Friday 21st October 2016

Resource Clips

Posts tagged ‘chromite’

The optimistic route

August 26th, 2016

As one Ring of Fire road study disappoints proponents, another surfaces

by Greg Klein

A 2013 expression of Ring of Fire optimism now sounds dispiriting: “With the support of the critical parties, planning and permitting for the main all-weather access road could be completed in 2014, and actual construction operations could commence in 2015.” That was the conclusion of a study commissioned by KWG Resources CSE:KWG three years ago but not published until August 26.

The company posted the 18-page “preliminary scoping exercise” on its website four days after CBC reported that a federally and provincially funded study on the same subject had been completed but not released. Although anticipated to herald a breakthrough, that study simply called for more study, the network stated. Moreover the report didn’t even consider a route to the proposed mining region, focusing only on connecting four native bands with a highway.

As one Ring of Fire road study disappoints proponents, another surfaces

Warmer temperatures make winter roads increasingly
unreliable, according to a KWG-commissioned study.

Release of the $785,000 report would be up to the four communities that led it, Ontario mines minister Michael Gravelle told the CBC. The network somehow obtained a copy but quoted only a few short excerpts. KWG president Frank Smeenk tells he wanted to counter disappointment with “an alternative that is feasible, financeable and attractive.”

KWG’s study estimated the cost of connecting its proposed north-south rail line with an existing road near Pickle Lake, about 305 kilometres west, between $83.6 million and $99.9 million. Trunk roads to four reserves would add another $36.1 million to $73.1 million. The four communities total roughly 2,500 people, according to numbers then available to the researchers.

The study didn’t consider expenses related to potential cultural or archaeological surveys, or the environmental assessment.

As for the region’s existing winter road, access “appears … increasingly unreliable as a consequence of warmer winter temperatures.”

Socio-economic benefits would include training and employment, as well as easier access to health care, police, schools and social services. The road would lower shipping and personal travel costs. Economic spinoffs could encourage growth in forestry and tourism, along with industrial, mechanical, transportation, commercial, financial and legal sectors, according to the study.

It was conducted by GreenForest Management, a Thunder Bay-based firm whose previous work included planning, construction and maintenance of 700 kilometres of all-weather roads north of Sioux Lookout and of 360 kilometres of all-weather roads north of Nakina.

Smeenk calls the report, which cost KWG between $25,000 and $35,000, “a good news story” that counters disappointment in the government-funded study.

While a proponent of a north-south railway, Smeenk says year-round east-west road access will be “a necessary ingredient to building the rail, which in turn is a necessary ingredient to creating a mining camp at the Ring of Fire.” A railway would be necessary to develop chromite deposits, the company argues.

But Noront Resources TSXV:NOT proposes to develop its Eagle’s Nest nickel-copper-PGE project first, using an east-west road. That company holds about 75% of the region’s claims, having closed a 75% acquisition of MacDonald Mines Exploration’s (TSXV:BMK) RoF properties this week. Noront holds 70% of the Big Daddy chromite deposit and 85% of the McFaulds copper-zinc deposits. Noront is also KWG’s largest shareholder.

KWG holds 30% of Big Daddy, an 80% option on the Koper Lake project/Black Horse chromite deposit and 15% of McFaulds.

KWG has an agreement with China Railway First Survey and Design Institute Group to conduct a feasibility study on a link to a Canadian National Railway TSX:CNR line 340 kilometres south. China Railway expects to add that to the Ring of Fire library by year-end.

News of the government-funded study prompted opposition politicians to criticize the federal and provincial Liberals. But the proposals seem mired in the duty to consult. On August 25 the Globe and Mail stated it obtained that report’s three-page conclusion. “Some of the unresolved issues include who would own and manage the roads and how the new road connections would affect social assistance payments,” the paper stated. “Some social programs pay more to residents of remote fly-in communities.”

