McFaulds Lake
(“Ring of Fire”)
Mineral Exploration and
Development Overview
(MNDMF)
May 11, 2010
Summary
► Several
significant new mineral discoveries have
been found in the Far North over the past 8 years
in an area now known as the “Ring of Fire”.
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Copper–zinc
Nickel-copper-platinum
Chromium-iron-vanadium
Gold
► The
area is remote, wet (edge of Lowlands), with
no power or access, and is within Marten Falls FN
and Webequie traditional areas.
March 1, 2010
Exploration History
► 2002
ƒ De Beers drilling program for diamonds
ƒ Copper-zinc discovery announced (KWG-Spider)
ƒ Staking rush ensued
► 2003
to 2007
ƒ Staking and exploration by more than 30
companies, drilling geophysical anomalies
ƒ Eagle One Ni-Cu-PGE deposit discovered (Noront)
ƒ Second staking rush
Exploration History
► 2008
ƒ Discovery of Eagle Two Ni-Cu-PGE and Blackbird
One chromite (Noront) deposits
ƒ Freewest-KWG-Spider discover Big Daddy & Black
Thor chromite zones
► 2009
ƒ Canada Chrome Corporation formed as KWG
subsidiary
ƒ Blackbird chromite deposit discovered – 8.9 Mt
grading 35% Cr203 (Noront)
ƒ Black Label chromite zone discovered (Freewest)
2010: 31,000 claim
units held by over
30 companies
Area of most
intense
exploration (1220 km long);
copper-nickel and
chromite
discoveries
McFaulds Lake
Key Host Rocks for
Chromite, CopperNickel
Superimposed on Thunder Bay
to demonstrate scale
Exploration History
► 2010
ƒ Freewest announces that Black Thor deposit contains an
Inferred Mineral Resource of 69.5 Mt at a grade of
31.9% Cr2O3 (cut-off grade of 25% Cr2O3)
ƒ Freewest Resources acquired by Cliffs Natural Resources
Inc.
ƒ Engineering firm continues geotechnical studies
ƒ KWG / Spider / Freewest announce resources for the Big
Daddy deposit (indicated resource of 23.2 Mt averaging
40.66% Cr2O3; and an additional inferred resource of
16.3 Mt averaging 39.09% Cr2O3)
Exploration History
► 2010
ƒ Noront announces Eagle’s Nest deposit contains:
►an Indicated Mineral Resource of 6.9 Mt at a
grade of 2.04% Ni and 4.7 gpt PGE
►an Inferred Mineral Resource of 4.3 Mt at a
grade of 1.42% Ni and 4.2 gpt PGE
Nakina
Where We Are In The Process
► Still
in Exploration
stage
► over $100M spent
to date
► Consultation with
FN’s
Why Chromite?
►Chromite
(Cr203) is an oxide mineral,
not a sulphide mineral
Why Chromite?
► Chromium
is a strategic metal (i.e. a metal
that is essential for industry and national
security, but for which a nation has little or
no domestic supply) used mainly as an alloy
to produce stainless steel; there is no
substitute for chromium
► The value of high-grade chromite (>40%
Cr2O3) is approx. US$150 per tonne
delivered to port (2009)
Why Chromite?
► Resources
and production are mostly in the
Eastern Hemisphere
► Global outlook is for continued rising prices
and increasing demand
► U.S.A. is import-dependent; chromium
travels over long supply routes
► Chromium comes from politically and
economically dynamic areas
(Chromium – A National Mineral Commodity Perspective, John F. Papp, U.S. Geological
Survey, Open File Report 2007-1167)
Proponents
► Canada
Chrome Corp. (CCC), formerly
ChromeCana Inc., operates as a subsidiary of
KWG Resources Inc. and engages in the
development of mining properties of its parent
company
► Joint-venture agreements have been signed
between KWG, Spider Resources Inc. and
Freewest Resources Canada Inc.
► Noront Resources launched an unsuccessful
takeover bid for Freewest Resources; recently
initiated feasibility study on their Eagles Nest
nickel-copper deposits at McFaulds Lake
Proponents
► Cliffs
Natural Resources Inc. is an international
mining and natural resources company and the
largest producer of iron ore pellets in North America
► Cliffs has a strategy designed to achieve scale in the
mining industry and focused on serving the world’s
largest and fastest-growing steel markets.
► Cliffs accepted KWG's invitation to become a principal
investor (19.9%) in order to participate in its
development initiatives, at a cost of $3.5M
► Cliffs recently acquired Freewest Resources and its
shares in Black Thor (100%) and Big Daddy (~50%)
deposits
Requirements
Mine and Mill
► Open pit…..
► Construction of a concentrating mill (at mine site?); estimated 4000 tonnes
per day
Processing
► $500M ferrochrome foundry/smelter; technology options studied
► Sourcing coking coal for smelting process
Infrastructure
► Construction of a new railway line (~350 km) to ship ore or concentrate
► CCC engaged an engineering consultant to provide geotechnical services to
study potential for construction of a new railway line
► Significant electrical power:
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25 to 35 MW for a mine/mill facility
100 MW for a smelter
Deep-water port locations for a possible smelter site
Current focus of Geotechnical surveys
(CCC study routes)
CNR
584
Infrastructure
Considerations
McFaulds
Lake
Canadian National
Railway (Main Line)
CNR (Kinghorn Spur)
Canadian Pacific
Railway (Main Line)
Ontario Northland
Railway
CNR (Algoma
Central Spur)
Infrastructure
Considerations
Existing
Electrical
Transmission
Infrastructure
and Route
Options
McFaulds
Lake
Musselwhite
Mine
Pickle Lake
Little
Jackfish
Kenora
Nakina –
Aroland
Dryden
Ignace
Nipigon
230
115
Thunder
Bay
Marathon
Wawa
Hydro One (2009)
Other Developments
►There
are a number of companies working
in the area who have developed business
relationships with several of the Aboriginal
communities
►The range of business arrangements
includes site employment, training, onreserve hotel, construction, and staging
►New relationships are being developed
between industry, communities, and
government
Other Developments /
Inter-Ministry Initiatives
► Several
communities in the McFaulds Lake
area have entered into discussions with MNR
related to Community-Based Land Use
planning
► Mines and Minerals Division staff have met
with MNR and MOE to share information and
form informal working groups
► All affected ministries to work together to
implement Mining Amendment Act and Far
North Act
Summary
► One
of the most significant exploration plays in
Ontario’s history
► Located in Ontario’s Far North
► Significant discoveries of chromite, nickel, copper
and platinum group elements
► Chromite potential emerging as the most
significant development opportunity
► Development could include: mine, mill, smelter
refinery
► Requires significant infrastructure development
that could include rail, hydro transmission and port
facilities
► An unparalleled opportunity to think strategically
and plan for development in an environmentally
sustainable manner
Summary
► This
would be a significant economic
development driver for Northern Ontario,
supporting regional and community
infrastructure development and value-added
manufacturing
► It would provide significant economic
development opportunities for a number of
First Nation communities
► Current estimates indicate that this could
mean significant direct and indirect jobs
during construction as well as permanent
jobs once facilities are in production
Summary
►A
historic opportunity to “Get it Right”
ƒ Strategic infrastructure
ƒ Value-added manufacturing
ƒ Training and employment
ƒ Partnerships and FN engagement
ƒ Far North Planning
Questions?