May 25, 2007
Commerce Resources Corp. (“Commerce”) is pleased to announce the acquisition by staking and a purchase agreement with Virginia Mines Inc. (TSX: VGQ) of a 100% interest in the Eldor Carbonatite Complex, located in the Labrador Trough area of Quebec, Canada. Limited historic exploration of the Eldor Carbonatite has shown it to have an elliptical shape with dimensions of 7.75 km by 2.5 km, and with localized, high concentrations of niobium and tantalum. Several grab and channel samples from the carbonatite have ranged from >1% to 11.4% Nb2O5, and from >0.01% to 0.21% Ta2O5.
The Eldor Property is at a relatively early stage of exploration with historic exploration results indicating considerable potential for carbonatite-hosted niobium and tantalum mineralization. Commerce is planning a comprehensive exploration program during the summer of 2007 to confirm the historic mineralization at the property. The Eldor Carbonatite is similar in size to, or slightly larger than, the present and past producing Canadian carbonatite complexes Oka, and St. Honore, both located in Quebec. It is also comparable in size to the Araxa Carbonatite Complex in Brazil, which is about 4½ km in diameter.
The primary mineral from which niobium is obtained is known as pyrochlore, found occurring in carbonatites globally. The world’s largest deposit located at Araxa, Brazil, is operated by CBMM, and averages between 2.5% and 3.0% Nb205. Two other currently operating pyrochlore mines are the Anglo American Brasil Mineracao (Brazil), grading at 1.34% niobium oxide and the Iamgold-owned Niobec (Quebec) at their St. Honore deposit, grading at 0.67% niobium and mined underground.
Dave Hodge President and CEO states, “We are pleased with the unanimous decision of our board to focus on the metals tantalum and niobium. Commerce’s focus has positioned the company with a number of high-quality projects in a market with a robust demand for its target minerals. The Eldor Carbonatite is a significant addition to Commerce’s project base; in conjunction, as now along with the Blue River Carbonatite, we have the potential of producing tantalum oxide, niobium oxide and ferro-niobium metals.”
Discovery and Historical Exploration
The Eldor Property was discovered in the early 1980’s by Eldor Resources Limited (“Eldor”) during regional exploration fueled by the uranium boom in nearby Kitts-Michelin, Labrador. Eldor’s work included lake sediment sampling and airborne radiometrics surveys followed by prospecting, mapping and rock chip sampling.
The Eldor Property came to the attention of Unocal Canada Ltd. (“Unocal”) in 1983 who obtained and reanalyzed Eldor’s rock samples to confirm the up to 4.1% niobium and 0.15% tantalum values reported. The samples were also studied petrographically, and identified as sovites (calcitic carbonatites) and beforsites (dolomitic carbonatites) containing pyrochlore and columbite.
In 1985-86, Unocal conducted a brief field program over the same area to further evaluate the historical showings, and to determine the potential of the carbonatite to host a significant niobium deposit. Exploration consisted of rock chip sampling, prospecting, and soil and radiometric surveys, followed by mineralogical and petrological investigations. Thirty rock samples and sixty-three soil samples were taken for analysis.
In 2001, Virginia Mines Inc. (“Virginia Mines”) carried out four days of reconnaissance geology and rock sampling.
The Eldor Carbonatite, from work completed by Eldor, Unocal, and Virginia Mines Inc., has niobium and tantalum mineralization that ranges from 1.15% Nb205 and 0.046% Ta205 up to 11.4% Nb205 and 0.21%Ta205.
Historic exploration by previous owners defined an area of niobium and tantalum mineralization 1.5km x 0.5km in extent. Within this area of generally poor bedrock exposure, outcropping carbonatite, altered country rocks, and glacial erratic boulders contain anomalous to very high grades of Nb and Ta.
Exploration by Unocal identified significant grades of niobium mineralization in two areas; the Southeast and Northwest Zones. Channel samples cut by diamond saw from trenches in the Southeast Zone returned values ranging from 0.20% - 1.15% Nb2O5 over intervals ranging from 0.6m to 1.6m. The best interval averaged 1.15% Nb2O5 and 460ppm Ta2O5 over 1.2m. Significant niobium mineralization is confined to the carbonatite.
In the Northwest Zone, three small trenches exposed magnetic biotite-rich rock (“glimmerite”) within an area of little outcrop. A 1.3m long chip sample collected by Unocal from one pit returned values of 5.4% Nb2O5 and 0.11% Ta2O5. A representative chip sample over 2m2 from another pit assayed 2.3% Nb2O5 and 0.18% Ta2O5.
Niobium mineralization associated with anomalous radioactivity was sampled in five other locations in the Northwest Zone. The best assay was obtained from biotite-rich rock fragments in overburden located 360m north of the Northwest trenches. This assayed 11.4% Nb2O5, and 0.18% Ta2O3.
Approximately 500m to the north of the Northwest Zone, grab samples collected by Virginia and Eldor from two areas of carbonatite boulders provided values of up to 3.2% and 7.7% Nb2O5, and 2,110 ppm and 1,890 ppm Ta2O5 respectively.
“Based on my observations and the work of Wayne Wright, we can conclude that there is a high potential for a very favorable type of pyrochlore mineralization in the Eldor Complex. This pyrochlore is rich in both tantalum and niobium and is coarse-grained, with a size of grain that is large and similar to the pyrochlore found at the Blue River carbonatite complex. Additionally, at Eldor, this pyrochlore is hosted in a glimmerite (mica-rich) rock and is therefore easily liberated during mineral processing. The Eldor clearly merits a concerted exploration effort to further enhance this high potential.” states Anthony N. Mariano, PhD, Mineralogy and Economic Geology, Boston University.
Alex Knox, P.Geol., a qualified person as defined by National Instrument 43-101, supervised the preparation of the technical information in this release.
Niobium Markets and Pricing
Niobium, at its current trading price — in the area of $58.44 USD per kilo ($26.55 per pound) up from $16.00 USD per kilo 6 months ago — is seen as an economic alternative to vanadium, which in late 2006 went to over $100.00 USD per kilo. Niobium and vanadium both share the ability to triple the tensile strength of steel, increasing with a 2% alloy the PSI to 120,000.
The niobium market is growing at the rate of 5 to 8% per year, largely as the result in the demand for High Strength Low Alloy (HSLA) steel which is used in vehicles, bridges and pipelines. Niobium is also used in high technology applications such as superconductors, capacitors, optics and medical technologies.
Purchase Agreement with Virginia Mines Inc.
Commerce has agreed with Virginia Mines Inc. to purchase 8 mineral claims covering a portion of the Eldor Carbonatite. The claims are adjacent to the approximately 88 claims staked previously by Commerce. The Virginia acquisition adds key claims to the Commerce’s holdings.
In consideration of the purchase, the Commerce will issue to Virginia 710,000 common shares, of which 350,000 may not be traded until at least May 1, 2008, and will grant 290,000 share purchase warrants. The warrants are exercisable for 2 years at a price of $1.12. Virginia will also be entitled to a 1% net smelter royalty. In addition, five of the 8 claims acquired are subject to an underlying 5% net profit royalty, which can be bought out for $500,000. The acquisition is subject to Commerce receiving regulatory approval for the transaction.
On Behalf of the Board of Directors
COMMERCE RESOURCES CORP.