Secutor Capital Management Initiates Coverage on Commerce Resources Corp. (April 2014)

SECUTORCAPITAL MANAGEMENT CORPORATION
28 April 2014
COMMERCE RESOURCES CORP
Commerce REO Speedwagons
its Ashram Rare Earth Project
Price:
Market Cap:
Common Shares:
Fully Diluted:
52 Wk Range:
30 Day Avg Vol:
Source: Stockhouse
$ 0.20
$ 33.4 MM
167.18 MM
188.47 MM
$ 0.055 - 0.26
302,310
Project:
Loca on:
Ownership:
Commodity:
Status:
Resource:
Catalysts:
Project:
Loca on:
Ownership:
Commodity:
Status:
Resource:
Catalysts:
Ashram Deposit (Eldor)
Nunavik Region, Northern QC
100 %
REE
Pre-Feasibility Stage
29.3 Mt 1.90 % TREO (M&I)
220 Mt at 1.88 % TREO (Inferred)
PFS, metallurgical results, joint
venture partnership
Upper Fir Deposit (Blue River)
250 km north of Kamloops, BC
100 %
Tantalum, Niobium
PEA complete
48.4 Mt at 197 ppm Ta₂O₅,
1610 ppm Nb₂O₅ (Indicated)
5.4 Mt at 191 ppm Ta₂O₅,
1760 ppm Nb₂O₅ (Inferred)
PFS, joint venture partnership
COMPANY SUMMARY
MARKET DATA
TOP HOLDERS
Marquest Asset Management Inc
Zimtu Capital Corp
Zurcher Kantonalbank
5.36 %
2.25 %
0.40 %
Ini a on of Coverage
Arie Papernick
Equity Capital Markets
apapernick@secutor.ca
(416) 847-1220
Lilliana Paoletti
Analyst
lpaoletti@secutor.ca
(416) 545-1015
V-CCE
Rare earth element (REE) Supply Remains Limited,
Concentrated, and Vulnerable. China con nues to dominate world REE
produc on, controlling approximately 90% of the market, despite progress
made by Molycorp and Lynas. Although China provided the world with
ar ficially “cheap” REEs for years, its labour costs are increasing, its reserves
are deple ng, and its mines have been abused to the limit. The costs of
producing “cheap” rare earths are becoming increasingly unsustainable in
terms of the environment, the availability of reserves, the health of its
communi es, and the poli cal ramifica ons. China can no longer afford the
costs associated with “cheap” rare earths and is beginning to worry about its
own domes c supply, as China is its own biggest customer.
The Bottom of the Curve? REE prices have decreased considerably in
recent years, although they are generally s ll above where they were in
2009, before fears of constrained supply sent prices sky-rocke ng. Very
li le produc on has since come online, implying that REE prices may have
over-corrected. Increasing environmental standards, decreasing reserves in
China, and minimal new supply indicate that REE prices cannot stay this low
indefinitely.
Commerce Resources is one of the most advanced REE juniors in
regards to metallurgy, which in the REE space, is everything. The
Ashram Project hosts a substan al resource with a well-balanced rare earth
oxide (REO) distribu on. The deposit is enriched in light and heavy rare
earths, including all five of the cri cal elements. The mineralogy is simple
due to the presence of the minerals monazite, bastnaesite, and xeno me
which currently dominate commercial processing. Unlike many of its
compe tors, Commerce is able to produce a 43.6% total rare earth oxide
(TREO) mineral concentrate due to the deposit’s simple mineralogy, allowing
significant cost reduc ons.
Valuation. A net present value (NPV) per share of CAD$1.44 was
calculated for the Ashram Project based on a 10% discounted cash flow
(DCF) model. In addi on to Ashram, Commerce has an advanced niobium-
tantalum project in BC, named Blue River, which was not evaluated in this
report. Blue River is compelling in its own right due to recent developments
in the tantalum space, however, given that Commerce Resources currently
trades at around CAD$0.20 and Ashram yields an a er-tax NPV per share of
CAD$1.44, including project financing, Commerce Resources is a stock of
interest on the merit of Ashram alone.

SECUTOR
CAPITAL MANAGEMENT CORP
Commerce Resources Corp
Source: Company Filings
Ashram Project Overview
Commerce Resources’ wholly owned Ashram Deposit is part of the Eldor Property. Eldor covers 190 square km
in Quebec’s Labrador Trough. Adriana Resources’ Lac Otelnuk Iron Deposit is approximately 85 km to the south
and Kuujjuaq, the closest community, is 130 km to the north. Infrastructure in the area is limited.
Ashram is a carbona te deposit hos ng a well-balanced distribu on of all of the rare earth elements,
including the five most cri cal metals: neodymium, europium, dysprosium, terbium, and y rium. REE
mineraliza on is virtually completely contained within the minerals monazite, bastnaesite, and xeno me,
allowing Commerce Resources to use standard processing techniques. In the REE industry, the ability to use
conven onal metallurgy and processing is rather unique. Only four REE-bearing minerals out of over 200 have
ever supplied the market in a material fashion. These four minerals currently, and historically, dominate
commercial REE processing and are host to the REEs at Ashram.
The Ashram Project is envisioned as a conven onal, open-pit opera on running at a mining rate of 4,000 tpd.
Using this mining rate, and assuming a cut-off grade of 1.25% TREO, Ashram has a mine life of 177 years. The
2012 PEA assumed that the mixed REE concentrate would be produced at the mine-site, however, subsequent
economic studies found that it would be more economical to process the mineral concentrate off-site.
Commerce is considering loca ons east of Montreal, along the St. Lawrence Seaway. Be er access, to skilled
personnel and consumables for example, is the most significant advantage of loca ng a processing facility off-
site. It makes sense for Commerce to consider this op on given that it can achieve a high-grade mineral
concentrate with 97% mass reduc on (3% mass pull), notably lowering transporta on costs.
Due to Ashram’s advantageous mineralogy, Commerce is able to produce a 43.6% TREO mineral concentrate
at a recovery of 70.7%. This is one of the highest-grade REE mineral concentrates, which we are aware of,
produced by a junior mining company globally. The 2012 PEA evaluated the economics of producing a mixed
rare earth carbonate concentrate (REC) or a mixed rare earth oxide concentrate (REO), both with a purity of
99.9%. There are ready markets for these products since they are the basic feedstock for REE separa on
facili es.
