Ontario to work with First Nations to unlock Ring of Fire

Ontario is one step closer to making the Ring of Fire a reality.

Rick Gregford, Minister of Energy, Northern Development and Mines, and Minister of Indigenous Affairs, announced in August that the province would work directly with First Nation communities to develop infrastructure that unlocks the mineral-rich region in northern Ontario.

Establishing bilateral agreements with individual First Nation communities to replace the previous Liberal government's collective-negotiations approach under a 2014 framework agreement with nine Matawa First Nation communities will expedite the building of a north-south corridor to the Ring of Fire.

Noront Resources (TSXV: NOT) - which says it holds 85% of all claims staked in the Ring of Fire - and Marten Falls First Nation released a statement in late August applauding the provincial government's move.

"We are encouraged by the Ontario government's support and commitment to develop, on an expedited basis, the Ring of Fire mineral deposits and associated infrastructure, which will be shared between community and industry use," the joint statement said.

Marten Falls First Nation is leading an environmental assessment for an all-season access road along the north-south corridor that will connect the community to Ontario's provincial highway network in the south.

The all-season access road project consists of two phases. The first phase is an all-season community road between 140 and 250 km that will connect Marten Falls First Nation to forestry roads near Painter Lake, north of the small town of Nakina, Ontario. The second phase is an all-season supply road that will branch off the community access road north of the Albany River and connect to the Ring of Fire.

"Ontario recognizes the importance of the connection to the Ring of Fire and will work with Noront and partner communities to pursue this work," the Ministry of Energy, Northern Development and Mines said in an email.

The provincial government's announcement is big news for Noront. The Eagle's Nest project, which hosts a high-grade, nickel-copper-platinum deposit, is Noront's flagship project in the 5,120 sq. km Ring of Fire. The project calls for an all-season road to get the mineral concentrate to market.

"We need to have certainty around the road and the road construction going ahead," Alan Coutts, Noront's president and CEO, says in an interview. "Without the road, that project is not viable."

A helicopter flies over a bog on Noront Resources' property in Ontario's Ring of Fire region. Credit: Noront Resources.

Marten Falls First Nation is located near the Ring of Fire, 170 km northeast of Nakina. There is only one airline connecting the First Nations community to Nakina, and winter roads are hazardous.

Chief Bruce Achneepineskum of Marten Falls First Nation in Ogoki says the north-south corridor means remote First Nation communities in the region can benefit from the Ring of Fire's development.

Noront signed a project-advancement agreement with Marten Falls First Nation in April 2017. The agreement helps Noront consult and involve traditional landholders like Marten Falls First Nation on developing mining projects that fall on ancestral land in the region.

Under the agreement, Noront issued 300,000 shares to Marten Falls First Nation in early September. Another affected community, Aroland First Nation, 20 km west of Nakina, also received 150,000 Noront shares as part of a memorandum of understanding it signed with the company in June 2019.

The Ring of Fire is made up of a belt of mafic and ultramafic rocks wrapped around a circular intrusion of granodiorite. Coutts describes the Ring of Fire as a 2.7-billion-year-old greenstone belt. According to the Ontario Chamber of Commerce's 2014 report, "Beneath the surface: Uncovering the economic potential of Ontario's Ring of Fire," the emerging mining district will generate up to $9.4 billion in gross domestic product, up to $6.2 billion for Ontario's mining industry and create up to 5,500 full-time jobs annually, including nearly $2 billion in government revenue within the first decade of development.

"It will be a mining district where you will have multiple mines built and developed over the next 100 years. That why it is so important," Coutts says. "There have already been over 20 mineral discoveries made in the region."

Chief Achneepineskum says Marten Falls First Nation has already felt the effects of interest in the Ring of Fire. "It already has [had] a lot of impact, with the exploration [and] choppers flying by," he says.

For Coutts, the Eagle's Nest project comes at a time that global nickel demand is growing, due to its use in batteries for the electric vehicle industry.

According to Natural Resources Canada, global mine production of nickel in 2017 was estimated at 2.1 million tonnes. Canada ranked fifth, accounting for 10% of all production. Stainless steel is the largest end use for nickel, accounting for two-thirds of total consumption. Nickel also serves as an alloying agent in making both ferrous and non-ferrous metal products, as well as batteries.

The burgeoning need for electric-vehicle batteries could raise nickel demand by as much as 500,000 tonnes per annum in the next 10 years, Coutts says. "So the demand is very, very high, and our project [has] perfect timing."

With an anticipated 11-year mine life, Eagle's Nest could produce 3,000 tonnes of ore per day and deliver 150,000 to 250,000 tonnes of nickel-bearing concentrate each year.

Noront has had discussions with nickel smelters in Sudbury that Coutts says are keen to get feed from the project. In addition to nickel, the project will also produce copper, platinum and palladium by-products. Says Coutts: "Palladium prices are very strong, and copper, of course, has a number of uses."