Late August 26 the G&M said it now had the entire 147-page final report, which estimated road-building costs between $264 million and $559 million. “Among the positives, people said road access would make it easier for parents to visit children who must move away to attend high school,” the story noted. “Cheaper food and other goods from the south are also viewed as a benefit, along with new links between first nations communities. Common concerns were that a road could bring more hunters from the south, which could negatively affect trap lines and other traditional hunting practices. Many fear that more drugs and alcohol could reach the communities.”

Clearly nothing is going to be built in that part of Canada without social licence.—Frank Smeenk,
president of KWG Resources

While emphasizing the positive, Smeenk seems resigned to slow progress. “Clearly nothing is going to be built in that part of Canada without social licence,” he emphasizes. “We’ve flown a number of trial balloons on how that might best be accomplished. The best is that the first nations whose traditional territories will be traversed by this transportation infrastructure should be equal partners in it. So we’ve proposed to the first nations of Webequie and Marten Falls that we create an equal partnership in both the mine and transportation.”

In June KWG announced that chiefs of those bands were considering a proposal to place its mining claims in a limited partnership to be held half by KWG and half by the two communities. To buy their way in, KWG offered the bands a non-recourse loan of $40 million.

This week a Webequie drum group opened a new drill program at Eagle’s Nest “to ensure minimal disturbance to the land and water and for the health and safety of the workers,” Noront stated. The project reached feasibility in 2012. Earlier this month, in apparent expectation of the latest government-funded study, Noront said it “anticipates that mine construction will begin in 2018 when road construction starts, resulting in first concentrate production in 2021.”

Despite pessimistic reports of the government-funded study, Noront reiterated its expectation that Ontario will “make a joint announcement with local first nations regarding plans for a shared regional access road before the end of this year.”

The province has committed $1 billion for RoF infrastructure and has asked Ottawa for matching funds.

Update: Ring of Fire road study stalls as KWG rail study proceeds

August 22nd, 2016

by Greg Klein | August 22, 2016

Hours after KWG Resources CSE:KWG updated its Ring of Fire rail proposal, CBC reported that a highly anticipated government-funded road study simply called for more study. Specifically excluded from its scope, the network added, was a route to the potential mining sites.

CBC obtained a copy of the document entitled All Season Community Road Study, Final Report June 30, 2016 and quoted this excerpt:

KWG’s Ring of Fire rail study proceeds, government road announcement anticipated

KWG looks to China to support its proposed railway.

“This study has always been considered to be focused on an all-season community service road rather than an industrial road to connect to the Ring of Fire mineralized zone. Its intention was always to (1) link the four communities together and (2) link the communities to the existing highway system.”

Release of the federally and provincially funded report had been expected since its scheduled completion in June. Ontario has pledged $1 billion to Ring of Fire infrastructure and asked Ottawa for matching funds.

“This study was going to be the one that was going to give us the road map forward, literally,” the network quoted NDP MP Charlie Angus. “Now it’s just going to be kicked down the road for more delay, more study and more excuses.”

CBC stated that Ontario mines minister Michael Gravelle “said those discussions are ongoing and there is no timeline for coming to definitive answers. The study was led by the First Nations and it’s up to them to release it to the public, he added.”

Besides the report’s disappointing lack of a call to action, news that the study excluded the Ring’s mineral deposits will take many observers by surprise. Noront Resources TSXV:NOT favoured an all-season east-west road that would connect its deposits and four native communities with Highway 599 at Pickle Lake, which leads south to a Canadian National Railway TSX:CNR line at Savant Lake.

KWG maintained that rail would be necessary to develop the region’s chromite assets. Noront countered that its nickel-copper-platinum-palladium deposits should be developed first, pending better market conditions for chromite. A road would be the faster, cheaper option, the company argued. KWG has said Chinese investors have shown interest in a railway.

Hours before CBC posted its exclusive, KWG announced that a “conditional bankable feasibility study” for its proposed railway should be complete by year-end. The company stated it has “agreed on the deliverables and timetable” with China Railway First Survey and Design Institute Group to examine a 340-kilometre north-south route linking its properties with CN at Exton.

