impact assessment and reclamation
planning. Materials range from colluvial veneers to fluvial plains, glaciofluvial terraces,
rock, and morainal blankets. On the Upper Fir slope, morainal materials are most
common, while fluvial and glaciofluvial deposits are limited to lower elevations near the
valley bottom. Silts and sands are the most prevalent soil textures, although mixed
fragments, rubble, and gravel also occur. Overall the deposits are relatively shallow,
although blankets, which have more than 1 m of surficial materials (e.g., glacial till),
are much more common than veneers, which have less than 1 m of surficial materials.
Soil moisture and nutrient regime are generally average over the majority of the site
and have formed in place within morainal and glaciofluvial landforms.
Brunisols are the most dominant soil order found, while Podzols are secondary,
becoming more prominent in areas with increasing rainfall and elevations above
1,500 m. Soil quality and quantity appear to be adequate to support soil salvage and
reclamation activities in the area of the proposed development. Soil fertility suggests
normal levels of soil nutrients as compared to other mine sites in BC. Soils are
moderately acidic (i.e., pH 4-5.5) and considered normal for mesic, conifer-dominated,
forested vegetation in similar areas. Soils are very rapidly to imperfectly-drained with
soil moisture regimes ranging from sub-xeric to hygric and soil nutrient regimes limited
to moderate and rich.
Terrestrial Ecosystem Mapping (TEM) was completed to describe terrestrial
ecosystems according to the bioterrain base and standards established by British
Columbia’s Resource Information Standards Committee. The Blue River Project falls
within the Cariboo Mountain Ecosection of the Northern Columbia Mountains. Two
biogeoclimatic zones are found in the project study area. These are the Interior Cedar
Hemlock (ICH) zone, which occurs at lower elevations, and the Engelmann Spruce
Subalpine Fir (ESSF) zone which occurs at higher elevations above the ICH zone.
Biogeoclimatic zones, subzones and variants within the Study Area were classified
using the Ministry of Forests Biogeoclimatic Ecosystem system. The following
subzones/variants are present within the larger project study area:
• Wells Gray Wet Cool Interior Cedar – Hemlock Variant (ICHwk1)
• Mica Very Wet Cool Interior Cedar – Hemlock Variant (ICHvk1)
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• Northern Monashee Wet Cold Engelmann Spruce – Subalpine Fir Variant
(ESSFwc2)
• Wet Cold Engelmann Spruce –Subalpine Fir Woodland Subzone (ESSFwcw)
• Wet Cold Engelmann Spruce – Subalpine Fir Parkland Subzone.
Much of the area is forested, although avalanche chutes punctuate the landscape at
seemingly regular intervals and forest harvesting has been extensive at lower to mid
elevations.
In terms of vegetation, the area directly covered by the Blue River Project is relatively
small and generally characterized by common plant communities associated with five
biogeoclimatic subzones (ICHwk1, ICHvk1, ESSFwc2, ESSFwcw and ESSFwcp).
Based on an assessment of biogeoclimatic units in the Study Area and the BC
Conservation Data Centre species at risk list for the Headwaters Forest District (BC
Conservation Data Centre 2006), at least 37 ranked plants may occur within the larger
study area. However, a field study of rare vascular plants identified only four
populations of two Provincially-listed rare plants (Galium trifidum ssp. trifidum and
Carex paysonis) occurring outside the current project envelope. No Federally-listed
plant species or plant communities were identified.
The region encompassing the proposed Project is likely home to many terrestrial
wildlife species including black and grizzly bears, deer, moose and mountain goats;
birds are likely to include osprey, eagle, woodpecker and raven, migratory songbirds,
raptors; and numerous small mammals.
Wildlife species of concern, whose confirmed distribution intersects that of the Blue
River Project, include the blue-listed grizzly bear (Ursus arctos) and red-listed
mountain caribou (Rangifer tarandus caribou). Mountain caribou presence on the
larger area of the mining claims making up the property and in the general area has
been confirmed through ongoing government radio-telemetry studies. Mountain
caribou are a Federally- and Provincially-listed species and are of considerable
concern to the public. They have the greatest potential to interact with the Project
property in early winter.
Due to deep snow pack in the region, and considerable management and local
interest, other species of concern include mountain goat (Oreamnos americanus) and
moose (Alces alces). Mountain goat winter range exists throughout the area, with
occupied ranges within 2 km of the area of potential Project development. Moose are
the most heavily-hunted ungulate in the area. Moose winter range occurs throughout
the North Thompson valley, with valley wetlands and early seral stage habitats of
prime importance.
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Habitat suitability was assessed for wildlife focal species selected based on their at-
risk status under the British Columbia Conservation Data Centre (CDC) and the
Committee on the Status of Endangered Wildlife in Canada (COSEWIC) systems, and
their level of local concern. Species include mountain caribou (Rangifer tarandus
tarandus; southern populations), moose (Alces alces), grizzly bear (Ursus arctos),
mountain goat (Oreamnos americanus), and marten (Martes americana). Specific
habitat notes were also recorded for other species such as deer (Odocoileus sp.), elk
(Cervus canadensis), wolves (Canis lupis), and black bear (Ursus americanus).
Habitat ratings suggest moderate and high suitability for mountain caribou during the
early winter season in the ICH. Moderate ratings were also assigned to marten in
many sites in the ICH. No sites were rated as high or moderate suitability for mountain
goat in the immediate areas of Project infrastructure.
Regional and site specific fisheries studies show that bull trout and mountain whitefish
are utilizing lower Gum Creek for rearing. Bull trout consisted of both juveniles and
young-of-the-year suggesting that it is being used for spawning by this species. The
lower reach of Bone Creek is being utilized by coho salmon, parr, and torrent sculpin.
Benthic invertebrate data were also collected. Habitat available for fish within Gum
and Bone creeks is limited to their lower most reaches, near their mouths. Gum Creek
fish habitat use is limited to the lower most portion of the creek, from the mouth to
600 m upstream before a falls/gradient barrier (>20%) and fish distribution in Bone
Creek is limited to the section from its confluence with the North Thompson River to
approximately 2,100 m upstream before an impassable water fall.
Water quality studies were conducted at various sites within the project area from 2006
to the present, with the objective of providing a long-term record of the relative
chemical stability of the project area. Samples were analyzed for physical variables,
anions, nutrients, total organic carbon and total and dissolved metals. Data for each
site were compared to the Canadian Council of Ministers of the Environment (CCME)
and BC water quality guidelines (BCWQG).
Total suspended solids (TSS) and turbidity values tend to be the highest at sample
sites in the North Thompson River and Bone Creek, the latter the result of small scale
debris flows upstream caused by larger rain events. Metals that exceeded the
applicable aquatic life protection guidelines included total and dissolved aluminum,
total and dissolved cadmium, total chromium, total cobalt, total and dissolved copper,
total and dissolved iron, and total lead, total manganese, total selenium, total silver,
total thallium and total zinc. Of these, dissolved cadmium, total cobalt, dissolved
copper, total and dissolved iron, total manganese, total selenium, total silver, total
thallium and total zinc did not exceed the applicable guidelines in most years. In most
years, concentrations of total chromium and total copper tend to be naturally elevated
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in the North Thompson River and Bone Creek compared to other sites. As the Project
is at the exploration stage, these values reflect natural background values. While
elevated metal concentrations were noted in the sediment samples from selected
streams, chromium was the only metal to exceed CCME Sediment Guidelines in one
sample collected from Bone Creek.
Samples from surface rocks and drill core were collected and tested as part of the
Upper Fir acid rock drainage/metal leaching (ARD/ML) characterization program.
Laboratory tests included static acid-base accounting, total inorganic carbon and a
standard multi-element ICP suite on material solids.
A subset of the samples were submitted for additional testing including solids trace
element/rare earth element (REE) chemistry, short-term leach extraction tests, acid
buffering characteristic curves (ABCC) and mineralogical analysis including
petrography and Rietveld XRD. All carbonatite samples tested were classified as non-
potentially acid generating (non-PAG). Paste pHs for nearly all host rock samples
were near-neutral to alkaline indicating currently available buffering capacity in the
samples at the time of testing.
Most country rock in the Upper Fir deposit was characterized by generally low to
moderate sulphide content (<1% sulphur) and low to moderate neutralization potential
predominantly provided by slower reacting silicate minerals. However, a minor
proportion of country rock (~10% of samples) was associated with elevated sulphide
content (>1% sulphur). These rock units showed a range in acid generation potential
classifications, and in particular, a significant proportion of gneiss (~52% of gneiss
samples) was considered potentially acid generating (PAG). The majority of
amphibolite (~85%) and pegmatite (~65%) samples were classified as non-acid
generating (non-PAG), with a minor proportion classifying as PAG, typically associated
with higher sulphide samples. Fenite material was considered to be non-PAG.
Based on this initial characterization program, though some proportion of waste rock
appears to be PAG, it would appear that the Blue River Mineral Resource has an
overall low potential for acid rock drainage/metal leaching (ARD/ML) generation,
especially if waste segregation strategies can be incorporated into proposed mining
methods. Kinetic test work on two composite samples is ongoing and results will be
incorporated into planning for additional sampling as well as modeling of PAG. No
work has yet been completed on the ARD/ML potential of tailings.
Hydrogeologic investigations show that groundwater elevation in bedrock roughly
mimics topography in the Project area, so flow in the vicinity of the Upper Fir Deposit is
generally from east to west. Groundwater depth in boreholes was observed to range
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from 15 m to 130 m in the area of the deposit, and is near the surface at lower
elevations. Most groundwater flow through bedrock occurs through fractures, and the
bulk hydraulic conductivity of bedrock was estimated to range from 10-8 m/s to
10-6 m/s. Due to fracture-control, flow through bedrock is likely complex, and may not
be well connected to the surface.
