Tuesday 27th October 2020

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Posts tagged ‘ring of fire’

Stan Sudol to Elon Musk:

July 26th, 2020

Stop fretting over potential nickel shortages and back some potential nickel mines

by Stan Sudol | posted with permission of Republic of Mining

Stop fretting over potential nickel shortages and back some potential mines

As its Gigafactory continues to ramp up production, Tesla already
produces more kWh of batteries than all other automakers combined.
(Photo: Tesla Inc.)

 

Elon Musk is practically begging nickel miners to boost production as potential future shortages would severely impact his ability to manufacture electric vehicles, as the metal is a key component for the batteries Tesla Inc. depends on.

Historically, nickel has always been a boom/bust metal due to the fact the world only produces about 2.1 million tonnes of the material a year, as opposed to a more commonly used metal like copper at 20 million tonnes. And roughly only half of nickel production is of the Class-1 type that is used in batteries that run electric vehicles.

Currently the cost of nickel is nearing a cyclical bottom, hence the reluctance of nickel miners to invest the possible near-billion it takes to bring on a new mine.

Musk is a multi-billionaire and his company stock is at an all-time high. Instead of whining to the mineral industry to invest “their shareholder money” in new nickel production at a time of low returns, here are some suggestions to calm his fear of future shortages:

 

Stop fretting over potential nickel shortages and back some potential mines

“At the heart of these products are batteries,” says Tesla.
But Elon Musk worries about the nickel needed to make them.
(Photo: Joni Hanebutt/Shutterstock.com)

1. Why can’t Tesla start stockpiling Class-1 nickel now during a time of low prices? The American military stockpiled nickel during the 1950s and 1960s as it was in constant short supply due to a booming economy and its use as a critical metal for military production—the Korean conflict, Vietnam War and the Cold War between the U.S.A. and U.S.S.R. What is to prevent the company from stockpiling two or three years’ worth of nickel needed for its car batteries? This would help firm up prices and encourage more exploration or expanded production.

During the 1950s, the U.S. government gave Falconbridge/Glencore a $40-million subsidy—roughly an astonishing $390 million in 2020 dollars—to help develop one of their Sudbury nickel mines and ensure diversity of supply. At the time, INCO supplied almost 80% to 90% of the West’s supply of nickel and the military were terrified of being so dependent on one key supplier. Perhaps subsidizing a few companies that are near production might be the route to go.

 

2. Polish miner KGHM has a terrific nickel deposit—the Victoria in the Sudbury Basin. They don’t seem to be that interested in developing the project that some analysts feel would need roughly a billion to put into production.

For much of the last century, the Sudbury Basin was basically the Saudi Arabia of nickel mining for the Western world.

Just a quick tangent for any Americans or Canadians who are not “mine literate.” For much of the last century, the Sudbury Basin was basically the Saudi Arabia of nickel mining for the Western world. The communist East had the astonishingly rich nickel mines of Norilsk, located in the isolated wilderness of Siberia. There are still enormous nickel reserves in the Sudbury Basin. Why we are not producing more would practically take an entire book to explain!

Why doesn’t Musk try to buy the deposit from KGHM and hire contractors to build and run his own mine? He would get nickel, copper and some cobalt for his car batteries. In addition, the mine would also provide him with platinum group metals and some gold and silver. If KGHM refuses to sell at a reasonable price, Ontario/Canada might enact some sort of “build/sell it or lose it” legislation!

 

3. Sudbury junior miner Wallbridge Mining has some very promising nickel properties in the Parkin Offset Dyke in the northeastern corner of the Sudbury Basin. According to the Wallbridge website, “The quality of the mineralization found in the Parkin Offset is high. The average nickel tenor for the mineralization found within the Parkin Offset is approximately 4%, which is comparable to the tenors of some deposits found in the Copper Cliff Offset Dyke.” Some of the Sudbury Basin’s biggest nickel mines, past and present, are on the Copper Cliff Offset Dyke, hence the importance of that statement!

Unfortunately, Wallbridge is not doing any exploration on this property during 2020 as the company is focused on its Quebec gold properties. Who can blame it with the precious metal hitting $1,900 an ounce? Why doesn’t Musk buy an equity position in the junior and fund it to the tune of $20 million or $40 million worth of exploration on the Parkin Offset Dyke?