Noront’s flagship Eagle’s Nest nickel-copper-PGE project reached feasibility in 2012. In an optimistic news release earlier this month, the company stated it “anticipates that mine construction will begin in 2018 when road construction starts, resulting in first concentrate production in 2021.”

Noront’s other Ring of Fire assets include the Blackbird chromite deposit and the Black Thor and Black Label chromite deposits. Noront and KWG hold 70%/30% respectively of the Big Daddy chromite deposit and 85%/15% of the McFaulds copper-zinc deposits. Noront is KWG’s largest shareholder.

Noront recently signed a definitive agreement to buy a 75% stake in MacDonald Mines Exploration’s (TSXV:BMK) regional properties, increasing Noront’s portfolio to around 75% of the Ring’s staked claims.

KWG also holds an 80% option on the Koper Lake project with its Black Horse chromite deposit.

Both companies have faced recent public criticism. Last week CBC reported the Neskantaga First Nation issued a “cease and desist” order to Noront, after the company announced a drill program. An online video posted by KWG drew widespread censure for its display of bikini-clad women.

Champion Iron begins financing on signing $53.3-million deal to buy Bloom Lake

December 11th, 2015

by Greg Klein | December 11, 2015

Obviously betting on better times ahead, Champion Iron TSX:CIA announced a definitive agreement December 11 to buy the Labrador Trough property abandoned by Cliffs Natural Resources NYE:CLF. Still subject to court approval, Champion subsidiary Quebec Iron Ore would get the assets for $10.5 million, around $41.7 million in environmental costs and about $1.1 million in bond obligations. Now all the company has to do is raise the money.

Champion’s bid was approved last spring by a court-appointed monitor of Cliffs affiliates now under bankruptcy proceedings. Champion expects to close in Q1 2016.

Bloom Lake is considered an exceptional opportunity for Champion and one that would not have presented itself without the challenges of the current downturn in bulk commodities.—Michael O’Keeffe, CEO/chairperson of Champion Iron

To help fund the deal, the company also announced a private placement of up to $25 million. Commitments totalling up to $15 million have already come in from two parties, one of them controlled by Champion CEO/chairperson Michael O’Keeffe, who could end up with as much as 19.95% of the company. “Additionally, discussions with strategic partners, funds, government agencies and private investors are at an advanced stage” that might help finance up to two years of care and maintenance “should low iron ore prices prevail during this period,” Champion stated.

Champion sees a potential increase in annual maximum production, previously six million tons of iron fines at 66% iron, to over seven million tons at a similar grade. The company also hopes to reduce costs substantially.

In November last year Cliffs estimated another $1.2 billion would be needed to make Bloom Lake viable. But Champion’s announcement stated, “Even with an extended care and maintenance and planned upgrade period, Bloom Lake could potentially become one of the lowest capital cost iron ore mines in the world.”

Quebec’s Plan Nord fund has put up $20 million to study the feasibility of a new rail line linking the Bloom Lake-Fire Lake region with the St. Lawrence deep-water port of Sept-Iles. Two railways already serve the Trough, one of them a private carrier operated by an ArcelorMittal subsidiary.

Last May Quebec economy minister Jacques Daoust said the province was open to the idea of investing in Cliff’s former Bloom Lake assets. The company’s subsidiary suspended operations late last year before entering creditor protection in January.

In April Cliffs sold its Ring of Fire chromite deposits to Noront Resources TSXV:NOT for US$27.5 million.

Mining-friendly federal budget to fund rare earths and chromite research

April 22nd, 2015

by Greg Klein | April 22, 2015

Canadian mining groups welcomed a number of industry stimulants in the federal budget tabled April 21, among them a $23-million, five-year allocation to unlock rare earths and chromite production. The money, channelled through Natural Resource Canada, would “address the technical challenges of separating and processing rare earth elements for use in advanced manufacturing applications and products,” said a statement from Finance Minister Joe Oliver. “Funding will also support the development of efficient and green processing technologies to reduce the environmental impacts of chromite production.”

Mining-friendly federal budget to fund rare earths and chromite research

Canada could provide 20% of
global rare earths demand, Ottawa stated.

