Asian Metal: Please tell us about your company and its current projects.

Christopher: The Upper Fir deposit is the project that we have a preliminary economic assessment leased on by AMEC, the world’s foremost mining engineering firm. AMEC identified ore. Since the PEA we've improved several features of the deposit so that it now has a resource of 48 million tons measured and indicated, 5 million tons inferred. That would make a resource of 53 million tons at 200g of tantalum per ton, so just slightly under a half pound of tantalum per ton. So the resource is approximately 23 million pounds of tantalum and about 200 million pounds of niobium. In terms of the deposit, its ratio is about 1 to 6, tantalum to niobium. The Brazilian deposits are usually more in the 1 to 10 range. So in terms of 1 to 6, we have a situation where it is really more of a co-product opportunity, economically. The value of the tantalum and the value of the niobium would be about equal and that is our reason for a business plan where we would do the separation on site and process through to separating the tantalum and niobium oxides. The current production scenario would have us produce 3/4 of a million pounds of tantalum pentoxide per annum and about 7 million pounds of niobium oxide per annum. In terms of a ready market for both commodities, for example, if we sell all of the niobium that we produce at market, then our cost to produce tantalum oxide would be about USD10/lb. There would be nobody who could produce tantalum oxide for USD10/lb., arguably in the world. It does put us in a position where, with our partner, we could produce tantalum and niobium at a very significant profit. Current extraction is about 7500t of extraction per day 360 days per year. That’s a fairly large production scenario. There is no other tantalum project out there right now that has that goal.

Asian Metal: Where do you see the tantalum market right now?

Christopher: I see the tantalum market at a point where the actual shutdown of 3 of the largest tantalum producers of all time is being felt. You have Wodgina, the world’s largest tantalum producing mine of all time shut down in February of 2012. You have Tanco, the Canadian mine that was in operation since 1929. You see that tantalum division finally shut down in early 2013. You see Noventa, the Mozambique operation, which had a couple of good years and a couple of really poor years. You see them shut down in August 2013. You see a huge reduction from Kenticha , their operation in Ethiopia, which formerly produced in the range of 450,000/lbs a year and is currently producing about 75,000/lbs per year. If you add it up, you’d be looking at about 2.5 million pounds that is just not available anymore. The spot market gives you an indication that there is a disconnect between supply and demand, because the spot market has gone from say USD65/lb a year ago to USD90-100/lb now, much higher than it was. So arguably, all of those tantalum primary mines shutting down has had an effect.

Asian Metal: Has the Dodd-Frank bill also had an impact on material coming to market?

Christopher: At this point and time I would have to say no. I would say that Dodd-Frank has had little effect on the supply chain so far. There are a lot of companies that would say, well it’s made my life more difficult. That is if they are publicly traded companies. The specifics of Dodd-Frank are meant to affect everybody but in reality it is section 1502 of the SEC that really brings it home to the companies that have a US listing. So ultimately the SEC has only sway over companies that have US listings. So the Dodd-Frank is really the piece of legislation that backs up the section 1502. But in terms of the opacity of the tantalum market, there hasn't really been increased transparency on that market. Arguably the intent of the Dodd-Frank legislation is to stop the production of minerals that are being produced in a matter that’s not complaint with the guidelines of the OECD. But the smelter verification is basically a self-reporting document, like you would get as a customs declaration. The problem is, I don’t know of anyone who is going upstream to go to the actual extraction site. In terms of supply and demand I just don’t see any impact right now.

Asian Metal: How do you see the development of the capacitor and aerospace sectors moving forward, and what impact will this have on consumption?

Christopher: We do keep an eye out on things that would be indicating some direction there. The biggest indicators over the last 15 years were the perception, and the real increase, in the use of tantalum that started with the dotcom. That led to an episode of research and design where substitutes for tantalum were looked for but never really found, so that led to an increase in tantalum applications in 2006 and onward. In terms of other materials that people have talked about as being a substitute for tantalum, there is really no effective substitutes right now for most of tantalum's 4 main properties: capacitance, steel alloying, anti-corrosive, and medical applications. There has actually been arguable growth in all of those 4 characteristics, although there is fundamentally a difference in the amount of tantalum used in a tablet over a laptop. There is a lower amount of tantalum going into a tablet and so you have seen a correction. But that correction was felt a year or 2 ago. I don’t really know where the picture is right now, but I think the investigations that were done in R+D basically concluded in the fall of 2005. Since that time tantalum has ended up being the go to metal for lots of other applications that it wasn't being used for prior to 2005.

Asian Metal: What are the long term goals for Commerce Resources?

Christopher: We have 2 projects right now. In addition to our tantalum/niobium deposit, we also have what I would call a world class rare earth element deposit. We are currently looking for a JV partner for both of our assets. Both projects have huge resources and both have robust economics, so our current goal is to secure a JV partner who would enjoy security of supply for the next generation in terms of our tantalum project and for the next 300 years for our rare earth element project. And I think there are similarities between the tantalum market now and the rare earth element market, in that security of supply will be attractive to potential partners. The goal is to put the Upper Fir project into production and to follow that with another tantalum mine, either in British Columbia or perhaps Quebec. We want to be in the business for the long haul. I've been here for 10 years. A lot of people think that we've taken a long time to advance, and that’s true. But ultimately, to take a mining project from discovery into production is typically a 10-12 year process. And that’s with good capital markets, which we have not had for 6 years. It’s been a little slower, but we have been fortunate in being able to raise capital to advance our projects and we are looking forward to the future.