VANCOUVER (miningweekly.com) – With the first commitments in place to build roads into Northern Ontario’s emerging Ring of Fire (RoF) mining camp, regional first mover Noront Resources is taking the opportunity to continue to build out its inventory of polymetallic resources by prioritising copper/zinc targets for exploration in 2018.
The Toronto-based exploration junior and project developer is the largest landholder in the RoF region, holding about 80% of the claims in the RoF over 117 400 ha. Noront’s claims in the RoF district are of comparable size to the entire Sudbury basin with significant exploration potential.
“The exploration focus for 2018 is on copper/zinc mineralisation at the Butler and McFaulds deposits, between which the company has already outlined a million tonnes grading nearly 4% copper and 1.1% zinc,” president and CEO Alan Coutts told Mining Weekly Online in an interview.
He said their development could potentially move up the priority list as prices for these commodities continue their respective upward trajectories.
The McFaulds #1 and #3 volcanogenic massive sulphide (VMS) deposits are the centrepiece of an 80-claim property held 85% by Noront and 15% by KWG Resources.The Butler claim block consists of 77 claims covering a well-defined VMS trend (75% Noront, 25% MacDonald). Previous exploration work has returned notable copper and zinc showings at Butler Zones 1 to 4.
Coutts is extremely bullish on nickel and its increasingly important role in the electric vehicle supply chain. The high-grade nickel market has extremely compelling fundamentals that continue to tighten over the next five years.
Noront recently intersected encouraging mineralisation at the McFaulds No 8 volcanogenic massive sulphide (VMS) deposit, hosted on the property where the first discoveries in the RoF were made and which spurred the initial staking rush in 2002 to 2003.
With more than 30 years of experience under the belt, mining veteran Coutts joined Noront about 3.5 years ago, after serving in various domestic and international positions in mining exploration, feasibility, construction and production across a broad range of commodities. Most recently, Coutts was with Xstrata Nickel as MD for the Australasia region, based in Perth, Western Australia, and before that was Xstrata’s GM at the Brunswick mine, in Canada.
Noront is also surrounding itself with the people required to develop a remote new mining district. Its board includes Canadian Council for Aboriginal Business president and CEO Jean Paul Gladu; former Vale COO for its North Atlantic operations John Pollesel; and former federal minister of natural resources and FedNor Greg Rickford.
LEADING LAND HOLDER
Since making the first discoveries at Eagle’s Nest nickel/copper/platinum-group metals (PGMs) in 2007, the company has evolved to become the largest land holder in the emerging mining district. It has also made significant chromite discoveries, and that was when Cliffs Natural Resources (Cleveland-Cliffs today) entered the fray.
However, Cliffs’ projects stalled around 2012/13, just as iron-ore prices flatlined and, early in 2015, Noront scooped up a majority land position in the Ring of Fire district when Cliffs agreed to bow out of the prospective region by selling its subsidiary and claims for $20-million. The deal included a 100% interest in Cliffs' prized Black Thor chromite deposit and a 100% interest in the Black Label chromite deposit.
Today, Noront has no fewer than 11 solid prospects in the development pipeline, led by the feasibility study stage Eagle’s Nest, with the Blackbird and Black Thor chromite projects in the preliminary phases of economic analysis.
“We were convinced that this is an emerging polymetallic district. We saw the regulatory and infrastructure delays Cliffs was experiencing as an opportunity, and were able to conclude a deal with the support of our major shareholder Denver-based Resource Capital Fund,” Coutts stated.
Over the past 2.5 to 3 years, Noront has entered several transactions to secure outstanding claim blocks in the RoF, usurping assets from the likes of Cliffs, and MacDonald Mines, and has now also become the largest shareholder in junior project developer KWG Resources, with which it jointly owns projects in the district.
Coutts explained that when looking at the potential timeline for development of the RoF, it will pan out with smaller-scale base metals/PGM operations developing first, followed in about 20 to 30 years’ time by large-scale chromite operations that could in the future potentially benefit from a railway line being built into the emerging mining district.
A political hot potato since its discovery in 2002, the RoF’s rich ores are estimated to hold some C$60-billion in nickel/copper/platinum group metal (PGM) mineral wealth, a figure still touted by both the federal and provincial governments for years, albeit perhaps calculated at a time when metals prices were considerably higher.
“The railway line would require a minimum regional output in the order of eight- to ten-million tonnes a year to break even, a volume that the initial projects cannot even come close to justify for another 10 to 15 years,” he said.
Becoming a ferrochrome producer is the long-term strategy, which, once in production, would result in the delivery of substantial volumes for more than 50 years.
While North America represents a small ferrochrome market, the high-grade product will receive higher prices and premia in Asian markets.
Noront plans to build a 100 MW to 130 MW scalable ferrochrome furnace at an existing Northern Ontario municipality, for which it is receiving expressions of interest until February. “We were pleasantly surprised by the high level of interest to host the smelter project. This will be the first smelter to go through the permitting process since the 1980s and we are going to put a lot of effort into the environmental assessment process.”
According to Coutts, operating in the RoF is challenging, given that the goal posts seem to move every now and again. Coutts described the relationships between the private sector, First Nations and the government governing development of the RoF as a constantly changing playing field.
Following years of complex negotiations and several delays, the Ontario provincial government in August made the historic announcement that it would support and fund at least two road proposals that will connect Northern Ontario’s far-flung First Nation communities and provide industrial road access to the emerging Ring of Fire (RoF) mining district.
“With the road routing now in the hands of the government and First Nations, this streamlines the process to establish infrastructure into the mining camp," Coutts said.
Noront has from the outset taken a very high-tech approach to its project designs to ensure the minimum surface footprint. A key focus rests on sustainability. For instance, because of the waterlogged nature of the James Bay Lowlands, underground operations will be better suited which, for instance, includes underground stacked tailings for Eagle’s Nest.
Coutts stressed that the company continues to look for strategic partnerships and joint venture partners to move substantially all of its large portfolio of opportunities in the RoF forward and further up along the value curve.