Of the six groundwater samples collected in 2009, the British Columbia Ministry of the
Environment Water Quality Criteria for Freshwater Aquatic Life (BCMOE) and the
Canadian Water Quality Guidelines for the Protection of Aquatic Life (CCREM) criteria
for aquatic life were exceeded in five samples for fluoride, one sample for aluminum,
three samples for chromium, one sample for copper, and three samples for zinc. No
other parameters exceeded these criteria. However, as the boreholes used in this and
past hydrogeology studies of the Project site are deep exploration holes, and were not
developed or purged prior to sampling, sample chemistry may not be accurately
characterize existing groundwater conditions.
Current air quality at the site is considered excellent with limited influence from road
traffic and forestry activities. No site specific data has been collected to date.
An initial review of environmental conditions and planned project features indicates
that proactive design and mitigation can be successful in addressing environmental
impacts associated with developing, constructing, operating and closing the proposed
Blue River Project. As with other projects in the many BC mines located in
mountainous terrains, water management will be a key issue.
20.4 Closure Considerations
Commerce has engaged in progressive reclamation activities during exploration since
geological work and drilling began to focus on the area of, and around, the Upper Fir
resource.
Conceptual closure planning for the Blue River Project involves staged reclamation
and closure over the life of the exploration, development, construction and operation of
the mine. This will include appropriate contouring and revegetation of any waste
dumps, the Upper and Lower Portals, the drystack tailings storage facility, closure of
exploration roads, trails and platforms, closure of mine roads and removal of all mine
facilities, as well as post-closure management and monitoring plans for a defined
period of time.
It is expected that the initial design of the drystack tailings storage facility, water
storage, diversion and water management structures, waste rock dumps, and other
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mine and plant facilities will be integrated into closure designs for each component as
well as for the mine as a whole.
20.5 Current Environmental Liabilities
Current environmental liabilities are believed to be restricted to exploration drilling
programs. Existing disturbances due to exploration include drill pads, trails and
accessways, which are remediated in an ongoing program of progressive closure once
Commerce establishes exploration has been completed in a particular area.
Under the existing exploration permit, a reclamation bond is in place which will cover
the cost of any outstanding reclamation from these activities.
20.6 Closure Plan
For the purposes of the PEA, a closure estimate of $10 million was incorporated in the
financial analysis. The figure was obtained by benchmarking to similar-size mines with
the same level of complexity.
20.7 Permitting
Following environmental assessment approval, permits needed for construction and
mine operations can be issued. In BC there is an option to apply for concurrent
permitting. This allows a review for permit applications to be processed at the same
time as the environmental assessment is being conducted, resulting in the permits
required for construction being issued shortly after a positive environmental review
decision.
Table 20-1 and Table 20-2 provide a listing of possible federal and provincial permits
that will be required for construction, mine operations, closure and post-closure.
This listing cannot be considered comprehensive due to the complexity of government
regulatory processes, which evolve over time, and the large number of minor permits,
licences, approvals, consents, and authorizations, and potential amendments that will
be required throughout the life of the mine. The permit requirements will be reviewed
and updated as the Project advances.
20.8 Considerations of Social and Community Impacts
Socioeconomic and cultural heritage studies have not yet been initiated for the Blue
River Project. Basic community profiling has been completed of the individual
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communities nearby as well as relevant regional government and planning
organizations. This work shows that as with other areas of rural BC, there is a large
dependence on primary resource industries, and overall the population of the area is in
decline.
Table 20-1: Provincial Permits, Approvals, Licences and Authorizations Provincial Permits Description ACT
Notice of Work Approval for exploration and site programs to be conducted to gather geological and other site information
Mines Act
Mines Act permit Approval to construct, operate and reclaim mine and its infrastructure
Mines Act
Mining Lease Land occupancy for mine (sub-surface rights)
Mineral Tenure Act
Surface Lease Surface land occupancy for mine and site infrastructure
Land Act
Licence of Occupation Land occupancy for other features (e.g. borrow pits)
Land Act
Statutory Right of Way Land occupancy for linear features Land Act Waste Discharge Permit – Water Approval to discharge mine effluent and
sewage into the environment Environmental Management Act
Waste Discharge Permit – Air Approval to discharge air emissions into the environment
Environmental Management Act
Occupant Licence to Cut Approval to remove timber (mine, infrastructure, borrow areas)
Forest Act
Road Use permits Approval to use existing forestry roads Forest and Range Practices Act
Special Use permit Approval to construct new roads Forest Practices Code of BC
Water Licence Approval to construct, maintain and decommission water works
Water Act
Section 9 Approval Approval for changes in and about a stream
Water Act
Section 8 Approval Approval for short term use of surface water
Water Act
Authorization for Public Highway Use Approval to use public highways Transportation Act Exemption Permit Approval to haul concentrate (if required) Transportation Act Construction Permit To construct a potable water system Drinking Water
Protection Act
Table 20-2: Federal Permits, Approvals, Licences and Authorizations Federal Permits Description ACT
Navigable Waters Approval Approval to build bridges across streams Navigable Waters Protection Act
Section 35(2) Authorization Allows harmful alteration or disruption of fish habitat (HADD) (e.g. bridge upgrade)
Fisheries Act
Explosives Magazine Licence Approval to store explosives Explosives Act Radio Licences Approval to operate radios Radio Communications
Act
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The Blue River Project is located in the North Thompson River valley within the
Thompson-Nicola Regional District (TNRD). TNRD functions as a partnership of 11
member municipalities (Ashcroft, Barriere, Cache Creek, Chase, Clearwater, Clinton,
Kamloops, Logan Lake, Lytton, Merritt and Sun Peaks) as well as 10 electoral areas
whose voices at the Board table are representative of many small unincorporated
communities, member municipalities and electoral areas.
The area has a population of over 122,286 (2006 census) and a total area of
45,279 km2. The Regional District is active in providing over 115 services including
planning and building inspection, emergency preparedness and 911 services,
recreation, utilities, TV rebroadcasting, river buoys, transit, tourism, economic
development as well as environmental health services which include waste reduction,
mosquito and weed control.
The closest town to the Project is the small community of Blue River located about
20 km south of the project. Blue River is an unincorporated village, located at the
confluence of the Blue and North Thompson Rivers along the Yellowhead Highway about
halfway between Kamloops and Jasper, Alberta. It currently has a declining population
of about 260 residents, with a local economy supported by logging, tourism, and
transportation industries. Accommodation is available for exploration crews by way of
hotels and rental housing. Commerce maintains an active presence in the town with a
field office open during the exploration season.
The Project is about 90 km south of the village of Valemount, BC, a rural community of
about 1,150 situated between the Rocky, Monashee, and Cariboo Mountains. It is the
nearest community to the west of Jasper National Park, and is also the nearest
community to Mount Robson Provincial Park.
Outdoor recreation is popular in summer and winter; hiking, skiing, snowmobiling, and
horseback riding are common activities. Economic activities include logging, railway,
transport and tourism. Valemount is considered a fully-serviced village, boasting high-
speed wireless internet, train, bus and highway service. The town serves as a supply
centre for another 700 people who live in the Regional District of Fraser-Fort George,
from Albreda to Small River. Today Valemount’s economy is based on logging and a
rapidly-growing tourism industry.
20.8.1 First Nations
The Blue River Project lies on lands which comprise part of the traditional territory of
the Simpcw First Nation. Simpcw First Nation is a member of Secwepemc (Shuswap)
Nation Tribal Council (SNTC), a political organization, which works on matters of
common concern, including the development of self-government and the settlement of
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the aboriginal land title questions. The SNTC is involved with natural resource
management within the Secwepemc Nations territory and the creation of economic
development opportunities for Secwepemc communities. Commerce is very aware of
its responsibility to appropriately engage local and regional First Nations early in the
planning and development stages of the project.
On behalf of Commerce, members of the Simpcw First Nation completed
Archaeological Overview Assessments (AOA) over all areas of proposed disturbance
related to Commerce exploration activities, as well as over key areas of potential
project infrastructure. No concerns were noted by the archaeology field 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 (TK/TU) studies, as well as a detailed
archaeological impact assessment will need to be undertaken and will also involve
Simpcw First Nation participation. Such studies may identify areas and seasons
where Simpcw have engaged in traditional activities such as hunting, fishing, gathering
and spiritual ceremonies, and the outcomes will be used to inform the overall design
and operation of the Project.
First Nations engagement, with respect to exploration activities, began in May 2007,
and will be continuing 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.
On 25 October 2010, Simpcw First Nation and Commerce signed a confidential
Exploration Agreement with respect to exploration activities on the Blue River project,
which 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.
20.8.2 Local Communities
The Blue River Project is only at the exploration and early evaluation stage; however,
to introduce Commerce and its Project to its communities, Commerce has hosted one
community meeting in each of Blue River and Valemount, and has made presentations
to the Valemount Council. The Valemount Mayor and Council have toured the
property and continue to receive regular updates on the project. Periodic Community
Newsletters provide updates on the Blue River Project; these are distributed in the
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town of Blue River and Valemount, and available on Commerce’s website. In the
summer of 2010, Commerce hosted a community barbeque in Blue River to thank its
neighbours and the local people for their assistance and support over the past
exploration seasons. As the project moves forward, open houses/information sessions
and meetings will take place in other local communities such as Barriere, Clearwater
and Chu Chua.
Public engagement to date has included meetings with local councils (e.g., Valemount,
Barriere) and informal discussions with local land-owners and Vavenby.
