(Kitco News) - Noront Resources (TSXV: NOT) continues to push its Eagle’s Nest Project, located in Northern Ontario’s Ring of Fire, forward as Cliffs Natural Resources Inc. (NYSE: CLF) announced Wednesday that the company would be suspending feasibility work on its $3.3 billion Black Thor project.
Cliffs Natural Resources Inc. cited various issues, from unfinished agreements to uncertainty and unresolved issues with the federal government and First Nations, as to why it was suspending the Black Thor chromite project, located in the Ring of Fire.
Noront’s camp, located near Black Thor, would have benefitted from a $600 million North-South corridor road that Cliffs was undertaking. The junior mining company remains unfazed as it has a backup plan.
“We’re doing our own environmental assessment and as a backup, in case the North-South road doesn’t get built for whatever reason, we’re advocating for an East-West road,” said Paul Parisotto, Noront's chairman and interim chief executive officer. “We’ve done almost all of the work to complete the EA and we intend to submit it to the provincial government in early fall – hoping for approval in the first half of 2014.”
Located in the James Bay Lowlands of Northern Ontario, the Ring of Fire is considered lucrative but difficult to mine due to a lack of roads, infrastructure and power supply.
An East-West road is beneficial for the Ring of Fire. The company stated in a release Wednesday that the proposed East-West all-weather corridor would build upon existing winter roads to minimize environmental impact and cost. It could also be extended while benefitting four Matawa First Nations communities, the company said.
“We assumed in our feasibility study that we published that it would be a toll road,” Parisotto said. “That would suggest that the private sector and government would contribute towards building the road and users would have to pay a toll.”
Noront recently secured $15 million in funding from Resource Capital Funds, one of its major shareholders. It also has Baosteel, China’s second-largest steel company, as a major shareholder.
“We are fortunate to have two very large shareholders that are supportive of our project,” said Parisotto. “We’re working on various alternatives to finance our project.”
Given the headwinds that the mining industry is currently facing, Parisotto said that while it is difficult to secure investment, Noront is in good shape.
“It’s the chicken and egg thing a bit,” Parisotto said. “It’s hard to get people to commit to build a project when you don’t have infrastructure, and so, we’re working on infrastructure and with large financial institutions with respect to financing our project.
“We’re adequately funded to advance the project,” he added.
The junior mining company holds several interests in the Ring of Fire. They include the Eagle’s Nest Mine, a high-grade nickel-copper-platinum group elements deposit, and Blackbird, a high-grade development stage chromite project.
Eagle’s Nest shows proven and probable mineral reserves of 11.13 million metric tons with nickel grading 1.68%, copper at 0.87%, platinum at 0.89 grams per ton, palladium at 3.09 g/t and gold at 0.18 g/t. Inferred mineral resources total 8.99 million metric tons with nickel grading 1.1%, copper at 1.14%, platinum at 1.16% g/t, palladium at 3.49 g/t and gold at 0.30 g/t.
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By Alex Létourneau of Kitco News email@example.com