Cliffs Warms To Ring Of Fire

Ontario’s enticing but remote Ring of Fire polymetallic exploration camp took another step towards becoming a mining centre in late November with the first significant move into the camp by a miner actually capable of executing the kind of large-scale development the camp demands.

• Cleveland-based iron ore and metallurgical coal producer Cliffs Natural Resources tabled a generous, all-share bid on Nov. 23 for Mac Watson’s Freewest Resources, building on its existing 6.9% shareholding.

The prized asset of the friendly, $150-million offer is Freewest’s impressive grassroots chromite deposits in the camp, including Black Thor and Black Label, and a half interest in Big Daddy. Peripheral exploration assets are to be spun out into a new junior.

The deal offers a 27% premium on Freewest shares as of Nov. 20, and effectively puts the kibosh on a hostile, all-share bid by camp neighbour Noront Resources, launched in mid-October. We’ll see if Noront wants to come back with an improved bid, perhaps with a cash sweetener to make up for the junior’s obvious weaknesses compared to a big NYSE-listed American miner.

Though it’s early days, Cliffs is eyeing the development of an open-pit operation that would produce up to 2 million tonnes of high-grade chromite ore annually, which would be further processed into 800,000 tonnes of ferrochrome, an essential ingredient in stainless steel.

This expansive talk comes from a company that’s had a very difficult past couple of years in its core businesses owing to the recession, so it’s a strong vote of confidence in the quality and size of the Ring of Fire’s chromite.

• Twelve yearsafteritsexposure, theBre-X Mineralsfraudcontinues to wreak havoc on the professional lives of people tangentially associated with it.

This past week, it was Toronto-based lawyer Joseph Groia’s turn to feel the pain. The Globe and Mail revealed that the Law Society of Upper Canada may discipline the pugnacious defence lawyer for his outbursts against the Ontario Securities Commission while representing former Bre-X executive John Felderhof from charges of insider trading — charges dismissed in 2007 after seven years of legal battling.

Groia says he regrets his inflammatory statements, but argues he was already appropriately criticized at the time by two judges involved in the case.

• More trouble is brewing for the Cerro San Pedro open-pit, heap-leach gold-silver mine in Mexico’s San Luis Potosi state. On Nov. 12, owner New Gold was told by Mexico’s environmental protection agency SEMARNAT to suspend mining at the site, after the agency nullified the mine’s environmental impact statement. The EIS was issued in 2006, paving the way for mine construction and a first gold pour in 2007. New Gold is appealing the ruling and has already filed a new environmental impact statement.

This mine has proved to be a textbook example of how to successfully build and operate a heap-leach mine in the Sierra Madre, so the decade-long, vociferous opposition to its development from groups within and well beyond the local community is an action by individuals completely opposed to mining at Cerro San Pedro, despite its obvious economic benefits locally and regionally.

• Miners in North America are operating under the looming threat of new carbon taxes imposed by governments eager to use any pretext, even one as dubious as global warming, to raise taxes, expand their bureaucratic fiefdoms and gain more control over businesses and individuals.

So, for anyone still interested in the de-politicization of Western science, there were astounding but all-too-predictable revelations in what’s purported to be the release of hacked emails from the secretive University of East Anglia’s Climatic Research Unit, which played a key role in the Intergovernmental Panel on Climate Change’s Fourth Assessment Report. (The university did confirm to the BBC that its emails had indeed been hacked, and police are investigating.)

The content of the purported emails generally confirms climate skeptics’ worst suspicions: that a “trick” was used to “hide the decline” in atmospheric temperatures over history; instructions are given on how to resist Freedom of Information Act requests for their data; long-term marketing plans are discussed to push the climate- change agenda; and there is talk on how to pressure peer-reviewed journals to stop accepting papers that disagree with the “accepted” view of global warming. There is also unfettered glee over the death of a well-known global warming skeptic.