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Explosion of Cellular Phone Use Drives Commerce Resources’ (TSX.V:CCE) Value

niobium, tantalum, exploration, tsx, tsx venture, stock tips, investment advice, commerce resources

Commerce Resources is developing what may very well be newest domestic source of tantalum and niobium in North America. The company has just raised $32.7 Million in a financing that will see it continue to develop resources at its 100%-owned Blue River Tantalum-Niobium Project.

Commerce Resources Corp.'s stated goal is to become the world's next source of tantalum and niobium. Commerce is the most active tantalum and niobium explorer in North America, with a focus on developing its Upper Fir deposit into production.

At present the major use of tantalum is in capacitors which are used in desktop and laptop computers, mobile phones, digital cameras, pagers, PDA's, handheld games, automotive applications and a number of other fields in the electronic industry. It is estimated 65 percent of tantalum made available each year is used in the production of capacitors.

Rising numbers of cell-phone-using teens have become a key source of growth for the wireless industry.

The latest estimates show that by the end of the year, 84 percent of the U.S. population will be carrying mobile phones, according to SNL Kagan, a communications research firm.

This has left yet-to-be-connected youngsters as one of the few remaining ready sources of new subscribers.

Major companies such as AT&T, Verizon Wireless and Sprint Nextel Corp. have done a brisk business by encouraging existing customers to sign up for family calling plans. These services allow the addition of a mobile phone to an account, usually for an additional charge of about $10 a month.

Tantalum capacitors are a key component in mobile phones. The sector's rapid growth has led to a worldwide tantalum shortage and prices have risen significantly, swelling the coffers of the Congo's warring factions who profited historically from increased demand for the material.

In January 2000, a kilogram of tantalum cost $65. Last December, the price was $550, although that has fallen back to about $375 today.( Where are these price quotes coming from? They are not consistent with current prices that we know of. A pound of concentrate would be worth around $55 dollars. A pound of tantalum oxide would be $ 150 pp and a pound of capacitor grade powder would be worth approximately $ 350pp

Tantalum ores are found primarily in Australia, Canada, Brazil, and central Africa, with some additional quantities originating in southeast Asia and in China. There is also interest in exploration for this element in various regions of the world, such as Canada, Egypt and Saudi Arabia.

Tantalum minerals with over 70 different chemical compositions have been identified. Those of greatest economic importance are tantalite, microlite, and wodginite; however, it is common practice to name any tantalum-containing mineral concentrate as 'tantalite' primarily because it will be processed for the tantalum values and is sold on that basis.

The single largest source of tantalum mineral concentrates is the production by Sons of Gwalia Ltd. from its Greenbushes and Wodgina mines in Western Australia. These two mines combined produce between 70 and 80% of the world's supply, with production in 2001 reported at approximately 1.8 million pounds.

Additional operating mines are the Tanco Mine (Cabot) in Manitoba, Canada, the Kenticha Mine (Ethiopia Minerals Development Authority) in Ethiopia, the Yichun Mine in China, and the Pitinga Mine (Paranapanema) and Mibra Mine (Metallurg) in Brazil.

Quantities are available from Brazil through the processing of small alluvial deposits by prospectors and in numerous countries in Africa, such as Rwanda, Namibia, Uganda, DRC-Kinshasa, Zaire, Gabon, Nigeria, South Africa, and Burundi.

The central African countries of Democratic Republic of the Congo (DRC-Kinshasa) and Rwanda and their neighbours used to be the source of significant tonnages. But civil war, plundering of national parks and exporting of minerals, diamonds and other natural resources to provide funding of militias has caused the Tantalum-Niobium International Study Center to call on its members to take care to obtain their raw materials from lawful sources. Members should refrain from purchasing materials from regions where either human welfare or wildlife are threatened.

Exploration to date at the Upper Fir deposit has outlined an indicated resource of 8.6Mt with 208.2 g/t Ta2O5 and 1,372.6 g/t Nb2O5 and an inferred resource of 5.5Mt with 208.2 g/t Ta2O5 and 1,349.9 g/t Nb2O5 (Gorham, 2007). Exploration to date at the Fir deposit has outlined an indicated resource of 5.65Mt with 203.1g/t Ta2O5 and 1,047g/t Nb2O5 (Verzosa, 2003). The Fir is also host to an inferred resource of 6.7Mt with 196g/t Ta2O5, 646g/t Nb2O5 and 3.20% P2O5 (McCrea, 2001). The Verity deposit, 10 km north of the Fir property, is estimated to host an inferred resource of 3.06Mt with 196g/t Ta2O5, 646g/t Nb2O5 and 3.20% P2O5 (McCrea, 2001).

Niobium is an additive to the production of steel. A 2% alloy of niobium has the ability to triple the tensile strength of the steel, from a PSI (pounds per square inch) of 40,000 to 120,000. Niobium-alloyed steel is found in construction steel, oil and gas pipelines, nuclear plant pipelines, the automotive industry and aerospace.

The primary mineral from which niobium is obtained is known as pyrochlore, found occurring in carbonatites globally. The world's largest deposit located at Araxa, Brazil, is operated by CBMM, and averages between 2.5% and 3.0% Nb205. Two other currently operating pyrochlore mines are the Anglo American Brasil Mineracao (Brazil), grading at 1.34% niobium oxide and the Iamgold-owned Niobec (Quebec) at their St. Honore deposit, grading at 0.67% niobium and mined underground.

This article is intended for information purposes only, and is not a recommendation to buy or sell the equities of any company mentioned herein. It is based on sources believed to be reliable, but no warranty as to accuracy is expressed or implied. The opinions expressed in the article are those of the author except where statements are attributed to individuals other than the author, in which case the opinions are those of the individual to whom they are attributed.

Published: 2007-09-21
Author: Sergeant Silver

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