JOHANNESBURG (miningweekly.com) – Chromite explorer KWG Resources and Chinese State-owned China Railway First Survey & Design Institute Group (FSDI) are considering a possible transaction for FSDI to undertake a feasibility study on behalf of KWG on all aspects of the construction of Ontario’s Ring of Fire (RoF) transportation corridor and railroad.

This would include the terms for construction financing facilities.

The companies this week signed a confidentiality and nondisclosure agreement, which included a three-year standstill provision, to allow for KWG subsidiary Canada Chrome Corporation’s (CCC’s) scoping and engineering data to be made available to FSDI for examination and analysis.

FSDI had started its review of the CCC data and it had advised that it would deliver a proposal “as soon as possible” in preparation for discussions in early 2016.
The agreement was arranged by Canada-based junior miner Golden Share Mining Corporation (GSH), which was appointed by CCC as its representative and advocate in China.

GSH is indirectly controlled by the Beijing Institute of Geology for Mineral Resources, a Chinese State-owned enterprise.

As a completion incentive, CCC would grant GSH a finder’s fee for capital expenditure incurred by FSDI, its affiliates and associates for any transportation assets that benefit CCC; 1% of all construction expenditure, payable on substantial completion of construction; and, thereafter, a royalty on revenues generated by such transportation assets of 1.5% of freight revenues, payable quarterly.

To secure access to its mineral interests in the RoF, CCC, in 2010, staked mineral claims along a 340-km-long route covering a series of sand ridges. These claims traverse the traditional territories of the Aroland and Marten Falls First Nations.
“The interests of these two First Nations and their Matawa Tribal Council neighbours must be accommodated for any construction to proceed and are expected to be negotiated as part of the feasibility study process,” KWG concluded.