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THE FUTURE OF TANTALUM IN THE GLOBAL MARKET
SEPTEMBER 2010 | TSX.V:CCE | FSE:D7H
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.
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1450 – 789 West Pender StreetVancouver BC V6C 1H2
1.866.484.2700
VISION:To become a large and profitable low-cost producer of tantalum and niobium for the global market.
MISSION:To provide a reliable supply of tantalumfor all customers.
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Capacitor grade tantalumpowder (US$350 – 400 per lb)
CORPORATE HIGHLIGHTS:
• Uniqueinvestment:Opportunityto supply global tantalum market needs• Tantalummarketindeficit• BlueRiverProject,BC: Moving through development• EldorProperty,Quebec: New Rare Earth Element Discovery• CarboProperty,BC: Contiguous with rare earth discovery• Financiallystrong• Focusedmanagement; Global industry expertise
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Geologist Sasha Blinova holdspyrochlore, the principal host mineral for tantalum andniobium.
SHARE STRUCTURE AND MARKET INFORMATION
Symbols: TSX-V(Canada):CCE FSE(Germany):D7H
Shares Outstanding: 130.5 MOptions: 7.9 MWarrants: 36.2 MBroker Warrants: 0.9 M
Fully Diluted: 175.7 M
Recent Price: $0.5052-Week Range: $0.18 – $0.82Market Cap: $65 Million
Well financed with over $14 millionin cash and investments
*Data as at September 24, 2010
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Previous Financings:
2009: $7.2M at $0.40
2007: $32.7M at $1.20
2006: $3.9M at $0.30
2005: $1.3M at $0.12
TANTALUM
Rare: Specialtymetal;Highestcapacitance(ability to hold and release electricity) known to science
Essential:Forelectronicdevices: Forspecialtyapplications:
• Cellularphones • Jetengines• Computers • Medical(Trabecularmetalimplants)• Digitalaudio/videoplayers • Carbidecuttingtools• Airbags • Corrosion/heatresistantmaterials• GPS (Nuclearpowerplants)
As technology for electronic devicesprogresses, need for tantalum rises.
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GROWING DEMAND FROMNEW TECHNOLOGIES
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• HighEfficiencyLightBulbs
• ElectricalAppliances
• IndustrialandTransport
Control Systems
• TicketingMachines,
ATMs, and Systems
• AntennaforRadar
• Implants–Pacemakers,
Defibrillators
• AutomotiveApplications
• OilDrillingApplications
•LithiumIonBatteries
•WindTurbines
TANTALUM – PRICE
•Pricingnormallyestablishedbylong-term contracts between miners and processors
•RecentTransactions:
- Ningxia Non Ferrous Metals (China) purchases 91 metric tonnes of tantalum concentrate fromCIFluminenseata30%premiumto existing tantalum price -Containedinconcentrate:US$80/lb -Tantalumoxide(K2TaF7): US$140/lb–US$200/lb
•Metals traders predict high tantalum prices for the next 5 years
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7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.01990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
CAGR = 5%
TANTALUM MARKET DEMAND
Source:Tantalum-NiobiumInternationalStudyCenter(TIC)www.tanb.org
TANTALUM: SUPPLY STRAIN
•Globalprimarysupplyhasfallenbehind demand:
- Difference between demand (~ 6 M lbs) and primary supply (~ 4.3 M lbs) filled by scrap, inventories, and tin slags
•Longterm:Marketrequiresadditionalproduction from new projects
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Russia3%
AsiaOther4%
Canada(Tanco)
4%
Rest of Africa24%
Australia (Talison)
30%
Brazil14%
China8%
Mozambique(Noventa)
13%
Tantalum Primary Production 2008- 4.3Mlbs Ta2O5
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TANTALUM: OPPORTUNITY
Threedevelopmentsinsupplychainmakesupplyproblemcritical:
Leaders No Longer Supplying: Within the last 22 months, Talison Tantalum (Australia) and Tanco(Canada)haveceasedproduction.Suppliersofatleast45%oftheworldmarket.
Drained Inventories: TheUnitedStatesDefenseLogisticsAgency,secondlargestsupplieroftantalum 2001-2007 (500,000+ lb per yr.), exhausted its captive supply and stopped sales
Restrictions on Product from Conflict Regions: US Dodd-Frank Wall Street Reform and ConsumerProtectionActwaspassedonJuly15,2010.Thisincludedaconflictmineralsclause which requires all US-listed companies to file with the SEC an annual report stating that they,ortheirsuppliers,donotsourcetantalumfromconflictareas.