The budget document added, “Canada has the possibility to play a leading role in supplying rare earth elements by potentially fulfilling 20% of global demand.”

The Mining Association of Canada saw a number of industry benefits, including renewed funding for the Targeted Geoscience Initiative, aboriginal training and environmental assessment. “Mining now accounts for a large majority of federal environmental assessments,” MAC stated. “Support for the Canadian Environmental Assessment Agency, and other federal permitting departments, is essential to ensure the timely and effective review of major mining projects.”

Speaking for the Mining Association of B.C., president/CEO Karina Briño said her group will continue “to work with our provincial and federal partners towards one process for environmental assessments in British Columbia.”

The feds also extended the 15% flow-through tax credit for mineral exploration to March 2016. Calling for a permanent credit, Association for Mineral Exploration British Columbia chairperson David McLelland said a PDAC study had found “72% of exploration-stage financing from 2012 through 2014 was by flow-through shares that are made possible by the Mineral Exploration Tax Credit.”

The costs of environmental studies and community consultations necessary for an exploration permit will now be eligible tax deductions. In B.C. those expenses totalled over 21% of exploration spending in 2012, according to AME B.C.

The extension of borrowing limits for the Northwest Territories and Nunavut should encourage infrastructure development, MAC noted. Additional funds for marine safety and the overseas Trade Commissioner Service would also benefit miners, the group pointed out.

MAC president/CEO Pierre Gratton said, “Given the current financial situation and the need for fiscal discipline, I am pleased to see the federal government renew investment in critical areas.”

Ontario hires Deloitte to push forward Ring of Fire development

February 14th, 2014

by Ana Komnenic | February 14, 2014 | Reprinted by permission of

Despite the fact that a major stakeholder has iced its project, the Ontario government is making a major push for development of the massive Ring of Fire region.

The provincial government announced on February 14 that it had hired consulting firm Deloitte to help establish a development corporation which would build infrastructure in the Ring of Fire.

Ontario hires Deloitte to push forward Ring of Fire development

“Deloitte LLP will act as a neutral, third-party resource for key partners, including first nations, the provincial and federal governments and industry,” the Ministry of Northern Development and Mines wrote in a news release.

“Work is also underway to help partners build a common understanding of infrastructure needs in the region. A third-party research report will examine existing infrastructure proposals and establish a common technical basis to inform decisions to maximize the economic and social potential of the Ring of Fire region.”

Last year the Ontario government announced the creation of a development corporation for the Ring of Fire which brought together mining companies, government bodies and first nations communities.

Negotiations between these parties have stalled development for some time now. The provincial and federal governments can’t agree on who should pick up the tab and they have yet to reach an agreement with the Matawa First Nations Council.

“We remain committed to making a significant investment to support infrastructure needs in the region, but we need partners to come together so that decisions can be made,” Michael Gravelle, minister of Northern Development and Mines, said in the February 14 statement.

A lack of infrastructure—particularly an all-weather road—has been a major sticking point. Last November Cliffs Natural Resources NYE:CLF suspended its $3.3-billion Ring of Fire chromite project due to an “uncertain timeline and risks associated with the development of necessary infrastructure,” Cliffs vice-president Bill Boor said at the time.

Following the release of its 2014 budget, the federal government was criticized for not including the Ring of Fire.

“The Harper government was willing to invest in Alberta’s oilsands and large energy projects in Newfoundland and Labrador, but won’t partner with Ontario to develop the huge Ring of Fire mineral deposit or meet its infrastructure needs,” Ontario Premier Kathleen Wynne said, as reported by Canadian Press.

The Ring of Fire deposit—located in northwestern Ontario—is considered so economically promising that it’s been dubbed “Ontario’s oilsands.” Its worth in chromite, nickel and gold has been estimated at $60 billion. Key companies with claims in the region include Cliffs, KWG Resources TSXV:KWG and Noront Resources TSXV:NOT, but there are dozens more.

