Commerce Resources Corp V.CCE

COMPANY TO WATCH: COMMERCE RESOURCES - CCE-TSX.V

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Commerce Resources Corp.:  A World-Class Deposit of Tantalum & Niobium

Prepared by DYNAMIC STOCK MARKET ANALYSIS
   
    One of the most fascinating and rapidly growing segments of the mining industry is the rapid expansion in the development of markets for the specialty minerals including cobalt, iridium, titanium, gallium, tantalum and niobium. As science and industry have advanced into new areas, the markets for these metals have been expanding rapidly.

    A Canadian junior mining company, Commerce Resources Corp., is a leading participant in the search for two of these metals. Through the acquisition and exploration of their Blue River Project, they're positioning themselves to take advantage of the escalating growth in usage and demand for tantalum and niobium.

HISTORY

    Vancouver-based Commerce Resources Corp. was incorporated in 2000 and immediately focused their attention on the 100% owned Fir and Verity carbonatite properties located in northeastern British Columbia. During the past five years they have concentrated on raising capital for the project's exploration and development.     
    The first discovery of carbonatite bodies in the area occurred in 1949 by geologist Oliver French, and Anschutz Mining Ltd. performed the first serious efforts at development during the 1980s when nearly 30,000 meters of diamond drilling was undertaken at the Verity, Fir and other nearby properties. Mapping and sampling were completed by 1984, but onerous property payments and low market demand didn't justify further development. The properties lay dormant until 1999 when Commerce Resource's VP Exploration, geologist Jody Dahrouge of Edmonton, initiated a new program of exploration.
    Ongoing exploration and development programs have included diamond drilling, ground geophysical surveys, metallurgical studies, a mini bulk sample and the updating of resource estimates; all activities focused on a goal of creating a producing mine.

PROPERTIES

    Commerce Resource's tantalum/niobium prospects are located in the Rocky Mountain Trench, just west of the highest peaks in the Canadian Rockies and between the small towns of Blue River and Valemount. Both the Fir and nearby Verity properties contain carbonatite bodies that host associated rare earth elements, phosphates, vermiculites and uranium (among others), in addition to tantalum and niobium.
    A resource estimate was developed showing an indicated resource of approximately 5.65 million tonnes grading 203 g/t Ta2O5 at Fir (Verzosa, 2003) and an inferred resource at Verity of about 3.06 million tonnes grading 196 g/t Ta2O5
(McCrea, 2001). Commerce recently announced the completion of an eight-hole drilling program that revealed carbonatite bodies having widths ranging from eight to twenty meters at Upper Fir, and two to nine meters at Bone Creek. While assay results from that program were pending in late 2005, previous samples at the Upper Fir returned grades ranging from 135 to 266 g/t Ta2O5 and 2,260 to 6,738 g/t Nb2O5. That earlier sampling also showed significant uranium values at Bone Creek. Both deposits are open for expansion with additional drilling.
    The Verity deposit is close to the surface making it amenable to open pit mining, while drilling at Fir shows that its tantalum and niobium bearing ore is found at depths near or below one hundred meters indicating underground mining operations would likely be required. Nonetheless, both deposits are easily accessible, with excellent road, rail and power infrastructure already present.
    Another strong quality of the Commerce deposits is the low environmental impact of mine production. In the ecologically dramatic area of the Rocky Mountains, the required footprint is small, and primarily onsite milling would be through a simple, clean gravity concentrate. Refinement of the concentrate would take place in a commercial industrial setting.
    Commerce is commissioning a pre-
feasibility study for the project — it's an important development for the company as it will provide an estimated economic return from a potential mining operation, and be the blueprint for going forward.
    The company also recently acquired the Mud Lake Property and its carbonatite showing about 15 miles to the south of Fir, and have a gold exploration property in its portfolio — the Au Project located near Merritt, British Columbia.

WHY TANTALUM AND NIOBIUM?

    Tantalum was discovered about 200 years ago and it was soon learned that the metal had several unique characteristics. It has an exceedingly high melting point of 2,997 degrees centigrade; is highly resistant to corrosion; alloys well with other metals; is superconductive for electricity; and has an excellent capacity to store and release an electric charge. These attributes make tantalum ideal for use in the capacitors found in computers, mobile phones, personal organizers and video cameras. It is also used as an alloy in jet engines where operation at high temperatures is required. Tantalum powder is the triggering agent for air bag release mechanisms, and is used to provide x-rays with a brighter image while reducing the radiation dosage to the patient.
    According to the Tantalum & Niobium International Study Center, demand rose from approximately three million pounds per year in 1993 to around five million pounds per year now.        
    Niobium has similar attributes to tantalum, including corrosion resistance, high temperature applications, increased light transmittance, and excellent suitability in alloy applications. Recent market estimates place the price for Tantalum, depending on the form, up to $150 US per pound. Niobium, in more plentiful supply, in late 2004 traded near $6-8 US per pound.

SPECIAL FACTOR

    At present, most tantalum and niobium comes from mines developed by Sons of Gwalia of Australia. Other known ore bodies are in places like Rwanda, Ethiopia, Egypt and Saudi Arabia. Major consumers of tantalum prefer supply stability and wouldn't regard such geographic areas as such highly reliable – they'd rather see their future requirements met by sources in more stable jurisdictions, such as Canada.

MANAGEMENT

David Hodge, President, contributes to Commerce Resources many years of management experience with publicly traded companies. He has been a director of mineral exploration companies since 1996, and has stewarded the Blue River Project from its acquisition in 2000 through to current development activities.

Jody Dahrouge, Director and VP Exploration, is a graduate of the University of Alberta with a Bachelors Degree in Science (Geology) and a certificate in Computer Science. Mr. Dahrouge has successfully operated Dahrouge Geological Consulting Ltd. since 1998. He provides the company expertise in the acquisition and management of resource projects.

Shaun Ledding, VP Corporate Compliance, was appointed to the Board of Directors of Commerce Resources in 2002. He continues to be an active member of the management team in the areas of corporate finance, regulatory compliance and marketing.

DYNAMIC CONCLUSION

    Commerce Resources has positioned itself to become an important player in the growing tantalum and niobium world markets. The facts that Commerce has defined resources, its holdings are located in a politically stable part of the world, and the properties have excellent existing infrastructure, all contribute to the potential for securing long-term supply contracts for their products.
    The upcoming pre-feasibility study will provide important information about the potential of the Blue River deposits, and generate attention towards this little-
known project.
FOR FURTHER INFORMATION
Chris Grove, Shareholder Services
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www.commerceresources.com