20.9 Comment on Section 20
In the opinion of the QPs, the following conclusions are appropriate:
• 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 a project is a process that will take up to
18 months to complete. The process would 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
• The environmental review and assessment process results in a decision with
respect to whether or not the Project should be issued an Environmental
Assessment Certificate by the provincial government, as well as receive federal
Ministerial approval based on the recommendations put forth to the Minister of
Environment in a Comprehensive Study Report prepared by the Major Projects
Management Office. Both are required for a project to proceed to permitting and
development
• Environmental monitoring, baseline studies and site investigations have been
ongoing at the Blue River Project site since the summer season of 2006 with the
selection of local and regional studies areas for each biophysical discipline. Field
studies completed by specialist consultants independent of Commerce include: site
hydrology (2006–present); snow course depths (2007, 2008); fisheries and
aquatics (2006–2008); soils, flora and fauna assessments (2006, 2007), including
studies of rare, threatened and endangered plants (2007), breeding birds (2007)
and terrestrial ecosystem mapping (2006, 2007); wildlife studies and habitat
suitability mapping (2006–2008); geochemistry, mineralized material and waste
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rock characterization with baseline ABA and metals analyses (2007, 2008), surface
water and sediment quality (2006–present), groundwater (2007–2009) and terrain
stability assessment for roads (2007–present)
• Kinetic test work for ARD/ML was initiated in June 2010 and is ongoing; results of
this work will give an indication of the type of management strategies required for
handling PAG waste rock. Additional environmental baseline programs are
expected to continue, as required through 2011
• A preliminary list of the Federal and Provincial permits required for operation of a
mine has been developed. This listing cannot be considered comprehensive due
to the complexity of government regulatory processes, which evolve over time, and
the large number of minor permits, licences, approvals, consents, and
authorizations, and potential amendments that will be required throughout the life
of the mine. 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
communities nearby, as well as relevant regional government and planning
organizations. This work shows that as with other areas of rural BC, there is a
large dependence on primary resource industries, and overall the population of the
area is in decline
• 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 May
2007, and will be continuing 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. On behalf of Commerce, members of the
Simpcw First Nation completed Archaeological Overview Assessments (AOA) over
all areas of proposed disturbance related to Commerce exploration activities, as
well as over key areas of potential project infrastructure. Traditional
Knowledge/Traditional Use (TK/TU) 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, which,
amongst other aspects, 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
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Simpcw in environmental plans to gain from their knowledge of the region, as well
as to keep them informed of project goals
• Public engagement to date has included meetings with local councils (e.g.,
Valemount, Barriere) and informal discussions with local land-owners.
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21.0 CAPITAL AND OPERATING COSTS
21.1 Capital Cost Estimates
21.1.1 Basis of Estimate
Capital costs used in this PEA were derived from a variety of sources including but not
limited to comparative analysis of other operations, derivation from first principles,
equipment quotes and factoring from other costs contained within this study.
The accuracy of the estimates contained within this study vary due to the different
methods of derivation used to estimate the costs; however, in general the capital costs
are expected to be within a +40%/-10% range as per the AACE Class 5 (scoping level)
definition.
The estimate scope is limited to the battery limits of the plant and mine sites with no
allowance for off-site facilities.
All costs are expressed in first quarter (Q1) 2011 Canadian (CAD) dollars. No
allowance has been included for escalation, interest or financing fees, taxes or duties.
The capital costs are divided into five areas:
• Infrastructure costs
• Process costs
• Mining costs
• Material handling costs
• Contingency costs
• Indirect costs
Escalation is excluded from the estimate.
21.1.2 Infrastructure
Blue River initial direct civil infrastructure capital costs amount to $30M. This area
covers the infrastructure and facilities required to support the mine/mill operations
including site preparation, civil work, services, roads, explosive facilities and electrical
substation.
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The planned surface conveyor system is included as a material handling item, and
does not appear in the civil infrastructure total.
Power supplies in the region have been assumed to be sufficient for Project
requirements, and no allocation for additional power line construction has been
included.
21.1.3 Material Handling
Blue River initial direct material handling capital costs amount to $8M. This area
covers belt conveyors and transfer stations and is based on in-house AMEC data and
benchmarking against comparable projects. The cost estimate for the primary crusher,
bin and structure is included in the process plant capital estimates.
21.1.4 Process Plant
Blue River initial direct process plant capital costs amount to $116M. This area covers
all the process equipment and structures from mills to tailing filters, as well as pre-
treatment and refinery facilities.
21.1.5 Mining
Blue River initial direct mining capital costs amount to $89M. Mining direct capital costs
include pre-production mining, capital development costs, mine mobile equipment, and
mine infrastructure.
Development to be completed prior to the commencement of production at full rate
was classified as pre-production development. This development was assumed to be
undertaken by Owner’s mining crews with unit costs rates as shown in the operating
cost section.
Development associated to semi-permanent excavations, when used for more than
two years, was treated as capital development. Based on preliminary designs, an
estimate of 20% of all development was treated as capital development.
The equipment hours required for each unit of activity and daily service equipment
requirements were estimated. The required equipment operating hours for each
equipment type were aggregated. Assuming typical yearly operating hours for each
type of equipment, AMEC has estimated minimum equipment fleets to forecast capital
expenditure.
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AMEC used a database of budget costs for mine equipment. Where necessary, the
budget costs were factored to reflect Q1 2011 costs.
AMEC used a database of costs estimates for mining infrastructure and fixed service
equipment. Where necessary, the budget costs were factored to reflect Q1 2011
costs.
Initial direct mining capital requirements include major equipment for underground
operations (drilling, loading and hauling), support equipment for underground
operations, equipment for surface road maintenance and hauling and handling of
tailings from the process plant to the drystack (co-disposal) area.
Capital requirements were allocated to Year -1, but during more detailed studies,
consideration should be given to allocating the capital requirements over more than
one year, as it is likely that payments for equipment will be required prior to the
equipment being delivered to site.
In a similar manner, the development metreage allocated to the pre-production year
should be re-evaluated during more detailed studies, and a formal pre-production
development schedule with achievable monthly development metreage targets should
be developed.
21.1.6 Contingency Costs
Blue River contingency costs amount to $44 M. Contingency accounts for unforeseen
costs within the project scope. Contingency costs were calculated using a factor of
25% of civil infrastructure, material handling, process plant, and mine infrastructure
direct capital costs. A contingency factor of 5% was applied to the mine mobile
equipment direct capital costs. No contingency was calculated for pre-production
mining and capital development costs. The contingency factors are considered
appropriate for the level of engineering work performed in the preparation of this
Report. Input variables used in calculating the contingency are a result of information
gathered from previous projects and industry standards.
21.1.7 Indirect Costs
Blue River indirect costs amount to $92 M. Indirect costs covers temporary
construction facilities and services, construction equipment, freight, vendor’s
representatives, start-up and commissioning, engineering, procurement and contract
management (EPCM), working capital, warehousing spares, and first fill. Indirect costs
were calculated using a factor of 30% of civil infrastructure, material handling, process
plant, and mine infrastructure direct capital and contingency costs. An indirect costs
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factor of 5% was applied to the mine mobile equipment direct capital and contingency
costs. No indirect cost was calculated for pre-production mining and capital
development costs.
21.1.8 Sustaining Capital
The sustaining capital costs of Blue River total to $116 M. The primary sustaining
capital components of the proposed mine are:
• Underground mine development ($34 M)
• Fleet replacement ($73 M)
For underground development, the cost of development of the entire mine life was
estimated, and then factors were applied to distribute this cost over the life-of-mine,
with costs decreasing as time increased. A unit cost in $/m was then applied against
the annual metres.
The second portion of the initial truck purchases in the first production year was
categorized as sustaining capital.
Equipment fleet replacement costs were based on actual requirements as the useful
life of each unit was reached. Major mobile equipment replacements were considered
in Years 5–6 of operation, smaller mobile equipment was considered to be replaced in
four-year intervals.
21.1.9 Mine Closure
A total of $10 M was estimated for mine closure and was benchmarked to similar-size
mines with the same level of complexity.
21.1.10 Capital Cost Estimate Summary
Contractor-mining is not envisaged for the pre-production development period. Owner
mining is envisaged as costs associated with this option are reduced.
The estimate covers the direct field costs of executing the project, plus the Owner’s
indirect costs associated with design, construction, and commissioning. The
preproduction costs are capitalized that include all the expenditures before Year 1 of
production.
The estimate is summarized in Table 21-1 and Figure 21-1.
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Table 21-1: Summary of Estimated Capital Costs
Calendar year Total
(x $1,000) 2011
(x $1,000) 2012
(x $1,000)
Project year 1 2
Production year -2 -1
Capital expenditure
Initial Capital Infrastructure 29,500 10,300 19,200
Process Initial Capital 116,200 40,700 75,600
Mining Initial Capital 89,400 89,400
Material Handling 8,000 8,000
Contingency 43,600 12,800 30,900
Indirect/Owner Costs 92,300 29,600 62,600
Total 379,000 93,400 285,600 Note: Summation discrepancy due to rounding.
Figure 21-1: Distribution of Capital Costs
21.2 Operating Cost Estimates
The operating cost estimate excludes:
• Contingency
• Allowance for escalation
• Sales tax
• Product shipping
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• Import duties. This would only be applicable if any equipment is required to be
sourced outside of Canada.
21.2.1 Basis of Estimate
The operating costs for the Blue River project are based on an Owner-operated mining
fleet and process facility and have been prepared in first quarter 2011 Canadian
dollars. Owner-operation was selected as this method minimizes operating costs.
AMEC recommends that this selection be reviewed during more detailed studies. It
may be preferable to have contract labour for the pre-production development at a
minimum.
21.2.2 Mine Operating Costs
Over the life of mine, mining production costs total $529 M, and the unit cost was
$21.16/t mined.
The mine operating cost estimate incorporates costs for operating and maintenance
staff, underground mine development costs, waste management, and haulage costs.
All mining costs are based on production occurring between Years 1 and 10. Pre-
production/development costs have been capitalized and include the costs for the
mining infrastructure.
Operating costs were developed from models estimating the unit costs of the main
mining activities and overhead requirements to support the activities. The models
were previously developed for analogous mining operations and were adapted to suit
the Blue River Project.
