Noront pays more for Cliffs claims – by Carl Clutchey (Thunder Bay Chronicle-Journal – April 29, 2015)

Thunder Bay Chronicle-Journal is the daily newspaper of Northwestern Ontario.

Noront Resources has formally acquired three key chromite deposits in the Ring of Fire, but for a much higher price than what the company had offered earlier this year.

The Toronto-based company said Tuesday it increased its offer to US$27.5 million from $20 million after the previous owner of the properties, Cliffs Natural Resources, “received an unsolicited, competing bid.”
“To ensure maximum value was received for its chromite assets, Cliffs then requested that both parties submit revised final binding offers, at which point Noront increased its offer to $27.5 million,” Noront said in a statement Tuesday.

“We feel $27.5 million is an attractive price for the acquisition of these strategic assets,” said Noront president Alan Coutts. Noront now holds 360 mining claims and roughly 65 per cent (80,000 hectares) of the Ring of Fire mining belt located about 500 kilometres northeast of Thunder Bay.

“The project has value,” observed Thunder Bay-based Ontario Prospectors Association executive director Garry Clark. “It just depends on how long you can sit on it.”

Cleveland-based Cliffs, which noted the increased amount for the chromite properties in a separate news release Tuesday, said the planned sale “is another step in divesting interests in non-core assets.”

Cliffs said it would use the money to help cover court costs associated with the sale under the Companies Creditors Arrangement Act.

The sale, which was approved Tuesday, solidifies Noront’s position as the dominant RoF player. Chromite is a main ingredient in the manufacture of stainless steel.

Coutts earlier cautioned against the prospect of a new chromite mine in the near future.

“These are fabulous deposits, but there is no infrastructure in place,” he said.

On Tuesday, Coutts reiterated the company’s intentions “to have meaningful dialogue with the local First Nations and government regarding the development of these chromite assets which represent a generational opportunity.”

Noront has said it will first focus on the development of its proposed $700-million Eagle’s Next nickel mine, also located in the Ring of Fire. Noront has so far spent $150 million developing that project.

The proposed mine will require the construction of a $500-million east-west access road connecting the mine site to Pickle Lake.

Earlier this month, the provincial and federal governments jointly provided $785,000 for a First Nation-led study into a road that could benefit both mining companies and remote reserves in the Ring of Fire.

Noront, meanwhile, continues to enjoy the backing of financial heavy-hitters like Denver-based Resource Capital and China’s Boasteel. For the purchase of Cliff’s Ring of Fire deposits, Noront relied on a seven-year loan from Franco Nevada Corporation.