Noront Resources Acquires Cliffs' Chromite Assets in the Ring of Fire

Noront Resources Ltd. (“Noront”) (TSX Venture: NOT) announced today that it has entered into an agreement to purchase Cliffs Natural Resources chromite mining claims in the Ring of Fire district, for an acquisition price of US$20 million.

The deal includes the acquisition of approximately 103 claims currently owned by Cliffs’ or its subsidiaries, including: a 100% interest in the Black Thor chromite deposit; a 100% interest in the Black Label chromite deposit; and, a 70% interest in the Big Daddy chromite deposit. It also gives Noront 85% ownership of the McFauld’s Lake copper zinc resource.  

“This purchase consolidates the world-class discoveries made in the Ring of Fire," said Noront President and CEO Alan Coutts.  “It also underscores Noront’s long-standing belief and commitment to the region. We have made significant investments in the Ring of Fire and our team has become experts in the region from both a technical and social point of view. We also believe in the considerable exploration upside which we are eager to develop.”

As a result of the deal Noront will acquire, among other things, the shares of Cliffs Chromite Ontario Inc. (CCOI) and Cliffs Chromite Far North Inc. (CCFNI), both indirect wholly owned subsidiaries of Cliffs Natural Resources Inc. (NYSE: CLF)

Deal Expected to Close Mid-April, 2015                                                                                                         The deal has to fulfill of certain conditions, including obtaining an Approval and Vesting Order from the courts in Canada and satisfaction of other conditions required under the Share Purchase Agreement and the Loan Agreement.  The deal is expected to close on or about mid-April, 2015. 

Noront to control 65 Per Cent of Ring of Fire Mining Claims                                                                      Upon closing the deal, Noront will hold a total of approximately 360 mining claims and roughly 65% (80,000 hectares) of the emerging mining camp known as the Ring of Fire, located 500 kilometres northeast of Thunder Bay.  These additional assets, alongside Noront’s existing Eagle’s Nest nickel-copper-platinum group element deposit and its Blackbird chromite deposit will allow Noront to further its vision of becoming the leading resource company in the area. 

Cliffs Precipitous Fall From The Ring of Fire....and Canada                                                                       Cliffs formerly, the front runner in developing the chromite deposit at Black Thor until, the summer of 2013 when a series of financial and political occurrences motivated the company to pull a 180 degree turn against further participation in the Ring of Fire. These developments included a drop in global iron and chromite prices; an Ontario Mining and Lands Commissioner decision rejecting Cliffs permanent road route; and the takeover of its Board of Director by an aggressively anti-Ring of Fire faction who fired all Pro-Ring of Fire senior managers at Cliffs and inserted radical corporate cost-cutter Lourenco Gonclaves as its Chairman, President and CEO. Cliffs Board of Directors gave Gonclaves the mandate to return to its core U.S. based iron ore mining business and to jettison all peripheral ventures.

Cliffs continued on with its policy of radical divestment despite a court ruling overturning the Mining and Lands Commissioners rejection of Cliffs preferred road route. The divestment of Cliffs Canadian interests didn’t stop with its holdings in the Ring of Fire. Goncalves soon announced Cliffs intention to sell its Quebec Bloom Lake iron mine. 

 “The sale of these assets to Noront, an experienced mining company with a strategic interest in the Ring of Fire region, further demonstrates the execution of Cliffs' strategy which includes divesting non-core assets and focusing on being the major supplier of iron ore pellets to the North American steel industry,” said Patricia Persico, Cliffs Director of Global Communications.

Noront Enters Loan Agreement with Franco Nevada Corporation                                                                   To finance the deal, Noront has entered into a loan agreement with Franco Nevada Corporation which will loan US$22.5 million to Noront for a seven-year period at a 7% interest rate with interest to be accrued and paid at the end of the loan term. In exchange, Franco Nevada will receive a 3% royalty over the Black Thor chromite deposit and a 2% royalty over all of Noront’s property in the region with the exception of Eagle’s Nest, which is excluded. 

The loan will be secured against the CCOI and CCFNI assets acquired in the deal. The funds will be used to finance Noront’s purchase of Cliffs assets in the Ring of Fire (US$20 million). The remaining US$2.5 million will be used by Noront for general working capital purposes.  Noront will also receive from Franco Nevada US$3.5 million in cash consideration as part of the granting of the royalty arrangements.  

Cliffs' Quebec Iron Mining Subsidiary Requires Court Aprroval of Deal                                                   Before this deal can be consummated, Quebec Iron Mining ULC still under Cliffs' control, must obtain a Court Approval for the sale of the securities of CCOI and CCFNI to Noront under the Companies' Creditors Arrangement Act (Canada).  In addition before the deal can be closed Noront must be satisfied that it acquisitions are free of all liens and other encumbrances.

On January 2, 2015, Cliffs stopped production at Bloom Lake iron mine in Quebec after the property that it had purchased in 2011 when it took over Consolidated Thompson for $4.2 billion.

In December, 2014 Cliffs’ Bloom Lake General Partner Ltd. – in which Cliffs has a controlling stake – pleaded guilty on Dec. 18 to 45 in the Criminal and Penal Division of the Court of Quebec to offences under the federal Fisheries Act and the Metal Mining Effluent Regulations in the Criminal and Penal Division of the Court of Quebec, according to Environment Canada. The Court fined Cliffs $7.5 million for the infraction, making it the largest penalty for environmental infractions in Canada according to Environment Canada.  

Cliffs is still looking for someone to purchase its Bloom Lake mine.

Noront Resources                                                                                                                                     Noront Resources Ltd. is focused on development of the high-grade Eagle’s Nest nickel, copper, platinum and palladium deposit and the high-grade Blackbird chromite deposit, both of which are located in the James Bay Lowlands of Ontario in an emerging metals camp known as the Ring of Fire. www.norontresources.com

 Cliffs Natural Resources Inc.                                                                                                                      Cliffs Natural Resources Inc. is a leading mining and natural resources company in the United States. The Company is a major supplier of iron ore pellets to the North American steel industry from its mines and pellet plants located in Michigan and Minnesota. Cliffs also operates an iron ore mining complex in Western Australia. Additionally, Cliffs produces low-volatile metallurgical coal in the U.S. from its mines located in Alabama and West Virginia.  Driven by the core values of safety, social, environmental and capital stewardship, Cliffs' employees endeavor to provide all stakeholders operating and financial transparency. http://www.cliffsnaturalresources.com/