Noront Resources

Noront Resources (TSXV: NOT; US-OTC: NOSOF) was the target of a heated takeover contest, won by Australian miner Wyloo Metals last year. A shareholder vote on the takeover is slated for mid-March and the acquisition is expected to close in the first quarter. Noront’s assets are located in Ontario’s Ring of Fire, near James Bay. It holds 100% interests in the Eagle’s Nest high-grade nickel-copper-platinum group metals deposit, the Blackbird chromite discovery, and the Black Thor chromite deposit. It also holds a 70% interest in the Big Daddy chromite deposit and a 100% interest in the Black Label deposit.

Noront Resources’ Esker camp in Ontario’s Ring of Fire. Credit: Noront Resources

With so many riches in the ground, there remains much to be settled about the Ring of Fire — Indigenous participation, rail or road access, economic production decisions, and financing. A ferrochrome production facility is under consideration, perhaps in Sault Ste. Marie, Ont.

Noront has already produced a preliminary economic assessment for the Eagle One deposit (2008), a PEA at McFaulds Lake (2010), a prefeasibility study for Eagle’s Nest (2011), a feasibility study for Eagle’s Nest (2012) and a 43-101 technical report for the Nikka copper-zinc deposit (2020).

The first development in the Ring of Fire will probably be Noront’s Eagle’s Nest project. The feasibility study gave the project an after-tax net present value with an 8% discount rate of C$543 million and an internal rate of return of 28%. A conventional 3,000 tonne per day, blasthole open stope underground mine with paste backfill is planned. Returning the tailings underground as fill means there would be no management facility at surface.

The Eagle’s Nest project has proven and probable reserves of 11.2 million tonnes grading 1.68% nickel, 0.87% copper, 0.89 gram platinum per tonne, and 3.09 grams palladium per tonne. The inferred resource is 9 million tonnes at 1.1% nickel, 1.14% copper, 1.16 grams platinum per tonne, and 3.49 grams palladium per tonne. Production of concentrates containing 34.2 million lb. nickel, 19.2 million lb. copper, 23,470 oz. platinum and 90,022 oz. of palladium annually is planned.

Capital costs were estimated at C$609.4 million with operating costs of C$1.1 billion over the life of the project. The study used metal prices of $9.43 per lb. nickel, $3.60 per lb. copper, $1,600 platinum per ounce, and $599 palladium per ounce.

The decision to begin development on Eagle’s Nest or any other of Noront’s projects in the Ring of Fire is dependent on the new owner.