Ontario Ring of Fire's Astonishing World-Class Mineral Potential
Located 500 kilometres northeast of Thunder Bay, the Ring of Fire mining camp contains billions worth of chromite -- among the best deposits in the world -- plus nickel, copper, platinum group elements, gold, zinc and vanadium.
In 2007, an interesting mix of six geologists and junior mining executives - Richard Nemis, Mac Watson, Frank Smeenk, Neil Novack, John Harvey and Don Hoy -- collectively found the most significant mineral discovery in Canada since the Sudbury Basin in 1883 and the Timmins gold camp in 1909.
Unfortunately, Cliffs Natural Resources' decided to indefinitely suspend its Ring of Fire operations (Black Thor chromite deposit) in November, 2013. Notwithstanding the blaming game between the different levels of government, other stakeholders and First Nations communities, the global economic slump in metal demand and the company's current financial problems were one of the primary reasons for this decision.
Recently, the situation at Cliffs and the Ring of Fire has taken a dramatic turn with the entry of activist hedge fund Casablanca Capital. If this hedge fund is successful in taking control of Cliffs' board of directors, they will insist that the company's chromite properties be sold. This will impact every part of Cliffs' previous plans for the Ring of Fire and the Ontario government's current initiatives.
Expect the unexpected and hang on to your hats as we are in for a wild, twisted and bumpy ride in what is becoming the most dramatic mining story in Canada since the failed Inco/Falconbridge mergers and subsequent foreign takeovers, in the middle of the last decade.
However, there are two other juniors -- Noront Resources (Eagle's Nest nickel/copper/PGM project) and KWG Resources (Black Horse and Big Daddy chromite deposits) - with major proposals and a host of other companies with good exploration potential that will eventually see the development of this enormously rich mining camp once metal demand recovers.
But just how financially significant are the current and future mineral deposits in this isolated region of northwestern Ontario?
In engaging presentation about the Ring of Fire at the Prospectors & Developers Association of Canada convention in March 2013, geologist James Franklin outlined the staggering economic value of Canada's newest mining camp.
Franklin was the chief geoscientist at the Geological Survey of Canada from 1993 to 1997. He is one of the country's top experts on the Canadian Shield geology underlying northwestern Ontario, including the Ring of Fire.
By comparing the similar geologies between the Ring of Fire and surrounding regions and that of the enormously rich Abitibi-Greenstone belt between northeastern Ontario and northwestern Quebec, Franklin has come up with some educated guesses of the financial values for the deposit types found in the Ring. For slightly over a century, the legendary Abitibi-Greenstone belt has produced hundreds of billions of dollars' worth of mostly gold, silver, copper and zinc.
"The Ring of Fire is a truly extraordinary mineral discovery due to the various types of deposits. Similar deposits, elsewhere in Canada and around the world have yielded billions of dollars of metallic metals," Franklin said. "Due to roughly eight smaller VMS-type deposits that hold copper, zinc and silver, which have not been thoroughly drilled-off, the Ring of Fire could ultimately produce between $30 billion to $50 billion worth of these metals and perhaps another Kidd Creek ore body, which has been in operation since the mid-1960s in Timmins."
He very conservatively estimates an additional $7.5 billion to $12.5 billion worth of nickel, copper, PGE values in the Ring alone and while no one is currently looking for gold, feels that due to the favourable geology, at least $10 billion worth of the precious metal is yet to be found. In the adjacent greenstone belts -- prime gold bearing geology -- to the west of the Ring of Fire, Franklin is exceptionally optimistic and feels an additional $140 billion to $190 billion worth of the precious metal will eventually be discovered.
These financial projections are on top of the currently accepted Ministry of Northern Development and Mines valuations of $50 billion for chromite and $10 billion for Noront Resources' nickel, copper, PGE mine!
"These are only conservative estimates," Franklin said, "and the provincial government should spend at least $50 million over the next few years on more aerial high-resolution geophysical surveys, mapping where outcrops permit and extensive on-ground geochemical and till sampling on a regional basis. Every dollar spent on geoscience results in five dollars of industry activity."
