IPO Watch: Canadian rare earths chasing second home in Australia

C$23 million Commerce Resources Corp is the latest TSX critical minerals play to seek a secondary listing on the ASX
Led by noted Aussie resources name Ross Carroll, it owns the Ashram rare earths deposit in northern Quebec, the largest monazite hosted carbonatite resource in North America
Ashram also a potential Western source of tightly supplied battery material fluorspar

A Canadian company boasting what it says is North America’s biggest undeveloped hard rock rare earths resource is chasing a secondary listing on the ASX as Western governments back critical metals supply chains outside China.

Commerce Resources Corp (TSX-V:CCE) has placed an indicative early 2025 timeline on a dual listing on the Aussie bourse, a major step to commercialise its Ashram deposit 130km south of Kuujjuaq on the north edge of Canada’s resource rich Quebec province.

Uncovered in 2009, the project was vended into Commerce, which is likely to pursue a name change ahead of its ASX charge, by Jody Dahrouge and Darren Smith.

If those names feel familiar, they should. The CCE director and technical adviser respectively previously traded the Shaakichiuwaanaan project, then known as Corvette, to Patriot Battery Metals (ASX:PMT).

The deposit is now one of the world’s largest lithium resources, with Dahrouge and Smith’s fingerprints on a number of other tenements around the surrounding James Bay district.

Ashram is somewhat different. Located in northern Quebec, the project contains 73.2Mt in indicated resources at 1.89% total rare earth oxides and 6.6% fluorspar (also known as fluorite).

Outside that is 131.1Mt inferred at 1.91% TREO and 4% fluorspar, with 21% of the TREO being the high value NdPr (neodymium-praseodymium), used in permanent magnets for EV motors and wind turbines.

Fluorspar, meanwhile, is used in steel and aluminium refining, where it helps to remove gangue materials, while it also has an application in the lithium-ion batteries key to the development of the electric vehicle market.

At a market cap of just C$23m, the explorer believes its resource ranks as very cheap compared to ASX alternatives.

“We’ve got a big capital spend ahead of us, and the Australian market’s more prolific for mining compared to the TSX, so we believe it makes sense to have a dual listing and bring it down here while maintaining our TSX listing,” new president and CEO Ross Carroll, who is based in Melbourne, said on the sidelines of the Resources Rising Stars conference on the Gold Coast this week.

“Hopefully we get a rerate through the process.”

Building the market

Previously the boss of contractor Macmahon, CFO at Chinese-owned base metals producer MMG and an executive at BHP and Woodside, Carroll is keenly aware of the dominant position China has in critical minerals supply chains.

“I believe there’s a sense of urgency (with Western governments) about opening up the rare earth market,” Carroll said.

“So we’re starting to see a lot of funding coming from export banks, whether it be US, Canada, Korea.

“I think there is a lot of support there, and that will help a lot of the rare earth projects get up in the not too distant future.”

While development costs will be updated in a new PEA next year, the big focus for Ashram will be an estimated $500m of infrastructure needed deliver product from the impressive but remote orebody to market.

A road and transshipment facility will be key.

The prize, however, is a deposit Carroll says is unique. It rivals other development stage deposits like Gina Rinehart-backed $380m capped Arafura Rare Earths’ (ASX:ARU) Nolans Range in terms of the size of its rare earths inventory.

“Currently you have Lynas and Mountain Pass, the two big Western producers, then the bulk of the rest of production comes from China. So this resource is unique, and also it’s very large compared to other discoveries, both in Australia and Latin America, and North America for that matter,” Carroll said.

It also boasts substantial fluorspar credits as well as hints of niobium, with nearby drilling hitting grades up to 0.6% Nb2O5 (niobium pentoxide).

According to The Oregon Group, fluorspar demand is expected to exceed supply by between 40-70% by 2035, with batteries needing up to 5-10x more of it than lithium. China produces over 60% of global production but has only 10 years of reserves left, with prices lifting 19% between last 2022 and late 2023 even as lithium prices nosedived.

America is completely dependent on imports, a challenge as carmakers try to ensure they are eligible for Inflation Reduction Act tax credits.

“There are very little reserves left in the world,” Carroll said. “So this could actually be quite a meaningful deposit just on a pure standalone fluorspar basis.”

Aboot time

It’s not the only Canadian looking to the ASX for capital as well.

Midweek, TSX-V-listed Golden Horse Minerals announced a deal to acquire Emerald Resources’ (ASX:EMR) non-core Hopes Hill and Greenmount gold projects near Southern Cross in WA.

Collectively they’ve produced ~235,000oz in the 1990s and early 1900s, respectively.

Emerald will acquire 32 million shares at 25c a pop to take a cornerstone stake in Golden Horse, and provide a $2m loan.

Golden Cross has also inked an option agreement to acquire tenements covering the Redbank and Woolgorang copper project in the Northern Territory with NT Minerals (ASX:NTM).

“Emerald’s investment as a cornerstone shareholder and their commitment to provide a $2 million loan facility underscore their confidence in our potential,” Golden Horse MD and CEO Nicholas Anderson said.

“With this acquisition and our proposed upcoming ASX listing, we’re eager to accelerate our exploration programs and unlock the value of our extensive tenement package.”

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