Big Daddy chromite deposit is big

The Big Daddy chromite deposit in the McFaulds Lake area in Northern Ontario is living up to its name as one of the largest and highest grade deposits in the world.

KWG Resources (KWG-V) and Spider Resource each hold a 26.5% interest in the project while Freewest Resources, a subsidariy of Cliffs Natural Resources (CLF-N) holds the remainder. KWG and Spider have rotating operatorship.

An initial resource estimate for the deposit calculated by Micon International put indicated resources at 23.2 million tonnes grading 40.66% Cr2O3 and inferred resources at 16.3 million tonnes averaging 39.09% Cr2O3.

Frank Smeenk, president of KWG, the current operator, says what makes Big Daddy attractive is its ratio of chrome to iron to waste. Many stainless steel makers use chrome pellets or brickette that are two parts chrome one part iron and as little waste as possible.

“What we have occurring naturally in Big Daddy is two parts chrome one part iron and two parts waste,” Smeenk says.

This is good news, Smeenk says, because there could be steel makers that would be willing to buy the ore as is known as “lump.”

“It’s possible that could be sold as lump, could mine and ship directly to some steel makers in some parts of world who would be untroubled by the two parts waste,” Smeenk says.

In fact, the news about the initial resource estimate caught the company off guard.

“This is big news and it’s a results we didn’t completely expect,” Smeenk says. “Even though mining exploration companies are (always called) optimists, this is bigger news than we anticipated.”

He says it will be some weeks before the company determines how it will proceed to develop the project.

Micon actually reported a second resource estimate that included a broader zone of chromite mineralization.

Indicated resources here were 26.4 million tonnes grading 39.37% Cr2O3 and inferred resources of 20.5 million tonnes grading 37.47% Cr2O3.

The deposit has been tested by 48 drill holes on a grid with 100 metre spacing. Drilling covers a strike length of 1km down to a depth of 365 metres.

The bulk of the chromite mineralization was found to be confined to the massive chromite domain but also occasionally occurs in the host peridotite as disseminated, semi-massive or intermittment beds of chromite.