Re: "Base Hit or Swing for the Fences?"

HIGH-GRADE NI-CU-PT-PD-ZN-CR-AU-V-TI DISCOVERIES IN THE "RING OF FIRE"

NI 43-101 Update (September 2012): 11.1 Mt @ 1.68% Ni, 0.87% Cu, 0.89 gpt Pt and 3.09 gpt Pd and 0.18 gpt Au (Proven & Probable Reserves) / 8.9 Mt @ 1.10% Ni, 1.14% Cu, 1.16 gpt Pt and 3.49 gpt Pd and 0.30 gpt Au (Inferred Resource)

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luker

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Re: "Base Hit or Swing for the Fences?"

in response to

"Base Hit or Swing for the Fences?"

Sambo37

posted on Dec 30, 2013 01:04PM

".....Despite the challenges with these projects, it is worth remembering that resource companies have overcome much tougher logistical challenges in the past, and they will continue to do so going forward. In the Ring of Fire, for example, prospects could turn on a dime in 2014 if the provincial government can reach key solutions involving infrastructure and First Nations negotiations....

But the overwhelming challenges around the remote project suggest a way for everyone to go about it: start small. Then the issues do not seem quite so overwhelming.

That is how Al Coutts, the chief executive of Noront Resources Ltd., sees it. He understands the government’s desire to have absolutely everything mapped out before the first pile of dirt is excavated. That would clear the way for Cliffs (or someone else) to build a giant chromite mine. But he thinks the region would be better served by opening a couple of smaller, manageable operations and getting a bit of success under its belt first. One of those could be Noront’s Eagle’s Nest deposit, a base metal project with a far smaller footprint than the massive operation that Cliffs is talking about. Noront is also proposing an east-west all-season road that is not as controversial as the north-south proposal that tripped up Cliffs.

“I think that’s the quandary. Do we kickstart this thing with a base hit or do we swing for the fence off the bat?” Mr. Coutts asked. The base hit makes sense, he said, noting it would create some immediate jobs and revenue.

These projects become much easier to finance if they don’t cost billions of dollars. And it is easier to get permitting and obtain First Nations support if they don’t leave a massive environmental footprint. A couple of small successes could embolden all the stakeholders to tackle the larger infrastructure challenges that a big chromite mine presents.

And from a share price perspective, if investors can see a credible path to development for remote projects in the Ring of Fire and elsewhere, they have no reason to value them so cheaply anymore. Until then, they seem content to keep them exactly where they are."