 

4. Another junior nickel explorer that might be worth looking at is Canada Nickel and its promising nickel-cobalt sulphide project near Timmins, Ontario. A maiden resource estimate last February showed 600 million tonnes (measured and indicated) at 0.25% nickel and 310 million tonnes (inferred) at 0.23% nickel. As with all junior explorers, financing is always a challenge. Perhaps a significant equity position by Musk in exchange for future nickel and cobalt would ensure Tesla has no problems accessing these critical metals.

 

For crying out loud, it’s a skinny 300-kilometre gravel road and a couple of bridges. We are not building the Panama Canal or the Pyramids of Giza!

5. And finally there is the enormous mineral potential of the Ring of Fire with a 43-101 nickel deposit owned by junior miner Noront Resources. More nickel deposits may be discovered. Perhaps Musk could chat with Premier Ford and impress on him the importance of shortening environmental assessments and building that road into the Ring of Fire. For crying out loud, it’s a skinny 300-kilometre gravel road and a couple of bridges. We are not building the Panama Canal or the Pyramids of Giza! In the 1940s, the Canadian-Alaskan highway—roughly 2,700 kilometres—was built in eight months. No typographical error folks, less than one year!

The proposed road is on the traditional territories of Webequie and Marten Falls first nations, who both want it built. Hell, Musk should even consider putting a few hundred million in financing that road—I say this only half in jest as both the provincial and federal levels of government might be broke before construction starts.

And Premier Ford might even share the seat on that bulldozer with Musk to start building that vital road which was promised during the 2018 Ontario election campaign.

The Ring of Fire not only has nickel but potentially significant deposits of copper, zinc and various other critical metals along with chromite. And Premier Ford might even share the seat on that bulldozer with Musk to start building that vital road which was promised during the 2018 Ontario election campaign. It’s been a little over two years since the Conservatives have come to power and the patience of the entire sector is wearing thin! Road construction would be a terrific infrastructure investment to help alleviate the pending COVID recession/depression!

 

6. Sorry about the Ring of Fire road digression. I have not even mentioned the Thompson, Manitoba Nickel Belt, Newfoundland’s Voisey Bay nickel mine and Quebec’s Raglan nickel deposits, all of which probably have some juniors that could use some seed funding to drill near these world-class deposits—as the old saying goes, the best place to find a new mine is in the shadow of a headframe.

 

So I wish Elon Musk all the best, but please stop complaining about possible Class-1 nickel shortages and perhaps start strategically investing in the Canadian nickel sector yourself, if you really want to ensure that you have access to this vital metal.

 

For a brief history of the extraordinary Sudbury nickel deposits and their geo-political significance, click here.

Stan Sudol is a Toronto-based communications consultant, freelance mining columnist and owner-editor of Republic of Mining.

Posted with permission of Republic of Mining.

Ontario plans direct talks with first nations on Ring of Fire

August 27th, 2019

by Greg Klein | August 27, 2019

Coming well over a year after Doug Ford vowed to drive a bulldozer himself if necessary to start Ring of Fire development, the announcement sounded anti-climactic. But before getting machinery on the ground you need signatures on paper, implied Greg Rickford. Speaking in Sault Ste. Marie on August 27, Ontario’s mines and indigenous affairs minister promised “a new, pragmatic approach to unlocking the Ring of Fire’s potential, one that includes working directly with First Nation partners who want to move at the speed of business, to ensure sustainable development.”

Ontario plans direct First Nations negotiations on Ring of Fire

As other companies left the region in frustration,
Noront Resources expanded its Ring of Fire portfolio.

His official announcement lacked details but Rickford did tell local media he hopes native bands will sign agreements on a north-south road this fall, the Sault Star reported. One community enthusiastic about the proposal was Marten Falls. In a joint statement with Noront Resources TSXV:NOT, the first nation called the proposal “an unprecedented opportunity to transform our socio-economic future. The youth of Marten Falls look toward the Ring of Fire as a generational opportunity that can provide training, employment, business prospects, new revenue for social services and many other opportunities—direct and indirect—for the province. Without the Ring of Fire, economic prosperity for our communities will remain a pipe dream.”

