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Northwest proves popular for iron ore exploration

Iron ore is experiencing a renaissance in northwestern Ontario. Driven by Indian and Chinese industrial demand, new companies arere-examining some old deposits that have sat dormant since the 1980s or longer.
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Iron ore
Vancouver's Northern Iron Corp. is one of a handful of companies re-exploring past-producing and prospective iron ore properties in northwestern Ontario.

Iron ore is experiencing a renaissance in northwestern Ontario.

Driven by Indian and Chinese industrial demand, new companies arere-examining some old deposits that have sat dormant since the 1980s or longer.

“It’s a resurgence of all metals,” said Mark Smyk, regional manager for the Ontario Geological Survey (OGS) in Thunder Bay, “but iron reallystands out.”

Demand from the Far East and an increase in global iron ore and scrap steel prices has caused companies to beat a path into the region.

“It’s been remarkable in the last four or five years,” said Smyk. “Even before the2008 crash, there were rumblings from Asia and that’s when we startedgetting the inquiries.”

He estimates there are 20 known deposits scattered throughout the northwest that have sat on the books for 40 years.

“Anywhere you have greenstone belts or sedimentary basins, you get these banded ore formations that go and go for kilometres along strike length.”

Smyk said when companies interested in iron ore come to his Thunder Bay office for advice, there is no one on staff with that kind of background.

“We’ve lost that generation. Companies are going to the U.S. or finding retired company geologists. It’s been a generation since the last mines closed and 10 or 15 years since the last exploration.”

Smyk said most iron deposits in the northwest were identified in the 1950s and 1960s by Algoma Steel (now Essar) and Steep Rock Iron Mines, but were never developed.Suddenly these properties are getting “dusted off again” and junior miners are drilling to beef up the resources into bankable standards.

One company, Rockex Mining, is working on the west end of Lake St. Joseph, known as its Eagle Island project.The company has three advanced stage iron properties between Pickle Lake and Sioux Lookout, including its main Lake St. Joseph property, which was once explored by Algoma.

At one time, Algoma was working with its competitors, Stelco and Dofasco, to develop multiple deposits in the area up until the late 1980s.

The Sault Ste. Marie steel maker estimated about one billion tonnes of ore was there, but Algoma let the claims lapse in 2007 and Rockex picked up the 5,300-hectare property a year later, along with all of the drill data.

A pre-feasibility study began last year and it could go into production as an open pit as early as 2016.

Smyk said there are private interests working another deposit on the lake's eastern shore, at Soules Bay, an area that was poised for production in the late 1960s.

On the top end of Lake Nipigon, a British outfit, Landore Resources, has another property with an iron resource generated in the 1960s.

Its 35,000-hectare Junior Lake project is one of four the company owns in Northern Ontario, and they are evaluating its nickel, copper and iron potential, which could prove more than a half-million tonnes of iron ore.

“It’s one of these properties that’s so large,” said Smyk, “you’re right in the middle of a greenstone belt, so you’re going to get a variety of different commodities.”

South of Red Lake, Vancouver’s Northern Iron Corporation plans to dewater an old iron ore mine while drilling off a large magnetite ore body close by.

The company has been on the ground for less than a year, but is working its way towards a resource estimate on its Karas project, just east of the former Griffith mine.

Stelco operated the mine for 18 years, producing 78.8 million tonnes of iron ore before it was closed in 1986.

The area came across CEO Basil Botha’s path in 2008 when, with the help of prospectors and Osprey Capital Partners, they put together a 14,600-hectare package of five properties, including the Griffith.The five properties have a combined 500 million tonnes of historical reserves.

The company wants to build a processing mill that makes hot briquetted iron (HBI) with an iron content in the 90 to 94 per cent range that has low carbon, low moisture content and fewer impurities than scrap steel.

Botha said HBI has been under the radar for years because of the lack of demand by the steel industry. Now there’s an insatiable appetite for HBI, direct reduced iron and scrap steel from major U.S. steel producers like Nucor.

“It’s a lot cleaner product than the scrap used in electric arc furnaces,” said Botha.If all goes well, the project could be producing 1.5 million tonnes of HBI by early 2015.To make this happen, Northern Iron is looking for partners to secure off-take agreements to help with pre-production expenses.

The company is looking to steel makers in the Great Lakes basin, where 60 per cent of all North American production is located. They’re also looking to China.

“The flavour of the day amongst junior exploration companies is to get a partner, Chinese or American, to fund that big number for production,” said Botha.

He points to companies like Advanced Explorations of Toronto which added XinXing Pipes of China in a joint venture agreement for the ironminer’s half-billion tonne Roche Bay project in Nunavut.

The textbook case is Consolidated Thompson, which secured Chinese partner, WISCO, early on before they were taken out by Cliffs Natural Resources for $5 billion.

“The preference would be the U.S. market,” said Botha. “It may be depressed but that’s not going to last forever.”Botha said they’ve opened negotiations with the “Big Four” U.S. steel producers along with a Russian steel maker operating in the States.

His company has also compiled a list of potential suppliers from China.Another high-profile project is Bending Lake Iron Group which is developing its namesake iron deposit southwest of Ignace for an eventual open pit.

The privately-held Thunder Bay company is evaluating a site near the town to place a concentrator and pellet plant. The project, so far, has 250 million tonnes of identified ore reserve, worth about 25 years of mine life.

Engineers were studying a potential short-haul railroad to connect to the Canadian Pacific Railway’s main line.

Last fall, the company was firming up its environmental assessment work and preparing its project description documents to move toward permitting.

www.mndm.gov.on.ca/mines/ogs

www.northernironcorp.com

www.rockexmining.com

www.landore.com

www.bendinglakeiron.com




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