Costs associated with activities related to mine services were factored from similar
operations and applied as fixed costs per year. Mine services costs included
consideration of items such as ventilation, heating, dewatering, compressed air,
maintenance costs, and support services.
AMEC estimated the cost to maintain the surface haulage roads and the operation of
the co-disposal site based on typical productivity of surface equipment such as dozers,
graders, excavators, compactors and water trucks. Unit hourly costs were related to
the volume of materials to be hauled and disposed.
Snow removal costs were included with surface road maintenance costs.
Operating costs for the tailings disposal facility were included in the Project sustaining
capital.
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Costs associated with Mine Administration and Technical Services for the mine were
calculated and applied as fixed costs per year.
21.2.3 Process Operating Costs
Over the life of mine, process operating costs total $339 M and the unit cost was
$13.54/t milled.
Processing cost include the costs of operating and maintaining the processing facility
from the crusher and mills to refinery and acid reagent systems. The processing
operating costs account for purchasing consumables, equipment maintenance, spare
parts, labour, and power consumption. All the workforce organization, salaries, hourly
workers, power consumption and rate are based on AMEC in-house data as well as
current market research.
21.2.4 Infrastructure Operating Costs
Based on benchmarking with other projects, a figure of $0.74/t of mineralized material
milled was used to estimate the conveying operating costs.
21.2.5 General and Administrative Operating Costs
Over the life of mine, general and administrative costs total $75 M.
The general and administrative (G&A) costs are the labour and overhead expenses for
cost centres that are not directly linked to the mining and process discipline. G&A for
each cost centre was estimated either from the first principles or input from AMEC
based on other operations.
Maintenance costs were assigned to G&A to cover maintenance cost not specific to
either mine or plant. Other incorporated costs include site service, safety and security,
warehouse, legal expenses, community and First Nations relations, insurance,
environment, and freight charges.
21.2.6 Operating Cost Summary
Operating costs over the life-of-mine are estimated at $38.44/t milled.
Operating costs include the three key areas of mining, process, and overall general
and administrative costs (G&A). The estimates are based on the staffing level,
consumables, and expenditures detailed as part of the underground mine plan and
process design.
Average operating costs are illustrated in Table 21-2. A percentage breakdown of life-
of-mine (LOM) operating costs is shown in Figure 21-2. Table 21-3 provides the
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operating costs by year, and Table 21-4 shows the unit operating cost per milled
tonne.
Table 21-2: Average Life-of-Mine Operating Cost Summary
Summary of Average Production Costs LOM Total (x $1,000)
Cost per Tonne Milled ($/t)
Mining 528,900 21.16
Process 338,500 13.54
Material Handling 18,500 0.74
G&A 75,000 3.00
Sub-total 960,900 38.44
Figure 21-2: LOM Operating Cost Summary
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Table 21-3: Operating Costs by Year Calendar year $ 000 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Project year 3 4 5 6 7 8 9 10 11 12
Production year 1 2 3 4 5 6 7 8 9 10
Mining Development 171,329 24,652 28,640 24,504 20,965 17,937 15,347 13,130 11,234 9,611 5,309
Production 84,237 8,653 8,364 8,663 8,919 9,139 9,326 9,486 9,624 9,741 2,322
Haulage 161,176 19,661 17,766 17,529 17,326 17,152 17,004 16,877 16,768 16,675 4,420
Service & Infrastructure 55,002 6,284 5,954 5,933 5,915 5,900 5,887 5,876 5,867 5,858 1,527
Mining G&A 57,193 6,177 6,177 6,177 6,177 6,177 6,177 6,177 6,177 6,177 1,600
Mining Production Costs 528,937 65,426 66,901 62,806 59,303 56,305 53,741 51,546 49,669 48,063 16,665
Unit Cost $/tonne 21.16 24.23 24.78 23.26 21.96 20.85 19.90 19.09 18.40 17.80 21.68
Table 21-4: Operating Costs Per Milled Tonne Calendar year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Project year 3 4 5 6 7 8 9 10 11 12
Production year 1 2 3 4 5 6 7 8 9 10
Mining (24) (25) (23) (22) (21) (20) (19) (18) (18) (6)
Process (14) (14) (14) (14) (14) (14) (14) (14) (14) (4)
Material Handling (1) (1) (1) (1) (1) (1) (1) (1) (1) (0)
G&A (3) (3) (3) (3) (3) (3) (3) (3) (3) (1)
Total Operating Cost/tonne (42) (42) (41) (39) (38) (37) (36) (36) (35) (10)
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21.3 Comment on Section 21
In the opinion of the QPs:
• The total estimated capital cost to design and build the Blue River Project at an
assumed 7,500 t/d capacity is $379 M
• A total of $10 M was included in the capital cost estimate for mine closure and was
benchmarked to similar-size mines with the same level of complexity
• Operating costs over the life-of-mine are estimated at $38.44/t milled.
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22.0 ECONOMIC ANALYSIS The following section is partly based on Inferred Mineral Resources that are
considered too speculative geologically to have the economic considerations applied
to them that would enable them to be categorized as Mineral Reserves, and there is
no certainty that the preliminary assessment based on these Mineral Resources will be
realized.
Approximately 15% of the Mineral Resources that were modified to produce the ROM
estimate and support the financial model have been classified as Inferred Mineral
Resources.
The results of the economic analyses discussed in this section represent forward-
looking information as defined under Canadian securities law. The results depend on
inputs that are subject to a number of known and unknown risks, uncertainties and
other factors that may cause actual results to differ materially from those presented
here. Information that is forward-looking includes:
• Mineral Resource estimates
• Assumed commodity prices and exchange rates
• The proposed mine production plan
• Projected recovery rates
• Infrastructure construction costs and schedules
• Assumptions that an EA will be approved by Provincial and Federal authorities.
22.1 Valuation Methodology
The project has been evaluated using a discounted cash flow (DCF) analysis. Cash
inflows consist of annual revenue projections for the mine and two years of
preproduction. Cash outflows such as capital, operating costs, and taxes are
subtracted from the inflows to arrive at the annual cash flow projections.
To reflect the time value of money, annual net cash flow (NCF) projections are
discounted back to the project valuation date using several discount rates. The
discount rate appropriate to a specific project depends on many factors, including the
type of commodity and the level of project risks, such as market risk, technical risk,
and political risk. The discounted present values of the cash flows are summed to
arrive at the project’s net present value (NPV).
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In addition to NPV, internal rate of return (IRR) and payback period are also
calculated. The IRR is defined as the discount rate that results in an NPV equal to
zero. Cash flows are taken to occur at the end of each period. Capital cost estimates
have been prepared for initial development and construction of the project and for
ongoing operations (sustaining capital).
The resulting net annual cash flows are discounted back to the date of valuation end-
of-year 2010 dollars and totalled to determine NPVs at the selected discount rates.
The IRR is calculated as the discount rate that yields a zero NPV. The payback period
is calculated as the time needed to recover the initial capital spent.
22.2 Financial Model Parameters
22.2.1 Mineral Resources and Mine Life
The model includes 36,349 kt of Indicated Mineral Resources as well as 6,385 kt of
Inferred Mineral Resources. For this study AMEC utilized average grades of
mineralized materials throughout the mine life at 195 ppm for Ta and 1,700 ppm for
Nb. The diluted grades as the result of the proposed mining method were assumed at
185 ppm Ta and 1,591 ppm Nb. After applying mine recovery and dilution factors, the
financial model assumes that the mine life is 10 years, assuming the plant will process
25 Mt at a 7.5 kt/d plant throughput rate (2.7 Mt/a).
22.2.2 Metallurgical Process
Recovery assumptions from the process plant include 65% recovery for Ta and 69%
recovery for Nb in the flotation stage. The refining process has an estimated 97%
recovery for both Ta and Nb.
22.2.3 Commodity Prices and Foreign Exchange
Publicly-available tantalum and niobium pricing information is very limited as the
markets tend to be based on long-term relationships between few buyers and sellers.
Slightly more information is available for niobium than for tantalum.
Given that there is currently a shortage of tantalum and the fact that historic prices do
not appear to sustain future production from any currently known projects, AMEC
considered the following question:
"What price is needed for a typical greenfield property to be brought into production
and give its owners a reasonable return on their investment?"
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Approximate calculations indicated that a tantalum price of US$317/kg of contained
metal in the oxide product was needed. This price is close to the prices for tantalum
reported on subscription news services during the last quarter of 2010.
The niobium price was set at US$46/kg of contained metal in the oxide product over
the life-of-mine.
An exchange rate of US$0.95 to C$1 is used for all years of the financial model.
22.2.4 Taxes
No taxes are incorporated in the model. AMEC is not an expert in taxation matters,
and appropriate taxation considerations should be reviewed with relevant auditors.
AMEC did review publicly-available taxation documents for taxes that could be levied.
Taxation considerations comprise Provincial and Federal corporate income taxes and
BC Mineral taxes. The following discussion outlines the main Federal and Provincial
taxation and considerations for mining ventures in BC:
• Federal taxes: Includes income tax, customs duties, fuel taxes, payroll taxes and
transaction taxes. The general rate of Federal income tax on active business
income earned by a corporation for 2011 is 16.5% and is legislated to decrease to
15% starting in 2012.
• Provincial income tax: The general rate of BC Provincial income tax on active
business income earned by a corporation in the Province is 10%.
• Provincial mineral taxes: The BC Mineral Tax provides for the Crown's financial
share of mineral production in two ways. The primary way is to receive 13% of a
producer’s profit that is in excess of a normal return on investment over the life of a
mine. This is referred to as Net Revenue Tax. To minimize any disincentive to
investment, the Province does not receive this share until the producer’s
investment and a reasonable return on it have been recovered. The second way is
to receive 2% of operating cash flow from production in each year. This is referred
to as Net Current Proceeds Tax. It is intended to provide compensation for
depletion of the resource when production yields less than a reasonable profit for
the producer. So that only one or the other share is paid, Net Current Proceeds
Tax is fully creditable against Net Revenue Tax.
