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Shares of Noront surged nearly 37 per cent on the deal, announced Monday. The stock gained 13 cents to close at 48.5 cents on the TSX Venture Exchange.
Toronto-based junior mining firm Noront Resources has agreed to pay $20 million (U.S.) to Cliffs Natural Resources Inc. to purchase the U.S. mining giant’s chromite properties in the Ring of Fire.
Shares of Noront surged nearly 37 per cent on news of the deal, announced Monday. The stock gained 13 cents to close at 48.5 cents on the TSX Venture Exchange.
“We are convinced that the Ring of Fire region is going to be the next major mining camp in Ontario. We’ve been looking at acquiring more land there and getting more deals done,” Noront president and chief executive officer Alan Coutts said in an interview.
“When Cliffs announced they were going to pull out of the area, we thought, ‘This is a natural fit for us.’ ” The miner said it will buy the shares of two Cliffs subsidiaries that own 103 claims, adding to its own holdings in the Ring of Fire area, about 500 km northeast of Thunder Bay, Ont.
After the deal closes, Noront will have about 360 mining claims covering 80,000 hectares or 65 per cent of the Ring of Fire.
The mining area holds one of the world’s richest chromite deposits as well as nickel, copper, and platinum. Chromite is used to make stainless steel.
While the area holds promise, critics fear it will be years before development without significant government spending on transportation and power services.
The Ontario government has earmarked $1 billion for infrastructure but there is no agreement with First Nations and Ottawa is reluctant to commit federal funding.
“I think it’s a very good change. Noront has an excellent track record in social responsibility and in working with First Nations,” said David Pearson, a geologist and professor at Laurentian University
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