Ashram Project Loca on
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Parameter Unit
SCMC
DCF
PEA
2012
RESOURCE
Total Tonnes Mined t 34,440,000 35,000,000
Total Waste Mined t 6,543,600 6,511,742
Mining Rate tpd 4,000 4,000
Strip Ra o - 0.19 0.19
Average TREO Grade % 1.86% 1.81%
Days in Opera on Days 350 350
Mine Life Years 25 25
MILLING
Average Annual Mill Throughput tpa 1,400,000 1,400,000
Average Annual Mineral Concentrate Produc on (REC) tpa 38,848 36,000
Average Annual Mineral Concentrate Produc on (REO) tpa 18,183 16,850
Mineral Concentrate Grade %TREO 10 10
Overall Recovery % 71% 67%
COSTS
Average Cash Opex per kg REO produced CAD$/kg 14 8
Average Cash Opex per Tonne Ore Treated CAD$/t 96 95
Capital Cost CAD$MM 763 763
Total Sustaining Capital Cost CAD$MM incl in G&A incl in G&A
PROJECT FINANCING
Debt % 100 -
Equity % 0 -
Average Annual Interest Expense CAD$MM 39 -
Total Interest Paid CAD$MM 386 -
Average Annual Debt Repayment CAD$MM 80 -
Total Debt Repayment CAD$MM 883 -
Parameter Unit
SCMC
DCF
PEA
2012
PRICES* (CAD$/kg)
Oxide Prices Discount % 30% 25
CAD:US Exchange Rate - 1.10 1
Lanthanum oxide (La) US$/kg 5.6 15
Cerium oxide (Ce) US$/kg 5.25 10
Praseodymium oxide (Pr) US$/kg 122.5 76
Neodymium oxide (Nd) US$/kg 67.5 77
Samarium oxide (Sm) US$/kg 9 12
Europium oxide (Eu) US$/kg 925 905
Gadolinium oxide (Gd) US$/kg 46.5 45
Terbium oxide (Tb) US$/kg 825 980
Dysprosium oxide (Dy) US$/kg 465 800
Y rium oxide (Y) US$/kg 17 28
Ashram Basket Price US$/kg 21.70 35.03
TAXES
Income Tax Rate % 42.40% -
Total Tax Losses Used CAD$MM 5 -
Total CCA Used at 30% Annual Rate CAD$MM 764 -
PRE-TAX RESULTS (pre-finance)
Discount Rate % 10% 10
Annual Average Net Cash Flow (LOM) CAD$MM 244 319
Pay-back Period Years 5 2.25
Total NPV CAD$MM 1,163 2,318
Total NPV/Share CAD$/sh 2.48 12.29
AFTER-TAX RESULTS
Discount Rate % 10% -
Annual Average Net Cash Flow (LOM) CAD$MM 139 -
Total NPV CAD$MM 675 -
Total NPV/Share CAD$/sh 1.44 -
Ashram DCF Assump ons
Source: Company Filings, Secutor Capital Management Corp
Valuation
A 10% discounted cash flow model was used to value the Ashram Deposit. The es mate was based on the
preliminary economic assessment (PEA), released July 2012, with a few differences as noted in the following
table. Using the assump ons summarized below, which include project financing, Ashram yields an a er-tax
NPV per share of $1.44.
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Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Pre-Feasibility Study
Feasibility Study
Permi ng
Project Financing
Construc on
Commissioning
20192014
ITEM
2015 2016 2017 2018
Assumed Timeline Used in the DCF
Rare Earth Prices
March 2014 prices, quoted by Metal Pages, were used in the DCF. Despite the fact that rare earth prices have
come down considerably since Commerce’s 2012 PEA, the project remains robust. Many rare earth companies
are struggling at these prices and must rely on by-products in order for their projects to remain somewhat
economic. Commerce does not have this problem. Furthermore, Ashram’s balanced rare earth distribu on
gives it a be er chance of surviving price weaknesses that may occur for the individual rare earth oxides.
Project Financing
For the DCF model, it was assumed that the Ashram Project will be ﬁnanced via 100% debt. The debt was
modelled over a period of 11 years at a 9% interest rate. Addi onally, CAD$28 million in equity was modelled to
account for expenses related to the comple on of the pre-feasibility and the feasibility study. These
transac ons were based on Commerce’s current share price.
Project Timeline
The project meline assumed in the DCF is shown in the diagram below.
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The Upside
A number of recent developments are expected to improve Ashram’s economics. These were not taken into
account in the DCF calcula on, nor the 2012 PEA, but will be considered in the upcoming pre-feasibility study
(PFS).
1. The +40% mineral concentrate
The 2012 PEA and the DCF model are both based on a 10% mineral concentrate. Since Commerce
Resources can now produce a higher than 40% mineral concentrate, Ashram’s opera ng and capital
costs should be reduced markedly. Less material will be processed to produce the mixed REO or REC
end-products, which will translate into less acid consump on, resulting in lower processing costs.
Construc on and equipment costs should also be reduced since a smaller facility and less equipment will
be needed to process less material. The upgraded concentrate should also have a posi ve impact on
transporta on costs. Assigning a value to the impact of going from a 10% to a 40% mineral concentrate
is difficult to assess without a detailed evalua on of the impacts on the project in its en rety, therefore
it has not been included in the DCF modeled herein. However, the upcoming PFS is an cipated to be
based on a minimum 40% mineral concentrate.
2. Infrastructure developments in Quebec
Ashram’s capital costs are about average for the rare earth industry, however, CAD$760 million is s ll a
substan al amount, especially in these capital-constrained markets. The 2012 PEA assumes that
Commerce will foot the bill on its own. However, it is possible that Commerce may be able to benefit
from infrastructure developments at Adriana’s Lac Otelnuk Project, 80 km to the south. Lac Otelnuk is
one of the largest mining projects in development of all me for Quebec, and will need a large amount
of infrastructure including rail, road, and power. Addi onally, although li le has been done to advance
Plan Nord, this is s ll a possibility going forward. The Liberal Party, the original proponents of the
strategy, have been elected and Philippe Couillard, Quebec’s premier, made Plan Nord an important
part of his electoral pla orm. Commerce’s proposed road route is in line with Plan Nord’s development
plans.
3. Fluorite (fluorspar) a poten al by-product
Ashram’s economics could be further improved by including fluorite as a poten al by-product. Fluorite
comprises the tailings of the final REE mineral concentrate, and therefore, follows the exact same flow
sheet, requiring no addi onal processing to produce. A 94% fluorite concentrate could likely be
produced with minimal impact to opera ng expenses and to capital expenditures. Fluorite sells for
approximately US$380 per tonne and has a ready market, opening up the possibility for a future off-take
agreement.