Reprinted by permission of

Some praise Cliffs’ Ring of Fire suspension, others not so much

November 22nd, 2013

by Ana Komnenic | November 22, 2013 | Reprinted by permission of

Earlier this week Cleveland-based miner Cliffs Natural Resources NYE:CLF pulled out of the $3.3-billion Ring of Fire chromite project in Ontario.

Cliffs chose to indefinitely suspend the project through its subsidiary Cliffs Chromite Ontario because of the “uncertain timeline and risks associated with the development of necessary infrastructure.”

“We continue to believe in the value of the mineral deposits and the potential of the Ring of Fire region for northern Ontario,” vice-president Bill Boor said in a statement. “As we’ve assessed the current challenges in the region and the costs to continue on the current path, we decided to suspend the chromite project indefinitely.”

The company said it would continue to work with the provincial government, first nation communities and other interested parties to resolve the issues, but did not mention a restart date.

The announcement didn’t come as much of a shock: In June the company suspended environmental assessment activities. In October Boor told Canadian Press that there were talks about shutting down the project because the company was having trouble building an all-weather road to the site.

Although Cliffs’ share price took a mild beating from the announcement, dropping from $27.50 per share on November 20 to $25.50 by November 22, not everyone sees the move as a bad sign.

H. Fraser Phillips at RBC Capital Markets said on November 22 that Cliffs made the right decision.

“It has been our view that the project would take years to develop if it could ultimately be developed at all,” Phillips was quoted in the Financial Post.

With today’s chromite prices, Phillips seriously questioned the project’s economics.

By scrapping the Ring of Fire plans, the company can now allocate resources and capital to its iron ore project in Quebec, Phillips noted.

But the province of Ontario might take a different view. In a piece for the Toronto Sun, Christina Blizzard writes that the Ring of Fire’s “flame-out will impact all of Ontario.”

When Cliffs pulled out of the project the company took jobs with it, closing its offices in Thunder Bay and Toronto, as well as the exploration campsite.

The project was valued at an estimated $60 billion in economic development.

Blaming a “Toronto-centric government” that “doesn’t get mining and doesn’t understand northern Ontario,” Blizzard writes: “That clanging sound is $60 billion being flushed down a stainless steel drain.”

Reprinted by permission of

Cliffs appeals Ring of Fire road decision

October 9th, 2013

by Cecilia Jamasmie | October 9, 2013 | Reprinted by permission of

U.S.-based Cliffs Natural Resources NYE:CLF is not giving up on its battle against Canadian junior KWG Resources TSXV:KWG as Cliffs today appealed Ontario’s Mining and Lands Commissioner ruling that didn’t allow the iron ore giant road access to its US$3.3-billion chromite project through KWG’s mining claims.

Cliffs appeals Ring of Fire road decision

The Cleveland-based company wanted to build an all-weather road to its massive chromite mining and smelting project in Ontario’s mineral-rich Ring of Fire region. But the proposed route would go through lands belonging to KWG, which wants to build a railway connecting to the town of Exton instead.

In a ruling released September 10, the tribunal decided that granting an easement to Cliffs would interfere with KWG’s ability to work its claims since “numerous heavy trucks (passing) every day” would cover up future drilling and sampling sites.

“It’s extremely material,” said KWG president/CEO Frank Smeenk of the commissioner’s ruling. “There couldn’t be any more material information for the owners of KWG.”

The claims on the northern half cover the only ridge of high ground where a road and rail could be built.

Bill Boor, senior VP for global ferroalloys with Cliffs, told NetNewsLedger he believes there can be no Ring of Fire without access to the area.

“Without access to the surface lands to develop the needed infrastructure, there is no project. Our proposed development has the scale needed to develop the road access and is therefore a catalyst for other smaller mining opportunities in the Ring of Fire,” Boor was quoted as saying.

Toronto-based KWG has a 30% interest in the Big Daddy chromite deposit and the right to earn 80% of the Black Horse chromite deposit. KWG also owns 100% of Canada Chrome Corp, which has staked claims and conducted a $15-million surveying and soil-testing program for the engineering and construction of a railway to the disputed area from Exton.

