THE FUTURE OF TANTALUM FEBRUARY 2009

Transcription

1 THE FUTURE OF TANTALUM FEBRUARY 2009

2 FORWARD LOOKING STATEMENTS Except for historical information contained herein, this presentation may contain forward looking statements including but not limited to comments regarding predictions and projections. Forward looking statements address future events and conditions and therefore involve inherit risks and uncertainties. Although Commerce Resources believes that such expectations are reasonable, there can be no assurance that such expectations will prove to be correct, and therefore actual results may differ materially from those currently anticipated in such statements. You are cautioned not to place undue reliance on any such forward looking statements, whether made in this presentation or in any question and answer period related to this presentation West Pender Street Vancouver BC V6C 1H Page: 02

3 CORPORATE VISION Commerce Resources Corp. aims to become a leading low-cost producer of tantalum and niobium and a stable source of supply for industry. Page: 03

4 CORPORATE HIGHLIGHTS Focus: Become the world s next major supplier of tantalum and niobium Strong market fundamentals; tantalum supply strained Blue River Project, BC: Clear path to feasibility Eldor Property, Quebec: Large exploration project Financially strong Focused management; industry expertise Page: 04

5 SHARE STRUCTURE AND MARKET INFORMATION Symbols: TSX-V: CCE FSE: D7H Shares Outstanding: 111.5M Options: 6.7M Warrants: 28.6M Fully Diluted: 146.8M Recent Price: $ Week Range: $0.15-$1.10 Market Cap: $22 Million Well financed with over $20 million cash and equivalents *Data as at February 23rd, 2009 Page: 05

6 TANTALUM Tantalum plays an important role in the high-tech world and in our everyday life Rare metal whose primary use is in the manufacture of electronic capacitors which are found in products such as: - Cell phones - Personal computers - Global position systems - Airbags - Other electronic equipment Crucial ingredient; stores and releases charge instantaneously Other major applications: - Super alloys jet engines, turbines, nuclear reactors, power plants, cutting tools - Corrosion resistant chemical equipment - Medical science Page: 06

7 TANTALUM PRICE Pricing is normally established by negotiation between buyer and seller Long-term contracts not significantly affected by current market volatility Current Price: - Contained in a concentrate: US$60 / contained lb - Tantalum Oxide or K2TaF7: US$140 / lb TANTALUM MARKET DEMAND CAGR = 5% Current annual demand growth rate: - ~ 5% (or 300,000+ lbs Ta2O5 year) Source: Tantalum-Niobium International Study Center (TIC) Page: 07

8 TANTALUM: SUPPLY STRAIN Tantalum Primary Production Mlbs Ta2O5 Canada Asia Other 4% 4% China 8% Brazil 14% Russia 3% Australia (Tallson) 30% Global primary mine supply has fallen behind demand: - Difference between demand (~ 6 M lbs) and primary supply (~ 4.3 M lbs) has been filled by scrap, inventories, and tin slags Long term: Market requires additional production from new projects Africa 37% Source: Talison Minerals Page: 08

9 TANTALUM: SUPPLY STRAIN Three notable developments in the supply chain have exacerbated the supply problem: Elimination of a Major Supplier: In November 2008, in a surprise move, Talison Minerals announced that it would be suspending mining at its Wodgina operation in Australia. Wodgina was the world s largest tantalum producer supplying 30% of the world s tantalum. New long-term price contract negotiations were in progress. Drained Inventories: The United States Defense Logistics Agency, which from was the second largest supplier of ore, has exhausted its captive supply and stopped sales. Restrictions on Product from Conflict Regions: The Kimberly Process has been expanded to include sanctions on the production of tantalum or coltan from conflict regions including Central African countries DRC, Rwanda, and Uganda. Result: Withdrawal of a large portion of supply from an already tight market Page: 09

10 INDUSTRY VIEW Processors and end users are eager to secure alternative sources of stable supply Even in a depressed market, the suspension of 30% of the world production of tantalum ore is almost certain to have a significant impact on the electronics industry, said Coady The spot price for tantalum will inevitably rise.. Edmund Coady: Sales director of component distributor Charcroft Electronics Ltd. January 22nd, 2009 Source: Electronics Weekly Page: 10

11 BLUE RIVER PROPERTY, BC Focus: Development of Upper Fir deposit to feasibility 1,000 sq km property located 10 kilometers north of Blue River 100% Owned; no royalties Road accessible Excellent intrastructure: - Railway, airports, highway - Power grid and water Carbonatite host rock; natural geologic advantage Three separate deposits defined: Upper Fir, Fir, Verity. Page: 11

12 DEPOSIT AND MINERALIZED ZONES Defined Resources Upper Fir Carbonatite Indicated resource of M tonnes: g/t Ta 2 O g/t Nb 2 O 5 Inferred resource of M tonnes: g/t Ta 2 O g/t Nb 2 O 5 Page: 12

13 POSITIONING STEPS TOWARDS DEVELOPMENT 2008 completed: - Additional deposit definition drilling: 118 new drill holes; assays pending - Commercial metallurgical bulk sample: 2,000 tonnes collected; to be tested - Conceptual tailings and waste management plan - Environmental baseline work (ongoing since 2006) - Preliminary product marketing studies Results: Will enable Commerce to commence and complete an updated resource and scoping study for the Upper Fir Sept. 15, 2008 Chris Grove, Corporate Communications with the Honourable Gordon Hogg Minister of State for Mining and Honourable Kevin Krueger Page: 13

14 POSITIONING MINERAL EXPLORATION CYCLE $ Discovery Speculation 1-2 Years Development Investment Analysis 2-3 Years Production Revaluation 2-3 Years Page: 14

15 MANAGEMENT OUR INDUSTRY ADVANTAGE Adding Dr. Axel Hoppe as the new Chairman of the board has sent a clear signal to the market and industry: - Internationally acknowledged leader in the tantalum niobium field - Formerly Head of Technical Services and Engineering Group for H.C. Starck; the world s largest consumer of tantalum - President of the Tantalum and Niobium International Study Center for the years 2002 and 2007 Page: 15

16 14) BLUE RIVER - VALUE IN THE NEW TANTALUM MARKET BLUE RIVER - VALUE IN THE NEW TANTALUM MARKET THE INDUSTRY VALUES Long Term Supply Low Political Risk Reliable Partners Diversification from Single Supplier and Region COMMERCE RESOURCES Potential for 20+ Year Operation British Columbia, Canada Industry Expertise, Solid Track Record Premier Development Project in North America Page: 16

17 ELDOR PROJECT Focus: Exploration and discovery 100% Owned; acquired from Virginia Mines Inc. 115 km south of the community of Kuujjuaq, Quebec Propective for carbonatite-hosted tantalum and niobium mineralization 26 holes (5,400m) completed; assays pending Page: 17

18 CLOSING THOUGHTS UNIQUE OPPORTUNITY Focus: Become the world s next major supplier of tantalum and niobium Tantalum market not significantly affected by present market volatility: - Tantalum is priced in long-term contracts - Supply strained - Fundamentals strong Large Exploration Target: Eldor Project Financially strong Current Market Cap ~ $20M Page: 18

19 MAKE CONTACT David Hodge President and Director West Pender Street Vancouver, BC, V6C 1H2 Canada Page: 19