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4. Hydrometallurgical plant loca on
The PEA evaluated the economics of performing acid “cracking” onsite. A recently completed trade-off
study indicated that a loca on off-site will be more economic due to be er access to skilled personnel
and consumables. An off-site loca on east of Montreal, along the St Lawrence Seaway, will be used as
the base case in the upcoming PFS.
5. Op miza on of the roads
The capital costs of the roads have been significantly reduced since the PEA. The op mized route is
easier to build, reducing construc on costs, and requires shorter water crossings. The only item
remaining is to determine the exact loca on of the docking facility and subsequently the final length of
the road. Again, these op miza ons will be included in the PFS.
Ashram Deposit: Resources
March 2012 Global Mineral Resource Es mate
Cut-off Confidence
Category
Tonnage
(t)
TREO
(%)
LREO
(%)
MREO
(%)
HREO
(%)
MHREO
(%)
MHREO/TREO
(%)
1.25 Measured 1,590,000 1.77 1.60 0.089 0.085 0.17 9.8%
Indicated 27,670,000 1.90 1.77 0.073 0.056 0.13 6.7%
Inferred 219,800,000 1.88 1.77 0.068 0.045 0.11 6.0%
March 2012 MHREO Zone Mineral Resource Es mate
Cut-off Confidence
Category
Tonnage
(t)
TREO
(%)
LREO
(%)
MREO
(%)
HREO
(%)
MHREO
(%)
MHREO/TREO
(%)
1.25 Measured 1,140,000 1.69 1.50 0.098 0.099 0.20 12%
Indicated 5,420,000 1.62 1.44 0.091 0.091 0.18 11%
Inferred 2,790,000 1.57 1.39 0.085 0.088 0.17 11%
LREO (Light Rare Earth Oxides) = La2O3 + Ce2O3 + Pr2O3 + Nd2O3
MREO (Middle Rare Earth Oxides) = Sm2O3 + Eu2O3 + Gd2O3
HREO (Heavy Rare Earth Oxides) = Tb2O3 + Dy2O3 + Ho2O3 + Er2O3 + Tm2O3 + Yb2O3 + Lu2O3 + Y2O3
MHREO (Middle and Heavy Rare Earth Oxides) = MREO + HREO
MHREO / TREO, ra o expressed as a percent
Note: Global mineral resource es mate includes the MHREO Zone
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Recent Drilling at the Ashram Deposit
SECUTOR
The most recent resource es mate for the Ashram Deposit was released March 2012. Commerce is currently
comple ng a 1,000 to 1,500 m infill drill program in order to upgrade the inferred mineral resource to measured
and indicated in prepara on for the pre-feasibility study. The drill program will focus on the Centre Pond area
and is an cipated to sufficiently delineate the Middle and Heavy Rare Earth Element Oxide Zone (MHREO).
The MHREO Zone, as its name implies, is enriched in middle and heavy rare earth oxides due to the presence
of the mineral xeno me. It is located in the central por on of the Ashram Deposit, extending from surface to a
depth of 178 m, and is expected to be the ini al focus of development ac vi es. An enriched zone of this
nature is rare in carbona te deposits.
Recent infill drilling hit high-grade intercepts including 61.40 m of 2.15% TREO, and 57.36 m of 2.28% TREO.
These intercepts are above the average grade of the overall resource. Furthermore, drilling encountered less
in-pit waste rock at surface than was previously modelled in the PEA, lowering the strip ra o, increasing the
resource, and reducing costs. Moreover, a couple of step-out holes intersected an extension of the deposit 60
m to the northwest.
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26%
46%
5%
17%
2%
0% 1% 0% 1% 2%
La
Ce
Pr
Nd
Sm
Eu
Gd
Tb
Dy
Y
5%
8%
19%
37%
1%
16%
2%
3%
8%
1%
La
Ce
Pr
Nd
Sm
Eu
Gd
Tb
Dy
Y
REE Distribu on by Tonnage REE Distribu on by Value
Rare Earth Element Distribution
Ashram contains a well-balanced distribu on of all of the rare earth elements, including the cri cal rare earths,
Nd, Eu, Tb, Dy and Y. It is neither a light rare earth deposit, nor a heavy rare earth deposit, but is rather
somewhere in-between. Though Ashram’s REE distribu on is 26% lanthanum and 46% cerium, these metals
account for only 5% and 8%, respec vely, of the ore’s value. Praseodymium, neodymium and europium
collec vely account for 72% of the rock value, despite being only 22% of the rock by tonnage. As previously
men oned, it is highly rare for a carbona te deposit, which is the dominant REE-deposit type in produc on, to
be enriched in these metals.
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Applica on
Growth
Rate La Ce Pr Nd* Sm Eu* Gd Tb* Dy* Y* Other
Magnets 8-12% - - 23.4 69.4 - - 2 0.2 5 - -
Ba eries 50 33.4 3.3 10 3.3 - - - - - -
Metal alloys 26 52 5.5 16.5 - - - - - - -
Cataly c converters 5 90 2 3 - - - - - - -
Catalysts 90 10 - - - - - - - - -
Polishing compounds 5-10% 31.5 65 3.5 - - - - - - - -
Glass addi ves 4-6% 24 66 1 3 - - - - - 2 4
Phosphors 0-4% 8.5 11 - - - 4.9 1.8 4.6 - 69.2 -
Ceramics 4-6% 17 12 6 12 - - - - - 53 -
Other 6-10% 19 39 4 15 2 - 1 - - 19 -
Heavy REE
6-12%
4-6%
Light REE Middle REE
Source: IMCOA, Cur n University, Kingsnorth, Na onal Ins tute of Advanced Studies
Use of Rare Earths by Applica on (Percentage)
Although not a heavy rare earth deposit, Ashram s ll hosts appreciable amounts of Tb, Dy, and Y. The
following charts compare Ashram to several well-known REE deposits. Furthermore, the grade of the individual
REOs becomes less important if a high-grade mineral concentrate can be produced economically, which
Commerce can do. In the end, it is never advantageous for a deposit to have the “right” rare earth distribu on
but the wrong mineralogy. The mineralogy determines the feasibility of a project.
Furthermore, Ashram contains the rare earth elements needed by industry. Though many perceive heavy rare
earth oxide (HREO) dominated deposits to be more favourable economically, only three of the heavy rare
earth elements (HREEs) have ready markets. These are terbium, dysprosium, and y rium. The remaining,
erbium, holmium, thulium, y erbium, and lute um, are small, niche markets. The chart immediately below
shows the rela ve quan es of rare earths used in diﬀerent intermediate products. As demonstrated, a
signiﬁcantly higher quan ty of light and middle rare earths will be required in the higher growth markets,
including magnets and ba eries.