Reprinted by permission of

Ontario: A partisan view

July 12th, 2013

Opposition critic Norm Miller says government policies hinder mining

by Greg Klein

Opposition critic Norm Miller says government policies hinder mining

Opposition NDM critic Norm Miller (left) and Minister of NDM Michael Gravelle

Resource Clips - essential news on junior exploration mining uranium, gold, silver, fluorspar, graphite, metalsIs Ontario’s Liberal government out of touch with the exploration and mining sector? Certainly there’s been widespread criticism from a range of sources. Early-stage explorers say they’re unfairly burdened by new regulations. A formidable entity like Cliffs Natural Resources took shots at the province when suspending the Ring of Fire’s largest project. Most recently, Northern Graphite TSXV:NGC CEO Gregory Bowes said bureaucratic delays put his company at a competitive disadvantage. On July 12 spoke with an admittedly partisan source, Norm Miller, the Ontario Progressive Conservatives’ official opposition critic for Northern Development and Mines.

As a mining jurisdiction, Ontario once held first place in the Fraser Institute survey, Miller says—conveniently for him, when his party was in power and current leader Tim Hudak was minister of Northern Development and Mines. Now the province ranks 16th, down from 13th last year. “I think the delays Northern Graphite faces are part of the reason,” he says.

He’s heard this from other companies. The privately held Ontario Graphite, which says it plans to start mining in Q4, is located in Miller’s riding of Parry Sound-Muskoka. “They had similar challenges getting their permits and it was getting critical for them at one point,” he says. “They came to me as their MPP to try to speed the process up.”

As for the Ring of Fire, Miller says there’s been little progress since the Liberal government promoted the region’s opportunities in the March 2010 throne speech. A month earlier, Canadian Press quoted then-premier Dalton McGuinty saying, “Why wouldn’t we take full advantage of this multi-billion-dollar economic opportunity? Why wouldn’t we ensure that our northern communities, our mining sector, our first nations benefit from the thousands of new Ontario jobs this will create?”

Since then, Miller says, “we’ve seen very little concrete progress,” with the most prominent recent news coming from Cliffs.

Opposition critic Norm Miller says government policies hinder mining

New regulations on early-stage exploration require a minimum 30-day public comment period, in addition to requirements to consult and accommodate natives. Miller says he attended a Northwestern Ontario Prospectors Association meeting in which the new law dominated discussion. “That was the big thing people wanted to talk about. There were big complaints from people trying to comply with the new early exploration plans and permitting process…. They were saying, ‘It wasn’t broken before, why mess with what was working?’”

In an e-mailed defence, a Northern Development and Mines spokesperson told the changes “improve how early exploration activities are carried out by introducing a graduated approach to consultation with aboriginal communities, surface rights owners and the public. The new rules also increase certainty and provide the clarity that the mining industry needs in order to make informed investment decisions.”

But some companies are taking their investment decisions elsewhere. Does Miller think the Liberals will revise the regs? “Who knows?” he responds. “I think it’s very safe to say that if we form a government we absolutely would.”

His party will have more details to come, he adds. “We’re going to come out with a white paper in the next few months on northern resources. I think our attitude is very different from the current government. Even former premier McGuinty made some comment about essentially moving the economy away from resources, not recognizing just how important that is to Ontario’s economy. It’s not just the financial hub for mining in Toronto, it’s a huge, important industry for our province and the country.”

Having said that, Miller doesn’t think mining will be a primary election issue outside of some northern constituencies. The Liberals currently hold 48 seats, six short of a majority. Five vacant seats go to byelections on August 1, all in southern ridings. “For us, jobs and the economy are big election issues and obviously mining is a lot about jobs and the economy,” Miller says.

He emphasizes, “I think the government needs to realize how important mining is, not only to northern Ontario, but to the whole province and the whole country and work on welcoming mining and putting a priority on making things happen.”

