McFaulds Lake ( Ring of Fire ) Mineral Exploration and Development Overview. (MNDMF) May 11, 2010

Transcription

1 McFaulds Lake ( Ring of Fire ) Mineral Exploration and Development Overview (MNDMF) May 11, 2010

2 Summary Several significant new mineral discoveries have been found in the Far North over the past 8 years in an area now known as the Ring of Fire. Copper zinc Nickel-copper-platinum Chromium-iron-vanadium Gold The area is remote, wet (edge of Lowlands), with no power or access, and is within Marten Falls FN and Webequie traditional areas.

3 March 1, 2010

4 2002 Exploration History De Beers drilling program for diamonds Copper-zinc discovery announced (KWG-Spider) Staking rush ensued 2003 to 2007 Staking and exploration by more than 30 companies, drilling geophysical anomalies Eagle One Ni-Cu-PGE deposit discovered (Noront) Second staking rush

5 Exploration History 2008 Discovery of Eagle Two Ni-Cu-PGE and Blackbird One chromite (Noront) deposits Freewest-KWG-Spider discover Big Daddy & Black Thor chromite zones 2009 Canada Chrome Corporation formed as KWG subsidiary Blackbird chromite deposit discovered 8.9 Mt grading 35% Cr (Noront) Black Label chromite zone discovered (Freewest)

6 2010: 31,000 claim units held by over 30 companies Area of most intense exploration (12-20 km long); copper-nickel and chromite discoveries

7 McFaulds Lake Key Host Rocks for Chromite, Copper- Nickel Superimposed on Thunder Bay to demonstrate scale

8 Exploration History 2010 Freewest announces that Black Thor deposit contains an Inferred Mineral Resource of 69.5 Mt at a grade of 31.9% Cr 2 O 3 (cut-off grade of 25% Cr 2 O 3 ) Freewest Resources acquired by Cliffs Natural Resources Inc. Engineering firm continues geotechnical studies KWG / Spider / Freewest announce resources for the Big Daddy deposit (indicated resource of 23.2 Mt averaging 40.66% Cr 2 O 3 ; and an additional inferred resource of 16.3 Mt averaging 39.09% Cr 2 O 3 )

9 2010 Exploration History Noront announces Eagle s Nest deposit contains: an Indicated Mineral Resource of 6.9 Mt at a grade of 2.04% Ni and 4.7 gpt PGE an Inferred Mineral Resource of 4.3 Mt at a grade of 1.42% Ni and 4.2 gpt PGE

10 Nakina

11 Where We Are In The Process Still in Exploration stage over $100M spent to date Consultation with FN s

12 Why Chromite? Chromite (Cr ) is an oxide mineral, not a sulphide mineral

13 Why Chromite? Chromium is a strategic metal (i.e. a metal that is essential for industry and national security, but for which a nation has little or no domestic supply) used mainly as an alloy to produce stainless steel; there is no substitute for chromium The value of high-grade chromite (>40% Cr 2 O 3 ) is approx. US$150 per tonne delivered to port (2009)

14 Why Chromite? Resources and production are mostly in the Eastern Hemisphere Global outlook is for continued rising prices and increasing demand U.S.A. is import-dependent; chromium travels over long supply routes Chromium comes from politically and economically dynamic areas (Chromium A National Mineral Commodity Perspective, John F. Papp, U.S. Geological Survey, Open File Report )

15 Proponents Canada Chrome Corp. (CCC), formerly ChromeCana Inc., operates as a subsidiary of KWG Resources Inc. and engages in the development of mining properties of its parent company Joint-venture agreements have been signed between KWG, Spider Resources Inc. and Freewest Resources Canada Inc. Noront Resources launched an unsuccessful takeover bid for Freewest Resources; recently initiated feasibility study on their Eagles Nest nickel-copper deposits at McFaulds Lake

16 Proponents Cliffs Natural Resources Inc. is an international mining and natural resources company and the largest producer of iron ore pellets in North America Cliffs has a strategy designed to achieve scale in the mining industry and focused on serving the world s largest and fastest-growing steel markets. Cliffs accepted KWG's invitation to become a principal investor (19.9%) in order to participate in its development initiatives, at a cost of $3.5M Cliffs recently acquired Freewest Resources and its shares in Black Thor (100%) and Big Daddy (~50%) deposits

17 Requirements Mine and Mill Open pit.. Construction of a concentrating mill (at mine site?); estimated 4000 tonnes per day Processing $500M ferrochrome foundry/smelter; technology options studied Sourcing coking coal for smelting process Infrastructure Construction of a new railway line (~350 km) to ship ore or concentrate CCC engaged an engineering consultant to provide geotechnical services to study potential for construction of a new railway line Significant electrical power: 25 to 35 MW for a mine/mill facility 100 MW for a smelter Deep-water port locations for a possible smelter site

18 Current focus of Geotechnical surveys (CCC study routes) CNR 584

19 Infrastructure Considerations McFaulds Lake Canadian National Railway (Main Line) CNR (Kinghorn Spur) Ontario Northland Railway Canadian Pacific Railway (Main Line) CNR (Algoma Central Spur)

20 Existing Electrical Transmission Infrastructure and Route Options Infrastructure Considerations Musselwhite Mine McFaulds Lake Pickle Lake Kenora Dryden Ignace Little Jackfish Nakina Aroland Nipigon 230 Thunder 115 Bay Marathon Wawa Hydro One (2009)

21 Other Developments There are a number of companies working in the area who have developed business relationships with several of the Aboriginal communities The range of business arrangements includes site employment, training, onreserve hotel, construction, and staging New relationships are being developed between industry, communities, and government

22 Other Developments / Inter-Ministry Initiatives Several communities in the McFaulds Lake area have entered into discussions with MNR related to Community-Based Land Use planning Mines and Minerals Division staff have met with MNR and MOE to share information and form informal working groups All affected ministries to work together to implement Mining Amendment Act and Far North Act

23 Summary One of the most significant exploration plays in Ontario s history Located in Ontario s Far North Significant discoveries of chromite, nickel, copper and platinum group elements Chromite potential emerging as the most significant development opportunity Development could include: mine, mill, smelter refinery Requires significant infrastructure development that could include rail, hydro transmission and port facilities An unparalleled opportunity to think strategically and plan for development in an environmentally sustainable manner

24 Summary This would be a significant economic development driver for Northern Ontario, supporting regional and community infrastructure development and value-added manufacturing It would provide significant economic development opportunities for a number of First Nation communities Current estimates indicate that this could mean significant direct and indirect jobs during construction as well as permanent jobs once facilities are in production

25 Summary A historic opportunity to Get it Right Strategic infrastructure Value-added manufacturing Training and employment Partnerships and FN engagement Far North Planning

26 Questions?