Commerce Resources Corp V.CCE

Mike Kachanovsky on Commerce‘ progress

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Dez 03.

I finally got a chance to chat with the prez of CCE this morning for an update. A lot of points were discussed so I will break it down by my notes:

CCE used some of the proceeds from the last PP to pay for assay results on drill core that was pulled in 2016. So this was not new drilling although the results were not previously known. The numbers were exceptional, including the highest grade fluorspar content yet from this deposit. There was some positive chatter with regards to fluorspar from JV partner Saville Resources, already contributing to a bump in share price for CCE to start last week and so they chose to put out the assays immediately. The timing was less than ideal because it hit the market when some investors were not watching, but they were trying to build momentum.

Chris also advised me that he was in touch with many long term shareholders, some of whom have held CCE since it was a dividend from Zimtu Capital prior to the IPO for CCE. More than $1 million in funding from the recent PP came from these people who opted to add to their CCE holdings even after all this time. That to me is very encouraging.

The selling in November was likely unrelated to cheap paper issued in the placement. I had originally believed that some people getting paid in shares for debt settlement may have been shorting stock to lock in gains and then provide the PP shares for settlement of the shorts when it became free-trading. This is unlikely because Chris advised me that the paper was mostly issued to insiders that would have to disclose their transactions. More likely, he believes it was tax-loss selling and even though the drop in share price during this time was significant, there was not that much paper sold off to create the downside.

Chris was in Quebec last month to meet with provincial government officials and some management people involved with other mining companies. There is solid support to move Ashram forward, and it appears that high level discussions with American officials are also gaining momentum to present Ashram as a viable domestic alternative for REEs. The project is considered 'front & Center' for a development candidate.

Late November was a REE conference in Malaysia that he also attended and met with some prospective partners interested in sample material. Chris has a list of candidates looking for samples, including some very high level names. CCE has already presented a concentrate sample above 50% REE from processing of Ashram material, but a full pilot plant testing program would confirm that once and for all in terms of economic viability. Perhaps the funding for this could come from an offtake agreement for fluorspar, as the current development plan would yield perhaps $50 million per year in fluorspar by-product, for many years of steady output. If CCE was able to get support to lock up just a small part of this offtake with a payment that could provide the funding to get a full test program done and maybe even a PFS.

I bought a bit more CCE in the last placement. I have held a small core position for many years. CCE runs a paid ad on this website. It has been a long haul but I know these guys are working hard to get Ashram into production and they get a bit closer every year. I am staying on board.

cheers!
mike

Nov 29.

I have great respect for the management of CCE, but why put out great news on the friday of a holiday week? This makes no sense! It will probably go unnoticed by most of the market participants, but I found this batch to be very positive. Yes, we have become accustomed to very high grade REE results. But what is even more appealing this time is that the best intervals came from the southern periphery of the established deposit area. There is already a 'hotspot' defined in the main zone of the deposit, with concentric rings of lower grade resource extending outward. Now this high grade section appears that may also become another near-surface hotspot. Ashram remains open in to depth and the deposit could run for decades just on what has already been established near surface. But an additional high grade section at surface could open a much larger higher grade envelope within the lowest cost surface section of a potential open pit.

CCE now has the money in the bank to advance the story instead of just hanging around and waiting for something good to happen with the metals. It will take a positive pilot plant confirmation to move the market cap higher, IMO. Thereafter, a potential development partner can get interested. Management has already lined up quite a few viable partners that are waiting for more data before committing to support this project. A higher market price will be helpful to get existing warrants exercised and keep the treasury flush. But it is largely up to the metallurgists now to get this project on the track for development.

cheers!
mike

Nov 08.

I know management is in Malaysia this week for a REE conference and I would assume they are making contacts there that have a potential for positive action going forward. I doubt the selling right now is due to anything fundamental, but more likely the lead agents in the recently closed PP were paid commission of placement units or broker warrants, and with the deal now closed those parasites are locking in their bonus money by shorting stock. They can just tender the broker warrants in four months to cover the short in a risk-free trade. That is just my guess here but perhaps I am wrong.

The bottom line for me is that for the first time in several years CCE is funded to carry out its pilot plant testing. This is a big deal. They already have sample testing to suggest very high recovery rates for the critical elements in the deposit. Now with a pilot plant, they can set up a processing unit along the lines of the recovery plant design and run a larger volume of test material through the exact circuit set up. This will demonstrate the effectiveness of the recovery process and validate the higher recovery rates that the company has presented. Several industrial consumers have expressed interest in this project but they will not commit funding until a confirmation of the recovery data is achieved through the pilot plant. Thereafter, some form of project funding may be at hand to enable a BFS to be completed, and the last hurdle to get a green light for development.

I bought some of this latest round of the PP. I still hold a core position in my PF for several years from the last 2 offerings. CCE runs a paid ad on this website. I do expect that at some point the long term approach to get this project developed will come to fruition.

cheers!
mike

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