KWG still pursuing the Ring of Fire Holy Grail, hoping a railway is the solution

“It was nice to emerge from the fog we’d been in due to COVID in in the last two and a half years”, stated Moe Lavigne, Vice President of Exploration and Development for KWG Resources while opening his presentation during the CEN CAN Expo in Thunder Bay in September 2022. Moe was invited to bring the audience up to speed on where KWG is and where they are going in the Ring of Fire mining region.

 

 

KWG Resources primary chromite holdings are located on several parcels of land in the Koper-McFaulds Lake area, one of the most dynamic parcels located in the Ring of Fire. Its most hopeful property is the Black Horse Project. This past October, KWG bought the property they had under option which contains its largest chromite resource, the Black Horse property. Previously KWG purchased 50% interest of a stake held by Bold Ventures Inc. Recently it purchased the interests held by Fancamp Resources. It also has a 30% interest in the nearby Big Daddy Chromite Project owned by Ring of Fire Metals. The other KWG Resources claims hold potential for nickel, zinc and copper as well as other metals and minerals many on the Ontario and Canadian lists of critical minerals.

One of KWG Resources pillars is bulk transportation. “You just can’t mine the Ring of Fire unless you have a way of getting the chromite out of the ring of fire. It has zero value if you don’t have a bulk transportation method”, stated Moe. KWG Resources sticks to that claim as they know they had to prove that they can get it out.

Another pillar of this organization is the direct reduction of chromite (technology). They need to utilize cutting edge technology, technology of the future to reduce the chromite to the ferrochrome. The company invested heavily in patenting direct gas reduction of chromite, to ferrochrome, and have received patents in five different jurisdictions on the planet, including Canada. They’ve also reached out all over the world for entities that might be willing to participate in this development. KWG partnered with Natural Resources Canada as they invested $8 million over an eight-year period of time to understand the nature of the chromite, the Ring of Fire, and how to best reduce it to ferrochrome and also how to deal with the byproducts. KWG’s new natural gas CHROMIUM IP, low temperature, ‘solid state’ reduction process, has enormous global competitive advantages in terms of reduced capital cost, reduced operating cost, and reduced greenhouse gas emissions.

The other key pillar for KWG is and has been from the very beginning the consultation and building of partnerships with the indigenous communities located within the Ring of Fire. When Marten Falls and Webequie, announced a few years ago that they were going to become the proponents of the construction of roads in the James Bay lowlands, KWG applauded that, because they thought that was truly the role of the First Nations. “It is important that they lead the development in the Ring of Fire, not to be simply a stakeholder and from the very beginning, KWG always wished to honor the spirit of the treaties and share the land. I think that’s finally happening. We’re very happy to be part of this process and it is truly historical”, said Moe.

The world is watching says Moe as they were invited to attend the International Chromium Development Association annual meeting in Paris and update them on what’s going on in the ring of fire. They also invited Marten Falls First Nation to go to Paris and give their perspective on what’s going on in the Ring of Fire project. Both were very well received as the world continues to be watching.
In 2021 KWG hired Tony Marquis as President and COO of Canada Chrome Corp. to explore their bulk transportation options. Tony is known as an experienced railway executive; he retired from CP in 2019 and also worked for CN Rail. KWG required Tony’s expertise and are glad to have him on board moving the project forward.

Also in 2021 they hired a hired a company called Rail-Veyor Technologies which is based out of Sudbury Ontario. They have an alternative to trains which is machinery that is really a blend of a bit of a roller veyor and railroad which was looked at to help reduce operating costs and ship the chromite out to be processed. The Rail-Veyor process needs electricity. KWG created a joint venture between them and Cormorant Utility Services to conduct an engineering financial study which has recently been completed. At that same time, one of the principles of Cormorant, Fiona Blondin became a board member of KWG. Megan McElwain was also appointed President and COO of KWG in January 2022 as she left her role of Vice President of the Canadian Chamber of Commerce. Frank Smeenk remains the CEO.