22.2.5 Depreciation/Salvage Value
No depreciation is incorporated in the model.
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22.2.6 Financing
The project is assumed to be 100% Owner-financed.
22.2.7 Capital Costs
The total estimated capital cost to design and build the Blue River Project at 7,500 t/d
capacity is $379 million.
22.2.8 Operating Costs
Operating costs over the life-of-mine are estimated at $38.44/t milled.
22.2.9 Working Capital
No working capital is incorporated in the model. Working capital allowances required to
operate this Project are not expected to have a significant impact on the cash flow of
the mine.
22.2.10 Inflation
No inflation adjustments are incorporated in the model. Capital and operating costs are
based on first quarter 2011 Canadian dollars.
22.2.11 Royalty
No royalty is incorporated in the model.
22.3 Financial Results
A discount rate of 8% was applied as the base case. The Project base case returns
an NPV of $18.5 M before tax with a 9.1% IRR (internal rate of return), and a 6.3 year
payback period. Discount rates from 5% to 10% return NPVs $80 M to ($14) M.
Annualized cash flows are summarized in Table 22-1. The financial results are
summarized in Table 22-2.
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Table 22-1: Project Cashflow Model
Calendar year Units Life of Mine 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Project year
1 2 3 4 5 6 7 8 9 10 11 12
Production year
-2 -1 1 2 3 4 5 6 7 8 9 10
Metal prices
Ta USD/kg
317 317 317 317 317 317 317 317 317 317 317 317
Nb USD/kg
46 46 46 46 46 46 46 46 46 46 46 46
Tantalum Revenue
Ta
Final Product Mt 2,403
260 260 260 260 260 260 260 260 260 67
Total in US$ USD000 761,702
82,264 82,264 82,264 82,264 82,264 82,264 82,264 82,264 82,264 21,328
Total in CAD$ CAD$000 801,792
86,593 86,593 86,593 86,593 86,593 86,593 86,593 86,593 86,593 22,450
Niobium Revenue
Nb
Final Product Mt 18,610
2,010 2,010 2,010 2,010 2,010 2,010 2,010 2,010 2,010 521
Total in US$ USD$000 856,039
92,452 92,452 92,452 92,452 92,452 92,452 92,452 92,452 92,452 23,969
Total in CAD$ CAD$000 901,094
97,318 97,318 97,318 97,318 97,318 97,318 97,318 97,318 97,318 25,231
Revenue CAD$000 1,702,885
183,912 183,912 183,912 183,912 183,912 183,912 183,912 183,912 183,912 47,681
Production costs
Mining CAD$000 528,937
65,426 66,901 62,806 59,303 56,305 53,741 51,546 49,669 48,063 15,177
Process CAD$000 338,500
36,558 36,558 36,558 36,558 36,558 36,558 36,558 36,558 36,558 9,478
G&A CAD$000 74,998
8,100 8,100 8,100 8,100 8,100 8,100 8,100 8,100 8,100 2,098
Material Handling CAD$000 18,516
2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 516
Total CAD$000 960,951
112,084 113,559 109,464 105,961 102,963 100,399 98,204 96,327 94,721 27,269
Earnings
Earnings before taxes, depreciation & amortization CAD$000 741,934
71,828 70,352 74,447 77,951 80,948 83,513 85,707 87,585 89,191 20,412
Deductible interest CAD$000
0 0 0 0 0 0 0 0 0 0 0
Earnings before taxes, depreciation & amortization CAD$000 741,934
71,828 70,352 74,447 77,951 80,948 83,513 85,707 87,585 89,191 20,412
Operating earnings CAD$000 741,934
71,828 70,352 74,447 77,951 80,948 83,513 85,707 87,585 89,191 20,412
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Calendar year Units Life of Mine 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Project year
1 2 3 4 5 6 7 8 9 10 11 12
Production year
-2 -1 1 2 3 4 5 6 7 8 9 10
Initial and Sustaining Capital Expenditure
Infrastructure Initial Capital CAD$000 29,491 10,322 19,169
Process Initial Capital CAD$000 116,240 40,684 75,556
Mining Initial Capital CAD$000 89,420
89,420
Material Handling CAD$000 8,000
8,000
Contingency CAD$000 43,613 12,751 30,862
Indirects/Owner Costs CAD$000 92,268 29,627 62,641
Sustaining Capital CAD$000 116,271
46,754 4,674 4,183 4,757 24,857 20,875 3,225 3,636 1,995 1,317
Total 495,303 93,385 285,648 46,754 4,674 4,183 4,757 24,857 20,875 3,225 3,636 1,995 1,317
Closure and Salvage
Closure costs CAD$000 10,000
10,000
Total CAD$000 10,000
10,000
Net Project Cash Flow
Pre-tax CAD$000 236,631 (93,385) (285,648) 25,074 65,678 70,264 73,194 56,091 62,639 82,482 83,949 87,196 9,095
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Table 22-2: Summary Pre-Tax Financial Analysis
Summary of Cash Flow Pre-tax
Cumulative net cash flow
Undiscounted CAD$000 236,631
Net present value
Discounted at 5% CAD$000 80,349
Discounted at 6% CAD$000 57,612
Discounted at 7% CAD$000 37,064
Discounted at 8% (Project Base Case) CAD$000 18,487
Discounted at 9% CAD$000 1,685
Discounted at 10% CAD$000 (13,514)
Internal rate of return % 9.1
Payback period Years 6.3
22.4 Cash Costs
The cash cost value represents the cost incurred to produce 1 kg of primary product
after deducting the revenue from sales of secondary products. Since the price
analysis for the report was performed around Ta price variation, Ta is chosen as the
main product and Nb is treated as the secondary product for the assessment of cash
cost.
Cash costs are derived through the following formulae:
Production costs = (Mining + Process + G&A + Material Handling)
Cash cost = (Production costs - Revenue of Nb sales) ÷ tantalum production in kg
Using the Brook Hunt convention for reporting C1 cash costs2, after credit for Niobium
contribution, the tantalum cash cost is calculated to be approximately $24.91/kg
contained in oxide product (equivalent to US$23.66/kg contained in oxide product with
the PEA study exchange rate of US$0.95 to C$1).
This is shown in Table 22-3.
2 Brook Hunt, established in 1975, is a global group that specializes in in-depth market analysis across the mining and metals
industries. Brook Hunt has established a method of comparison of costs between projects, countries and commodities that is considered an industry standard. C1 cash costs are defined by Brook Hunt as: the costs of mining, milling and concentrating, on-site administration and general expenses, property and production royalties not related to revenues or profits, metal concentrate treatment charges, and freight and marketing costs less the net value of by-product credits.
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Table 22-3: Life of Mine Cash Cost Summary
Summary of Cash Costs LOM Total (x $1,000)
Cost per Tonne Milled ($/t)
Cost per Kg Ta Payable ($/kg)
Cash costs
Mining 528,900 21.16 220.13
Process 338,500 13.54 140.87
G&A 75,000 3.00 31.21
Material Handling 18,500 0.74 7.71
Sub-total 960,900 38.44 399.92
Credits
Nb (901,100) (36.04) (375.01)
Sub-total (901,100) (36.04) (375.01)
Adjusted cash costs
Total 59,800 2.40 24.91 Note: The figures in this table do not include considerations of working capital or royalty payments
The cash cost for production of tantalum during the earlier years of the proposed
mining operation is $57/kg and decreases over the life of the mine. The major driver
behind the changing costs is the decrease in the mining costs over the life-of-mine. In
the last three years of operation, the revenue generated from niobium exceeds the
total operating costs (mining, processing and G&A). The mining cost for the entire
Project (i.e. mining cost of both tantalum and niobium) drops from an average of $24/t
in the first few years to $18/t in the last year of full production.
22.5 Sensitivity Analysis
The analysis shows that the Project is more sensitive to changes in operating
expenditures than capital expenditures. The project is most sensitive, in order, to
changes in exchange rate, operating expenditure, Nb price, Ta price and capital
expenditure. Since the sales currency is in United States dollars and operational costs
are in Canadian dollars, a rising United States dollar value versus the Canadian dollar
improves potential profitability. Project sensitivities are summarized in Table 22-4 for
the Project Base Case discount rate of 8%. Figure 22-1 shows a sensitivity graph for
the Project at the Base Case NPV at 8%. The graph assesses the relative impacts on
the Project to variations in exchange rates, capital expenditure, operating expenditure,
niobium price, and tantalum price.
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Table 22-4: Sensitivity Summary, Project Base Case NPV at 8%
SENSITIVITY OF NPV @ 8% Change in Factor
-30% -20% -10% 0% 10% 20% 30%
Fa
cto
r
Exchange rate 448.7 269.5 130.0 18.5 (72.8) (148.8) (213.2)
Capital expenditure 117.9 84.8 51.6 18.5 (14.6) (47.8) (80.9)
Operating expenditure 190.5 133.1 75.8 18.5 (38.8) (96.2) (153.5)
Nb price (140.9) (87.8) (34.6) 18.5 71.6 124.7 177.9
Ta price (123.3) (76.1) (28.8) 18.5 65.8 113.0 160.3
Figure 22-1: Sensitivity Summary NPV at 8%
22.6 Comment on Section 22
In the opinion of the QPs:
• Based on the assumptions in this Report, the financial analysis for the Blue River
project, using a discount rate of 8%, returns an NPV of about $18.5 M and an IRR
of 9.1% before tax.
• The Project is most sensitive, in order, to changes in exchange rate, operating
costs, niobium price, and less sensitive to changes in tantalum price , and least
sensitive to changes in capital costs.
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23.0 ADJACENT PROPERTIES There are no adjacent properties that are relevant to the Report.
