Break out the pick axes and shovels.

A preliminary economic assessment (PEA) prepared for KWG Resources recommends pushing their Big Daddy chromite deposit in the Ring of Fire closer down the path toward production.

The Montreal miner released a positive PEA, April 12, that recommends moving the remote deposit in the James Bay lowlands into the feasibility study phase.

The PEA, prepared by NordPro Mine & Project Management Services of Thunder Bay, places a $12.64 billion price tag on the project.

The project estimate is based on a price of US$325 per tonne of lump chromite mineralization.

The proposed development calls for an open pit and crushing plant, power line, a railway and all the bridges and other infrastructure that comes with it.

Construction would take three years with an open pit yield of 25.35 million tonnes of indicated resource (13.54 million tonnes of inferred) over a 16-year operating life.

KWG owns a 28 per cent interest in the project. Ohio-based international miner Cliffs Natural Resources has majority ownership of the Big Daddy.

In a statement, KWG president Frank Smeenk said the PEA shows if the Big Daddy deposit were developed, it “could provide compelling returns to the owners at present prices.”

The assessment shows a payback period of 2.5 years

But before a tonne of ore is mined, the transportation infrastructure must be built. The single biggest expenditure is a railroad, estimated to be $900 million.

The 350-kilometre-long rail line would connect the deposit with the Canadian National Railway's mine line at Nakina.

The PEA said project returns are “sensitive” to the railway's capital costs since it's money spent before any ore is mined.

The study added, “The PEA has assumed the cost of the railway would be borne between the project and other area projects presently under development or study for development and thus allocates 50 per cent of the cost of the project.”

The open pit would be mined conventionally using shovels and diesel haul trucks. The pit would measure 1.7 kilometres long by 1.3 kilometres wide and 570 metres deep. About 1 billion tonnes of waste would be produced over the life of the mine at a stripping rate of 27:1.