After years of negotiations, the Ontario government has approved the construction of a series of all-weather roads in the Ring of Fire area.
The roads will link isolated First Nations communities with the province’s highway system, and are part of a $1-billion infrastructure plan designed to open up Northern Ontario.
The decision was announced on Monday (August 21) by Ontario Premier Kathleen Wynne. She said the government will work with three First Nations communities to develop the roads, with environmental assessments starting in January 2018 and construction beginning in 2019.
“We’re talking about a couple of roads that will link communities to the highway system. It’s great news, because we know that the Ring of Fire will be a game changer for communities in the region and, quite frankly, for the whole province,” she said.
The long-awaited roads will also benefit junior miner Noront Resources (TSXV:NOT), which has a major land position in the area. “It’s a very important breakthrough. This is exactly what was needed to de-bottleneck the Ring of Fire development,” CEO Alan Coutts said.
Noront’s first priority is its Eagle’s Nest high-grade nickel–copper-PGMs asset. “The reason we selected that site as the first mine is because there’s already existing smelting capacity for those minerals in Sudbury,” Coutts explained.
He added, “[t]hat mine will take five years from now to see a mineral concentrate coming from the Ring of Fire to Sudbury for processing.”
Noront will then develop its Ring of Fire chromite deposits, which include Blackbird, Black Thor, Black Label and Big Daddy. But the company is still looking for a ferrochrome smelting facility to process that metal. Noront has been speaking with representatives from Sudbury, Timmins, Sault Ste. Marie and Thunder Bay.
“We’ve advanced that conversation significantly,” Coutts noted, adding that the company expects to have a location decision by the end of this year. “Permitting [of the smelter] will take a long time and we know we have to get out ahead of this because it will be a long process of environmental assessment.”
“We have offered to make the First Nations full partners in our railroad and mining operations. The announcement by Premier Wynne yesterday will enable us to formalize that partnership and assist Marten Falls with an Environmental Assessment of their joint access route,” CEO Frank Smeenk said.
Noront’s share price jumped 25 percent after the Ring of Fire roads received the go ahead. The company has gained more than 60 percent year-to-date, and as of 1:00 p.m. EST on Tuesday (August 22) was trading at $0.39. Meanwhile, KWG remained flat after the news, closing the day at $0.02.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.