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24.0 OTHER RELEVANT DATA AND INFORMATION AMEC is not aware of any other relevant data or required information for inclusion to
make the report more understandable and not misleading.
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25.0 INTERPRETATION AND CONCLUSIONS Commerce has delineated a significant tantalum- and niobium-rich carbonatite deposit
near the town of Blue River in central eastern British Columbia. They hold a 100%
interest in the project.
Commerce has professionally executed an exploration program. The quantity and
quality of the lithological, geotechnical, and collar location, down-hole survey, and drill-
core sample data collected by Commerce in the exploration and delineation drill
programs meet and exceed industry standard practice.
The Blue River project has very good access and supporting infrastructure. The
deposit is amenable to conventional underground mining methods with estimated
mining recoveries of approximately 60%. It is expected that any future mining
operations will be able to be conducted year-round.
Process testwork has shown tantalum and niobium occurs in ferrocolumbite and
pyrochlore minerals and is amenable to conventional flotation and refining processes.
High-quality technical grade tantalum and niobium products proposed for production at
site are suitable for several markets.
The project has a 10 year mine life and capital costs, at $379 M, could be paid back in
6 years. The project is most sensitive to commodity price. A 20% to 30% increase in
the assumed tantalum price significantly improves the potential profitability of the
project. The tantalum price assumption used in this PEA is based on 4th quarter 2010
information. The tantalum price moved significantly higher through 2011. A higher
tantalum price could not only improve profitability but also increase the mine life.
Additional exploration potential could also provide additional mine life. A two or more
times capital payback is possible.
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 2011.
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 consultation
to date has included meetings with local councils and informal discussions with local
land-owners.
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As the Project is still at an early evaluation stage, Commerce has not initiated requests
from potential buyers for expression of interests from potential buyers of the proposed
Blue River products and has not negotiated any purchase or off-take agreements.
The opportunities to improve the project NPV are:
• Optimization of the mine plan to mine higher-grade zones early in the mine life
providing that a practical mining sequence can be implemented and the overall
recovery of the Mineral Resources is not negatively affected
• Optimization of the mine layout to minimize development costs
• Advanced geotechnical studied to identify and understand ground conditions which
could allow an increase in the size of stopes and production drifts
• Optimization of the supply and pricing of reagents for the refining.
The risk factors are:
• The base case mineral resource estimate is supported by current tantalum and
niobium prices which are higher than historic average prices and may not reflect
long term prices. Market analysts are in general agreement that current political
and market conditions support the probability of sustained higher prices, but this
may not occur.
• Commerce has not initiated requests from potential buyers for expression of
interests from potential buyers of the proposed Blue River products and has not
negotiated any purchase or off-take agreements.
• The proposed refining methods have been used in commercial applications but
have not been demonstrated in test work of Blue River material.
• Testwork to date has not considered factors such as water recycling. A water
treatment plant may be required and may result in increased capital costs.
• The financial analysis is partly based on Inferred Mineral Resources that are
considered too speculative geologically to have the economic considerations
applied to them that would enable them to be categorized as Mineral Reserves,
and there is no certainty that the Preliminary Assessment based on these Mineral
Resources will be realized.
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• 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 a project is a process that can take up to 18 months to complete.
• Traditional Knowledge/Traditional Use (TK/TU) studies, as well as a detailed
archaeological impact assessment will need to be undertaken.
The projects warrant additional work to examine the opportunities and mitigate the
risks. On completion of this work Commerce may consider proceeding with a pre-
feasibility study.
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26.0 RECOMMENDATIONS A two-phase work program is recommended. The first phase comprises a Mineral
Resources update incorporating the results of the 2010 and 2011 drill programs. This
phase of work is estimated at $350,000 to $400,000. The second phase comprises
completion of mining and related studies that can be used to support a pre-feasibility
study. This phase is estimated at $2.6 M.
26.1 Phase 1
The Phase 1 work program will culminate in an update to the Mineral Resource
estimate. The mineral resource estimate update will include the results of the following
work that is currently in progress:
• Incorporation of results of the 2010 and 2011 drill program in terms of updating the
block model with new geological data, and incorporation available of analytical
data
• Confirmation of current interpretation of polyfolding in the deposit from relogging of
selected drill holes
• Modelling of thorium and uranium to confirm the elements occur in low
concentrations in the deposit
• Completion of a drill spacing study which will use a conceptual volume that would
be equivalent to the volume to be mined in the first three years of mine life. The
drill spacing study will examine the uncertainty of metal content in this conceptual
volume as a function of the selected economic cut-off (mineable zone impact)
using “current” and planned drill hole designs.
26.2 Phase 2
The Phase 2 work program will consist of completion of mining and related studies.
Phase 2 can be conducted concurrently with Phase 1 work.
The program should include:
• Re-assay program on selected drill core to remove limitations on classification
based on precision and accuracy concerns
• Geometallurgical, geotechnical and structural studies
• Metallurgical testing, pilot plant design, and studies
Page 196
Commerce Resources Corp.
Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230
29 September 2011 Page 26-2
• Proof-of-process metallurgical program to produce Ta and Nb oxide
• Additional marketing studies and collection of letters of interest to purchase the
technical grade tantalum and niobium products
• Advance the waste and tailings management design
• Environmental biophysical programs, metals uptake studies and foundation
testwork
• Project management, claims, community liaison and office based work
This program will provide additional data such that Commerce will be positioned to
determine the most appropriate approach for a pre-feasibility study.
Page 197
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Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230
29 September 2011 Page 27-1
27.0 REFERENCES Aaquist, B., 1982a: Blue River Carbonatites, British Columbia: Final Report. B.C. Min.
Energy, Mines Petr. Res. Ass. Rept. 10 274, 30 p.
Aaquist, B., 1982b: Assessment Report Blue River Carbonatites, British Columbia:
B.C. Min. Energy Mines Petr. Res. Ass. Rept. 11 130, 15 p.
Aaquist, B., 1982c: Assessment Report on Verity First 1,2,3, Claims, Blue River
British Columbia: B.C. Min. Energy Mines Petr. Res. Ass. Rept. 10 955.
Birkett, T.C. and Simandl, G.J., 1999: Carbonatite-associated Deposits: Magmatic,
Replacement and Residual: in Selected British Columbia Mineral Deposit Profiles,
Volume 3, Industrial Minerals, G.J. Simandl, Z.D. Hora and D.V. Lefebure, Editors,
British Columbia Ministry of Energy and Mines.
Canadian Institute of Mining, Metallurgy and Petroleum (CIM), (2010). CIM Standards
for Mineral Resources and Mineral Reserves, Definitions and Guidelines: Canadian
Institute of Mining, Metallurgy and Petroleum, November 2010,
http://www.cim.org/committees/CIMDefStds_Dec11_05.pdf
Chong, A., and Postolski, T., 2011: NI 43-101 Technical Report, Blue River Ta-Nb
Project, Blue River, British Columbia. 145 p.
Chudy, T., 2008: Mineralogical Report on samples from the Upper Fir Carbonatite,
Blue River, British Columbia. PART A: Petrographic description; PART B: Mineral
Liberation Analysis, December 2008.
Chudy, T., 2010: The Niobium-Tantalum Mineralization In The Upper Fir Carbonatite:
A Summary Of Current Knowledge, 4 p.
Currie, K.L. 1976: The Alkaline Rocks of Canada: Geol. Surv. Can., Bull. 239, 228 p.
Dahrouge, J., 2001a: 2000 Geologic Mapping and Sampling on the Verity Property:
B.C. Min. Energy, Mines Petr. Res. Ass. Rept 26550, 7 p.
Dahrouge, J., 2001b: 2000 Geologic Mapping and Sampling on the Fir Property: B.C.
Min. Energy, Mines Petr. Res. Ass. Rept 26549, 7 p.
Dahrouge, J. and Reeder J., 2001: 2001 Geologic Mapping, Sampling and
Geophysical Surveys on the Mara Property: B.C. Min. Energy, Mines Petr. Res. Ass.
Rept. 26733, 14 p.
Page 198
Commerce Resources Corp.
Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230
29 September 2011 Page 27-2
Dahrouge, J. and Reeder J., 2002: 2001 Geologic Mapping, Sampling and
Geophysical Surveys on the Fir Property: B.C. Min. Energy, Mines Petr. Res. Ass.
Rept. 26781, 9 p.
Davis, C., 2006: 2005 Diamond Drilling and Exploration at the Blue River Property:
B.C. Min. Energy Mines Petr. Res. Ass. Rept, 10 p.
Diegel, S.G., Ghent, E.D., and Simony, P.S., 1989: Metamorphism and Structure of
the Mount Cheadle area, Monashee Mountains: in Current Research, Part E, Geol.
Surv. Can., Paper 89–1E, pp. 95–100.
Ghent, E.D., Simony, P.S., Mitchell, W., Perry, J., Robbins, D. and Wagner, J., 1977:
Structure and Metamorphism in the Southeast Canoe River area, British Columbia: in
Report of Activities, Part C, Geological Survey of Canada, Paper 77–1C, pp. 13–17.
Gervais, F., 2009: Personal Communication to John Gorham.
Gorham, J., 2007: Technical Report on the Upper Fir Ta-Nb Bearing Carbonatite 20
June 2007, 48 p. plus appendices.
Gorham, J., 2008: Report on 2007 Diamond Drilling and Exploration at the Blue River
Property 20 June 2008: 48 p. plus appendices and maps.
Gorham, J., Ulry, B. And Brown, J., 2009: 2008 Diamond Drilling and Exploration at
the Blue River Property, Kamloops Mining Division B.C Ministry of Energy, Mines and
Petroleum Resources, Assessment Report 31174, 79 p (plus appendices and maps)..
Klohn, Crippen Berger, 2009a: Blue River-Upper Fir Deposit Tailings and Waste Rock
Scoping Study: Prepared for Commerce Resources Corp.