The nickel project has an inferred resource of 8.9 million tonnes grading 1.1% nickel, 1.14% copper, 1.14 grams platinum per tonne and 3.49 grams palladium for 34.2 million lb. nickel, 19.2 million lb. copper, 23,470 oz. platinum and 90,022 oz. palladium per year.

Over the next 12 months, Noront will update a 2012 feasibility study on Eagle's Nest. It also plans to do metallurgical work and conduct studies around a nickel and copper concentrate, instead of the bulk concentrate envisioned in the 2012 feasibility study. The company says that "we would also like to establish a cobalt resource for the deposit. We have cobalt, but we don't currently have resources established."

Notwithstanding the Ring of Fire's economic potential, the Ontario Chamber of Commerce said in a report that the lack of adequate transportation infrastructure, labour shortages in northern Ontario and the province's energy costs - which deter some companies from processing minerals within the province - are barriers to the Ring of Fire's development.

Coutts says Noront envisions running the Eagle's Nest project on diesel generators. "We prefer to have grid power, or some other sorts of power at the site that are more sustainable, and cheaper."

There are also concerns about environmental repercussions. Chief Achneepineskum says that any mine will affect the land. As a result, he stresses the importance of keeping nearby communities informed of how mining developments will affect them.

According to Coutts, local First Nation communities have raised their concerns about water quality, the effect that open pits and waste-rock piles would have on the surrounding environment, and legacy issues, such as tailings dams and cleanup after the mine has been exhausted.

As a result of concerns raised during discussions with local communities and stakeholders, Noront has designed the Eagle's Nest project as an underground mine, and tailings will stay underground.

"There will be no open pit, no associate waste-rock piles," he says. Process-plant water will be recycled to minimize the discharge of effluents. "A lot of these minimize the footprint, and that means you don't have as many legacy issues."

Coutts expects it will take two years to complete permitting activities and the public-review process, while mine construction could take three years. "So let's say in five years' time, you would have mineral concentrate from Eagle's Nest going down an all-season road to market."

In addition to Eagle's Nest, Noront has three advanced chrome projects in the Ring of Fire: Blackbird, Black Thor and Big Daddy. "We have got resources that are sufficient for over a hundred years of mineral production," Coutts says.

Noront's wholly owned Blackbird deposit, discovered in 2008, and located less than 1 km from Eagle's Nest, will be the company's second project. A 2012 resource estimate outlined measured and indicated resources of 20.5 million tonnes grading 35.8% chromium oxide (Cr?,,O?,?), and inferred resources of 23.5 million tonnes grading 33.1% Cr?,,O?,?. The resource used a chrome-to-iron ratio of 1 to 1.97, and a cut-off grade of 20% Cr?,,O?,?.

The 100% owned Black Thor chromite deposit - Noront's third project - is 8 km northeast of Eagle's Nest. Black Thor is the largest chromite discovery in the Ring of Fire. It has a measured and indicated resource of 137.7 million tonnes grading 31.5% Cr?,,O?,?, and an inferred resource of 26.8 million tonnes grading 29.3% Cr?,,O?,?.

Black Label, a parallel chromite deposit that lies 150 metres northwest of Black Thor, has a measured and indicated resource of 5.4 million tonnes grading 25.3% Cr?,,O?,?. Inferred resources stand at 900,000 tonnes grading 22.8% Cr?,,O?,?, with a cut-off grade of 20% Cr?,,O?,?.

The Big Daddy deposit, 5 km northeast of Eagle's Nest, has a measured and indicated resource of 29.1 million tonnes grading 31.7% Cr?,,O?,?, and an inferred resource of 3.4 million tonnes grading 28.1% Cr?,,O?,?, based on a cut-off grade of 20% Cr?,,O?,?. Noront holds a 70% interest in Big Daddy, and Canada Chrome Mining Corp., owned by KWG Resources (CNSX: KWG), owns the other 30%.

Coutts says Noront will need a ferrochrome production facility to process the chromite mined from its deposits. In May 2019, Noront chose Algoma Steel in Sault Ste. Marie as its ferrochrome production facility through a bidding process that saw submissions from four communities: Sudbury, Thunder Bay, Sault Ste. Marie and Timmins.

Factors that were considered in the bidding process included environmental and site suitability, capital costs, operating costs and community acceptance for hosting the facility. Sault Ste. Marie was chosen for its lower operating costs per pound of chrome in ferrochrome, and its location near the Great Lakes, which offers a lower, long-term operating cost, according to the company.

"We really like that location because it gives us great access to North American markets - but also international markets," he explained.

For now, all eyes rest on the development of a north-south road.

"The north-south road will not only provide access to the Ring of Fire and those mineral deposits, but it will also provide access to the local community," Coutts says. "There is an industrial need, and there is also a social need, that is addressed by this development."

Chief Achneepineskum says he is hopeful that the Ring of Fire will create investments in infrastructure, employment, training and social support. It will also inject revenue streams into First Nation communities. "I believe it can do that," he says.