Result: Withdrawal of large portion of supply from already tight market
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BLUE RIVER PROPERTY, BC
•Focus:MovingtheUpperFirdepositthroughdevelopment
• 1,000sqkmpropertylocated10kilometersnorth of Blue River
• 100%Owned;Noroyalties
• Excellentinfrastructure: - Road accessible - Railway, airport, major paved highway - Power grid - Water supply
• Geologically-uniquedeposit;Carbonatitehostrock: - Expecting higher recovery rates than the industry standard
• Threeseparate43-101compliantdepositsdefined: Upper Fir, Fir, Verity
DEVELOPMENT FOCUS: UPPER FIR DEPOSIT
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Defined Resources to end of 2008
Based upon drilling programs:2005-06: 21holes2007: 18holes2008: 114holesTotal: 153holes
ResourceCategory
Tonnes(Mt)
Ta2O5 Grade(g/t)
Nb2O5 Grade(g/t)
Contained Ta2O5(pounds)
Contained Nb2O5(pounds)
Indicated 7.38 217 1,202 3,533,000 19,568,000
Inferred 16.49 213 1,222 7,746,000 44,436,000
* (Stone & Selway, 2010) ** 175 ppm cut-off
POSITIONING –STEPS TOWARDS DEVELOPMENT OF UPPER FIR
UpcomingMilestones:
• Filing of Technical Report for updated 43-101 resource estimate including 22 holes drilled in 2009
• Preliminary Economic Assessment (PEA) by AMEC
• Additionaldrilling:13,000metes completed in 2010
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MANAGEMENT – OUR INDUSTRY ADVANTAGE
• AddingDr.AxelHoppeastheChairmanoftheboardhassenta clearsignaltothemarketandindustry:
- Internationallyacknowledgedleaderintheglobaltantalummarket - Formerly Head of Technical Services and Engineering Group forH.C.Starck;theworld’slargestconsumeroftantalum - PresidentoftheTantalumandNiobiumInternationalStudy Center for the years 2002 and 2007
• AddingMr.IanGrahamtotheboardhasaddedfurtherdepth toourdevelopmentteam:
- Formerly Chief Geologist with the Project Generation Group at Rio Tinto - Track-record of successfully moving projects through the exploration process into production - InvolvedwithdevelopmentworkforDiavikDiamondMine (Canada), Resolution Copper (USA), Eagle Nickel (USA), LakeviewNickel(USA)andBunderDiamonds(Africa)
EC10_039EC10_031EC10_030
EC10_029
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EC08_012
EC08_011
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0 70 140 210 28035Metre
Ashram Zone
Star Trench Zone
Southeast Zone
Northwest Zone
LegendPlanT_CollarHole
2008 Holes
2010 Holes
HoleSub-Surface Trace
Water Body
Total Magnetic IntensityRGB
Red: Band_1
Green: Band_2
Blue: Band_3
AshramPeninsula
NAD3 Zone19
0 42Kilometers
COMMERCE RESOURCES CORP.
Eldor Property, QC
ASHRAM ZONE
CENTRE LAKE
200 m 400 m
Phase 3 Proposed Hole Locals
ELDOR PROJECT, QUEBEC
• New Rare Earth Element Discovery • Hole#1:1.72%TREOover 215.30m (3.74 to 219.04m) • Hole#2:1.95%TREOover 243.84m (2.53 to 246.37m) • Additional drilling underway
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NIOBIUM
Alloy for the production of harder and greater load-bearing steel.
Usedinthemanufactureof:• Bridges• Buildings• Oilandgaspipelines
A low percentage alloy of niobium will triple thestrength of steel.
IAMGOLD’sNiobecMineinQuebecisasignificantprofitgenerator.Oneofonlythreemajorproducersofniobium globally.
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6040000mN
6044000mN 56
00
00
mE
56
20
00
mE
55
60
00
mE
55
80
00
mE
56
40
00
mE
6038000mN
6042000mN
NEW 2009CERIUM SOIL ANOMALY
(Open ended)?
?
?
?
MAPPED CARBONATITE
SPECTRUMMINING
SPECTRUMMINING
COMMERCE RESOURCES
CORP. /CANADIAN
INTERNATIONALMINERALS
INC.
COMMERCE RESOURCES
CORP. / CANADIAN
INTERNATIONALMINERALS
INC.
Staked
Staked
WICHEEDA REE DISCOVERY ZONE2009 DDH 72 Meters of 2.92% REE2008 DDH 48 Meters of 3.55% REE
N
0 1 2KILOMETRES
CARBO PROJECT, BC
• Focus:Rareearthelementdiscovery
• 25%Ownership;JointventuredwithCanadian InternationalMineralsInc.
• 80kilometersnortheastofPrinceGeorge,BC
• ContiguouswithSpectrumMiningCorporation’s Wicheeda Rare Earth discovery
• Hostsrareearthandniobium-bearingcarbonatite and alkaline intrusions
• Drillingin2010
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CLOSING THOUGHTS
Strong market fundamentals:Tantalum market in deficit
• Over45%ofthemarketsupplyshut-out in less than 20 months • Industrystockpilesbeingrundown• Tantalumpriceincrease
Strong company:Opportunitytosupplyglobaltantalummarketneeds
• Confidentinbecomingalargeandprofitablelowcost industrial scale supplier of tantalum concentrate• Premiumpaidforethicallong-termproduction• AdvancedDevelopmentProject:BlueRiver,BC• NewRareEarthDiscovery:Eldor,Quebec• RareEarthTargetinEmergingCamp:Carbo,BC
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MAKE CONTACT
Chris GroveCorporate Communications
1450 - 789 West Pender StreetVancouver, BC, V6C 1H2Canada
1.866.484.2700
[email protected] www.commerceresources.com
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