Commerce Resources manager Jenna Hardy talks to the Goat about the potential for a Tantalum-Niobium mine 90km south of Valemount:
Do the positive results in the preliminary economic assessment mean a mine will happen in Blue River in the next few years?
No. It’s a step in the process that gives you more certainty about that answer. When we do these sorts of reports, we’re handicapped by a certain framework of engineering requirements. The biggest one is the prices we’re required to use for the metals. These maybe don’t reflect what’s happening in the world where Tantalum and Niobium prices have risen substantially in the last year. Right now, the prices are 40 per cent plus (what was used in the preliminary economic assessment) … which would give us a much better business case.
What does the report say?
The report says let’s move forward. As prices stand right now it’s worth spending more time and money doing the next steps of engineering and valuation.
What has to happen before it’s developed?
There are several steps. We did a lot of drilling in 2010 and 2011. That information isn’t integrated into this study. Our next milestone will be to update the base on which we did the analysis. We’ll update the body of mineralized material with the improved price. The results from the latest drilling assays won’t be available until spring 2012. We can’t really pull together a picture of what we’ve found until we get those assays back. The pre-feasibility and then feasibility study could take one year each if all the information is available – but it’s going to be more than that. We’ve tried to tell people the mine is a few years out.
Will Commerce Resources develop the mine itself or find another company to do that work?
We are looking for a strategic partner. We need to raise more money to take it to pre-feasibility and feasibility. We could do that in the markets if times were good, but right now times aren’t so great in the markets. There’s other options open to us. We could try to make an alliance with someone already in production or you could sell forward some of your product if there was a company interested in getting a secure supply of both. With the situation in the Congo, with less than ideal labour practices, the money from some of the mining in Africa is being used to funding militia activities. We’re Canadians and our mine would be in Blue River and we’d be required to operate to a very high standard. Somebody like a Sanyo or Samsung is quite interested in getting a safe and secure supply. That has an extra value to them. We have been approached by some of the electronic manufacturers to have a talk with them. We’re spending a lot of time and effort on building a number of relationships to find the right prospective partner.
How strong is the market for tantalum and niobium?
The markets are quite strong because there aren’t a lot of supplies that are safe and clean and ethical. In Canada right now there aren’t any other tantalum mines. The existing mine that’s the biggest in the world is in Australia. They’re just ramping up after having been out of production for a few years. It’s not like there’s a lot of excess supply that isn’t already coming from the Congo or other places.
What about bans on conflict minerals like tantalum coming from the Congo?
The US government did put a program into place (Dodd-Frank Act) to make companies declare where they were sourcing minerals from. There’s been a bit of a delay in implementing the requirements. In that time, a couple of companies have gone into the Congo and tried to implement a safe supply chain with third party auditors. But it hasn’t quite happened yet. So it’s happening but it isn’t there yet. There’s a fair bit of skepticism about how sure you can be in a country where there’s a fair bit of corruption. We think maybe there is some clean material coming out of Africa but it has to be third-party provable.
How long will the potential mine be operational based on the numbers right now?
It’s got about a 10-year mine life (once it becomes operational). But at a higher tantalum and niobium price, more of the material becomes worth mining. If our third party engineer does accept the higher price for the next study, what will that really do? We know it will increase (the mine’s) life but if it’s by ex) 10 or 15 per cent, we don’t know.
What would be the spinoffs for the area?
We would try to source labour from the local area. It would mean anyone who isn’t an engineer, who had transferable skills from logging or something else. We’d probably do a bus system to collect people. There are enough people in the Valley with the right set of skills. Sourcing local is the right way to go.
Do you know how many jobs this could create?
The Preliminary Economic Assessment gives numbers for various areas (between 260-400 operators and administrators, depending on the year). I have to caution about the exact number at this point, but it’s a significant number of jobs. (Author’s Note: According to the PEA, the mine is scheduled for three 8-hour shifts/day, 360 days/year, which would require an equivalent of 4.5 mine crews working a rotating schedule for activities scheduled seven days a week and three crews for activities scheduled five days a week.)
Is this mine dangerous? What would the mining operation look like?
The host rock the mineral is in is really quite stable. We’d go in with a flat tunnel at a couple locations in the hillside. You go in on the upper tunnel and mine and drop stuff down to the lower tunnel which brings stuff out of the earth. These kinds of mines are very safe. Employees would go into the mine with heavy equipment and trucks. I visited a similar Niobium mine in Quebec. The rooms in there are the size of football fields. They don’t have rockfalls – they’re very stable. That’s sort of our model. It’s in the Sagueney area of Quebec – dairy country. You come out of the mine and there’s farmers’ fields and cows all around.
