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Junior miner Noront Resources has signed a $20-million deal with Noront Resources to acquire 103 of the company's claims in the remote Ring of Fire mineral deposit. File photo.
Junior miner Noront Resources has signed a $20-million deal with Cliffs Natural Resources to acquire 103 of the company's claims in the remote Ring of Fire mineral deposit.
The transaction includes a 100-per-cent interest in the Black Thor chromite deposit and the Black Label chromite deposit. It also includes a 70-per-cent interest in the Big Daddy chromite deposit and an 85-per-cent interest in the McFauld's Lake copper zinc resource.
Once the transaction is completed, Noront will hold around 360 mining claims, or roughly 80,000 hectares of the emerging mining camp known as the Ring of Fire, located 500 kilometres northeast of Thunder Bay.
“All of the major discoveries (in the Ring of Fire) are now controlled by Noront,” said Noront president and CEO Alan Coutts.
The Cliffs transaction is still awaiting court approval, but Coutts said he expects that to happen by mid-April.
Coutts said Noront's Eagle's Nest nickel-copper and platinum group elements deposit remains the company's first priority in the Ring of Fire.
The company has completed a three-year environmental assessment for the site, which is still pending approvals. If those approvals come by late 2015, Noront can begin the three-year construction period to build a mine.
“Best case scenario, it's late 2018 to get the Eagle's Nest deposit developed,” Coutts said.
The former Cliffs properties, which are primarily chromite deposits, would follow.
“They are fantastic deposits,” Coutts said. “We just need to figure out what's the best way to develop them, when, and how we finance it.”
To finance the transaction, Noront has entered into a loan agreement with Franco Nevada Corporation.
Franco Nevada will loan Noront $22.5 million for a seven-year period at a seven-per-cent interest rate.
Franco Nevada will receive a three-per-cent royalty over the Black Thor chromite deposit and a two-per-cent royalty over all of Noront's property in the region with the exception of Eagle's Nest, which is excluded.
“Franco Nevada is pleased to support Noront in this acquisition,” said Paul Brink, Franco Nevada's senior vice-president of business development, in a press release. “We believe that consolidating the interests in the Ring of Fire can unlock value for all stakeholders by focusing on a common vision for development going forward.”
Cliffs spent $500 million on its chromite properties in the Ring of Fire before deciding to shut down the project indefinitely in November 2013.
The company pinned much of the blame on the Ontario government for its lack of commitment toward building infrastructure to reach its stranded Black Thor deposit.
