The value of the Ring of Fire exaggerated by the Minister of Mines, denounce experts
George Pirie, the Minister of Mines, said the economic potential of the Ring of Fire is “unlimited”. (File photo)
Ontario Mines Minister George Pirie recently claimed that the Ring of Fire ore deposit could be worth up to $1 trillion, citing industry people. However, analysts and industry representatives call the comments exaggerated and even irresponsible.
In a recent documentary produced by Global News , Mr. Pirie indicated that the 1000 billion figure was not a formal estimate, but based on the increase in the value of the minerals.
Luca Giacovazzi, the chairman and CEO of Wyloo Metals, said in the same documentary that this amount was exaggerated and that there were several myths surrounding the Ring of Fire.
Luca Giacovazzi said in a video posted earlier this month that there are a lot of myths surrounding the Ring of Fire. (File photo)
CBC Newscontacted Minister Pirie's office to find out why he used this amount in a public statement, to find out what sources he is relying on and to check if the province has a financial valuation of the mineral deposit.
Dylan Moore, the minister's spokesman, had a brief answer: the economic potential is limitless.
Ring of Fire Metals, a subsidiary of Wyloo Metals since its takeover last year, disclosed in an email that the most recent valuation instead comes in at a value of $90 billion for Ring of Fire minerals. /p>
The email, however, did not include a detailed breakdown of this estimate, but did indicate that it takes into account the value of Measured and Probable Resources.
Geologist Mohan Srivastava says he is frustrated by Minister Pirie's statement and his spokesperson's response.
No, it is not unlimited. It's not possible, Mr. Srivastava said, adding that the $1 trillion claim is such a round number that it looks like outright speculation.
He adds that geologists and publicly traded companies in Canada cannot make such statements, due to National Instrument 43-101 Disclosure of Mining Projects.
This regulation came into effect in 2001, following one of the largest financial frauds in the history of the global mining industry.
A Calgary mining company, named Bre-X Minerals, claimed in 1996 to have discovered a major gold mine in Indonesia.
The value of the mining company's shares soared, allowing early investors to become millionaires , before collapsing when an independent assessment showed that the deposit did not exist.
Mr. Srivastava notes that politicians and financial analysts are not subject to NI 43-101.
So they have the right to make wildly optimistic statements, like the one uttered by George Pirie.
He fears this could lead to speculation and possibly fraud, because small and large investors can get excited about projects if the person making the statement, someone like Mr. Pirie, is a credible source according to them.
The Ring of Fire is located in the Far North of Ontario. It is currently not connected to the road network.
Mohan Srivastava also questions Ring of Fire Metals' $90 billion valuation.< /p>
The feasibility study for the Eagle Nest project, located in the Ring of Fire, carried out in 2012, arrived at a value of 500 million dollars, taking into account initial investments, operating costs and taxes.
The geologist has reviewed other reports regarding various mining projects in the country, and does not understand how the company arrived at a value of 90 billion dollars.
Not calculating the cost [of resource extraction] is meaningful. They play cheerleaders and are not thoughtful developers.
At this time, the Ring of Fire is not connected to the province's road or power grids.
A road connection project, led by First Nations, is currently being evaluated.
The developers are however facing opposition from other Indigenous communities in the area.
With information from Logan Turner of CBC News
