The Sudbury Star is the City of Greater Sudbury’s daily newspaper.
Noront Resources Ltd. announced Monday it plans to buy Cleveland-based Cliffs Natural Resources’ chromite assets in the Ring of Fire for $20 million.
International companies have touted the region’s mining potential for years, but have yet to take any projects to construction, largely due to transportation and access issues.
“We’re all in with respect to the Ring of Fire. This is where we want to be committed to,” Alan Coutts, Noront’s president and CEO, told The Star on Monday. “We think the region is very prospective, from a geological and exploration point of view.”
Coutts likened the Ring of Fire “to another Sudbury,” predicting “there’ll be multiple mines discovered over time, like in Timmins or Red Lake. We think it’s another one of these emerging mining camps.”
Coutts said the Toronto-based company has been involved in the Ring of Fire since 2007 with the Eagle’s Nest nickel-copper-platinum group deposit.
The chromite deposits are part of Coutts’ longer-term vision. While not an immediate priority, he said he would like to begin extracting nickel within three years and chromite within five years.
Stan Sudol, a Toronto-based communications consultant and mining columnist, described the acquisition as a “game-changer” on Monday.
“A well-respected and admired Canadian company is putting cold hard cash on the table – during one of the most severe mining busts in decades – in the long-term financial belief of the economic potential of the Ring of Fire,” Sudol wrote in a submission to The Star. “This also sends a resounding message to both levels of government to stop their inept dithering and partisan fighting, and to start making the vital strategic infrastructure and social investments in order to move this stalled project forward.”
Coutts said his is the only company whose environmental assessments have been completed (they are still waiting for provincial approval), adding Noront has worked closely with the First Nation communities in the region to develop plans and train locals to fill jobs.
Sudol said those relationships represent a “textbook case study of how to do corporate social responsibility correctly.”
On March 2, the Prospectors and Developers Association of Canada honoured Noront with an environmental and social responsibility award for its work engaging communities in the remote corner of the province.
“We’ve spent a lot of time with the First Nations communities, getting to know them and understanding their concerns, and building those concerns into our project designs. We want to put all our efforts into one region,” Coutts said.
Franco-Nevada Corp. has agreed to loan Noront $22.5 million for seven years at an interest rate of seven per cent. The loan will cover the cost of the Cliffs assets, as well as $2.5 million for general working capital.
The royalty and streaming company will also pay Noront $3.5 million in cash, receiving royalties of three per cent on the Black Thor project and two per cent on all of Noront’s property in the region, excluding its Eagle’s Nest nickel deposit.
Cliffs paid $118 million for its Ring of Fire assets in 2009. It was the biggest company invested in the region, but in 2013 it suspended work. Hit hard by a weakened steel market and problems at its mine in Quebec, Cliffs’ Canadian subsidiary sought creditor protection in January.
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