Hope burns bright for Toronto miner in Ring of Fire

KOPER LAKE—The guys have just finished a Chinese food lunch and are parked in front of the TV, riveted to men’s Olympic hockey, Canada vs Finland, in the Esker Camp recreation room.

Next door, a young chef cleans up the cooking show-worthy kitchen — complete with icemaker in the dry camp — and preps for the usual Friday night feast. This time it’s prime rib, which they alternate with steak and shrimp every other week.

“We don’t mess around here,” says the burly manager on Cliffs Natural Resources’ half of the exploration camp, which sits on land claims owned by Toronto rival Noront Resources.

Only a handful of miners from both companies are left at the remote Northern outpost now that drilling has stopped, so the vibe is collegial — particularly since Cleveland-based Cliffs dropped the bombshell three months ago that it was shelving its massive chromite mining project here in the Ring of Fire mineral belt.

Up to 200 miners worked here a couple years ago, operating drill rigs that dug a kilometre underground for core samples to prove the grades of mine-worthy ore. Now a dozen men share an awkward co-existence in a virtual ghost town, the whirling snow substituting for tumbleweed.

While the U.S. firm is in mothballing mode, Noront is loading up on fuel and other supplies as it gears up to start construction next year on its Eagle’s Nest nickel-copper-platinum mine – bumping Cliffs as the most likely to finally tap into the metals-rich region touted to be the next Sudbury basin.

It’s Noront CEO Alan Coutts’s first visit to Esker Camp since last fall, so affable camp manager Randy Oinonen actually shaved for the first time in weeks. The temperature is minus 27 degrees and the dry Arctic air emphasizes the frozen isolation of the James Bay lowlands that brings anything but a burning Ring of Fire to mind.

“We have a real sense of pride that we’re a Canadian company starting a mining district up here,” says Coutts, a geologist who left the executive suite at international nickel giant Xstrata last year to take the helm of the penny stock firm listed on the TSX Venture Exchange.

The junior is the largest claim holder in the crescent-shaped Ring of Fire region, a world-class mineral deposit valued at $60 billion that prospectors stumbled on while looking for diamonds in the district heavily explored by De Beers. Instead they discovered North America’s first commercial-level resource of chromite — necessary in making stainless steel and coveted by metals-hungry China — along with a vast store of base and precious metals.

It’s been a lifelong goal for Edmonton-born Coutts and his right-hand man Paul Semple – chief operating officer who grew up in New Liskeard — to see a mining project all the way through from prospecting to operations: the geologist’s ultimate prize.

“I’m a Northern Ontario boy and I have worked on projects around the world. At this stage in my career — getting involved in a project of this scale in the North, with the potential for some great positive impacts — is very exciting for me,” says Semple.

Nothing in the mining world moves fast or runs smoothly. So geologists like this Toronto team are a pretty patient bunch, knowing it takes years to get most projects off the ground. Over a two hour-charter flight, the duo tell story after story about crazy times exploring for metals around the globe, with Semple’s former team in Russia trying to win over locals with western belt buckles — then realizing they didn’t own belts.

But with all the hype surrounding the promising Ring, it has seemed like a glacial-paced evolution from the initial metal discoveries in the early 2000s to the Klondike-calibre claim-staking frenzy of 2007, to today, with everything stalled awaiting much-needed infrastructure to turn coveted finds into working mines.

It’s all about “location, location, location,” jokes Semple. And this one is particularly tricky, with the nearest highway 330 kilometres away and smack dab in the middle of nine First Nations communities and one of the world’s largest wetlands. The rugged environment is characterized by wide swaths of muskeg lands and low-lying marshes that are impassable when not frozen, making construction a pricey, logistics nightmare.

In Noront’s drill core shack, Coutts points out brightly coloured flecks of copper and nickel in row upon row of samples that cost $750 a metre to bring to the surface. The miner has spent $200 million to date on exploration and Coutts says it’s not worth burning up any more shareholders’ money on drilling the ore body further until there is some sense of certainty that they can get that ore to market.

The company is applying for permit approvals to build an all-season road running 280 kilometres east-west from Pickle Lake, the nearest town, to the Eagle’s Nest mine site located 500 kilometres northeast of Thunder Bay. The permanent road would mostly be built along an existing winter road that serves four First Nations communities, travelling south on Highway 599 to a trans-load facility (which includes a link to a rail line) to be established near Savant Lake.

