The one-millionth ounce of gold poured at the Bell Creek mill in October was part of the record gold production recorded by Tahoe Resources Inc. for all of 2017. The company has reported gold production of 445,000 ounces with a good portion of that coming from its gold mining operations in Timmins.
Noront Resources Ltd. is looking to partner with a gold company as it continues to lead exploration of the Ring of Fire, a vast isolated area in northwestern Ontario with untapped mineral resources.
The company has proven nickel and chromite deposits in the Ring of Fire, but those base metals are too heavy to transport out of the area, given the current lack of road access. Gold, on the other hand, is so valuable that it is often flown out of remote areas.
A road could take a minimum of five years to build, chief executive Alan Coutts said, so in the meantime the company has initiated discussions with several intermediate to senior gold producers, in Canada and elsewhere, about striking a joint partnership to explore for gold.
“We know there’s good gold potential in this area,” he said. “It’s the right rocks, the right age, but we just really haven’t got around to dealing with the gold, so we’re looking for a partner.”
A document that Noront circulated to gold producers shows a core drilling sample with a visible splotch of the yellow metal, and notes “accidental (gold) discoveries” in 54 drill holes.
It’s not exactly a secret that there could be gold in the Ring of Fire, so named for the circular shape of the underlying geologic structure. In May 2010, Noront, while drilling for chromite, disclosed it had found a zone “hosting erratically distributed gold.” It highlighted a 1.5-metre-long streak that contained 18 grams of gold per ton, according to the press release.
But an informal poll of some of the largest gold companies in Canada and the U.S. did not apparently reveal strong interest in spending scarce exploration funds on an area that Noront has already staked, and expects to maintain an interest in.
Coutts said the apparent lack of interest is because all the gold companies contacted are bound by confidentiality agreements, but added that the Ring of Fire is highly alluring because it is such a large area with the potential to host dozens and dozens of mine-worthy deposits.
Located about 500 kilometres northeast of Thunder Bay, in the James Bay lowlands region and surrounded by First Nations communities, the “ring” is roughly 100 kilometres in diameter. Noront has staked what it said amounts to 85 per cent of the area.
“A lot of the mid-tier and bigger gold companies know the cupboard is bare, that they haven’t been doing a lot of exploration,” Coutts said. “None of them want to fool around with an isolated claim. They want something that’s district scale; I mean something that’s at least 100 kilometres long.”
There is some data to support the idea that gold exploration is becoming more difficult. In May, an S&P Global Market Intelligence report noted a “declining rate of discoveries” even though gold exploration budgets are at near historically high levels.
“Unless discovery rates begin an upswing in the near future, there could be a lack of quality assets available for development in the longer term,” the report said.
Coutts said several gold companies have flown in their geologists to inspect the Ring of Fire property and view Noront’s core shack there, while their executives have been visiting the company’s headquarters in Toronto.
The goal is to strike a deal by summer’s end with a gold-focused company that would fund exploration on Noront-staked land in exchange for an interest in the property, he said.
Although Premier Doug Ford repeatedly criticized the lack of roads in the Ring of Fire during the recent Ontario election, Coutts said the Progressive Conservatives’ win is unlikely to have an immediate impact on the project, since it is about five years away from production.
Coutts estimates it will take two years for an environmental assessment on a road and an additional 2.5 years to build the road, during which time Noront plans to simultaneously begin construction of a nickel mine.
Noront also soon plans to announce where it will base its ferrochrome plant smelter. Four Ontario cities are bidding to host the smelter, including Thunder Bay, Timmins, Sudbury and Sault Ste. Marie.
That decision is expected in late July, and any gold joint-venture partnership would be announced after that, Coutts said.
“That road won’t come to fruition for five years, and our mine won’t start producing for five years,” he said, “but in the meantime, there’s all these other steps we can take that are value added.”