Fifteen years without material progress has made Northern Ontario’s Ring of Fire mining project the source of much talk and scrutiny. But Noront Resources CEO Alan Coutts said Tuesday that the company’s recent acquisition by Australian company Wyloo Metal Ltd. may be the kick-start the project needs.
Coutts made the comments during an address hosted by the Greater Sudbury Chamber of Commerce. His goal was to provide details of the tumultuous last few months, where a bidding war for control of Noront raised questions about the Ring of Fire’s future.
Due to its prevalance in the mining industry, Sudbury has always had a particular interest in the project.
“We’ve always had a lot of support coming out of the Sudbury area,” said Coutts. “The people are knowledgeable and they're interested in the developments in the Ring of Fire, so it’s just kind of natural to provide an update, especially with so much happening recently.”
First discovered in 2007, the Ring of Fire is a massive mineral deposit in the James Bay Lowlands of Northern Ontario, which has been the site of planned chromite mine and smelting development project for over a decade.
The abundance of minerals like palladium, nickel, chromite, and copper has made the area a major topic of conversation for such development.
A number of obstacles have held the project back over the years, including significant environmental and treaty rights concerns from the dozens of First Nations in the region that will face the brunt of the development’s impact.
Coutts emphasized the strides Noront made on the project over the years, including consolidating other companies into its brand, securing partnerships and funding with the province for innovative infrastructure projects, and increasing collaboration with First Nations both in leadership roles and on major projects like the environmental assessment for the Eagle’s Nest mine road.
“We’re pretty proud of the role that we played in this development, and we appreciate the support from the communities and provincial government,” he said.
The acquisition is mainly the result of ongoing financial struggles within the company, which Coutts attributed primarily to a lack of cash flow from a long permitting period.
“As a junior mining company, it’s often difficult to finance your activities,” he said. “You don’t have cash flow, you’re spending borrowed money at all times and potentially diluting your shareholder base.
"When you’re drilling off new deposits and it’s a very exciting time, money is easy to come by. When you’re turning your attention to the long and arduous period of permitting, environmental assessments, and Indigenous consultation, it’s harder.”
This struggle was heightened when the company's main backer, private equity firm Resource Capital Fund, which owned a 35 per cent stake in the Noront, could no longer finance it. But the interest from other companies was apparent immediately.
“Because of a few factors, like the progress we’d seen on infrastructure and the work with the communities and the province of Ontario, because battery metal and future-facing commodities, we started to get a lot of interest,” Coutts said.
The Perth-based mining company closed its $616.9 million acquisition of the Canadian junior miner on April 7, with Noront shareholders voting 98.92 per cent of Wyloo’s offer. A later vote saw over 80 per cent of shareholders electing to accept the $1.10 cash offer rather than retain their shares, leading the company to go private.
According to Coutts, this offer far outstripped the highest bid of $0.75 per share from rival bidder BHP, which also had significant interest in acquiring Noront.
At this point, Wyloo has four main priorities, said Coutts, the first of which will be the move forward on the Eagle’s Nest mine.
“It’s the most advanced project that Noront has,” he said, “but they want to do it in a certain way: they want it to be a net-zero emissions mine, and they’ve been very vocal about that.”
That could mean solar and wind energy, an electric fleet, and investigations into insuring a small underground footprint.
Wyloo’s other commitments include putting $25 million towards feasibility assessments for battery metal production in Ontario; targeting $100 million in contracts to First Nations businesses in the surrounding area to provide training and resources; and creating and sustaining employment opportunities within the company for First Nations in the region.
While Wyloo continues to settle into its leadership role, Noront’s leadership will continue to facilitate conversations with local communities, including Sudbury, who play important roles in the development of the Ring of Fire.
“We’re pleased and we feel that there’s a good alignment with Wyloo and the approach to not only the development of the deposits, but also with the work with the local communities and the First Nations,” Coutts said. “We’re drinking from a fire hose right now, but it’s been a good transition.”
The Local Journalism Initiative is made possible through funding from the federal government.
Mia Jensen, Local Journalism Initiative Reporter, The Sudbury Star