Construction is expected to take three years, starting with a new winter road from Webequie Junction to the mine site that would allow for the staging of equipment and supplies for mine site development and road construction, Coutts says.

Competitor Cliffs turned tail when their proposal for a more expensive north-south road that would cross three rivers — one a kilometre wide — and two pristine provincial parks hit numerous regulatory roadblocks. And its court battle continues with KWG Resources, a Toronto junior with plans to develop a chromite mine at some point in the Ring, but prefers a rail line on the 300-kilometre north-south route on which it holds numerous land claims.

Noront plans to pump $10 million a year into the year-round, east-west road that would provide an economic and social lifeline for the fly-in communities of Webequie, Naskantanga, Nibinamik and Eabamatoong – along with access to power and broadband. The miner says the province should pledge most of the $400 million needed to build it, with Noront and eventually other mining companies paying tolls to use it.

First, Noront needs the thumbs up from neighbouring communities and has to submit its final environmental assessment for provincial and federal approval.

Environmental experts have warned that permanent transportation infrastructure leading to the Ring of Fire will likely have adverse effects on the habitat and migration patterns of the threatened woodland caribou, along with marine life.

Noront’s draft environmental assessment includes baseline environmental studies that examine the mine site, the east-west access road corridor and a railcar loading site on the CN mainline.

Michael Gravelle, minister of northern development and mines, announced last week that Deloitte LLP will advise the government on how to set up a corporation to oversee infrastructure development in the Ring of Fire.

North Bay MPP Vic Fedeli is along for the ride for his fourth site visit since 2012, when the camp was teeming with 80 geologists and engineers and roaring drill rigs. He’s the proverbial kid in a candy store, holding his camera out the window of the weaving chopper, sans gloves, to get the best shots of the blinding white terrain.

“It’s breathtaking. Totally worth freezing your fingers. I’ve framed some of my other pictures from here,” he says.

He doesn’t see a very pretty picture otherwise with almost zero activity save the necessary care and maintenance of the camp – clearing snow, taking care of equipment, babysitting expensive drill core samples – in order to preserve the assets and ensure they do not go into decline as they sit and wait.

“We need to get a quick win in the Ring of Fire, go after the nickel first. The chromite is a longer play,” Fedeli says.

As Coutts puts it: “You don’t need to go for the grand slam homerun right away. You just need to get a base hit.”

With most of the needed exploration already completed, the only sense of urgency at the camp now is for Noront to stock up on supplies, including a year’s worth of fuel to get started on the proposed east-west road construction next winter.

Bill Boor, Cliffs’ senior vice-president in charge of the chromite division, said in an interview he does not see the need to maintain a presence at Esker Camp since they’ve already proven the geology. Despite the company’s surprising pullback announcement, he says he continues to consult behind-the-scenes with First Nations groups and the provincial government in hopes of one day returning to build a mine.

Boor says Cliffs will leave the camp they share with Noront in the next six months. But its side of the camp looks like the company had planned to stay for some time, with heated washrooms and showers and a 32-man bunk house individually equipped with televisions and air conditioning. Snowmobiles and ATVs are parked outside tents and buildings, and a helicopter sits near dozens of outdoor core racks.

“We support each other up there, and that’s the way it should be,” he says, adding he is in discussions with Noront on what facilities it might be able to use when Cliffs is gone.

Meanwhile, the U.S. firm covers the bill for the helicopter that flies both crews and supplies from the icy landing strip on Koper Lake to Esker Camp, and regular transportation to the Webequie First Nations reserve for the workers’ two-week shift rotation.

They even eat meals together, with Cliffs catering for the Noront guys in their much larger and shinier kitchen in lieu of rent at Esker Camp, which sits on some of Noront’s land claims. The Toronto miner owns the most, 30 per cent, of land claims in the Ring of Fire.

Noront has filed a proposal for an underground multi-metal mine at a mining rate of 2,960 tonnes per day, representing an anticipated mine life of at least 11 years. The plan also includes an underground concentrate processing facility and a concentrate pipeline from Webequie Junction to the Eagle’s Nest site.

Coutts says he’s had to do significant damage control since Cliffs announced it would shelve its project, with the perception being that the region known as a metals jackpot is now dead.

“We’re very committed to this project, and we’re seen as the frontrunner. This represents a very important first step in the Ring of Fire,” says Coutts.