HIGH-GRADE NI-CU-PT-PD-ZN-CR-AU-V-TI DISCOVERIES IN THE "RING OF FIRE"

NI 43-101 Update (September 2012): 11.1 Mt @ 1.68% Ni, 0.87% Cu, 0.89 gpt Pt and 3.09 gpt Pd and 0.18 gpt Au (Proven & Probable Reserves) / 8.9 Mt @ 1.10% Ni, 1.14% Cu, 1.16 gpt Pt and 3.49 gpt Pd and 0.30 gpt Au (Inferred Resource)

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Message: The optimistic route

I think that anyone who talks about trucking chromite out of the Ring is being misleading. No companies other than Cliffs have ever publicly suggested trucking chromite out, even though people keep hinting that Noront intends to do the same.

Noront could truck refined nickel out. Unprocessed nickel ore, however, means bigger volumes. I guess everything depends on eventual processing plans.

Regardless of whether or not any type of processed or unprocessed ore is trucked anywhere, the road(s) that access the area will need to be able to handle some fairly large loads for equipment and supplies going in and out. Forestry-standard roads can sometimes handle off-highway loads of up to nearly 100,000 kgs, although there are a lot of different standards for logging roads. But my belief is that an all-weather road built to the standards of a main logging road should be able to handle all conventional traffic in and out of the area, assuming that the road base is adequate and there's a lot of grading and maintenace work carried out on an ongoing basis. It's quite common for logging roads AND roads accessing various mines all across Canada to need almost constant year-round grading to keep them viable for regular commercial traffic.

Based on the road construction costs that I'm familiar with (varying from the coast of BC, which is unbelievably expensive, to the flatlands of Alberta which is a fraction of coastal costs), Frank's numbers are in line with what I would expect for a full-load logging road into the area, assuming a solid base and no muskeg to deal with. 300km of logging road in rural Alberta could be built to standards for $30m. Add the costs of dealing with muskeg and major bridges and the price starts to increase rapidly.

It's possible that the discrepancy between Frank's numbers and the provincial numbers is not an inaccuracy in methodology on the part of one or the other, but rather based on the route used. I understand that the existing winter road goes by a route that involves a lot of muskeg. If that's accurate, then perhaps the government is basing their road costs on following the same route, where KWG's study is possibly picking an entire new unused route that makes more sense in terms of road-building economics. That's just a guess.

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