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REE Deposit Comparison: Grades for the Cri cal Metals
Neodymium (Nd) Oxide Grade by Deposit
Europium (Eu) Oxide Grade by Deposit
Source: Dahrouge Geological Consul ng Ltd
REEHost Rock Type
Carbona te
Carbona te (Laterite)
Peralkaline/Granitoid
Hydrothermal/Vein
Other
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Terbium (Tb) Oxide Grade by Deposit
Dysprosium (Dy) Oxide Grade by Deposit
REEHost Rock Type
Carbona te
Hydrothermal/Vein
Other
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Y rium (Y) Oxide Grade by Deposit
REEHost Rock Type
Carbona te
Hydrothermal/Vein
Other
Ashram Deposit: Geology
Ashram is a carbona te REE-F deposit hosted within the larger REE-Nb-Ta-P-F-enriched Eldor Carbona te
Complex, part of Commerce’s Eldor Property. The Eldor Property is situated within the central area of the
Labrador Trough, straddling two lithotectonic zones that are separated by a major thrust fault. The area’s
geology is complex. However, the Ashram Deposit is characterized by consistent rare earth mineraliza on
throughout, and shows li le dilu on from unmineralized fragments and clasts, resul ng in the amenability of
simple mining methods. The deposit is covered by only a thin veil of overburden, averaging less than three
metres in thickness, resul ng in an extremely low strip ra o of 0.19. Addi onally, as previously men oned, the
ore can be processed using standard methods owing to the rare earth mineraliza on being virtually en rely
hosted by the minerals monazite, bastnaesite, and xeno me. Furthermore, the fluorite mineraliza on is
par oned into the tailings of the final REE mineral concentrate, allowing for no addi onal processing if
Commerce chooses to produce a saleable fluorite concentrate.
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The Eldor Carbona te is ellip cal in shape and is es mated to be seven to 15 km long, and three to four km
wide. Mineraliza on is separated into three major divisions: early, mid, and late-stage. It is the late-stage
carbona te, central to the complex, which hosts the REE mineraliza on at the Ashram Deposit. Ashram’s rare
earth mineralized footprint has been defined for a length of 700 m, for a width 500 m, and to a depth of 600 m.
Mineraliza on remains open to the north, to the south, as well as at depth.
Metallurgy
The Advantage
For rare earth deposits, there is no standard metallurgical process to separate the minerals from the ore since
each deposit will vary in composi on. Therefore, unique processes have to be developed that are specific to
the orebody based on its paragenesis, and its mineralogical and chemical proper es, necessita ng expensive
research and development costs. Furthermore, REE concentra ons in the host rocks are low with up to 90% of
the ore’s mass discarded as waste; this coupled with the ore’s complexity leads to significant separa on and
processing costs. Moreover, some rare earth deposits may contain radioac ve metals such as uranium and
thorium which further complicates the process.
The largest cost of any REE project is processing, and a good por on of processing costs is acid consump on.
Processing costs are best reduced by upgrading the ore into a high grade mineral concentrate, reducing the
amount of material that must be treated downstream. Commerce is able to reduce the mass of the ore by 97%
on-site, producing a mineral concentrate of 43.6% total rare earth oxide (TREO) at a recovery of 70.7%. For
comparison, Chinese refineries process feedstock from non-ionic clay deposits grading over 30% TREO with
recoveries of over 60%. Molycorp and Lynas are also capable of producing mineral concentrates in excess of
30% TREO.
Therefore, it appears that this capability is a prerequisite for produc on; however, this is where most junior
mining companies struggle although it is the most crucial produc on criteria. Commerce is one of only two REE
juniors, that we know of, that are able to produce a higher than 30% TREO mineral concentrate.
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Simplified Flowsheet for the Production of a Rare Earth Mineral Concentrate
SECUTOR
There are over 200 REE-bearing minerals, yet only four of these have ever been a source of material supply to
the market, and thus dominate commercial processing, both presently and historically. These are monazite,
bastnaesite, xeno me, and loparite. However, many rare earth deposits contain mul ple REE-bearing minerals
contribu ng to the overall grade, and many of these have never been commercially processed, leading to
complicated flow sheets, and high processing and R&D costs. Significantly, although heavy rare earths are in
demand for the Chinese, they only have the capability to liberate HREEs hosted by xeno me, not those hosted
by the myriad of exo c minerals making up many of the most well-known HREE deposits. The reason why
Commerce’s metallurgy is so advanced is because the REE mineraliza on at Ashram is contained within
conven onal REE-bearing minerals, and therefore the metallurgy is well understood. Furthermore, waste rock
and mine tailings at Ashram are not considered to be acid-genera ng or radioac ve.
The Process
The simple schema c below illustrates Commerce’s flow sheet for the produc on of a rare earth mineral
concentrate. Upgrading begins with a conven onal one-stage beneficia on and flota on circuit which reduces
the mass by over 82%. This step is followed by a weak HCL leach at ambient temperature to remove carbonate,
significantly reducing the mass of the material and increasing the grade with essen ally zero REE loss. Currently,
acid consump on at Ashram is among the lowest in the industry, requiring only 25 to 90 kg (100% HCl basis) per
tonne of whole rock without op miza on. The material is then subjected to Wet High Intensity Magne c
Separa on (WHIMS) to remove fluorite and to upgrade the concentrate to 43.6% TREO.
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The next step is sulpha on roas ng and leaching to produce the desired end-products. Commerce will con nue
to focus on improving recoveries across the flow sheet. A pilot plant to scale-up the process is the next step. It
will allow sufficient feed material to be produced for the hydrometallurgical stage so that this por on of the
flow sheet can be op mized, and so that Commerce can begin to evaluate its op ons for end-products.
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End-Products
Commerce is currently evalua ng several op ons for end-products including a mixed REO concentrate, a
mixed REC concentrate, and a par al separa on. A par al separa on is not as difficult as a full oxide
separa on and will result in end-products such as a cerium oxide product, a didymium product (praseodymium
and neodymium), a SEG mixed oxide product (samarium, europium, gadolinium), and/or an HREO mixed
product. Ul mately, the end-products Commerce produces will depend on the needs of a JV partner or other
strategic partner. REE processors, such as Rhodia, would look to buy REO concentrates, whereas end-users are
more interested in buying specific oxides. Again, the simplicity of Commerce’s REE mineralogy allows for a high
grade mineral concentrate to be processed into solu on, resul ng in fewer impuri es and fewer difficul es in
producing the various end-product op ons.
