Wednesday 23rd September 2020

Resource Clips

Which way to the Ring of Fire?

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NOT’s not got the only transportation alternative, however. In February rival chromite explorer KWG Resources released a study that found rail more expensive to build but much cheaper to operate than road. The Tetra Tech report estimated a rail capex of $1.56 billion, compared to a road capex of $1.05 billion, to build a 330-kilometre route to the CN TSX:CNR mainline at Nakina. But assuming annual shipment of three million tonnes, rail would cost $10.50 a tonne compared to $60.78 for road. At five million tonnes a year, rail estimates plunge to $6.33 a tonne while road estimates dip just slightly to $59.28. Road operating costs “are more sensitive to market fluctuations and increase significantly with expanding operations,” according to the study.

As Cliffs stands down, Noront and KWG propose alternate transport routes

Except for hundreds of kilometres of ice road, Ring of Fire projects
like those of KWG Resources rely on fly-in/fly-out transit.

Through its subsidiary Canada Chrome Corp, KWG has staked a 330-kilometre line of mining claims from its Big Daddy chromite deposit to rail and road infrastructure to the south. The company now has a railway engineering firm conducting a pre-feasibility study on the route.

KWG holds a 30% interest in Big Daddy, with Cliffs holding the remainder. In another Ring of Fire chromite property, KWG may earn 80% of the Black Horse project by funding Bold Ventures’ TSXV:BOL drill program. Bold optioned the property from Fancamp Exploration TSXV:FNC last January. Fancamp still holds the McFaulds Lake property adjacent to Noront’s Eagle’s Nest.

Among other players in the immediate area, MacDonald Mines Exploration TSXV:BMK is now drilling its Butler VMS project, a polymetallic discovery 36 kilometres west of Big Daddy. Between Black Thor and Big Daddy, Probe Mines’ TSXV:PRB Black Creek chromite deposit hosts a 2010 resource showing:

  • measured and indicated categories totalling 8.64 million tonnes averaging 37.41% chromite with a Cr:Fe ratio of 1.8
  • an inferred category of 1.61 million tonnes averaging 37.78% with a Cr:Fe ratio of 1.7.

Whether it’s east-west, north-south, road or rail, transportation is just one of the concerns facing Ring of Fire development. Without citing its own challenges with current metal prices, Cliffs blamed its Black Thor suspension on delays in provincial environmental approval, legal action from native bands, unresolved surface rights issues and unfinished agreements with the province “that are critical to the project’s economic viability.”

Following the company’s announcement, Ontario’s New Democratic Party slammed the Liberal government, saying its “mismanagement of the Ring of Fire could cost Ontario thousands of jobs and billions of dollars in economic growth.”

But Ontario Minister of Northern Development and Mines Michael Gravelle reaffirmed his party’s support for the region’s development. “While Cliffs has notified the Ministry of the Environment that it plans to suspend its environmental assessment process, the company has not withdrawn its terms of reference, which [are] currently before the ministry for review,” he said.

Last February CN suspended its feasibility study on a $5-billion, 800-kilometre rail line to the Labrador Trough iron ore range due to “current market realities.” Read more here.

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