Noront signs Ring of Fire deal with Algoma, Hatch
Noront Resources Ltd. [NOT-TSXV] said Friday September 20 that it has signed agreements with Algoma Steel Inc. and engineering consulting firm Hatch Ltd. to facilitate development of the Ring of Fire mineral district in northern Ontario and associated processing facilities.
The Ring of Fire region is an area that Ontario government officials have previously described as “one of the most promising mineral development opportunities in Ontario in almost a century.”
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 company’s 100%-owned Eagle’s Nest deposit, which it has described as the highest- grade nickel-sulphide find in Canada since the Voisey’s Bay discovery in Labrador.
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 Ontario’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.
As a result, the agreement announced on Friday marks 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.
“Noront is partnering with two Ontario-based industrial and engineering giants to advance Ring of Fire development,” said Noront President and CEO Alan Coutts.
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 company’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 Eagle’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.
Noront said it will issue Algoma 750,000 common shares and 750,000 warrants to purchase common shares. Each whole warrant will entitle Algoma to purchase one common share at a price of $0.26 per share on or before September 11, 2024.
The common shares will be subject to a statutory hold period of four months and one day from the date of issuance. Upon exercising the option, a ground lease agreement will be established with principal terms, including a 99-year lease period and a land tenancy payment determined as 0.325% of the gross values of product produced and sold from the site.
Noront shares advanced on the news, rising 2.1% or $0.005 to 24 cents. The shares are trading in a 52-week range of 19 cents and 35 cents.