Wes Hanson focuses on Eagle’s Nest after losing chromite battle

The Ring of Fire region of northern Ontario may be one of Canada’s hottest regions for mineral exploration.

But developing a chromite mine in such a remote area will pose huge challenges, even for large companies with deep pockets.

That’s the view of Wes Hanson, President and chief executive officer of Noront Resouces Ltd. (TSX: V.NOR, Stock Forum), a Toronto junior that sparked a Ring of Fire staking rush by hitting nickel, copper and palladium while drilling its McFaulds Lake property in September of 2007.

In an interview with Stockhouse, Hanson said it is more likely that any new mining operations in the region will be small enough to be serviced by winter roads, rather than the 350-kilometre railway that may be needed to transport large quantities of chromite to North American markets.

“I have yet to see a study that indicates that a railroad is a viable option or that the environmental NGOs (non-governmental organizations) would accept a railroad into one of the most environmentally sensitive areas in Canada,’’ he said.

“It’s a matter of demonstrating viability and I don’t think that’s been done.’’

Mr. Hanson is expressing doubts after Noronto recently lost a high profile battle with U.S. giant Cliff Natural Resources Inc. (NYSE: CLF, Stock Forum) for control of Freewest Resources and its Ring of Fire chromite discoveries.

Having withdrawn from the Freewest fight, Noront hired a consultant in April to look at the feasibility of mining its Eagle’s Nest nickel, copper, platinum group element deposit. Expected to available by mid-2011, the study will determine whether or not a winter road is feasible and how much it would cost.

If it gets the green light, Noront envisages a 1,500-tonne-per-day nickel-copper-sulphide mine, with an underground waste tailings facility. “We are trying to find ways to minimize our environmental footprint, build a greener mine, and exploit the resource in the most efficient way possible,’’ Hanson said.

He believes a small underground mine would be a much more manageable thing for a junior company like Noront to take on than a big chromite operation.

Hanson was referring to speculation that Cleveland-based Cliffs wants add steel to its suite of products and is eyeing Ring of Fire chromite, including Freewest's Big Daddy property, to feed its steel operations.

In a bid to gain the interest in Big Daddy that it doesn’t already own, Cliffs has a 13 cents per-share offer on the table for Spider Resources Inc. (TSX: V.SPQ, Stock Forum). It has also signalled its intention to make an offer for Spider’s Big Daddy partner KWG Resources Inc. (TSX: V.KWG, Stock Forum).

Chromite is a mineral that is processed in a concentrator to produce ferro-chrome, a mixture of chromium metal and iron that is the feedstock for stainless steel.

Even if a chromite mine were to be developed, it isn’t clear yet whether or not a concentrator would be built near the mine site or in an urban area like Thunder Bay. But any decision to build a concentrator would be accompanied by the need for new power generating capacity, Hanson says.

Speaking of Noront’s failed bid for Freewest, Hanson said the company wanted to be a consolidator in the Ring of Fire area and saw chromite as an “add-on’’ to its existing exploration efforts, which are currently focused on nickel-copper-platinum at Eagle’s Nest.

Hanson said selling the company’s chromite assets is only one of a number of options that the company would consider if Noront needs cash to put Eagle’s Nest into production.

A ceo of Noront since June 2009, Hanson is a 50-year-old native of Cape Breton, who has been involved in just about every aspect of mining since he graduated from Mount Allison University in 1982.

Having been granted the opportunity to sit in the corner office and build his own team, he hopes to turn Noront into Canada’s next mining company.

The company has about $30 million on hand to fund its exploration efforts.

“We have a strong position in a very strong mineral district and we still believe that the best mineral discoveries (in the Ring of Fire) are yet to come,’’ Hanson said.

Wes Hanson Biography

Hanson is a 50-year-old native of Cape Breton

Before joining Noront, he was vice-president mining development for Western Goldfields

He was a vice-president, technical services for Kinross Gold Corp.

He has a Bachelor of Science degree in geology from Mount Allison University in Sackville, N.B.