Published: Jun 7 2010 4:324PM
LONDON -- Noront Resources Ltd. might sell a portion of its assets in Canada's Ring of Fire to focus on its copper and nickel sulfide resources, the company said.
Noront holds a number of high-grade nickel-copper-platinum-palladium, chromite, gold and vanadium resources in the district, located in the James Bay Lowlands of northern Ontario.
In March, Toronto-based Noront updated its copper and nickel sulfide resource estimate to 11.2 million tonnes at 2-percent nickel and 1-percent copper from just 3 million tonnes previously.
The company expects to complete a feasibility study for its copper and nickel resources next year, after which it will seek financing for the next stage of development with a view to starting production in 2016.
"Once the study is complete, we'll move on to financing," according to Wes Hanson, chief executive officer, noting that a number of financing o ptions were being considered. These include a combination of debt and equity, and a possible joint venture. "We might also vend a portion of our assets."
Should Noront decide to sell, it is likely that the chrome assets will be put on the market first, as the company's focus is on its Eagle's Nest nickel, copper and platinum group metals deposit, and not on its Blackbird chromite deposit.
"Chrome is not the focus-due to the remote location and particular challenges with infrastructure; it's very difficult at today's prices to create a stand-alone chrome business," Hanson said.
High-carbon ferrochrome is trading in the U.S. spot market at $1.30 to $1.35 per pound and in Europe at $1.25 to $1.35 per pound, well below the price level Noront would need to make a sustainable chrome mining and processing business feasible.
"We'd need prices at around $1.80 per pound to be sustainable, and only when the market peaked did prices get there," Hanson said.
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