Of course that’s always been the case, according to the party in power. The Northern Development and Mines e-mail also stated, “Ontario continues to hold the title of the leading jurisdiction in Canada for exploration and production of minerals. Ontario also continues to be ranked among the top 10 investment jurisdictions in the world and is a leading global producer of platinum, nickel, cobalt, gold, silver, copper and zinc. The Ontario government continues to work with industry and other ministry partners of the provincial and federal governments to improve regulatory efficiency without compromising environmental responsibilities or global competitiveness associated with mineral development.”

Some previous stories about Ontario:

Opportunity knocked: Is Ontario compounding the challenges faced by explorers and miners?

Facing Ontario’s challenges: More must be done for the Ring of Fire, says MacDonald Mines’ Kirk McKinnon

Which way to the Ring of Fire?: As Cliffs stands down, Noront and KWG propose alternate transport routes

Opportunity knocked

July 11th, 2013

Is Ontario compounding the challenges faced by explorers and miners?

by Greg Klein

Next Page 1 | 2

Resource Clips - essential news on junior uranium, gold, silver, fluorspar, graphite, metals exploration miningWorking in Ontario has become a competitive disadvantage, according to at least one CEO. Explorers have already expressed widespread disenchantment with new mining regulations that took full effect last April. Then Cliffs Natural Resources partly blamed government intransigence for the company’s decision to suspend its Ring of Fire chromite project. Now Northern Graphite TSXV:NGC CEO Gregory Bowes has slammed the province’s Ministry of Northern Development and Mines for what he says are unaccountable delays.

In a July 8 news release, Bowes said his company submitted a mine closure plan for its Bissett Creek project to the ministry on October 31, 2012. “This ‘45-day approval process’ has been ongoing for over seven months despite Bissett Creek being a relatively benign operation with no major environmental issues. It has strong community support and first nation consultations have been positive and constructive,” the news release stated.

Is Ontario compounding the challenges faced by explorers and miners?

A number of developments question the Ontario legislature’s commitment to mining and exploration.

According to the company, the ministry completed its review but must issue a mining lease before it can approve the project. The company applied for the lease in October 2011. The following July, the company stated, it was ordered to “redo” a government survey. “The survey was submitted to the surveyor general’s office in November 2012 for a 30-day approval process but a mining lease has still not been issued. The company believes approval is imminent but cannot provide further guidance and suggests any interested parties contact the MNDM directly.”

When asked Bowes what’s going on, he responded, “Nothing’s going on. That’s the problem. I guess the simplest way to explain it is that the ministry just can’t deal with permitting in a timely fashion. They advertise a 45-day process and they advertise that it’s a one-window approach, in other words we just deal with the Ministry of Northern Development and Mines, and they’re responsible for dealing with all the other ministries and co-ordinating things. And neither is true.”

He adds, “We’re pretty much on our own to deal with other ministries and no one can stick to timelines, they don’t deal with issues, they don’t return phone calls.”

Anyone who took up Bowes’ suggestion to contact the MNDM directly might have got the same wordy but vague-to-meaningless e-mail that a ministry spokesperson sent In response to a second phone call and a written list of questions, the ministry sent a second e-mail containing more feel-good fluff, but this time directed inquiries about the survey to Ontario’s Ministry of Natural Resources.

A spokesperson for Minister of Natural Resources David Orazietti told a request for the mining lease was received by the Crown land registry on July 9, 2013, and processing will likely take about a month. By press time she was unable to track information about the survey document Northern said was submitted in November.

Northern’s news release stated it is “competing with companies in Quebec, Europe, Africa and Australia to build the first new Western graphite mine in over 20 years. Being first to market is very important but the company is at a competitive disadvantage due to the regulatory process in Ontario which continues to damage the province’s reputation as a place to invest and is potentially depriving it of investment, jobs and tax revenues.”

As Bowes explains to, “Industrial minerals are smaller, more specialty markets. It’s not like gold where we can use two, three or four more mines and the market will absorb it. In this market there might only be room for one new mine and there might only be room for a couple of new mines over the next few years…. So timing is very important.”