 

Tony Marquis spoke as part of the KWG presentation and said, “I was brought in to build and run a heavy haul railroad. When I looked at the costs that were first presented to me by the KWG team, I thought they were a little bit light. And then when you’re looking at maybe six, maybe 8 million tonnes per year of ore coming out, the return on invested capital may not be there.” Tony explored another potential solution for this which they call the utility corridor. KWG staked over 300 kilometers of claims on gravel deposits between Nakina and the Ring of Fire.

Tony explained the system being explored by KWG as Rail-Veyor being a light haul rail system which will carry the ore from the Ring of Fire down to Nakina. It can be transloaded at Nakina and be processed at the area. It can also haul goods north and material north to the communities and to the mine site. For the overall transportation solution, what do you do with 6 million tonnes of the chromite? Nakina going west- Nakina is located on the CN mainline and has easy access to the West Coast, whether it’s Prince Rupert or it could go to Vancouver. Nakina going to the south- you’ve got ease of transport to Sault Ste. Marie, you can operate on the CN and the Agawa Canyon Railway. Nakina going southeast with ease of transport to Sudbury via CN. “Nickel moving to Sudbury might be a nice idea”, stated Tony. Then there’s Nakina to Timmins, you’ve got the ONR if they made an investment and resurrected the Pagwa sub you could easily get direct transportation to Timmins. Tony said, “it would travel on the ONR and imagine six to 8 million tonnes of freight product on the ONR. That would probably make for a very viable railroad. There are people looking that this and saying this could really help out an Ontario funded railroad.

 

Why Rail-Veyor?

 

Rail-Veyor is very environmentally friendly, it meets so many of the environmental issues and conforms with the need for sustainable technologies to protect our planet. It runs on electricity, has no emissions, it sits on the land surface, you do not have to upset what we know is called the breathing lands. There are no particulates, no emissions, less noise, less dust. It’s simple, it’s fast, it’s flexible, it’s extendable, it’s expandable. Tony said, “let’s assume we build Rail-Veyor into the initial claims that we have and then another mine starts a further way up, you can easily extend the railway or up to the next mine you don’t have to add all kinds of roads, you don’t have to add the infrastructure. It’s a very simple system to build. It’s also a simple system to move if you have to move it. The energy efficiency is remarkable and the beauty of rail there allows for underground mining, no open pit mining. We would run the system underground, load it, and loop it up and to Nakina. If you’re only handling the once your cost of operating the mine is substantially less”. We believe the mining community is responsible to build the transportation infrastructure to move the ore from the Ring of Fire to a location where it can be transloaded – not depending on publicly funded construction of roads.
A case study was released from the Casteel Mine in Missouri where the superintendent was quoted in saying this technology has the potential to revolutionize underground mining. One of the added benefits of Rail-Veyor is that it will reduce traffic on community roads. The train will replace 200 one-way haul truck trips each day. Tony shared what he calls almost proprietary information. The capex costs that we’ve come up with using Rail-Veyor is $859 million Canadian, the OPEX is $3.79 per tonne which is substantially less than rail and way less than trucking. The overall costs will end up being a lot less than traditional mining.
Another partner in our project is Cormorant Utilities Service and they also completed their electrical infrastructure capex study to supply the power to Rail-Veyor, to the mine sites, and to at least five First Nation communities planning on a 230 kilovolt transmission line, which has included with it, 72 single mode fibers to allow for high speed communications across the whole system. The cost is estimated at almost a billion dollars on capex, and just shy of $2 million per annum on the OPEX.

Procurement Opportunities

For a city like Thunder Bay there’s upwards of $460 million of potential business when it comes to fabrication of rail and fabrication of the cars for services. The only thing proprietary for Rail-Veyor and what they produce themselves are the drive stations. So there’s a lot of opportunity in the pipeline, when the project starts to roll out.
In closing Tony said, “Megan has shared with the chiefs of Marten Falls and Webequie First Nations the vision of KWG since its inception, that this utility corridor will be the foundation of an indigenously owned enterprise much more than a partnership, more than just a handshake this is this a business we plan to build as a utility and turn it over to be run as an enterprise by the indigenous people.”

 

For this article and more visit the digital copy of: The Northern Ontario Mining Report

 

 

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