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The lack of a coherent plan to develop transportation infrastructure in the Ring of Fire is hurting the exploration financing scene in Ontario, insists a leading international business law firm.
Fasken Martineau issued a December bulletin that the Toronto Stock Exchange (TSX) has taken the position not to list companies with exploration projects in global regions where there is no authoritative plan to move raw and bulk product to market. This pertains to junior miners operating in Ontario’s Far North, the firm said in a statement.
The bulletin states, historically, a National Instrument 43-101 technical report establishing “economically interesting grades” of mineral resources on a property was usually good enough to satisfy the TSX. But not anymore.
Fasken said the TSX now wants assurances that bulk products, such as concentrate, can be shipped to market by roads, rail or via port facilities. “We understand that the TSX has recently turned down the listing application of several companies in the Ring of Fire and in Quebec, because of concerns about the availability of infrastructure.”
Carolyn Quick, a TSX spokeswoman, called Fasken’s release “inaccurate,” adding the exchange “does not agree with that assessment.”
“(The) TSX judges each application on its own merits – it is approved or not approved on that basis only.”
She pointed to the TSX’s manual on listing requirements for mining companies which outlines criteria for mineral reserves and mine life, working capital, exploration plans with funding benchmarks and property ownership.
“To put it simply, companies apply to list on the exchange and they are evaluated against these publicly available listing requirements. They either meet the standards, and are listed, or they don’t.”
According to the Fasken bulletin, which was released without authorship, in the firm’s opinion, infrastructure issues are one of the many risks for mining companies that impact a project’s economics along with commodity prices, Native claims, environmental permitting, and changes in government policy and taxation.
“Provided such risks are adequately described in appropriate disclosure documents, we see no valid reason to apply a blanket prohibition on listing such companies solely on the basis of lack of infrastructure.
“We believe it would be helpful for the TSX to solicit comments from the mining industry on this issue.”
A Fasken spokesman would not grant an interview with the author of the document.
Stephen Hastings said the bulletin was intended to provide information to clients and the public, “and I think largely speaks for itself.
“Its intent was, in part, to start a dialogue and we are pleased that it has done so.”
While the Ontario government has committed to investing in transportation infrastructure to move raw material out of the Far North, it’s been vague in providing any financial details on how it would accomplish that.
The Ontario government’s assistant deputy minister for Ring of Fire coordination, Christine Kaszycki, told delegates last spring at an Ontario Construction Secretariat conference that a public-private partnership on infrastructure, known as the P3 financing model, was a possibility based on discussions with the federal government.
The deficit-plagued provincial government has appealed to Ottawa for infrastructure capital and has floated the idea of an all-season toll road.
One Ring of Fire junior miner, Noront Resources, noted that during its discussions with the province, it was confirmed that a road, open to all the mining companies, was being considered with tolls based on “proportional usage.”
To date, the only clear cut path out of the Ring of Fire has been staked by KWG Resources, a Toronto junior miner with a chromite deposit in the James Bay Lowlands. The company has designs that its 350-kilometre right-of-way becoming a future railway corridor.