Quebec Deal with FerroAtlantica: More to Come?
FerroAtlan ca, a Spanish mul na onal that is one of the world’s largest producers of silicon metals, plans to
build a $375 million silicon metal plant in Quebec. Although the plant’s site has yet to be selected, the Company
expects that the plant will begin opera ons in late 2016. According to FerroAtlan ca’s Director General, “very
favourable” condi ons a racted the Company to Quebec including discounted rates for hydroelectricity, a ten
year tax holiday, and financial support from Inves ssement Quebec which could amount to five to ten percent
of the project’s capital cost.
Could a similar deal be ini ated between the province and a rare-earth processor? As discussed, due to the
West’s complacency to accept cheap resources from China, as well as a lack of vision for the long-term, there
are very few rare earth processing facili es located in the western world. Rhodia, part of the Solvay Group, is
one of the few companies outside of China that has the technology to separate, purify, and produce rare earth
intermediate products. Since a number of rare earth deposits are located in Quebec, such a deal would be
posi ve in establishing an integrated supply chain outside of China, provided that the deal is supported by
provincial and federal governments in terms of capital and regula ons.
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28 April 2014
Rare Earth Primer
The rare earth elements (REE) are a group of 15 metals with very similar chemical proper es. This similarity in
chemical behaviour is the reason why REEs o en occur together in nature, though in varying, generally small
concentra ons. It is also the reason behind the complex metallurgy required to separate each individual REE
into a saleable, high-purity form. To further complicate ma ers, processing technology is specific to each ore
body and there is limited exper se outside of China.
Each rare earth deposit contains a different propor on of the 15 rare earth metals. Therefore, a basket price
represen ng the unique, average realized price of the separated metal oxides is a common metric used to
compare the rela ve value of different deposits. Generally, prices and rare earth concentra ons are expressed
in terms of the specific, corresponding metal oxide (REO) or the total rare earth oxides (TREO) contained in the
ore.
The rare earth elements are divided into two main groups: light (LREE) and heavy (HREE), based on atomic
weight. The majority of rare earth deposits are dominated by light rare earths such as lanthanum, cerium,
praseodymium, and neodymium. These metals can make up 75% to 99% of a deposit’s composi on. Heavy
REEs have a higher supply risk in the short-term since there are essen ally no sources of produc on outside of
China. Addi onally, five of the 15 rare earth elements have been designated “cri cal metals”: neodymium
(Nd), europium (Eu), terbium (Tb), dysprosium (Dy), and y rium (Y). Cri cal metals are metals of high strategic
importance to advanced economies, given their high-tech, military, and green-tech applica ons, and are
extremely vulnerable to supply deficits.
The primary applica ons of REEs include polishing powders (14% of the market), metal alloys, as used in Li-ion
ba eries for example (21%), permanent magnets, which are used in a variety of high-tech applica ons (23%),
and catalysts, used in cataly c converters and in oil refining (18%). Recent R&D expenditures have not yielded
any suitable, economic subs tutes to the rare earth metals due to the group’s desirable and unique chemical
proper es.
Concerns over the state of the global economy, coupled with Molycorp and Lynas’ start-up troubles, have le
many junior rare earth companies priced as though their projects are uneconomic. Assessing the quality of
these rare earth projects can be difficult given that there are limited historical metrics to rely upon, and un l
recently, there have been virtually no explora on and development ac vi es in the sector. That being said,
junior companies with the greatest poten al to appreciate in the current market climate will have cash, sound
economics, the ability to produce a mineral concentrate grading higher than 30%, and a deposit with exposure
to the cri cal metals.
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The Rare Earth Market
Rare earth metals are s ll a niche industry. The global rare earth market is valued at approximately US$8 billion
in comparison to US$260 billion for iron ore. However, it is a high-growth industry, especially as newer and
improved technologies requiring these materials are developed and implemented. Addi onally, the rare earth
market is itself highly technologically driven in that producers and developers need to stay current in
metallurgical and material science research. Having a deposit is not enough; one must be able to economically
process the ore to realize value, and as previously men oned, processing methods are unique to each orebody.
Metallurgy is much less standardized than for other metals.
The rare earth industry is complicated. Pricing is en rely opaque, demand is difficult to es mate, supply is
concentrated in one country, global supply chains are complex, end-use applica ons are numerous, and there
are virtually no public, established producers that seek out junior companies to feed their project pipelines.
Furthermore, it is highly poli cally charged. Due to the Chinese monopoly, there is significant uncertainty
regarding the future of rare earth metal markets.
No Production is Sold on the Open Market
Unlike tradi onal base and precious metals, rare earth metals are produced to certain specifica ons given by
the end-user. As a result, REEs are not typical commodi es and are not sold on the open market. Producers of
rare earth metals are required to establish their own markets for their products, which is generally done by
securing off-take agreements and strategic, end-user partnerships before the produc on stage. Japan is by far
China’s largest trading partner for REEs, accoun ng for approximately 66% of all exports (USGS, 2010). As a
result, Japan has been ac vely searching for a viable REE supply to curb this dependence, hence the increasing
numbers of joint ventures between established Japanese companies and junior resource companies.
Pricing: China and the Rest of the World
Generally, prices for REEs are variable and can depend, in part, on the source quoted. Addi onally, there are
two prices for rare earth oxides: the “China price”, and the “Rest of World price”. Prior to the recent WTO
ruling, China was able to set its internal rare earth prices at a significantly lower level than its external (FOB)
prices. The lower pricing in China is largely the result of poli cs, decreasing REE export quotas, and the
considerable tariffs that are applied to rare earth materials that leave the country. These restric ons
guaranteed domes c manufacturers a reliable REE supply as well as significant cost-savings, exer ng pressure
on foreign companies to relocate their manufacturing opera ons to China, crea ng jobs and transferring
technologies.
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Moreover, China has two compe ng rare earth industries: legal and illegal. According to a white paper issued by
the Chinese government, from 2006 to 2008, volumes of exported rare earth products from China were 35%,
59%, and 36%, respec vely, higher than the official numbers recorded by Chinese customs. In 2011, the rest of
the world recorded rare earth imports that were 120% higher than China’s official export numbers. The illegal
smuggling of rare earths metals allows end-users to shop around, further depressing prices.
