TORONTO (miningweekly.com) – Explorer Eagle Hill has consolidated its ownership of the prospective Windfall Lake project, in the Abitibi mining camp of northern Quebec, as project developer Noront Resources agreed to sell its 25% interest in the project for $5-million in cash and 25-million shares.
Noront said selling its interest, royalty interests and all other associated rights in the noncore asset provided it with an immediate cash infusion that would be put to use in developing the company’s flagship Eagle’s Nest project, in the chromite-rich Ring of Fire-region of northern Ontario, while the equity interest in Eagle Hill would allow it to participate in the upside potential of the Windfall Lake gold project.
Eagle Hill had also entered into a binding letter agreement with its strategic partner Southern Arc, under which Southern Arc Minerals had agreed to invest, together with Dundee Corporation, a total of $12-million in Eagle Hill to complete the Windfall Lake transaction and advance the project. Dundee had been a shareholder in Eagle Hill since February 2012, and currently owned an 18.8% interest in Eagle Hill.
Noront had previously agreed to sell its stake in the Windfall Lake project to gold producer Maudore Minerals. Completing of the transaction was still subject to obtaining shareholder approvals of Eagle Hill and Southern Arc to finance the agreement, for which Eagle Hill had already paid a non-refundable deposit of $615 000 and obtaining all required stock exchange and regulatory approvals.
Should the agreement be terminated, in certain circumstances, Noront’s royalty option would be reinstated and its share in the property would increase to 30%.
RING OF FIRE PROJECTS
Meanwhile, Noront had earlier this month reaffirmed its plans to develop its deposits in the Ring of Fire, after US-based diversified miner Cliffs Natural Resources announced it would temporarily suspend its environmental assessment for its Black Thor chromite project.
Noront said it was still in favour of an east-west corridor, which was seen to be more beneficial to Aboriginal concerns and environment friendly, if the planned north-south access route proposed by Cliffs did not materialise.
“We’re confident this alternative will be attractive to each level of government, the local communities and the people who will benefit from this sensible approach to stimulating development in the Ring of Fire,” Noront chairperson and interim CEO Paul Parisotto said at the time.
The alternative route for an all-weather road to the Ring of Fire, which would include access for nonmine traffic from local communities, would balance First Nation objectives, the environment and jobs in a responsible manner and would allow for the early development of the high-grade nickel deposits in the area, Noront said.
Cliffs early this month suspended environmental assessment activities for its $3.3-billion chromite project in Ontario’s mineral-rich north, citing stalled negotiations and delays to the assessment process as among the reasons for its decision.
Another project developer in the Ring of Fire, KWG Resources, which is invested in an early stage chromite project in the region, had proposed building a railroad on the narrow ridge that Cliffs’ highway would follow.
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