http://www.thesudburystar.com/2016/09/08/ring-fire-will-happen-ceo

Ring of Fire will happen: CEO

By Carol Mulligan, Sudbury Star

Thursday, September 8, 2016 1:11:37 EDT AM

David Harquail , president and chief executive officer of Franco Nevada, addresses the crowd at a Laurentian University press conference in Sudbury, Ont. on Tuesday September 6, 2016. Gino Donato/Sudbury Star/Postmedia Network

Franco-Nevada Corp. chief executive officer and president David Harquail is "absolutely convinced" a mine will be built in the Ring of Fire, but realistic enough to believe it may be a future CEO who benefits from it.

Franco-Nevada loaned Noront Resources Ltd. US$22.5 million last year, at 7 per cent interest for five years. That was in return for a 3 per cent royalty on the Black Thor chromite deposit and a 2 per cent royalty of all Noront's property in the region with the exception of Eagle's Nest.

Noront purchased shares of Cliffs Chromite Ontario Inc. and Cliffs Chromite Far North Inc., independently owned subsidiaries of Cliffs Natural Resources, which held mining claims in the Ring of Fire, for US$20 million. The remaining US$2.5 million provided Noront with operating capital.

Harquail attended an event Tuesday at Laurentian University where it was announced his family foundation, the Midas Touch Foundation, was giving $10 million to the university's earth sciences department. It has been renamed the Harquail School of Earth Sciences, and the donation will support Metal Earth, a $114-million applied research and development project at Laurentian.

"You have to put mining in perspective," Harquail said in response to a question about the Ring of Fire from The Sudbury Star after the Laurentian news event. "We talk about (mining) in eons, geological eras, and the Ring of Fire is really ... less than eight years ago, in terms of the whole thing coming together," he said.

When developing base metal deposits, a number of factors have to come together -- financing, market need, the commodity cycle.

"Right now, we're in a low ebb, it's going to be really hard. Even if the governments were totally behind it, industry right now would probably not be able to finance it," he said of the Ring of Fire's chromite, nickel and other metal deposits.

To move development of the Ring forward, government, first nations and industry must be involved in discussions "so when the commodity cycle is back up, then we can have all the agreements together."

Harquail said his company in involved with deposits discovered in 1963 that are still a couple of years away from production.

That has nothing to do with barriers. "It's just the commodity cycle itself. There's a time and a window for all these things," he said.

"We're building things for multi-generations," he said of the Ring of Fire properties.

Harquail agrees with some observers who say the time to build mines is when commodity prices are low, to be ready to reap the benefits when prices rise, but it's not that simple.

"You can't get people to finance them. That's the problem," he said.

If they do, "they're just getting more short-term oriented."

Companies have to advance their opportunities when the financing cycle is open, "and then husband your resources, which is what the industry's doing right now ... It's all going to come back guaranteed."

Sudbury MP Paul Lefebvre and Nickel Belt MP Marc Serre, both Liberals, attended the Laurentian event along with Harquail. The MPs announced the federal government was contributing almost $50 million to Metal Earth. The goal of the project is to transform understanding of the genesis of base and precious metals in the Earth's evolution, ultimately making exploration easier and less expensive for companies.

Speakers at Tuesday's event focused on the need to make new mineral deposits. When asked about the chromite and other deposits already found in the Ring, the MPs insisted the Liberal government of Prime Minister Justin Trudeau fully supports Ring development.

That why the federal government "put a lot of money up front" to fund a study of transportation in the Ring, said Lefebvre. The then Conservative government of Stephen Harper and the Liberal government of Premier Kathleen Wynne split the cost of the $785,000 study, which was conducted by first nations located close to the Ring.

The first nations who conducted that study have not made it public yet, and there are questions about whether more work will be needed.

"There is more study to be done," said Lefebvre, but once it's done, the federal government will talk to the provincial government to "see how we make this move forward."

Some critics have said developing the Ring of Fire isn't high on the federal Liberal agenda, but that's not true, said Lefebvre.

"We talk about the Ring of Fire all the time. It is a priority, however it takes time. We want to get it right."

Serre said Liberal MPs have convinced his government to invest $8.4 million in first nations, billions of that into infrastructure, "and now we're waiting for proposals" from the province.

People who say the Liberals aren't doing anything to advance the Ring of Fire should know Grits are "engaging," having discussions with First nations, who are partners in developing the Ring.

"We can't move forward unless we have that agreement," said Lefebvre, "so that is being worked a daily basis, at this time. And once that's completed, let's talk about the next phase," he said.

CMulligan@postmedia.com