"The strategy is to produce a commercially marketable product on site which can then be shipped to REE processors globally."

Christopher Grove

PRESIDENT AND CEO, COMMERCE RESOURCES

July 10, 2024

What have been the main developments for Commerce Resources over the past year?

Commerce Resources recently announced significant advancements and simplifications in the mineral processing and hydrometallurgical flowsheets for the Ashram deposit. The Ashram deposit has the most attractive of the standard fundamentals that typically allow a rare earth element (REE) project to go into commercial production with positive economics, and considering that we have the best versions of both mineralogy and geology, we can produce an extremely high percentage floatation product with greater than 30% TREO. Due to the high grade of the flotation concentrates, we can then reduce the number of steps in the hydrometallurgy to produce a finished end product that is above 98% TREO with extremely high recoveries. We expect that simplifying the process design flowsheet will lower our operating cost, and the actual economics of this will be detailed in our updated preliminary economic assessment which we hope to release by Q4 2024. 

Can you elaborate on the timeline for the Ashram project? 

Rather than focusing on one business plan which will be detailed in a PFS, Commerce Resources decided to update our PEA as it gives a wider scope to present the total blue sky for the project. The strategy is to produce a commercially marketable product on site which can then be shipped to REE processors globally, however, we are also looking at downstream processing to produce separated oxides, specifically, neodymium praseodymium oxide, which is the ideal feedstock for a metallization facility that would deliver their end products to a magnet manufacturer. The percentage of products we will produce as mixed rare earth carbonates or downstream oxides will be determined in a PFS after the scenarios are detailed in our updated PEA. An updated PEA will allow us to be re-rated by both the market and the industry in terms of putting a value on the Ashram project and give us a wider range of commercial opportunities in terms of potentially securing an industry partner who recognizes the strong fundamentals of the deposit and who will then ideally deploy capital into Commerce Resources in a non-dilutive project level investment which could allow us to complete a PFS and a BFS. If we are successful in releasing our PEA by Q4 2024, it may be possible to complete a PFS by the end of Q2 2025 and a BFS and environmental and social assessment certificate by mid-2026, whereafter we will be in a position to apply for a mining permit to be in full commercial production by 2028.     

How has the North American rare earth supply chain progressed over the past 12 months? 

The fact is that Canada has the most demanding mining legislation in the world, making it exponentially more challenging to raise the needed capital to satisfy the demands of the mining legislation.  To address this challenge, Commerce Resources has appointed two Australian directors and plans to secure a listing on the ASX, hopefully trading there by September 2024. To illustrate this difference, peer group companies of Commerce Resources are trading on the ASX at market caps of 10 to 50 times our market cap on the TSX Venture Exchange.

What will be the importance of Québec in developing the North American rare earths supply chain?  

Québec has a huge opportunity to significantly contribute to the development of the North American rare earth supply chain due to the Ashram project being second to none in terms of its fundamentals that typically allow economic production of REEs.  

In November 2023, the federal government launched a CA$1.5 billion budget for the Critical Minerals Infrastructure Fund. Commerce Resources applied to that fund in February 2024 and were required to include letters of support from other companies active in the same parts of Nunavik as us. We were fortunate to receive approximately a half dozen letters of support from our peers in the area.

Why is Commerce Resources a great story moving forward? 

Due to forces beyond our control, Commerce Resources is currently at a market cap that is an attractive entry point for any investor as we continue to advance our Ashram project in one of the world’s best mining jurisdictions, Québec, with additional blue sky potential of our high-grade niobium claims proximal to the Ashram deposit.

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