KWG Resources and Chinese Railway Builders Mean Business in the Ring of Fire

Frank Smeenk the President and CEO of KWG Resources, one of three leading mining companies vying for opening up the mineral rich but inaccessible track in Northwestern Ontario known as the Ring of Fire, believes in finding solutions to seemingly intractable problems.

The intractable problem is how to get the Ring of Fire project, which has been stalled and seemingly gliding in reverse for the last four years, rolling and the minerals from this inaccessible and remote area of the province to a refinery and to end use markets.

This morning Smeenk, Doug Flett (KWG Chair of the Board) and Bruce Chapman (Vice President Corporate Communications) led a team of Chinese railway builders into a meeting with Michael Chan, Ontario Minister of Citizenship and International Trade to discuss the groups’ proposal for building a rail line from the McFauld’s Lake and Koper Lake areas where KWG’s Big Daddy chromite deposits are located to a CNR transcontinental railway track at Nakina.

From there the ore which is primarily rock with chromite content to a mill and a refinery for conversion into refined minerals for use in steel making.

“China consumes some 60 per cent of the world’s ferrochrome production so that the future development of the Ring of Fire is of great interest there,” said Smeenk.

“This is particularly so because the chromite discovery in the Ring of Fire may enable the development of a new method of refining ferrochrome using our bountiful, ‘green’, and low-cost natural gas, rather than expensive electricity,” Smeenk added.

“In this way further processing into ferrochrome can be done in Ontario and a part of our wealth in natural gas can thus find a long term market and become part of an export product,” explained Smeenk.

China not only is interested in the chromite discovery in the Ring of Fire but also in developing new ferrochrome refining techniques.

Last November, KWG Resources signed a confidential agreement with China Railway First Survey and Design Institute Group Co. Ltd. (FSDI). The agreement will provide KWG with China’s assistance in creating a business plan for the Ring of Fire.

The agreement also permits FSDI to study KWG’s Canada Chrome Corporation’s data that was assembled for constructing a railroad into the Ring of Fire. FSDI reviewed the data and found it to be adequate a feasibility study.

Last January KWG and FSDI signed a MOU to proceed with the feasibility study.

The delegation of eight professional railroad engineers that met with Minister Chan this morning is here to visit the proposed railroad road to gather information on whether a railroad can be built on the swampy muskeg lands that compose the Ring of Fire. The delegation, a senior management team designated by FSDI, hails from Xi’an, China.

In addition to the hour-long meeting by Minister of International Trade Michael Chan in his office at 9:30 a.m. the delegation also went to the Ontario Legislature where they were recognized by Finance Minister Charles Sousa.

The delegation also met with People’s Republic of China’s Consul General before departing for Thunder Bay later in the day.

On Wednesday and Thursday of this week KWG will take the delegation to the area through which the rail line will run through. They we will conduct a number of crucial site inspections along KWG’s ‘railroad route’ claims, by helicopter.

On Saturday April 20 they will travel by charter for a visit with the Ontario Northland Railroad executive and then onward to Montreal for an introductory meeting on Monday at CN’s head office.

Next week the delegation of Chinese railway builders and investor will travel by train to Ottawa and visit the House of Commons.

They will return to Beijing from Vancouver on the following Friday April 26.