Ring of Fire activity heating up- Too hot to handle or just what junior resource sector needs?

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When someone mentioned the term ‘Ring of Fire’ in the past it was typically associated with the volcanic activity outlining the Pacific Ocean.

Being that this area is home to roughly 75% of the worlds active and dormant volcanoes, the name seemed fitting.

Over the last decade however the term Ring of Fire has been given a new postal code- the James Bay Lowlands of barren northern Ontario.

Major discoveries, including the Black Thor chromite deposit by KWG Resources Inc. (TSX.V: KWG) in 2006 (now being developed by Cliffs Natural Resources [TSX: CLF]) and Eagle’s Nest deposit by Noront Resources Ltd. (TSX.V: NOT) in 2007, have transformed the once ignored swamplands into what is quickly becoming one of the most active exploration regions in all of North America.

Nearly 40 junior mining companies have tied up over 30,000 mineral claims across a 5,000 square kilometer area of prospective Archean terrain buried by younger Paleozoic sediments, which is now known among investor circles as the new Ring of Fire.

The term ‘Ring of Fire’ was initially coined by former Noront President and CEO Richard Nemis who, being a lifelong Johnny Cash fan, fittingly named the region after the songwriter's 1963 best hits album because of the rimmed geological structure of the region .

And while it has been long debated as to the references Cash was making in the song (most claim he was referring to his relationship with June Carter), there is no argument as to the potential the Ring of Fire region holds as a possible world-class mining district.

Geologists believe the region hosts chromite reserves on levels that could rival South Africa, where current annual production accounts for nearly 50% worldwide.

In addition to its massive chromium reserves the Ring of Fire region is also highly prospective for base metals, platinum grade elements (PGE) and even kimberlite deposits.

According to Ontario’s Ministry of Northern Development and Mines, nine base metal and five chromium deposits have been discovered to date. The Cliff and Noront deposits mentioned earlier are currently progressing through feasibility and environmental assessment stages.

These two potential mines alone could account for nearly $4 billion in capital investments over the next four years. Inevitably hundreds of millions of dollars in risk capital for grassroots exploration will follow suit.

But following the path to access this remote region of northern Ontario is anything but easy. There is literally no access to roads, rail or electricity for hundreds of kilometers in any direction.

Infrastructure remains almost non-existent and juniors have been forced to utilize helicopters and winter landing strips for small engine planes to access their exploration camps.

Year-round access roads and a north-south rail line have been proposed by Cliffs, Noront and KWG. Talks of support with the Ontario government for infrastructure development stalled nonetheless in January when Liberal Party member Kathleen Wynne became the new Premier.

But despite the lack of clear political support during the interim, junior explorers continue to forge ahead with multi-million dollar exploration programs for 2013. It is anticipated that nearly $90 million in exploration expenditures will be incurred within the region this year alone.

That number becomes even more impressive when one takes into account the current state of the resource sector as well as lack of capital being directed towards higher-risk grass roots exploration.

MacDonald Mines Exploration (TSX.V: BMK) kicked off its winter 2013 drill program in February at the Butler Property, which host four volcanogenic massive sulfide (VMS) occurrences across a cumulative strike length of 20 kilometers. Initial assay results from drilling are expected to be released soon.

Meanwhile Bold Ventures Inc. (TSX.V: BOL) and KWG announced in March that three drill rigs have been mobilized and a 6,000 meter diamond drill program budgeted at $3 million has commenced.

The exploration program will test the mineral horizon of the Back Horse discovery zone as well as additional copper-nickel targets. KWG is funding exploration in exchange for the right to earn an 80% interest in chromite minerals and 20% interest in non-chromite minerals.

KWG also holds a 30% interest in the Big Daddy chromite deposit, which is under joint venture development with Cliffs. Current National Instrument (NI) 43-101 mineral resources at the Big Daddy deposit include 23.2 million tonnes of 40.66% chromium oxide in the indicated category and 16.3 million tonnes of 39.09% chromium oxide in the inferred category.

Probe Mines Ltd. (TSX.V: PRB) holds a 14,000 hectare land package in the region that includes the prospective Black Creek Project located between the Black Thor and Eagle’s Nest deposits. Probe released a NI 43-101 resource estimate on Black Creek in 2010 that outlined 8.65 million tonnes of 37.41% chromium oxide in the measured and indicated categories.

The 2010 technical report recommended additional drilling of deeper targets as well as preliminary metallurgy tests. Probe has yet to announce its plans to move Black Creek forward.

With Cliffs targeting production at Black Thor in 2015, it is likely Probe will either pick up activities or sell/option Black Creek sometime in the near future.

Noront Resources, which is advancing the high-grade Eagle’s Nest deposit towards construction phase, has outlined NI 43-101 compliant proven and probable mineral reserves of 11.1 million tonnes grading 1.68% nickel, 0.87% copper, 0.89 g/t platinum, 3.09 g/t palladium and 0.18 g/t gold. The company is working to commence mine construction as early as 2015 and commercial production by 2017.

In addition Eagle’s Nest, Noront is also developing the nearby high-grade Blackbird chromite deposit, which contains 20 million tonnes of chromite mineralization. Noront is well positioned to be a huge success in the region if infrastructure needs are addressed for the long-term.

The most recent addition to the region is Black Widow Resources (TSX.V: BWR), who commenced trading on the TSX Venture in early April. And while the entity name may be new the management team certainly is not.

Black Widow is headed up by the former leadership team of Spider Resources, who are credited with discovering the Big Daddy chromite deposit in 2008. Spider was subsequently acquired by Cliffs in a deal valued at $126 million.

Back on the scene after a three year hiatus, Black Widow has acquired nearly 10,000 hectares of prospective lands located 70 kilometers north of the Big Daddy deposit.

In 2013 the company will spend up to $1.5 million on a core drill program to test electromagnetic anomalies for potential sulfide mineralization. The company also plans to target five structural features from VTEM surveys that were previously identified by Spider Resources for possible kimberlite intrusive features.

Also newly trading on the Venture Exchange is Discovery Harbour Resources Corp. (TSX.V: DHR) who began trading in early April. Discovery has earned a 51% interest in the Wabassi property located just south of the Ring of Fire.

Discovery Harbour will test numerous VTEM anomaly targets this year. A new exploration camp was constructed in 2011 and the company staked thousands of contiguous hectares in 2012. A recent financing will allow the company to focus on a drilling multiple high-priority targets at Wabassi in 2013.

While concerns over infrastructure continue to swirl around the future of the Ring of Fire, one thing is certain- the region is hot and investors are paying attention. As drill programs conclude and intercepts are reported throughout 2013, the Ring of Fire region could quickly assert itself as the new pedestal of Ontario’s mining industry.