Vancouver, British Columbia, May 25, 2012 - Commerce Resources, (TSXV:CCE) (FSE:D7H) (OTCQX:CMRZF) reports robust economics from a NI 43-101 compliant Preliminary Economic Assessment for the Ashram Rare Earth Element Deposit in Canada. This deposit is located at the Eldor Property within the Labrador Trough in northeastern Quebec.
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The independent report, prepared by consultants SGS Canada Inc. - Geostat of Montreal, indicates that the deposit can be developed economically as an open-pit mine and recommends future work applicable to the pre-feasibility and feasibility phases of economic evaluation.
Key findings of the Preliminary Economic Report included:
- a strongly positive cash flow from a 4,000 tonne per day open-pit operation, with a 25-year mine life
- a pre-tax and pre-finance Net Present Value of $2.32 billion at a 10% discount rate.
- a pre-tax Internal Rate of Return of 44%
- a pre-tax payback period of 2.25 years
- an estimated capital cost of $763 million, including a 25% contingency
- an estimated operating cost of $95.20 per tonne treated, or approximately $7.91 per kilogram of rare earth oxide produced
- a greater than 175 years worth of mineable mineralized material, including both open-pit and underground, using a Cut-off Grade of 1.25% true rare earth oxides
"The PEA displays robust economics for the Ashram Deposit, and recommends next steps for the economic evaluation of this very large and highly strategic resource. The high NPV derives partly from the value of the Ashram material in that it is enriched with all five of the critical REE's namely neodymium, europium, dysprosium, terbium and yttrium" states David Hodge, President and CEO of Commerce Resources Corp. "Management believes that significant benefits will be further realized during the next phase of metallurgy based on the testwork completed to date, given the deposit's simple mineralogy and history of successful commercial processing of Ashram's three host minerals. We look forward to initiating the pre-feasibility study to demonstrate this."
The company plans to upgrade the mineralized material on site to a minimum 10% total rare earth oxide mineral concentrate, using conventional flotation techniques, resulting in a mass reduction of 87.3%. The material will be subjected to sulphuric acid cracking on site to produce a mixed rare earth carbonate product.
The resulting product will be trucked north 185 kilometres on an all-weather road that Commerce will construct, to a storage and docking facility at Mackay's Island at Ungava Bay. The product will be stored and shipped during the 3 or 4 months of the year that shipping lanes are operational.
The rare earth mineralized footprint at Ashram extends approximately 700 metres along strike, over 500 metres across, and to depths exceeding 600 metres. Mineralization remains open to the north, south, at depth, and is not fully constrained to the west and east.
The shares currently trade at $0.27, and with 148 million shares outstanding, the company is capitalized at $40 million.
For a more information on Commerce Resources, including a full copy of the current news release, please visit their website at www.commerceresources.com (http://www.commerceresources.com/), phone 866-484-2700 or email email@example.com (mailto:firstname.lastname@example.org).
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