Please note this article was originally published in Mining Markets in September 2009. Much has changed in the Ring of Fire since then and this article is posted here for archival reasons. – Stan Sudol
The ‘Ring of Fire’ contains vast gobs of black ore known as chromite. Some wild-eyed folks are speculating that there is enough ‘black gold’ for 100 years worth of production at current demand levels. No junior in the camp really knows how much chromite it has but they are all racing to find out.
Somewhere beneath the labyrinth of peat bogs, meandering streams and shallow lakes, there is a hole in an Archean-aged greenstone belt that started everything.
Two men are largely responsible for drilling that hole and finding Canada’s biggest chromite deposits (as well as others): Spider president and chief operating officer, Neil Novak, who until June was the vice-president of exploration of — you guessed it — Noront Resources; and Richard Nemis, Noront’s former president and CEO, and current chairman emeritus.
Spider was seeking diamond-bearing kimberlites in the McFauld’s Lake area, since dubbed the ‘Ring of Fire’ in the late 1990s when it engineered a joint venture with De Beers Canada. It was a good fit: De Beers had cash and, Spider, prospective concessions.
De Beers was drilling those joint-venture concessions in April 2002 when the program’s ninth drill hole hit volcanogenic massive sulphide (VMS) copper-zinc mineralization. The presence of VMS mineralization — known to host high-grade gold and base metals deposits — led to a small staking rush.
Among those staking claims was Nemis, who had braved the frigid James Bay lowlands in January 2003 to stake anything in the vicinity of the Spider-De Beers discovery. Some claims were staked under the Noront banner — named after James Nemis’s (Richard’s father) steel business in Sudbury — while other claims were registered to Nemis himself.
He unwittingly staked four major chromite deposits on that trip. Noront has drilled 154 holes into Blackbird One and Two, while Nemis sold some concessions to Freewest that eventually became the Black Thor and Big Daddy chromite projects.
In March 2006, Novak was on-site with the Spider-KWG joint venture, drilling claims optioned from Freewest, when one hole returned two thin intersections containing a jet black mineral, with what looked like the same black material disseminated in between.
“Me and this other geologist kind of scratched our heads,” recalls Novak. “We pulled out our field manuals and eventually convinced ourselves that it was chrome.”
It was Big Daddy (originally known as the SKF property).
Nemis retained a 2% net smelter royalty on Big Daddy (owned equally by Freewest and KWG-Spider) as well as on Freewest’s wholly owned Black Thor and Black Label properties.
Nemis sold half of the royalty (1%) earlier this year to KWG for $635,000, plus another $1 million to be paid inside 12 months. He also received 15 million KWG shares (trading at around $0.04 at presstime) and 15 million warrants exercisable at $0.10 for five years.
“The royalty allows us to cover our backside,” says Frank Smeenk, president and CEO of KWG Resources.