Politics and China
In 2011, China supplied 95% of the world’s rare earth metals. Even with foreign produc on from Molycorp
and Lynas, this figure hasn’t changed significantly. The U.S. Geological Survey (USGS) notes China’s
contribu on to world produc on in 2013 was 90%. China’s dominance of the industry, due to its lower labour
costs and lack of environmental standards which have priced compe tors out of the market, is a concern for the
rest of the world. Not only is the supply of cri cal, strategic materials needed for weapons’ systems and key
technologies concentrated in one country, but that country happens to be one that is not trusted. It is seen by
some as a poten al adversary and by others as unreliable, since many believe that it is not above using its
monopoly of key resources as leverage in interna onal conflicts, as it allegedly did in 2010 with Japan in its clash
over the Senkaku/Diaoyutai Islands.
If given the op on, it seems as though most buyers would rather not deal with China. However, not only does
China control the raw materials, but it also controls the produc on of the downstream oxides, the associated
metals, and the alloys. The implica on is that even if new sources of rare earths are established outside of
China, who will process the material into the high-value products required by modern industry?
The WTO Ruling
From the end of 2010 to early 2011, REE prices rose considerably amid fears that China would con nue to
restrict rare earth exports. China reduced its quota for rare earth exports from 50,000 tonnes in 2009 to 30,000
tonnes in 2010, where the quota remains. It argues that the quotas were adopted in order to curb the massive
environmental damage associated with its rare earth industry, and to help conserve its finite resources. These
claims appear to have some validity. In 2010, China was producing 97% of the world’s rare earth metals but
only had 30% of the world’s reserves, according to China’s Ministry of Commerce. In 1996, China had 43% of
world reserves. However, due to the lack of transparency, data coming out of China is highly unreliable and
global rare earth reserve es mates vary widely.
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China is able to sell rare earth metals so cheaply, deterring new market entrants, because of its disregard for the
environment, something that is not permissible in the western world and not sustainable anywhere. The
implica on is that for several years, rare earth prices have been kept ar ficially low since resource scarcity,
and social and environmental damages were never priced into the equa on. China is star ng to improve its
environmental prac ces and new foreign producers have come online that must follow more stringent
environmental standards, meaning that China cannot con nue to sell rare earth metals this cheaply
indefinitely. However, the global community is hesitant to take these claims at face value.
In September 2010, Japanese companies accused China of blocking REE shipments to Japan for three weeks,
believing Beijing was using these economically vital materials as leverage in a bilateral conflict. The US, the EU,
and Japan ini ated a complaint to the World Trade Organiza on (WTO) on the grounds that Chinese export
quotas on rare earths broke world trade law by allowing China’s domes c manufacturing industries an unfair
advantage over the rest of the world, in terms of rare earth prices and availability. This past March, the WTO
announced that it agreed. The quotas were not handled uniformly, resul ng in an obvious advantage for
Chinese-based companies. China is expected to appeal the ruling.
Will the WTO Ruling Change Anything?
The WTO is expected to maintain its decision, meaning that China will have to abolish its quota system within a
reasonable meframe. What happens next will depend on whether China priori zes its monopoly, or the
extensive environmental damage caused by its rare earth mining prac ces. If one examines the current state
of Bayan Obo, China’s largest rare earth mine, China’s environmental problems actually seem understated.
However, there are some that believe that China will con nue to undercut emerging foreign producers in order
to maintain its control over the industry. Another considera on to keep in mind is that China’s domes c
demand for rare earth products is also increasing, which could limit its ability to keep prices ar ficially low.
Bayan Obo: How Bad is Bad?
Bayan Obo, situated near Baotou in Inner Mongolia, is China’s single largest supply of REEs and contributes to
almost half of the world’s annual produc on. No one outside China knows what the current reserves are,
however, a 1998 USGS report cited resources of 1,500 million tons of iron at a grade of 35%, and at least 48
million tons of rare earth oxides at an average grade of 6%. Rare earth produc on from Bayan Obo con nued to
ramp up in the 2000’s, so it is doub ul that the current mine life is as rosy as some may believe. The Chinese
government claims that a er over 50 years of intensive mining, rare earth reserves in Baotou are only one third
of the original volume in the main mining areas.
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According to Chinese-controlled media, every year seven to eight million tons of waste is dumped into Bayan
Obo’s 11 square km unlined tailings pond. Outdated processing prac ces have contributed to soil erosion,
pollu on, acidifica on, and have severely limited the surrounding area’s agricultural land. Many studies have
been conducted on the heavy metal content of the soils surrounding the mine, which are high in arsenic and
fluorine, as well as the toxicity of the land and the epidemiological consequences. However, these studies are
only available in Chinese print journals and much of the data is s ll deemed “sensi ve informa on” (Klinger,
University of California, Berkeley).
The toxic, radioac ve waste generated from the processing of rare earth metals at Bayan Obo is seeping into the
groundwater, making its way toward the Yellow River. Furthermore, some worry about the tailings dyke failing,
a common occurrence in China in recent years, especially due to the age and the mismanagement of the Bayan
Obo opera on. If such an event were to occur, the consequences would be disastrous due to Bayan Obo’s
proximity to the city of Baotou and the Yellow River. 200 million people depend on the Yellow River for drinking
water, irriga on and agriculture, fishing and industry (Klinger, University of California, Berkeley).
It should be clear that the environmental burden carried by China to supply the world with “cheap” rare earths
is high. It is unfortunate that some believe China is using the environment as an excuse in order to procure a
favourable ruling from the WTO. If the world’s first ins nct is to distrust informa on coming out of China, is it
possible then that perhaps China is underrepor ng the extent of the environmental damage caused by rare
earth mining and processing? Admi ng to the full scale of the damage, how greed and reckless management
have endangered its own popula ons and the environment would likely be embarrassing for China’s
policymakers. However, it seems as though there is li le interna onal understanding of the true cost of
“cheap” rare earth metals.
The Chinese are likely struggling with their rare earth assets due to decades of inefficient, wasteful processing
and non-existent environmental standards. The reality is for how long can one abuse its mines before seeing
these consequences? China has recently begun efforts to remedy the situa on, including industry consolida on
to improve control, implemen ng stricter environmental standards, improving its own extrac ve processes and
recoveries, and cracking down on viola ons of the laws and regula ons. However, the point is that no one
really knows the full extent of the damage done by China’s rare earth industry, and the shape these mines are
in. Could it be that China will have to secure both a supply of heavy rare earths and a supply of light rare
earths sooner than the rest of the world an cipates?
