Noront Resources Ltd. [NOT-TSXV] said Monday it has arranged a $2.5 million non-brokered private placement. It said proceeds with be used for exploration and development of the companyâ€™s Eagleâ€™s Nest Project and chromite deposits in the Ring of Fire mineral district in northern Ontario
The Ring of Fire region is an area that Ontario government officials have previously described as â€œone of the most promising mineral development opportunities in Ontario in almost a century.â€
Recent estimates suggest multi-generational potential for chromite production as well as significant production of nickel, copper and platinum.
Noront is hoping to extract nickel and chromite from its properties in the Ring of Fire area in partnership with local First Nations. Those properties include the companyâ€™s 100%-owned Eagleâ€™s Nest deposit, which it has described as the highest- grade nickel-sulphide find in Canada since the Voiseyâ€™s Bay discovery in Labrador.
On Monday, Noront said it has arranged a non-brokered private placement of any combination of units of the company at a price of 20 cents per unit and flow through shares of the company at 25 cents per share. Gross proceeds are expected to be approximately $2.5 million, the company said.
Each unit will consist of one common share of the company and common share purchase warrant. Each warrant will entitle the holder to acquire one common share of the company for 30 cents for a period of 24 months after the offering closes. Closing is expected to occur on or before November 20, 2019.
Noront shares declined on the announcement, falling 7.3% or $0.015 to 19 cents on volume of over one million.Â The shares are currently trading in a 52-week range of 19 cents and 35 cents.
Noront recently said it has signed agreements with Algoma Steel Inc. Â and engineering firm Hatch Ltd. to facilitate development of the Ring of Fire mineral district .
It was envisioned that the chromite would be extracted and then concentrated at source. It would then be shipped by road or rail to processing facilities further south in one of Ontarioâ€™s major mining centres, where it would be turned into Ferrochrome, a critical ingredient used to manufacture stainless steel.
Noront has been hoping to see construction of a related Ferrochrome production facility in Sault Ste Marie.
The agreements with Algoma and Hatch mark another step toward a larger goal that would see the establishment of Noront as a Ring of Fire developer, backed by First Nations, contractors, suppliers and communities in northern Ontario.
Based in Sault Ste. Marie, Algoma is a fully integrated producer of hot and cold rolled steel products, including sheet and plate.
The agreement with Algoma provides Noront with a five-year renewable option to lease a brownfield property in Sault Ste. Marie for up to 99 years. Noront plans to design, construct and operate a ferrochrome production facility which will service the companyâ€™s Ring of Fire chromite deposits.
The agreement provides the two companies with an opportunity to repurpose an existing brownfield location with a view to sharing infrastructure.
In addition, Hatch will perform engineering and project support services for the Eagleâ€™s Nest and Ring of Fire chrome projects as part of a master services agreement. As part of this collaboration, Hatch will participate as an equity partner with Noront and form an integrated project management and engineering team to manage development and execution of projects in the Ring of Fire.