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Mining exploration company KWG Resources Inc is negotiating a deal for China Railway First Survey & Design Institute Group Co to undertake a feasibility study for the construction and financing of a proposed 328 km multi-user railway which would link mineral deposits in the remote Ring of Fire region of northern Ontario with the existing CN main line at Nakina, around 300 km northeast of Thunder Bay.
KWG has rights in the Big Daddy and Black Horse chromite deposits. It also owns 100% of Canada Chrome Corp, which has staked land claims and conducted a surveying and soil testing programme for the proposed railway.
FSDI has undertaken an initial analysis of data collected by KWG ahead of the more detailed studies. A pre-feasibility study was undertaken by Krech Ojard & Associates, with geotechnical sampling conducted by Golder Associates. Tetra Tech WEI undertook a comparison of road and rail transport, which estimated the capital costs of a road at C$1·052bn and a railway at C$1·561bn, but with operating costs of C$10·50 per tonne for rail and $60·78 for road based on 3 mtpa; rail costs could fall to C$6·33 with traffic of 5 mtpa.
China's Golden Share Mining Corp is acting as KWG's agent in the negotiations with FSDI, and would be granted a finder's fee of 1% of construction expenditure, payable on substantial completion, and a royalty of 1·5% of freight revenues.
This article first appeared on www.railwaygazette.com
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