There has been some discussion about the value of Noront. Tonight I thought I would just focus on the chromite and remind you folks what Cliffs said when they purchased Freewest Resources.

They came out and said, this acquisition will allow them to increase their revenues by 50% once they were mining.

Their revenues were 1.5 billion dollars a year back then and they were $100.00 usa dollars per share. When the Ontario govt was courting them their market cap was over 12 billion!

http://www.macrotrends.net/stocks/charts/CLF/market-cap/cleveland-cliff-market-cap-history

You can imagine the additional increase to their market cap with an extra 750 million per year...

I have a fairly long post below but I assure you it will get you thinking about the value of the chromite...

I compiled the below for comment.

(1) In May of this year, Noront did a presentation to the Sault Chamber of Commerce.

The link for this presentation is below.

http://www.northernontarioangels.ca/wp-content/uploads/2017/06/NORONT-Presentation-May-10-2017-in-SSM.pdf

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(2) August 21, 2017, Wynne announces a road to the RING of FIRE

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(3)  4 months AFTER the Noront presentation in Sault Ste Marie and 1 month AFTER the Road announcement we got this news: 

The Community Economic Development Corporation now has the support of City Council to apply for funding to buy the equipment.

Commission Gets Support For Smelter

Posted on Monday, September 18, 2017 09:04 AM

“A smelter connected to the Ring of Fire might be coming to the city.

The Community Economic Development Corporation now has the support of City Council to apply for funding to buy the equipment.

It's putting in an application with the province's mining readiness program.

If the CEDC gets the money, the equipment could be used to process minerals extracted from the

Ring of Fire.”

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(4)

Below is a presentation by Cliffs in 2013 at the International Ferroalloys Congress in Kazakhstan

http://www.pyrometallurgy.co.za/InfaconXIII/0073-Cramer.pdf

The project will be producing BOTH chromite concentrate and high carbon ferrochrome for sale to international markets

The project is based on an open pit mine producing about 4 million tons of ore per year, 

The facility is designed to produce 560 OOO tons of High Carbon Ferrocbrome (HCFeCr) per year utilising ore only from the captive mine. This will make the Cliffs FPF one of the largest ferrocbrome facilities in the world.

From the IBK presentation:

http://www.ibkcapital.com/capital-market-highlights/base-metals-sector/chromium/

Cliffs has scheduled production to begin in 2016, consisting of four interrelated components. An open pit mine is anticipated to produce roughly 3.7 million tonnes of crude chromite ore annually, with a projected mine life of 30 years.  After preliminary processing at the mine site, 2.3 million tonnes of concentrated ore will be transported south.  In Sudbury, the proposed Capreol smelter is projected to produce 560,000 tonnes of high carbon ferrochrome annually.  As a huge portion of the world’s chromite ore is produced in South Africa, it would appear that Cliffs is taking advantage of producing ferrochrome in a geopolitically safe region such as Ontario, with an abundance of reasonably priced power.

Cliffs Natural Resources, a NYSE-listed iron-ore and coal mining company, has been executing a strategy over the last several years to achieve scale in its mining operations with a focus on serving the world’s largest steel markets.

The company’s objective is to become the sole North American chromite and ferrochrome producer and exporter. Cliff’s completed two transactions in 2010 to solidify its chromite position in the Ring of Fire. The first was the C$250 million acquisition of Freewest Resources for its Black Thor and Black Label chromium projects. The second was the acquisition of Spider Resources for its Big Daddy chromite project for C$130 million.

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(5)In the Noront May, 2017 Sault presentation we see the below...

Produce a Ferrochrome product for sale into the US market • Stage 1: Moderate-sized Mine/Smelter development concurrent with Eagle’s Nest (200-280 KT/year of Ferrochrome) – Utilizing the Blackbird Mine Resource – Modest penetration of US market, no scale impact on overall market – Utilizing proximity advantage to US Stainless Steel producers •

Stage 2: Major-scale Mine/Smelter development when the market warrants – Utilizing the Black Thor and/or Big Daddy Resource – Sales into Europe and Asia as well as NA – Stage 2 expansion to 560 KT/year Ferrochrome 

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When you look at these 5 points carefully you will note the following:

-Cliffs “intention”  was to be “the sole North American chromite and ferrochrome producer and exporter.”

