KWG receives electrical infrastructure capex report

2022-01-04 12:36 ET - News Release

Mr. Bruce Hodgman reports

RING OF FIRE ELECTRICAL INFRASTRUCTURE CAPEX STUDY FINDS ELECTRIFICATION OF MARTEN FALLS, WEBEQUIE, EABEMATOONG, NESKANTAGA AND NIBINAMIK FIRST NATIONS ECONOMICALLY FEASIBLE WITH RAIL-VEYOR TRAMWAY INSTALLATION

KWG Resources Inc. and Canada Chrome Corp. (CCC) have received an electrical infrastructure capex report from OneLine Engineering, the engineering branch of Eptcon Ltd., a Cormorant Utility Services company.

The report notes that previous project financings of such infrastructure capital cost were based on 30-year amortization for debt at an interest rate of 5 per cent per year in 2012, when the Bank of Canada overnight rate was 1 per cent per year. The current overnight rate of 0.25 per cent per year and the extent of resources in the Ring of Fire can be expected to contribute positively to the economic feasibility of the electrification plan so that user rates can be maintained at very attractive levels over the economic life of the infrastructure assets and the resources that may thus be developed in the Ring of Fire.

The electrification plan states, "We suggest that, from government alone, the amount of support for the capital cost of the proposed infrastructure is more than $1.5-billion." The plan estimates main corridor electrical infrastructure capital cost at $960.5-million and the indigenous community electrical infrastructure cost at $788.1-million. The main corridor would provide electricity for mining operations at the Ring of Fire and for operation of the Rail-Veyor ore haulage tramway system from the company's proposed mine in the Ring of Fire along a 330-kilometre corridor to a proposed processing or transshipment location near Nakina, Ont. The indigenous communities connections would connect the first nation communities of Marten Falls at Ogoki Post, Webequie, Eabematoong at Fort Hope, Neskantaga at Lansdowne House and Nibinamik at Summer Beaver to the Ontario power grid and optical fibre networks and would eliminate diesel generation, except in outage emergencies.

The company continues to be in discussions with the newly incorporated Gitchiziibii Company Inc., which has expressed its interest in managing the creation of a trust for members of the Matawa First Nation and Mushkegowuk First Nation. The trust is being designed to be endowed with the beneficial interests in the infrastructure assets required for mining in the Ring of Fire. The Gitchiziibii Company, KWG and CCC are currently planning an application for designation of the Rail-Veyor ore haulage tramway system as mining works under the Ontario Mining Act in preparation for flotation of a bond issue for construction financing. It is anticipated that the electrification plan will form part of the application to the Ontario Land Tribunal.

About KWG Resources Inc.

KWG is the operator of the Black Horse chromite project after acquiring a vested 50-per-cent interest through Bold Ventures Inc., which is carried for 10 per cent (20 per cent of KWG's equity in the joint venture) by KWG financing all exploration expenditures. KWG also owns 100 per cent of CCC, which staked mining claims between Aroland, Ont. (near Nakina), and the Ring of Fire. CCC has conducted a surveying and soil testing program to assess the prospects for the engineering and construction of a railway along that route between the Ring of Fire and Aroland, Ont. CCC engaged Cormorant Utilities and Rail-Veyor Technologies for engineering proposals for the construction of a transportation and utility corridor within the route and has received those proposals. KWG has also acquired intellectual property interests, including a method for the direct reduction of chromite to metalized iron and chrome using natural gas. KWG subsidiary Muketi Metallurgical LP has acquired two chromite-refining patents in Canada and one in the United States and in South Africa and is prosecuting an application in Turkey.