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Bayan Obo and Elevated Areas of Radioac vity
Proximity of Baotou Iron and Steel Plant (BTISP) to Baotou City
Source: Tsinghua University
Source: Tsinghua University
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Rare Earth Demand: China and the Rest of the World (ROW)
Source: Professor Dudley J. Kingsnorth, IMCOA, Cur n University
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
180,000
2004 2006 2008 2010 2012 2014E 2016E
ROW
China
Supply and Demand
World demand for rare earth oxides was es mated at 115,000 t for 2012 compared to 90,000 t in 2004, an
increase of almost 28%. China’s share of worldwide demand was es mated at 64% of this total in 2012,
compared to 42% in 2004. As China’s and the rest of the world’s demand for rare earths increase, access to a
reliable supply of these metals is becoming a great concern.
Grandview Research Inc predicts that the market for rare earth elements will grow to US$10.96 billion by
2020. That equates to an increase of 37% over ﬁve and a half years. Asia Paciﬁc, the largest customer of REE in
2013, is expected to see the largest growth in consump on during this period. Economic growth and the pace of
development for new technologies are the two main factors driving demand for REEs.
Build the Supply and the Demand will Follow
A key issue dampening demand for both light and heavy rare earth metals is the scarcity of a reliable, stable,
and secure supply. The probability of a supply disrup on from China may be fairly low, although, if such an
event were to occur, the economic and defense consequences would be severe. Due to this risk, it is
understandable that manufacturers are hesitant to invest serious money into developing product lines that use
rare earth materials.
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Mountain Pass (US) Down-Stream Processing (Majority in China)
Resources Chemicals & Oxides Magne c Materials
& Alloys
Rare Metals
Segment
Revenue ($MM) 11.3 55.4 59.3 14.5
Volume (tonnes) 1,034 1,760 1,353 58
Revenue Share 8% 39% 42% 10%
Volume Share 25% 42% 32% 1%
Source: Molycorp
Molycorp: Breakdown of Revenue
Instead of inves ng in these supply chains, manufacturers are dedica ng R&D money to finding rare earth
subs tutes, which is no easy task due to their desirable and unique properties, to recycling rare earth metals,
or to reducing the amount of REEs used in their products. For example, electric car manufacturers like BMW’s
Mini and Tesla use motors that do not require rare earth magnets (Reuters). The implica on is that certain
energy-saving or resource-saving technologies are not being used to their full poten al because of a lack of
raw materials. Another example is fluorescent light bulbs, which are twice as efficient as the current standard
but use rare earth-based phosphors. In 2009, the US Department of Energy tried to phase out the current
standard and switch to fluorescent light bulbs, however, companies like General Electric opposed the ini a ve
because it claimed that it would not be able to secure enough rare earths to manufacture the new bulbs (Jones,
Yale).
The lack of a secure supply of rare earths is a problem, especially as newer and be er technologies are
developed that require the use of these exo c metals. End-users will need to have confidence in their supply
chains before new and improved applica ons requiring rare earth metals can be developed and
commercialized.
Have Molycorp and Lynas Changed Anything?
Lynas (LYC-AU) and Molycorp (MCP-US) are the first two companies to develop rare earth mines outside of
China in recent years. Both of these mines produce light rare earth oxides and are located in Australia and in
California respec vely. Lynas announced produc on of 1,089 tonnes REO for the March 2014 quarter and
expects to ramp up to 11,000 tpa by June 2014, despite its financial difficul es. Molycorp, although con nuing
to operate at a loss, announced produc on of 1,000 tonnes of REO for the fourth quarter and an cipates that
the mine will produce below its design capacity of 19,050 tonnes in the first half of 2014. However, Molycorp is
virtually a Chinese company, and Lynas has pre-sold most of its produc on to Sojitz Corp, one of Japan’s largest
sellers of rare earth metals.
Molycorp essen ally became a Chinese company a er its merger with Neo Materials in 2012. Molycorp’s rare
earth ore is mined at Mountain Pass in California, however, it ships the majority of the mineral concentrates
produced to Neo Material’s facili es in China for further processing. The following chart breaks down
Molycorp’s revenue and produc on volumes for the fourth quarter of 2013.
28 April 2014
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As demonstrated, only 8% of the total revenue and only 25% of the total volume of goods produced is derived
from the US-based Mountain Pass Mine. The majority of Molycorp’s revenue (92%) and the majority of its
products sold (75%) are from higher-value processed goods. Molycorp’s facili es are largely Chinese-based. If
the world is looking to diversify its rare earth supply, does it change anything to mine and process the raw
materials in the US, ship these to China for addi onal down-stream processing, and then ship these products
to the rest of the world, including back to the US?
Lynas is different. It mines its ore at Mount Weld in Australia and then processes it in Malaysia. It has a ten year
off-take agreement for over 9,000 tonnes per year with Sojitz Corp. China has tried to acquire both Molycorp
and Lynas in the past. In 2005, China made a bid for Molycorp but was blocked by the US government. In 2009,
China tried to buy a controlling interest in Lynas but was blocked by the Australian government. Perhaps
China’s intent was solely to protect its monopoly on the industry, however, it is important to keep in mind
that China has a history of thinking long-term. Could it also be thinking of its rare earth supply for domes c
consump on? In either case, developing addi onal mine capacity for the REEs is only a part of the solu on. In
order to truly diversify supply, down-stream processing facili es must be constructed outside of China to
fulfill growing demand for REEs.
The Case of Cerium and Lanthanum: Are these really Dead-Weight?
Cerium and lanthanum are two of the lowest-value rare earth metals in terms of price. They are also the most
abundant, making up over 75% of the typical rare earth deposit, and are therefore in greatest supply,
domina ng China’s, Molycorp’s, and Lynas’ produc on profiles.
Once Molycorp and Lynas ramp up to full produc on, the consensus seems to be that the market will be
saturated with light rare earth metals and that these prices will con nue to fall to below pre-2010 levels, cerium
in par cular. However, it is important to keep in mind that cerium has been in oversupply for at least the last
two decades, and it s ll has a market. 49% of the bastnasite ore at Molycorp’s Mountain Pass Mine consists of
cerium. However, in a conference call, Molycorp stated that roughly 25% of the cerium produced is used as feed
material for further processing, and all of these cerium products were sold. The implica on is that there is
demand for higher value cerium products, but maybe not as much demand for basic cerium oxide.