With support from Noront, Marten Falls currently has its own environmental assessment underway for a potential road connecting with the highway about 280 kilometres south. Marten Falls’ ancestral territories cover most of the region’s known deposits, Republic of Mining editor Stan Sudol has pointed out. But other parts of the region sit on land traditionally used by the Webequie and Attawapiskat first nations.

In a thorough analysis published during the Ontario election, Sudol noted that the proposed road could impact a number of small communities: Webequie (with an on-reserve population of 850 people), Nibinamik (400), Neskantaga (250) and Eabametoong (1,500), as well as Marten Falls (400). 

Marten Falls and Noront pledged that they “will continue to engage the additional First Nations communities that are committed to developing the Ring of Fire and its associated infrastructure.”

Noront holds about 85% of the region’s claims, including seven deposits with resource estimates. One of three advanced-stage projects is Eagle’s Nest, described as among the world’s largest undeveloped high-grade nickel sulphide deposits and subject of a 2012 feasibility study.

Rickford called the Ring of Fire “one of the most promising mineral development opportunities in over a century with the potential to sustain up to 5,500 jobs annually across Ontario within the first 10 years of development.”

Read Stan Sudol’s commentary on the Ring of Fire and northern Ontario.

Republic of Mining commentator Stan Sudol addresses public confusion about First Nations and the Ring of Fire

January 18th, 2019

…Read more

The Ring of Fire: Some clarification and context from Stan Sudol

December 4th, 2018

by Greg Klein | December 4, 2018

Urban journalists hundreds of kilometres away might not get it, but regional opposition to Ring of Fire development is anything but unanimous. That’s emphasized in a recent post by Republic of Mining commentator Stan Sudol: Not all the region’s native bands oppose development. Those that do, moreover, have traditional territories outside the proposed mining areas.

The Ring of Fire Some clarification and context from Stan Sudol

“As with non-Aboriginal society, First Nations do not speak with one voice,” he points out. Two of five regional chiefs got considerable news coverage by criticizing a proposed road that would connect the provincial highway system with the mineral-rich region. Those chiefs represent the Eabametoong and Neskantaga bands, both with traditional territories outside the Ring of Fire.

“In fact, the Eabametoong reserve is a little over 170 kilometres southwest of the proposed first mine in the Ring of Fire—Noront Resources’ Eagle’s Nest underground nickel-copper mine—while Neskantaga is about 130 kilometres in the same direction.”

Concerns about a mine accident affecting water on their territories are unfounded, maintains Sudol, probably Canada’s most incisive mining commentator. “Eabametoong and Neskantaga are both up-river so if some problem did occur—and the risk for this is very, very low—neither community would be affected as the water flows eastward toward James Bay.”

Three other regional native communities consist of Nibinamik, Marten Falls and Webequie. The latter two have environmental assessments underway to study the proposed highway link. “And again it must be clearly stated the known Ring of Fire mineral discoveries and the proposed north/south road are on the traditional territories of Marten Falls and Webequie,” Sudol notes. “There are some overlapping claims between these two communities but they are not letting that issue stand in the way of the proposed north/south road.”

That’s not surprising when, as Marten Falls Chief Bruce Achneepineskum said last month, “This project is an opportunity to move forward on addressing many socio-economic needs of the community, including access to more affordable food and housing, access to training, education, health care and employment and access to neighbouring communities.”

Read Basic facts about the Ring of Fire including FNs’ traditional territories, by Stan Sudol.

KWG Resources president Frank Smeenk emphasizes the need for Ring of Fire community support

September 20th, 2016

…Read more

A critic bemoans bikini-clad Theresa and Ashley promoting the Ring of Fire for KWG Resources

September 7th, 2016

…Read more

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 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.

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.

KWG Resources promotes Ring of Fire with—harrumph!—women in swimsuits

August 8th, 2016

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.

KWG Resources promotes Ring of Fire awareness with—harrumph!—women in swimsuits

KWG boss Frank Smeenk keeps his eyes on target.

“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.

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