KWG Resources' subsidiary Canada Chrome has signed a service agreement with Golden Share Mining to explore the commercial possibilities of building a railway to the Ring of Fire region of northern Ontario.
The Ring of Fire is the name given to a proposed chromite mining and smelting development project in the mineral-rich James Bay Lowlands.
Under the agreement, a success fee and freight royalty will be provided if the services offered by Golden Share will result in the construction of a railroad. Once construction is complete, the company will be entitled to 1% of total construction expenditure as a success fee, in addition to 1.5% of freight revenue as freight royalty.
Golden Share arranged an agreement between KWG Resources and China Railway First Survey & Design Institute Group (FSDI) to enable the scoping and engineering data of Canada Chrome to be made available for examination and analysis by FSDI.
FSDI will perform a feasibility study for KWG on all aspects of the construction of a Ring of Fire transportation corridor and railroad.
Golden Share president and CEO Nick Zeng said: "We are excited with the prospect of playing an important role in possibly advancing the development of the infrastructure necessary to unlock the commercial potential of the Ring of Fire region, an emerging world-class multi-metals mining camp.
"The discussions are just at an initial stage, but we are encouraged by the progress made and interest thus far."
In 2010, Canada Chrome staked mineral claims along a 340km long route covering a series of sand ridges in a bid to secure access to its mineral interests in the mining project.
These claims pass through the traditional territories of the Aroland and Marten Falls First Nations, which are interested in developing any transportation corridor along that alignment. In case any construction project needs to go ahead, the interests of these two First Nations and their Matawa Tribal Council neighbours must be accommodated and are expected to be negotiated as part of the feasibility study process.
Image: Aerial view of sand ridge staked for railway corridor. Photo: courtesy of KWG Resources Inc.