by Greg Klein | June 2, 2014

With Ontario’s Ring of Fire subject to competing development proposals, KWG Resources TSXV:KWG has taken an unusual approach to sell its vision for the resource-rich region. The company has drafted its own proposed legislation, which it’s promoting to provincial election candidates and voters through a social media campaign.

Ontario elects a new government on June 12. Among the issues is the Ring of Fire, the infrastructure-less region that’s touted as containing mineral potential worth $60 billion, if not hundreds of billions. Other rough estimates thrown around by stakeholders and media say the region needs over $2 billion of initial development before mine development can be viable. The incumbent Liberals have so far pledged $1 billion. But with little agreement among stakeholders on how—or whether—to develop the region, KWG says it’s “happy to take a leadership role that helps end the political gridlock.”

Not surprisingly, a railway is central to KWG’s plan. While the company has advocated a north-south rail link, Noront Resources TSXV:NOT has called for an east-west road. Before Cliffs Natural Resources NYE:CLF suspended its Black Thor project last November, that company had conditional provincial support for a north-south road.

But to push its plan, KWG now takes a shot at the northern development corporation that Ontario created to co-ordinate and advise on the Ring of Fire. “Ontario already has a northern development corporation,” the company states. “It is the Ontario Northland Transportation Commission.” Helpfully, “the principal operating asset of the ONTC is the Ontario Northland [railway].”

KWG sees the railway revitalized by revenue from hauling the region’s chromite, nickel and other valuable minerals. “If the ONTC were made into a non-share capital corporation similar to Canada’s port and airport authorities, it could be governed by the northern residents of Ontario whose communities it serves,” including native bands, the company emphasized. The ONTC could then raise money in capital markets, enabling development “with the necessary social licence together with the discipline of the capital markets, rather than from the public purse.”

KWG encourages people to sign an online petition, contact candidates and distribute the company’s pitch through social media.

Through its subsidiary Canada Chrome Corp, KWG holds a 330-kilometre line of mining claims from the region to rail and road infrastructure to the south. Canada Chrome has spent $15 million on a surveying and soil testing program for the engineering and construction of a railway. The mining claims were the subject of a legal dispute with Cliffs, which wanted to build an all-weather road through much of the same route before the company suspended its Ring of Fire project.

Read more about Ring of Fire transportation proposals.
Read an April 1 commentary about the Ring of Fire.

Read an overview of KWG’s proposal here or the entire bill here.

This article was posted by Greg Klein - Resource Clips on Monday, June 2nd, 2014 at 5:24 pm.