Next Page 1 | 2

Facing Ontario’s challenges

June 14th, 2013

More must be done for the Ring of Fire, says MacDonald Mines’ Kirk McKinnon

by Greg Klein

“The Ring of Fire truly has an array of mineralization unlike any other in the world, says Kirk McKinnon, president/CEO of MacDonald Mines Exploration TSXV:BMK. “Our scientists tell me the Bushveld in South Africa has many of these attributes but the James Bay lowlands has all of them.”

More must be done for the Ring of Fire, says MacDonald Mines’ Kirk McKinnon

There’s even talk of rock worth some $30 billion to $50 billion. But despite the region’s potential for a “suite of minerals” including chromite, vanadium, nickel, copper, zinc and titanium, exploration and development are stymied by a lack of infrastructure. McKinnon discussed these challenges with ResourceClips following news that Cliffs Natural Resources had suspended work on Black Thor, by far the area’s largest project. That June 12 announcement re-kindled debate on how best to build access to the Ring of Fire—from the south or southwest, by road or rail—and whether governments effectively address the region’s challenges.

About 35 kilometres west of Black Thor, MacDonald drills its Butler property, focusing on the Butler 3 volcanogenic massive sulphide target. McKinnon also heads Energizer Resources TSXV:EGZ, whose wholly owned and joint venture claims in Madagascar undergo feasibility for one of the world’s largest known flake graphite deposits. The property also hosts the world’s third-largest known vanadium resource. Yet he can’t speak highly enough about the Ring of Fire’s potential. Another discovery comparable to Cliffs’ could be the catalyst for stronger government commitment to develop infrastructure, he says. But lack of infrastructure makes those discoveries more difficult.

Ontario’s Ministry of Northern Development and Mines struck a Ring of Fire Secretariat specifically to work “with all levels of government, industry and aboriginal peoples to encourage responsible and sustainable economic development in the region.” Last February the federal government appointed Treasury Board president Tony Clement as the go-to guy who would untangle the web of various bureaucracies and stakeholders. But McKinnon says, “For all the conversations we’ve had with the federal and provincial governments focusing on the Ring of Fire, I haven’t seen [commitment] manifested in a vigorous way.”

Not that they’ve lost interest. “I don’t think the zeal for development is gone,” he points out. “The manufacturing sector, which used to drive the province, has significantly shrunk. Because of that they’re looking for secondary activity that will replace that historic engine. The only place it can come from is the development of resources.”

If you’re going to get government funding, a transportation corridor coming out of Pickle Lake would benefit communities like Webequie and something like five to seven different communities overall.—Kirk McKinnon, president/CEO of MacDonald Mines Exploration

Backing the region’s biggest player, the Ontario government supported Cliffs’ proposed road south to the CN TSX:CNR rail line at Nakina. McKinnon thinks a comparable discovery by another company might make the province consider other approaches. Certainly, the transportation debate continues. KWG Resources TSXV:KWG studies the feasibility of a southbound railway while Noront Resources TSXV:NOT promotes an east-west road. McKinnon also favours the east-west route, although he’d prefer rail.

“If you’re going to get government funding, a transportation corridor coming out of Pickle Lake [roughly 260 kilometres southwest of Butler] would benefit communities like Webequie and something like five to seven different communities overall,” he says. “The route that Cliffs is talking about interacts with one community called Marten Falls. Now Marten Falls has about 250 people living there. There are over 600 at Webequie alone.”

The native communities currently rely on light plane service and, during winter, ice roads.

Exploration would benefit too, he maintains. The east-west corridor “would spread along the breadth of a much bigger mineralization opportunity.”

As for electricity, he believes the province could do more to connect the region with the grid. But failing that “there has to be a deal with Manitoba or Quebec.”

“We’ve been up there 10 years and I think we know the people very well,” he adds. Governments could work harder to find “common ground with the natives for development so that after a discovery they can come in and get the appropriate partnership arrangements that they’re looking for. But to do that the government has to stimulate exploration through infrastructure and taking a much more pro-active approach to opening up the country to development.”

As it stands now, “it’s damn expensive to operate up there,” he says. “But there are very big prizes to be had.”

Read more about Ontario’s Ring of Fire.

Read about Kirk McKinnon’s remarks on the state of the juniors.