Along these lines, Molycorp is increasing its downstream cerium products through the produc on of cerium
special es and through proprietary products such as SorbX. SorbX is a water treatment product that was
launched into municipal industrial wastewater treatment markets. It is a poten ally large-volume applica on
that could see a growth rate of 6-10% between 2015 and 2016, according to the Industrial Minerals Company of
Australia (IMCOA). The product’s success could significantly increase the amount of cerium sold through
finished products.
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In 2013, according to Grand View Research Inc, cerium dominated the global rare earth market, accoun ng for
40% of total rare earth metal consump on. A primary use of cerium and lanthanum is in catalysts, which makes
up 20% of the global market for rare earth metals. Grandview expects that catalyst demand, and consequently
demand for cerium and lanthanum, will drive the rare earth market for the next six years owing to increased
industrializa on and oil and gas extrac on ac vi es in Asia Pacific, La n America, and the Middle East.
Catalysts are used in a number of industries such as automobiles, metallurgy, phosphors, and glass. A dominant
part of this market segment is fuel cracking catalysts (FCC), which are used to produce gasoline, dis llate, and
other higher-value products like butane and propane. The global petroleum refining catalysts business was
valued at US$4.5 billion in 2012 (Chemical Week) and is expected to grow 5.8% per year to $19.5 billion in
2016, according to World Catalysts, due to rapid growth in Asia, led by China, and the Middle East. In 2013,
according to W.R. Grace, the FCC catalysts market was flat since refinery start-ups were offset by closures in the
Atlan c Basin and Japan. W.R. Grace believes that, following regular seasonal weakening in the current quarter,
FCC sales should return to growth going forward.
Again, China Leads the Way
As pundits an cipate a “hard landing” for the Chinese economy, China con nues to buy the world’s resources,
its most recent acquisi on being the US$6 billion Las Bambas Copper Mine. China has a much longer-term
investment meline than the western world. Therefore, regardless if the Chinese economy is slowing, it clearly
s ll requires resources to sustain future economic growth and increasing consumer demand.
Domestic consump on, the environment, and energy efficiency are priori es for the country, as set out in its
most recent Five-Year Plan, termed the “Green Plan”. Growth in these areas will require rare earths metals,
whether for cell phones, laptops, electric cars, or wind turbines. Specifically, China has set a goal of having one
million electric vehicles on the road by 2015. Last year, for the first me, there were more electric cars sold in
China than in the US.
China does not have an unlimited amount of feed stock for its rare earth processing industry, and the fact that it
is beginning to sign MOU’s with junior explora on companies demonstrates this concern. China may be ge ng
nervous about its domes c supply and it is its own largest customer. As a result, paying higher prices to import
these materials from the US, Russia, India, or Australia is not in its best interest.
MOUs are highly preliminary in nature, but they are s ll encouraging for the rare earth industry. China’s rare
earth reserves are deple ng, especially for heavy rare earths which are thought to only have ten to fi een years
le . However, China has significant over-capacity in smel ng and separa ng, but only for the three minerals
that it knows how to process, which are xeno me, bastnaesite, and monazite.
28 April 2014
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Conclusion
It is difficult to decide what to make out of the data coming from China due to the lack of transparency, the
state-controlled media, and the fact that poli cs o en encroaches on business interests. China’s unregulated
REE produc on prac ces, its apathy towards the environment, and its low labour costs have allowed it to
dominate the rare earth industry all these years. However, it appears that the costs of producing “cheap” rare
earth products are beginning to outweigh the benefits from the Chinese perspec ve, and as a result, China’s
rare earth industry is undergoing a number of changes that will make rare earth produc on more expensive.
In the past, China’s priority was to industrialize as quickly as possible, which it did using a low-cost, export-
oriented model. China’s rare earth monopoly supported this goal, boos ng exports and growing the economy.
However, the repercussions of this unbridled growth are star ng to catch up. The country is trying to transi on
from export-oriented growth to growth fueled by domes c consump on, and as previously stated, China is its
own largest REE customer. As China begins to look elsewhere to secure new REE feedstock, perhaps the rest of
the world should do the same, given the strategic importance of these metals to military and to industry. To
that end, why not look to Quebec?
Rare earth projects outside of China with feasible metallurgy and exposure to the cri cal rare earth oxides are
quite limited. Many rare earth juniors, though they may have this exposure, are not capable of producing a
saleable mineral concentrate, making their projects extremely risky. Commerce is one of the most advanced
juniors simply because it meets this key development requirement, even though a feasibility study has not yet
been completed.
Unlike many other projects, Ashram is made up of minerals that have a known processing procedure.
Management believes that it can advance Ashram fairly quickly, depending on financing. Its main focus will be
to con nue to advance the metallurgy and to secure a joint venture partner. Commerce is almost at the stage
where it can begin to focus on the hydrometallurgy and on the evalua on of end-products.
28 April 2014
27

The information contained in this report was obtained from sources we believe to be reliable at the
time obtained but neither Secutor Capital Management Corp nor its employees, agents, or
information suppliers can guarantee that such information is accurate or complete and it should
not be relied on as such.
Any opinions expressed herein reflect our judgement at this date and are subject to change. This
commentary is based on information that is believed to be accurate at the time of writing and is
subject to change. All opinions and estimates contained in this report constitute Secutor Capital
Managment Corp’s judgement as of the date of this report, are subject to change without notice
and are provided in good faith but without legal responsibility. Interest rates, market conditions
and other investment factors are subject to change. Past performance may not be repeated.
Secutor Capital Management Corp and/or employees from time to time may hold shares, options
or warrants on any issue included in this report and may buy or sell such securities.
Secutor Capital Management does and seeks to do business with companies covered in its
commentary. As a result, investors should be aware that the firm may have a conflict of interest
that could affect the objectivity of this report.
This commentary is intended for use only in jurisdictions where Secutor Capital Management Corp
is registered and is not to be construed as an offer or solicitation to buy or sell any security.
Secutor Capital Management Corp accepts no liability whatsoever for any loss arising from any
use or reliance on this commentary or the information contained herein. Any reproduction in
whole or in part of this commentary without permission is prohibited.
This commentary is furnished on the bases and understanding that neither Secutor Capital
Management Corp nor its employees, agents, or information suppliers is to be under any
responsibility or liability whatsoever in respect thereof.
Member of the Investment Industry Regulatory Organization of Canada and the Canadian Investor
Protection Fund.
SECUTOR
Commerce Resources Corp 28 April 2014
28

Secutor Capital Management Initiates Coverage on Commerce Resources Corp. (April 2014)

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Secutor Capital Management Initiates Coverage on Commerce Resources Corp. (April 2014)