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.
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 ResourceClips.com 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.
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:
“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.
by Greg Klein | August 8, 2016
President Frank Smeenk had KWG Resources CSE:KWG create a YouTube channel to bring Ontario’s Ring of Fire broader public exposure. But one recent video exposes too much, according to an outraged article on Sudbury.com.
“Socially progressive this video is not,” fumed the news site. The offending film opens with “Theresa and Ashley” lounging on a boat somewhere in northern Ontario as they’re about to relate five interesting facts about the Ring of Fire. The next scenes take place on land, allowing the co-hosts to shed their life preservers and display swimsuits as well as some presumably bug dope-covered flesh.
Investors might wonder how much KWG spends on these efforts. But the content and production quality would hardly intimidate the high school students who took part in mining video contests in Ontario and Nova Scotia.
Nor is this the first time anyone’s offered a light-hearted look at the Ring of Fire.
Check out KWG’s five interesting facts but be forewarned: Only slightly suggestive content follows.
by David Robinson | Reprinted with permission of Northern Ontario Business
Here is a fantasy about northern development and the Ring of Fire. Everyone in the story really exists. Not a single event in the story has happened—yet.
In late 2014, the chief of the Moose Cree First Nation, Norm Hardisty, wrote to Stephen McGlennan, CEO of Hybrid Air Vehicles in Britain, asking if their Airlander 50 would be a suitable vehicle for CreeWest, a First Nations-owned air carrier. Hardisty didn’t have a clear plan in mind, but he knew that if First Nations controlled an essential transportation system they would be big winners in the development of Ontario’s North. McGlennan phoned Hardisty back saying he would fly a half-dozen people to the hangar in London where the radical airship is being built.
According to the International Business Review, McGlennan’s super blimp has a top speed of 160 kilometres per hour, can carry 50 tons of equipment and can operate in the most extreme weather. If there is no runway, it can deliver 20 tons to any clearing bigger than a football field. In comparison, a CH-47 Chinook helicopter can only lift a maximum of 10 tons. And helicopters are fuel hogs. The Airlander has much better fuel efficiency than any conventional aircraft.
Hardisty knew that economical heavy-lift capacity could change the economics of northern development. You could serve mines anywhere, without having to build roads. Saving time and money would make hundreds of small mines economical and reduce their environmental impact. You could pick up a whole community and move it to a better location. Families could take their homes with them when they wanted to move to a new town. The Northern Cree could be nomadic again using 21st century technology.
Hardisty then phoned Webequie Chief Cornelius Wabasse and asked him to join the expedition and bring his development officer. It was a political masterstroke. Moose Factory is on the coast. It has a rail link to southern Ontario. Webequie is the community closest to the Ring of Fire. Between them they had a strategic location and a strong voice in two different tribal councils.
Hardisty also invited Frank Smeenk, the brilliant CEO of KWG Resources TSXV:KWG. Smeenk decided to pay his own way and bring his vice-president of exploration and development, Moe Lavigne. A glance at the specs for the Airlander put Lavigne’s brain into overdrive. If the technology worked as advertised it would revolutionize his job.
It may have been Wabasse who came up with the next brilliant move. He suggested inviting Premier Kathleen Wynne. Wynne is committed to economic development for First Nations and she is the only person who can get the province to consider any idea that comes from outside the box at Queen’s Park. Any bureaucracy filters out wild and unproven ideas, and Ontario has an excellent bureaucracy. Wynne actually seems to have some imagination.
Wynne accepted. She saw right away that a cheap heavy-lifter could improve food supply, housing, education and health care for more than 30 small northern communities without spending billions on roads. Just being able to deliver fresh vegetables and milk cheaply would save lives. She saw the possibility of a unique northern tourism industry with almost no environmental impact. And she saw the possibility of a new Canadian industry based in Ontario building fuel-efficient hybrid airships for the next generation of air travel.
At $100 million, the Airlander 50 is not cheap. That is the price of five kilometres of regional road in Vaughan or one Boeing 757. On the other hand, Mike Lazaridis alone has given the University of Waterloo more than enough to buy an Airlander 50.
In the end, Hardisty’s crew came home with a deal that changed the North. The province of Ontario invested $20 million and got Hybrid Air Vehicles to set up its North American operation in North Bay. Wasaya Airways, already 100% First Nations-owned, took a share of the new airline and put in an order for a second Airlander 50. Smeenk bought a small share for KWG. Wasaya Airlines added airship training to the pilot school they run with Confederation College making Confederation the go-to school for training on hybrid aircraft. And Ontario stepped into the 21st century.
Of course, it is all a fantasy.
David Robinson is an economist at Laurentian University. firstname.lastname@example.org.
Reprinted with permission of Northern Ontario Business
by Greg Klein | June 2, 2014
With Ontario’s Ring of Fire subject to competing development proposals, KWG Resources TSXV:KWG has taken an unusual approach to sell its vision for the resource-rich region. The company has drafted its own proposed legislation, which it’s promoting to provincial election candidates and voters through a social media campaign.
Ontario elects a new government on June 12. Among the issues is the Ring of Fire, the infrastructure-less region that’s touted as containing mineral potential worth $60 billion, if not hundreds of billions. Other rough estimates thrown around by stakeholders and media say the region needs over $2 billion of initial development before mine development can be viable. The incumbent Liberals have so far pledged $1 billion. But with little agreement among stakeholders on how—or whether—to develop the region, KWG says it’s “happy to take a leadership role that helps end the political gridlock.”
Not surprisingly, a railway is central to KWG’s plan. While the company has advocated a north-south rail link, Noront Resources TSXV:NOT has called for an east-west road. Before Cliffs Natural Resources NYE:CLF suspended its Black Thor project last November, that company had conditional provincial support for a north-south road.
But to push its plan, KWG now takes a shot at the northern development corporation that Ontario created to co-ordinate and advise on the Ring of Fire. “Ontario already has a northern development corporation,” the company states. “It is the Ontario Northland Transportation Commission.” Helpfully, “the principal operating asset of the ONTC is the Ontario Northland [railway].”
KWG sees the railway revitalized by revenue from hauling the region’s chromite, nickel and other valuable minerals. “If the ONTC were made into a non-share capital corporation similar to Canada’s port and airport authorities, it could be governed by the northern residents of Ontario whose communities it serves,” including native bands, the company emphasized. The ONTC could then raise money in capital markets, enabling development “with the necessary social licence together with the discipline of the capital markets, rather than from the public purse.”
KWG encourages people to sign an online petition, contact candidates and distribute the company’s pitch through social media.
Through its subsidiary Canada Chrome Corp, KWG holds a 330-kilometre line of mining claims from the region to rail and road infrastructure to the south. Canada Chrome has spent $15 million on a surveying and soil testing program for the engineering and construction of a railway. The mining claims were the subject of a legal dispute with Cliffs, which wanted to build an all-weather road through much of the same route before the company suspended its Ring of Fire project.
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.
“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 MINING.com
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.
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.
“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 Mining.com
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.”
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.”