Klohn, Crippen Berger, 2009b: Valemount Tailings Storage Options Scoping Study:
Prepared for Commerce Resources Corp.
Kraft, J., 2010: Structural geology of the Upper Fir carbonatite deposit, Blue River,
British Columbia: Confidential report for Dahrouge Geological Consulting Ltd. and
Commerce Resources Corp., 15 p.
Mariano, A.N., 1982: Petrology, Mineralogy and Geochemistry of the Blue River
Carbonatites: Confidential report, 130 p.
Mariano, A.N. 2000: Personal communication to J. Dahrouge.
Page 199
Commerce Resources Corp.
Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230
29 September 2011 Page 27-3
MESH Environmental Inc. 2008: Static Test Characterization Of Rock Units From The
Upper Fir Deposit, Blue River Tantalum-Niobium Project: Confidential report prepared
for Commerce Resources, August 2008.
MESH Environmental Inc. 2009: Static Test Characterization Of Rock Units From The
Upper Fir Deposit, Blue River Tantalum-Niobium Project. Phase 2 Static Test Report:
Confidential report prepared for Commerce Resources, April 2009.
McCrea, J. 2001: Summary Report on the Blue River Carbonatite Property, East-
Central British Columbia: Prepared for Commerce Resources Corp., 34 p.
McCrea, J. 2002: Fir Carbonatite Property, Resource Estimate: Prepared for
Commerce Resources Corp.
Mitchell, R.H., 2010b: Niobium Mineralization in Carbonatites: Paragenesis and
Origins: in International Workshop of Geology of Rare Metals, edited by Simandl, G.J.
and Lefebure, D.V., extended abstracts volume, November 9–10, 2010, Victoria,
Canada British Columbia Geological Survey, Open File 2010-10, pp 13–14.
Nicholas, D., 1992: SME Mining Engineering Handbook, 2nd Edition, Volume 2
Pell, J. 1987: Alkaline Ultrabasic Rocks in British Columbia: Carbonatites, Nepheline
Syenites, Kimberlites and Related Rocks: B.C. Min. Energy, Mines Petr. Res. Open
File 1987-17, 109 p.
Pell, J. 1994: Carbonatites, Nepheline Syenites, Kimberlites and Related Rocks in
British Columbia: B.C. Min. Energy, Mines, Petr. Res., Bulletin 88, 136 p.
Pell, J. and Hoy, T. 1989: Carbonatites in a Continental Margin Environment - the
Canadian Cordillera: in: Carbonatites: Genesis and Evolution (K. Bell, ed.). Unwin
Hyman, London, UK. pp. 200–220.
Raeside, R.P. and Simony, P.S. 1983: Stratigraphy and Deformational History of the
Scripp Nappe, Monashee Mountains, British Columbia: Canadian Journal of Earth
Sciences, 20, pp. 639–650.
Rukhlov, A and Gorham, J. 2007: 2006 Diamond Drilling and Exploration at the Blue
River Property: B.C., Min. Energy, Mines Petr. Res. Ass. Rept. 29024, 383 p. with
appendices.
Simonetti, A. 2008: Personal communication to John Gorham.
Page 200
Commerce Resources Corp.
Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230
29 September 2011 Page 27-4
Simony, P.S., Ghent, E.D., Craw, D, Mitchell, W., and Robbins, D.B. 1980: Structural
and Metamorphic Evolution of the Northeast Flank of the Shuswap Complex, Southern
Canoe River Area, British Columbia: Geological Society of America, Memoir 153, pp.
445-461.
Smith, M. and Dahrouge, J. 2002a: 2001 Diamond Drilling on the Fir Property: B.C.
Min. Energy, Mines Petr. Res. Ass. Rept. 26911, 13 p. with appendices.
Smith, M. and Dahrouge, J. 2003: 2002 Diamond Drilling and Exploration on the Blue
River Property: B.C. Min. Energy, Mines Petr. Res. Ass. Rept. 27131, 20 p. with
appendices.
Smith, T., 2008: Terrain stability study for the development of an environmental
baseline for the Fir Property near Blue River B.C: Confidential report prepared for
Commerce Resources Corp.
Stone, M., and Selway, J., 2010: Independent Technical Report, Blue River Property,
Blue River, British Columbia, Canada. 116 p.
White, G.P.E. 1985: Further Notes on Carbonatites in Central British Columbia: B.C.
Ministry of Energy, Mines and Petroleum Resources, Geological Fieldwork, 1984,
Paper 1985-1, pp. 95-100.
Woolley, A.R. and Kempe, D.R.C. 1989: Carbonatites: Nomenclature, Average
Chemical Compositions, and Element Distribution: in: Carbonatites, Genesis and
Evolution (K. Bell, ed.). Unwin Hyman, London. pp. 1–37.
Page 201
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29 September 2011
Appendix A
List of Claims
Page 202
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British Columbia, Canada
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Project No.: 162230 Appendix A
29 September 2011
Tenure Number Claim Name Ownership
Tenure Type
Tenure Sub-Type
Map Number Issue Date Good To Date Area (ha)
374665 FIR 3 100% Mineral Claim 083D025 2000/feb/16 2019/mar/31 25.000
374670 FIR 8 100% Mineral Claim 083D035 2000/feb/16 2019/mar/31 25.000
380034 MARA 5 100% Mineral Claim 083D045 2000/aug/18 2019/mar/31 25.000
382164 FIR 11 100% Mineral Claim 083D035 2000/oct/28 2019/mar/31 500.000
506262 100% Mineral Claim 083D 2005/feb/08 2019/mar/31 98.623
506263 100% Mineral Claim 083D 2005/feb/08 2019/mar/31 295.727
506264 100% Mineral Claim 083D 2005/feb/08 2019/mar/31 236.800
506265 100% Mineral Claim 083D 2005/feb/08 2019/mar/31 79.069
506267 100% Mineral Claim 083D 2005/feb/08 2019/mar/31 98.817
506270 100% Mineral Claim 083D 2005/feb/08 2019/mar/31 1,225.766
506273 100% Mineral Claim 083D 2005/feb/08 2019/mar/31 1,619.061
506274 100% Mineral Claim 083D 2005/feb/08 2019/mar/31 1,244.470
506387 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 98.638
506391 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 39.459
506392 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 39.460
506393 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 39.447
506395 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 39.452
506397 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 19.728
506399 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 79.084
506401 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 39.542
506402 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 19.768
506403 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 19.766
506405 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 19.765
506407 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 591.699
506408 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 118.380
506423 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 591.653
506425 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 157.847
506426 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 39.439
506427 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 19.717
506428 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 551.916
506429 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 78.924
506430 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 414.436
506431 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 315.765
506433 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 533.482
506445 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 355.921
506450 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 236.589
506459 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 473.370
506461 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 315.725
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29 September 2011
Tenure Number Claim Name Ownership
Tenure Type
Tenure Sub-Type
Map Number Issue Date Good To Date Area (ha)
506464 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 78.950
506466 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 217.118
506468 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 355.271
506473 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 474.810
506475 100% Mineral Claim 083D 2005/feb/09 2019/mar/31 395.675
507391 100% Mineral Claim 083D 2005/feb/17 2019/mar/31 553.698
530510 LIGHTNING 100% Mineral Claim 083D 2006/mar/24 2019/mar/31 494.525
530511 LIGHTNING 2 100% Mineral Claim 083D 2006/mar/24 2019/mar/31 395.741
530513 LIGHTNING 3 100% Mineral Claim 083D 2006/mar/24 2019/mar/31 217.556
537452 PYRAMID 1 100% Mineral Claim 083D 2006/jul/20 2019/mar/31 493.795
537454 PYRAMID 2 100% Mineral Claim 083D 2006/jul/20 2019/mar/31 494.024
537456 PYRAMID 3 100% Mineral Claim 083D 2006/jul/20 2019/mar/31 197.674
550560 MUD 10 100% Mineral Claim 083D 2007/jan/29 2019/mar/31 495.976
550562 MUD 11 100% Mineral Claim 083D 2007/jan/29 2019/mar/31 475.263
550563 MUD 13 100% Mineral Claim 083D 2007/jan/29 2019/mar/31 454.377
550565 MUD 14 100% Mineral Claim 083D 2007/jan/29 2019/mar/31 376.880
550568 MUD15 100% Mineral Claim 083D 2007/jan/29 2019/mar/31 178.524
550603 ARIANE1 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.608
550605 ARIANE2 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.837
550607 ARIANE3 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.618
550608 ARIANE4 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.846
550609 ARIANE5 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.629
550610 ARIANE6 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.856
550612 ARIANE7 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 473.847
550613 ARIANE8 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 473.846
550614 ARIANE9 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.768
550615 ARIANE10 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 474.159
550616 ARIANE11 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.484
550620 ARIANE12 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 494.116
550621 4512124519227380 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 474.593
550622 ARIANE13 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 474.855
550623 ARIANE 14 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 494.343
550624 ARIANE 15 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 494.571
550626 ARIANE 16 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.252
550628 ARIANE17 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 492.997
550629 ARIANE 18 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 473.249
550632 ARIANE 19 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.249
550633 ARIANE 20 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 414.104
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Tenure Number Claim Name Ownership
Tenure Type
Tenure Sub-Type
Map Number Issue Date Good To Date Area (ha)
550636 ARIANE 20 100% Mineral Claim 830 2007/jan/30 2019/mar/31 493.708
550637 ARIANE 21 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 197.646
550638 ARIANE 22 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.938
550639 ARIANE 23 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 494.165
550640 ARIANE 24 100% Mineral Claim 830 2007/jan/30 2019/mar/31 494.391
550641 ARIANE 25 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 395.676
550643 ARIANE 26 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.494
550645 ARIANE 27 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.716
550646 ARIANE 28 100% Mineral Claim 830 2007/jan/30 2019/mar/31 493.945
550647 ARIANE 29 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 494.170
550648 ARIANE 30 1 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 494.394
550649 ARIANE 31 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 395.677
550651 ARIANE 32 100% Mineral Claim 083D 2007/jan/3D 2019/mar/31 493.274
550652 ARIANE 33 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.054
550655 ARIANE 34 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 197.162
550658 ARIANE 35 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 492.968
550661 ARIANE 36 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.180
550662 ARIANE 37 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 197.334
550663 ARIANE 38 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.490
550664 ARIANE 39 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.712
550665 ARIANE 40 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.941
550666 ARIANE 41 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 494.167
550667 ARIANE 42 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 494.391
550668 ARIANE 43 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 395.674
550669 ARIANE 44 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 494.573
550670 ARIANE 45 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 494.351
550671 ARIANE 46 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 494.129
550672 ARIANE 47 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 414.919
