Resource World Magazine

F E B R U A R Y / M A R C H 2 0 1 5 www.resourceworld.com 25 producer and processor of the REEs, Grove says. "Basically, there are two competing Chinese supply streams," he said. "One is sanctioned by the state and the other is pro- duced on the black market." Grove says that about 10 years ago China initiated a two-tiered pricing system, with an export duty attached to material that was not processed in China. "It is a multi- purpose initiative," he said. "One goal is to drive foreign manufacturers to China to access cheaper feed stock. Another is to enable China to gain jobs and perhaps the intellectual property that these compa- nies would bring with them. "You could say that, no matter what the World Trade Organization has had to say about the two-tiered pricing system – basically tell- ing China that it is illegal – the Chinese will continue to charge more for export REEs." Despite China's price manipulations, total world supply and demand are roughly in sync. "Demand is growing slightly in several applications, such as magnets, auto catalysts, and fuel cell cracking catalysts," he said. "But it is down for phosphors, although no successful substitutes for them have been developed yet." Although China has a strangle-hold on world REE production; there are a number of Canadian companies that are advancing rare earth projects. In addition to Commerce Resources, they include Avalon rare Metals Inc. [AVL-TSX, NYSE MKT], Quest rare Minerals ltd. [QRM-TSX], and Medallion resources ltd. [MDL-TSXV]. Avalon's flagship project is the 100%- owned Nechalacho Project at Thor Lake, Northwest Territories. According to Avalon, Nechalacho is the most advanced, large, heavy rare earth project in the world outside of China. Avalon has completed a feasibility study of the project and a feder- ally-approved environmental assessment, and it has reached a refining agreement with Solvay, a large multinational process- ing company. Commerce is developing its Ashram REE deposit at the Eldor property in northern Québec. In 2012, Commerce completed a positive Preliminary Economic Assessment of the project. The company says the PEA shows a positive cash flow from a 4,000- tpd open-pit operation with a 25-year mine life, a pre-tax and pre-finance net present value of $2.32 billion at a 10% dis- count rate, a pre-tax/pre-finance internal rate of return of 44%; and a pre-tax/pre- finance payback period of 2.25 years. The company recently announced it has initiated a program of downstream hydro- metallurgical processing for material from the Ashram deposit. The goal of the testing is to demonstrate the conceptualized flow sheet with a target of producing a mixed rare earth carbonate (REC) product. Once the hydrometallurgical flow sheet is fully bench-tested, and mineral processing has been optimized, a mini-pilot plant will generate feed for the production of a mixed REC concentrate for evaluation by a poten- tial joint venture or off-take partner. The test work also allows for a more thorough evaluation of other potential end-product options with ready markets. n columbus gold building gold resources in French guiana and nevada columbus Gold corp. [CGT-TSXV; CBGDF-OTCQX] has been receiving promising drill results from its Phase II (25,570-metre/126 hole) resource develop- ment, diamond drill program (completed in November 2014), at its 100%-owned Montagne d'Or gold deposit on the road- accessible Paul Isnard Project, French Guiana, South America. The deposit is already known to host an NI 43-101 compliant inferred resource of 4.3 million ounces (140.1 million tonnes grading 1.0 g/t gold at a 0.4 g/t cut-off), with considerable expansion potential. The objective of the 2014 drill program was to complete a 50-metre spacing array over a strike extent of 2,300 metres to a vertical depth of 200 metres from surface in order to define a large tonnage open pit- table resource, and secondly to upgrade the resources from the inferred category to the indicated category. Assays to date have been quite encour- aging, including 50.0 metres grading 4.61 g/t gold, 49.0 metres grading 3.82 g/t gold, as well as 37.0 metres of 4.09 g/t gold. Other holes to date have also returned gold mineralization over longer widths, such as 95.4 metres of 1.59 g/t gold. All assays compiled from the large drill program will allow Columbus Gold to complete an updated resource estimate by the end of Q1 2015, and after combining a concur- rent detailed metallurgical study and a Preliminary Environmental Assessment, will complete a Preliminary Economic Assessment (PEA) by the second quarter of 2015. The company is about to commence a US $11 million 2015 development pro- gram to further advance the project. An interesting key component of the project is that nord Gold n.V. [NORD LI-LSE] is funding all work as part of a minimum US $30 million exploration and development program to earn a 50.01% interest in the project by completing a bankable feasibility study by March 2017. In Nevada, Columbus Gold is also gearing up for a US $7 million (185-hole/47,000-metre) exploration pro- gram to start in the second quarter at its recent gold discovery at the 100%- owned Eastside property located in the Walker Lane Trend 20 miles southwest of Tonopah, with extensive infrastructure and access. The goal is to build a resource by the spring 2016. The company has identified five new drill targets where assays from outcrops and float have yielded up to 24 g/t gold. Exploration to date has discovered wide- spread gold mineralization that suggests the potential for a district-scale miner- alized system. Assays have also been encouraging, including 63.6 metres grad- ing 1.43 g/t gold. Headed by Robert Giustra, CEO and Chairman, the company has about $5.3 million in the treasury. As of January 20, Columbus Gold was ranked 21 in the top TSX Venture Metals and Mining stocks by market capitalization. n

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