Wow, did that dream ever change. Seems Noront has taken Cliffs place.

But …here is where it gets very interesting….

Cliffs planned on smelting 560,000 tonnes of HIGH carbon…..Ferrochrome annually in Sudbury.

If you look at the Noront Sault Ste Marie presentation….you will see the SAME amount under Stage 2.

But……

But, Cliffs said …..they wanted to mine a total of 4 million tonnes annually.

When you look carefully at the IBK PDF….

…..it states something very very interesting here…

An open pit mine is anticipated to produce roughly 3.7 million tonnes of crude chromite ore annually, with a projected mine life of 30 years.  After preliminary processing at the mine site, 2.3 million tonnes of concentrated ore will be transported south. 

So let’s add this up ..and we’ll use the IBK 3.7 million tonnes of crude chromite ore per year.

Cliffs planned on  the following:

560,000 tonnes brought to a smelter for making high carbon ferrochrome

2,300,000 tonnes of concentrated ore to the SOUTH (USA)

What is fascinating here is this 2.3 million tonnes of concentrated ore to the south ….When Cliffs made that comment…can we assume they had an interested party in the USA?

How can you make that statement and just pull 2.3 million for the SOUTH out of thin air without having had a deal of sorts.

What I find very interesting is the NORONT Sault Ste marie presentation….They mention only the chromite for the smelter in their presentation….and mention the same amount for phase 2 as Cliffs originally had planned.

If you go into Noront’s 2017 corporate presentation  it’s mentioned ONLY the chromite headed for the smelter to make high carbon ferrochrome and the presentation states:

“There is no margin in selling ore; a conversion to a value added product is needed”

So…..what exactly is transpiring here…

Cliffs NEVER stated plans to sell lumpy ore… Their plan for the 2.3 million tonnes not headed for the smelter was to process it! ..From their presentation 2013..

Let’s think about this for a minute.

Cliffs clearly had a customer or customers in the USA that wanted 2.3 million tonnes of processed concentrate

Now that Cliffs is out of the picture as far as the ROF is concerned…….and the sole supplier they planned on being has be replaced by Noront…..what happened to this section????

Why is this not mentioned by Noront? Why mention ONLY the high carbon ferrochrome for smelting….what about the rest…the processed concentrate that was to be sent south by Cliffs.

I keep going back to Noront’s presentation where they state:

“There is no margin in selling ore; a conversion to a value added product is needed”

So, my question is ….who will convert it or process it for …..Noront? 

In the case of Cliffs they had planned a concentrator operation.

But, this 2.3 million tonnes of concentrate that Cliffs planned on selling to the south was to do what with?

This kind of ore is mainly for making stainless steel.

So, Cliffs idea was …sell 2.3 million tonnes of  this “concentrated ore” to the SOUTH….for stainless steel making ….by …folks in the USA….

But….why not make a lot of it here……In Canada…..

…..And Algoma in  Sault Ste Marie has the closest port to the ROF……and has been stated as the BEST SPOT TO MAKE STAINLESS STEEL…

If that is the case….why would you not process the concentrate there?

It would be the perfect place. Process it there and use it to make stainless in the Sault and sell the remaining processed ore to the ….south…

I believe once Algoma is …..finalized....the chromite feasibility will …surface.                                

I believe the best place to process the chromite into concentrate is the Sault…since the port is the closet to the ROF..this concentrate would then be used to make stainless at Algoma and any extra concentrate would be sent….SOUTH.

As far as making the HIGH carbon ferrochrome….which requires the smelter, the best place for this is Timmins…for many many reasons.