Noront Resources

Just some history as a refresher.

This road verus rail started long ago when CLF was in the driver's seat for the development of the RoF. Its plan called for a superhighway for monster trucks to haul the chromite concentrate out of the RoF from a huge OP mine. Of course it wanted KWG N-S esker route for its road which had the support of former Premier McGuinty and a promise from Ontario to chip in $600M (half the cost), just like that. The the whole thing came apart with CLF reduced to sort of bankrupted status and had to sell the entire package to NOT for some pitly sum, less than 10% of what they have spent ($0.5B) on the RoF. This road was supposed to be an exclusive road, but CLF would be willing to share it with the FN (for a fee which would be paid by the governments?). But, who who be willing to share the road in passenger cars with monster trucks in bad weather conditions which would be guaranteed i the winter: ice, blinding snow, etc...

Back then KWG already had a plan for the RR and at the begining CLF did not really object. Even later on their fearless leader Mr. Boor even express a potential buy-in, since the RR is certainly a much better solution than the road (which is more difficult to main maintain). The train is a heavy lifter and could be linked up easily with existing Canadian RR. Essentially, this is a no brainer for bulky stuff like chromite (and iron, CLF is an expert in this business). When you talk about an RR along a major transportation route, other things would normally come along with it. Transmission lines, communication infrastructure, gas pipelines,...The most important component would be a service road to serve the entire sytem. The service road and other infrastructure have been discussed, ad nauseam, in both NOT and KWG boards. The service road does not have to be a superhighway like the 400, or 401. Even a 1 lane for each direction would be fine for service vehicles and passenger cars to link the FN communities to the South. The esker may have some narrow spots, but both RR and the service road could fit in. If not, engineers should be able to have a fix. No big deal (The Chinese has built RR on a much more difficult terrain, check out the 2000km RR to Tibet, https://en.wikipedia.org/wiki/Qinghai%E2%80%93Tibet_Railway).

There was the question EW or NS for the roads. NOT prefers the EW route and Alan Coutts seems to be quite adamant about this (we can picture Alan chanting: EW, EW, EW and nothing else), but this EW route does not connect all FN communities. You would need both EW and NW roads...and this is the job for the governments. I can see why Coutts wants the EW route. This is a shorter term goal for NOT Nickel mine (Ni concetrates are much less bulky, so medium size trucks are probably OK). But, the NS route would serve the Ni transportation as well along with NOT chromite. Remember that the former Premier would give away $600M to CLF at a drop of his hat? and Premier Wynne promised $1B before the election, some 2 years ago (?) for RoF infrastructure (but she conditioned it on Fed matching fund (of $1B). So far, except for something less than $1M grant for the FN to do a road study, nothing has been spent from that $1B from Ontario.

Now, thanks to Frank's initiative, the Chinese was brought in to look at the possibility to develop the RoF (for the chromite, and presumably Ni as well, since they still have Baosteel sitting on NOT BoD...keep in mind Baosteel is a Chinese company, and the Chinese director, Mr. Yuanqing Xu, may prefer the RR, with chromite in the back of his mind).

It sounds like this is a total solution for the RoF

- transportation (no chromite can get out without an RR);

- funding would be provided by Chinese government and their banks to build the RR;

- funding for mine development;

- off-take from the mines (Black Horse, Big Daddy which NOT has 70%). If NOT is interested, it can throw in other mines as well.

For an isolated area like the RoF, it would be difficult to ask for a better package like that. A Canadian solution would involve a piece meal approach. Of course we have the expertise to build the RR, but the bickering and delays to "get it right" would never get this off the ground. No banks would be willing to loan the money for KWG to build a mine (first thing they would ask is do you have an off-take arrangement?).

We have been at it for many many years and it would seem that finally we have something that is doable from the Chinese. Of course, they will have to comply with all Canadian rules, but both level of governments should seize the opportunity to latch on this idea. This should go with NOT as well, Frank can certainly use Alan's support for the NS route (RR and service road), since the benefit is mutual. Coutts could sya he support both EW and NS routes since they are both good for the ROF and the FN...and they are not mutually exclusive.

There are only 2 companies left stading in the RoF, and if I remember correctly, from the purchase of CLFF assets, NOT now owns 14%(?) of KWG? It would appear that synergy is a better approach.

Enough rant for the day,

GH