And while he does not want to venture a guess at the value of future chromite discoveries, he believes the current chromite reserves of roughly 220 million tonnes could easily be doubled. He also indicated the chromite discoveries in the Ring of Fire are "very, very well behaved" so that initial (inferred) reserves estimates routinely move over to the (indicated and measured) categories with more infill drilling due to the enormous size and predictability of this massive deposit.
Last September, KWG Resources announced that it has discovered an additional 46.5 million tonnes (inferred) of chromite at the Black Horse deposit, of which the company has 80% control, while Bold Ventures has the remainder. This is the second largest chromite deposit in the mining camp after Cliffs' Black Thor project, which has 102 million tonnes (measured and indicated) and 33 million metric tonnes (inferred). However, the Black Horse deposit has a much higher grade, which could justify it being mined from underground, without the environmental impact of other proposals.
"We are tremendously pleased with these initial results," said M. J. (Moe) Lavigne, vice-president of exploration and development at KWG. "Our next step is to continue to expand this resource, as well as conducting infill drilling. This deposit will allow KWG to put together its own chromite mining development plan."
The massive chromite deposit in the Ring of Fire follows a 12 km strike-length. Each mining company seems to have a portion of this deposit, which remains to be fully explored. In the world of chromite mining, the Ring of Fire, if developed in an economically sustainable manner, will be a game changer.
In a global context, only South Africa with 6.86 billion tonnes, Zimbabwe with 930 million tonnes and Kazakhstan with 387 million tonnes, have larger reserves. (Heinz H. Pariser Alloy Metals & Steel Market Research)
At the Noront Resources' annual general meeting last fall, Alan Coutts, the company's new president and CEO, was also very enthusiastic about the future resource potential of the Ring of Fire camp. A professional geoscientist, Coutts has more than 25 years] of executive management experience -- mostly with the Falconbridge/Xstrata organization -- in a variety of roles, across multiple commodities, including nickel and zinc, and in many remote locations in Canada and abroad.
"The Ring of Fire represents a wonderful exploration opportunity for a host of mineral deposits," Coutts said. "I'm excited about the prospects for new nickel sulphide -- PGM discoveries in the region. In my experience, these deposits tend to occur in clusters, whether it's Canada, Russia or Australia. To think that Noront's Eagle's Nest deposit is the only one is like saying that there will only be one nickel mine in the Sudbury basin.
"Noront's plan over the next three years is to develop Eagle's Nest and our exploration activities will be focused on the discovery of additional Ni-Cu-PGM deposits." Noront has the largest land holdings in the Ring of Fire.
While the Eagle's Nest nickel mine is its first priority, Coutts intends to also work on the Blackbird chromite deposit that contains 44 million tonnes. "We are confident that the Blackbird chromite resource can be significantly increased. We may develop the chromite potential alone or look to do something in partnership with other industry players in the region."
Noront's Eagle's Nest smaller underground nickel/copper/PGE development is not affected by Cliffs' decision to indefinitely suspend its chromite project, but does need government commitment to fund an east-west access road that would also connect a number of isolated First Nations communities.
Without a doubt, the value of the Ring of Fire's current and future potential mineral discoveries are in the hundreds of billions of dollars and these multi-generational mines will provide enormous wealth and employment opportunities for the surrounding First Nations communities. This is an economically and socially transformative project that will positively impact not only Ontario's northwestern frontier but the entire country as well.
But current provincial indecision over what type of transportation - rail or road - that would best spur economic development of the mining camp, various legal challenges between Cliffs and KWG over access to a coveted north-south route, First Nations negotiations about resources revenue sharing, and provincial/federal conflicts over how to pay for transportation and power infrastructure are all stalling the massive chromite projects as well as further exploration efforts.
With a possible provincial election on the horizon, the lack of progress in the Ring of Fire may affect the outcome of many northern ridings. Considering that current polling indicates no party with a commanding lead, these northern ridings may ultimately impact on who becomes the next Premier of Ontario.