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FEBRUARY 2009 THE FUTURE OF TANTALUM
FEBRUARY 2009
THE FUTURE OF TANTALUM
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
1450 – 789 West Pender Street
CORPORATE VISION
Commerce Resources Corp. aims to become a leadinglow-cost producer of tantalum and niobium and a stable source of supply for industry.
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CORPORATE HIGHLIGHTS
• Focus:Becometheworld’snextmajorsupplier of tantalum and niobium
• Strong market fundamentals; tantalum supply strained
• BlueRiverProject,BC:Clearpathtofeasibility
• EldorProperty,Quebec:Largeexplorationproject
• Financially strong
• Focused management; industry expertise
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SHARE STRUCTURE AND MARKET INFORMATION
Symbols: TSX-V:CCE FSE:D7H
Shares Outstanding: 111.5MOptions: 6.7MWarrants: 28.6M Fully Diluted: 146.8M
Recent Price: $0.2052-Week Range: $0.15-$1.10Market Cap: $22 Million
Well financed with over $20 million cash and equivalents
*Data as at February 23rd, 2009
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SHARE STRUCTURE AND MARKET INFORMATION
TANTALUM
• Tantalumplaysanimportantroleinthehigh-techworld and in our everyday life
• Raremetalwhoseprimaryuseisinthemanufactureof electroniccapacitorswhicharefoundinproductssuchas:
- Cell phones - Personal computers - Global position systems - Airbags - Other electronic equipment
• Crucialingredient;storesandreleasescharge instantaneously
• Othermajorapplications:
- Super alloys – jet engines, turbines, nuclear reactors, power plants, cutting tools - Corrosion resistant chemical equipment - Medical science
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TANTALUM – PRICE
•Pricingisnormallyestablishedbynegotiation between buyer and seller
•Long-termcontractsnotsignificantlyaffected by current market volatility
•CurrentPrice:
-Containedinaconcentrate:US$60/containedlb -TantalumOxideorK2TaF7:US$140/lb •Currentannualdemandgrowthrate:
- ~ 5% (or 300,000+ lbs Ta2O5 year).
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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-Niobium International Study Center (TIC) www.tanb.org
TANTALUM: SUPPLY STRAIN
• Globalprimaryminesupplyhasfallenbehinddemand:
-Differencebetweendemand(~6Mlbs)andprimary supply (~ 4.3 M lbs) has been filled by scrap, inventories, and tin slags
• Longterm:Marketrequiresadditionalproductionfromnew projects
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Russia3%
Australia (Tallson)
30%
Africa37%
Brazil14%
China8%
Asia Other4%
Canada4%
Tantalum Primary Production 2008- 4.3Mlbs Ta2O5
Source:Talison Minerals www.talison.com.au
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TANTALUM: SUPPLY STRAIN
• Threenotabledevelopmentsinthesupplychainhaveexacerbated thesupplyproblem:
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.Wodginawastheworld’slargesttantalumproducersupplying30%ofthe world’stantalum.Newlong-termpricecontractnegotiationswereinprogress.
Drained Inventories:TheUnitedStatesDefenseLogisticsAgency,whichfrom 2001-2007 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 conflictregions–includingCentralAfricancountriesDRC,Rwanda,andUganda.
• Result:Withdrawalofalargeportionofsupplyfromanalready tight market
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 CharcroftElectronicsLtd.January 22nd, 2009
Source:Electronics Weekly www.electronicsweekly.com
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BLUE RIVER PROPERTY, BC
• Focus:DevelopmentofUpperFirdeposittofeasibility
• 1,000sqkmpropertylocated10kilometersnorth of Blue River
• 100%Owned;noroyalties
• Roadaccessible
• Excellentintrastructure:
- Railway, airports, highway - Power grid and water
• Carbonatitehostrock;naturalgeologicadvantage
• Threeseparate43-101depositsdefined: UpperFir,Fir,Verity.
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DEPOSIT AND MINERALIZED ZONES
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Defined ResourcesUpperFirCarbonatite
Indicated resource
of14.68Mtonnes:
-190g/tTa2O5
-1300g/tNb2O5
Inferred resource
of19.81Mtonnes:
-188g/tTa2O5
-1612g/tNb2O5
POSITIONING – STEPS TOWARDS DEVELOPMENT
• 2008completed:
-Additionaldepositdefinitiondrilling:118newdrill holes; assays pending
-Commercialmetallurgicalbulksample:2,000tonnes 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 fortheUpperFir
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Sept. 15, 2008Chris Grove, Corporate Communicationswith the Honourable Gordon Hogg Minister of Statefor Mining and Honourable Kevin Krueger
Sept. 15, 2008
POSITIONING – MINERAL EXPLORATION CYCLE
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$10
9
8
7
6
5
4
3
2
1
0Discovery
Speculation1-2 Years
DevelopmentInvestment Analysis
2-3 Years
ProductionRevaluation2-3 Years
MANAGEMENT – OUR INDUSTRY ADVANTAGE
• AddingDr.AxelHoppeasthenewChairmanoftheboard hassentaclearsignaltothemarketandindustry:
- Internationally acknowledged leader in the tantalum niobium field
- Formerly Head of Technical Services and Engineering GroupforH.C.Starck;theworld’slargestconsumerof tantalum
- President of the Tantalum and Niobium International Study Center for the years 2002 and 2007
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14) BLUE RIVER - VALUE IN THE NEW TANTALUM MARKET
THE INDUSTRY VALUES COMMERCE RESOURCES
LongTermSupply Potential for 20+ Year Operation
LowPoliticalRisk British Columbia, Canada
Reliable Partners Industry Expertise, Solid Track Record
DiversificationfromSingleSupplierandRegion PremierDevelopmentProjectinNorthAmerica
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BLUE RIVER - VALUE IN THE NEW TANTALUM MARKET
ELDOR PROJECT
• Focus:Explorationanddiscovery
• 100% Owned; acquired from Virginia Mines Inc.
• 115 km south of the community of Kuujjuaq, Quebec
• Propectiveforcarbonatite-hostedtantalumand niobium mineralization
• 26 holes (5,400m) completed; assays pending
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CLOSING THOUGHTS – UNIQUE OPPORTUNITY
• Focus:Becometheworld’snextmajorsupplierof tantalum and niobium
• Tantalummarketnotsignificantlyaffectedby presentmarketvolatility:
- Tantalum is priced in long-term contracts
- Supply strained
- Fundamentals strong
• LargeExplorationTarget:EldorProject
• Financiallystrong
• CurrentMarketCap~$20M
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MAKE CONTACT
David HodgePresidentandDirector
1450 - 789 West Pender StreetVancouver, BC, V6C 1H2Canada
1.866.484.2700
[email protected] www.commerceresources.com
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