550673 ARIANE 48 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 414.800
550675 ARIANE 49 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 414.687
550676 ARIANE 51 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 276.396
550679 ARIANE 52 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 414.499
550681 ARIANE 53 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.269
550683 ARIANE 54 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.051
550685 ARIANE 55 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 197.165
550687 ARIANE 56 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 473.522
550689 ARIANE 57 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 473.277
550691 ARIANE 58 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 492.977
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29 September 2011
Tenure Number Claim Name Ownership
Tenure Type
Tenure Sub-Type
Map Number Issue Date Good To Date Area (ha)
550693 ARIANE 59 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.181
550695 ARIANE 60 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.406
550697 ARIANE 61 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 454.564
550698 ARIANE 62 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 494.077
550700 ARIANE 63 100% Mineral Claim 083D 2007/jan/3D 2019/mar/31 494.066
550701 ARIANE 64 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 197.625
550703 ARIANE 65 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 494.305
550704 ARIANE 66 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 494.299
550706 ARIANE 67 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 494.292
550707 ARIANE 68 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 435.094
550709 ARIANE 69 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 474.767
550711 ARIANE 70 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 474.763
550714 ARIANE 71 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 474.759
550715 ARIANE 72 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 356.068
550718 ARIANE 73 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.392
550721 ARIANE 74 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.379
550726 ARIANE 75 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.166
550728 ARIANE 76 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 493.150
550731 ARIANE 77 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 492.964
550734 ARIANE 78 100% Mineral Claim 083D 2007/jan/30 2019/mar/31 492.950
550886 HELLROAR 100% Mineral Claim 083D 2007/feb/01 2019/mar/31 435.471
550887 HELLROARS 100% Mineral Claim 083D 2007/feb/01 2019/mar/31 475.246
550888 BAT OUT OF HELL 100% Mineral Claim 083D 2007/feb/01 2019/mar/31 475.396
550889 THE MONSTER IS LOOSE 100% Mineral Claim 083D 2007/feb/01 2019/mar/31 475.203
565127 PROSPER 1 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 475.099
565128 PROSPER 2 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 474.985
565129 PROPSER 3 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 494.798
565130 PROSPER 4 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 237.525
565131 PROSPER 5 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 494.798
565132 PROSPER 6 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 494.799
565133 PROSPER 7 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 494.799
565135 PROSPER 8 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 494.798
565136 PROSPER 9 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 494.802
565138 PROSPER 10 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 494.800
565139 PROSPER 11 ' 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 494.798
565140 PROSPER 12 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 475.159
565141 PROSPER 13 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 475.181
565143 PROSPER 14 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 475.182
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Tenure Number Claim Name Ownership
Tenure Type
Tenure Sub-Type
Map Number Issue Date Good To Date Area (ha)
565144 PROSPER 15 100% Mineral Claim 830 2007/aug/28 2019/mar/31 475.184
565145 PROSPER 15 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 475.185
565146 PROSPER 16 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 475.188
565147 PROSPER 17 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 178.195
565148 PROSPER 18 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 336.751
565149 PROSPER 19 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.163
565150 PROSPER 20 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.163
565152 PROSPER 21 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.164
565153 PROSPER 22 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 396.131
565154 PROSPER 23 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 396.131
565156 PROSPER 25 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.166
565157 PROSPER 26 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 396.133
565158 PROSPER 27 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 396.133
565159 PROSPER 28 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 455.547
565160 PROSPER 29 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.400
565161 PROSPER 30 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.390
565162 PROSPER 31 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.391
565163 PROSPER 31 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.391
565164 PROSPER 32 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.392
565165 PROSPER 33 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.393
565166 PROSPER 34 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.393
565167 PROSPER 35 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.394
565168 PROSPER 35 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.395
565169 PROSPER 36 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.394
565170 PROSPER 37 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.568
565171 SHADOWI 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.650
565172 SHADOW 2 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 436.167
565173 SHADOW 3 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.621
565174 SHADOW 4 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.621
565175 SHADOW 5 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.622
565176 SHADOW 6 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.622
565177 SHADOW 7 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.622
565178 SHADOW 8 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.623
565179 SHADOW 8 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 317.188
565180 SHADOW 9 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 475.952
565181 SHADOW 10 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 475.952
565182 SHADOW 11 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.840
565183 SHADOW 12 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.942
Page 207
Commerce Resources Corp.
Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230 Appendix A
29 September 2011
Tenure Number Claim Name Ownership
Tenure Type
Tenure Sub-Type
Map Number Issue Date Good To Date Area (ha)
565184 SHADOW 13 100% Mineral Claim 083D 2007/auq/28 2019/mar/31 495.942
565185 SHADOW 13 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.941
565186 SHADOW 15 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 456.366
565187 FALKOR 1 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 456.085
565188 FALKOR 2 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.763
565189 FALKOR 3 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 396.745
565190 FALKOR 4 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 495.993
565191 FALKOR 5 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 374.644
565192 FALKOR 6 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 496.139
565193 FALKOR 7 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 473.723
565194 FALKOR 8 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 496.445
565195 FALKOR 9 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 496.370
565196 FALKOR 10 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 476.525
565197 FALKOR 11 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 496.401
565198 FALKOR 12 100% Mineral Claim 830 2007/au•/28 2019/mar/31 495.497
565199 MINI 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 39.701
565200 FALKOR 13 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 476.517
565201 FALKOR 14 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 357.344
565202 FALKOR 15 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 496.168
565203 FALKOR 15 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 496.169
565204 FALKOR 16 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 377.098
565205 FALKOR 17 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 476.778
565206 MINI 2 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 39.694
565207 FALKOR 18 100% Mineral Claim 083D 2007/au /28 2019/mar/31 437.056
565208 FALKOR 19 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 496.588
565209 FALKOR 20 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 496.396
565210 FALKOR 21 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 476.746
565211 FALKOR 22 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 476.955
565212 FALKOR 23 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 496.394
565213 FALKOR 24 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 238.488
565214 FALKOR 25 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 496.633
565215 FALKOR 26 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 397.437
565216 FALKOR 27 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 496.627
565217 FALKOR 28 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 476.970
565218 FALKOR 29 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 496.626
565219 FALKOR 30 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 496.863
565220 FALKOR 31 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 496.628
565221 FALKOR 32 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 496.859
Page 208
Commerce Resources Corp.
Blue River Tantalum–Niobium Project
British Columbia, Canada
NI 43-101 Technical Report on Preliminary Economic Assessment
Project No.: 162230 Appendix A
29 September 2011
Tenure Number Claim Name Ownership
Tenure Type
Tenure Sub-Type
Map Number Issue Date Good To Date Area (ha)
565222 FALKOR 33 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 397.116
565223 FALKOR 34 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 496.859
565224 FALKOR 35 100% Mineral Claim 083D 2007/aug/28 2019/mar/31 496.629
588427 WASTED 1 100% Mineral Claim 083D 2008/jul/18 2011/jul/31 494.294
588428 WASTED 2 100% Mineral Claim 083D 2008/jul/18 2011/jul/31 474.330
588429 WASTED 3 100% Mineral Claim 083D 2008/jul/18 2011/jul/31 474.151
588430 WASTED 4 100% Mineral Claim 083D 2008/jul/18 2011/jul/31 473.977
589537 FELIX1 100% Mineral Claim 083D 2008/aug/05 2019/mar/31 496.396
589538 FELIX2 100% Mineral Claim 083D 2008/aug/05 2019/mar/31 496.398
589539 FELIX3 100% Mineral Claim 083D 2008/aug/05 2019/mar/31 377.104
589540 FELIX4 100% Mineral Claim 083D 2008/aug/05 2019/mar/31 496.170
589541 FELIX5 100% Mineral Claim 083D 2008/aug/05 2019/mar/31 495.966
589542 FELIX6 100% Mineral Claim 083D 2008/aug/05 2019/mar/31 436.310
589544 FELIX7 100% Mineral Claim 083D 2008/aug/05 2019/mar/31 376.684
589551 FELIX8 100% Mineral Claim 083D 2008/aug/05 2019/mar/31 475.820
589554 FELIX9 100% Mineral Claim 083D 2008/aug/05 2019/mar/31 396.317
589556 FELIX10 100% Mineral Claim 083D 2008/aug/05 2019/mar/31 495.472
589557 FELIX11 100% Mineral Claim 083D 2008/aug/05 2019/mar/31 415.973
589559 FELIX12 100% Mineral Claim 083D 2008/aug/05 2019/mar/31 495.167
589563 FELIX13 100% Mineral Claim 083D 2008/aug/05 2019/mar/31 356.679
798362 JOIN 100% Mineral Claim 083D 2010/jun/25 2011/jun/25 177.980
Note: Commerce has informed AMEC that the “Wasted” and “Join” claims (588427 to 588430 and 798362) have been renewed to March 31, 2021 and are in good standing. Email titled: “Re: Blue River 162230: Claims status request”; dated 10/28/2011 5:11 PM; from Dave Hodge, Commerce President and Director; to Albert Chong, AMEC.