Cliffs Chromite Booklet - Feb4 E - Web

8/3/2019 Cliffs Chromite Booklet - Feb4 E - Web

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CLIFFSCHROMITE PROJECTProject Description Summary - Update #1

October 2011

ISSUED FOR DISCUSSIONAND ENGAGEMENT


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Cautionary Note Regarding Forward-Looking Information

This document contains predictive statements that are intended to be made as orward-looking within the sae harbour protections o

applicable securities laws. Although Clis Natural Resources Inc. (Company) believes that these orward-looking statements are based on

reasonable assumptions, such statements are subject to risk and uncertainties. Specically, this document contains orward-looking statements

regarding the Companys proposed development o its Black Thor deposit and related mining, ore processing, transportation and errochrome

production inrastructure, including, but not limited to, the preliminary schedule, the proposed activities and the Companys strategies and

objectives, the receipt o approvals and permits in connection with development activities, the mining rate and mine lie o the proposed

project, and timing and estimates regarding uture production. Any statements that are not statements o historical act (including statements

containing the words believes, intends, will, plans, anticipates, expects, estimates or similar expressions) should be considered to

be orward-looking statements. Such orward-looking statements are based on current expectations and assumptions, including, but not limited

to, the Project being consummated on acceptable terms without undue delay; and that all necessary or desirable regulatory or other third-party

approvals and consents are obtained on terms satisactory to the Company.

Such orward-looking statements are also subject to risks and uncertainties, which could cause actual results to dier materially rom such

statements as a result o various actors, some o which are unknown, including, but not limited to, the results o pre-easibility and any

easibility studies; the time required to consummate the proposed Project; ability to achieve the strategic and other objectives o the proposed

project; changes in Project parameters; uncertainties involved in interpreting geological data; chromite ore and errochrome price volatility;

the possibility o Project cost overruns or unanticipated costs and expenses, labour disputes and other risks o the mining industry; problems

with productivity; weather conditions; fuctuations in ore grade and tonnes to be mined; changes in cost actors, including energy costs,

transportation, mine closure obligations and employee benet costs; ailure o plant, equipment or processes to operate as anticipated; impacts

o regulatory compliance and changes in legislation; ailure to receive required environmental permits and other regulatory or third-party

approvals and consents; changes in market conditions; the price and availability o adequate energy; the outcome o contractual negotiations

with signicant energy, material or service providers; the outcome o negotiations with aboriginal communities; rejection o major contracts

and/or venture agreements by customers and/or participants under provisions o the U.S. Bankruptcy Code or similar statutes in other countries;

trends aecting the Companys nancial condition, results o operations or uture prospects; risks relating to fuctuating interest rate and

currency exchange rates; ability to maintain adequate liquidity and the Companys ability to access capital markets; as well as those risk actors

discussed in the annual inormation orms, annual reports and other public disclosure o the Company. Reerence is made to the detailed

explanation o the many actors and risks that may cause such predictive statements to turn out dierently, set orth in the Companys AnnualReport and Reports on Form 10-K, Form 10-Q and previous documents led with the United States Securities and Exchange Commission, which

are publicly available on the Companys website. The orward-looking statements contained in this document are provided or the purpose o

providing inormation about managements current expectations and plans relating to the uture. Readers are cautioned that such inormation

may not be appropriate or other purposes. The orward-looking statements contained in this document are made as o the date o this

document and, accordingly, are subject to change ater such date. Except as may be required by applicable securities laws, the Company does

not undertake any obligation to update or revise any orward-looking statements contained in this document, whether as a result o new

inormation, uture events or otherwise.


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A Letter from the President of Cliffs Ferroalloys

The Cliffs Chromite Project

Cliffs Chromite Project Base Case

The Mine Site

Extracting the Chromite Ore The Mine

Making the Grade The Ore Processing Facility

From Mine to Market Integrated Transportation System

Processing the Final Product The Ferrochrome Production Facility

First Nations Roles and Responsibilities

Environmental Assessment

Continuing the Conversation

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Table of Contents


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A Letter from the President ofCliffs Ferroalloys

I am pleased to provide this update o the Clis Chromite Project.Clis Chromite Project is centred on a world-class chromite mine in the McFauldsLake or Ring o Fire area o Northern Ontario and includes the necessaryprocessing acilities and transportation inrastructure to bring this valuablemineral to North American and world markets.

The inormation in this Summary is based on the Project Description thatClis led with government agencies in May 2011. It provides an up-to-datesummary o the Project details being reviewed in the environmental assessmentthat ormally begins this Fall. This environmental assessment, or EA, will bea thorough and meaningul review o all components o the Project. It willcontinue to include extensive discussions and consultation with all levels ogovernment and communities, particularly the First Nations communities wherethe Project is located.

The Project must meet stringent ederal and provincial EA requirements. Clisis responding proactively and comprehensively by carrying out an EA that willsatisy these requirements while careully considering the views o those likelyto be aected by the Project. Our approach includes:

AComprehensiveStudyassessmentundertheCanadianEnvironmentalAssessment Act (CEAA). This assessment will examine in detail thephysical, biological and social eects o all the components o theProject, including the mine, processing acility, and transportationinrastructure.

AnIndividualAssessmentundertheOntarioEnvironmentalAssessmentAct (EAA) that allows the mine, ore processing and transportationcorridor to be considered as a whole rather than in a piecemeal ashionthat is more common in provincial assessments. Clis has taken theunique step o volunteering or an integrated Individual Assessment toassure a thorough review o all aspects o the Project and to allow ormeaningul coordination with the CEAA Comprehensive Study.

In keeping with Core Values, Clis will ensure the Project is developed in anenvironmentally responsible and sustainable manner. The extensive EA studieswill help us to meet these goals, while also addressing the views o those whocould be aected by the Project. The EA will help Clis to design and build aProject that is benecial or both Clis and the people o Ontario, including the

local First Nations in whose traditional territory the Project is located.

I want to thank you or your participation over the past year and encourageyour continued involvement throughout the EA process. I can assure you thatwe will continue to listen to your views, ideas and opinions and consider themcareully as we advance the Clis Chromite Project.

William BoorSenior Vice President-Global FerroalloysClis Natural Resources Inc.


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As shown on the map on the ollowing page , theproposed mine is located within Ontarios Far North. Theclosest communities are the Webequie First Nation to thenorthwest and Marten Falls First Nation to the southeast.The town o Nakina in the Municipality o Greenstone islocated 350 km directly south o the Mine Site on the CNtranscontinental rail line and the TransCanada Highway(Ontario Highway 11). The closest major city is Thunder Bay,approximately two hours by air to the southwest. The nearestindustrial acilities are the Victor Diamond Mine 150 km to theeast and the Musselwhite Gold Mine 300 km to the west.

Exploration to date has consisted o geophysics anddiamond drilling to trace the Black Thor chromite zone. Thecurrent inerred mineral resource estimate indicates theprojected lie o the Mine is expected to be approximately30 years. While remote, and with signicant inrastructurechallenges, Black Thor is potentially a world class chromitedeposit.

Black Thor is the largest known deposit o chromiteore in North Americabut the value o this chromitebecomes evident only once the ore is mined, processedand rened to errochrome, a product sold to producers ostainless steel. Development o this deposit will require amajor investment o money and resources by Clis, includingthe signicant cost o on-going easibility and environmentalstudies. Currently a pre-easibility study is underway that willhelp to more accurately determine the Project details andinvestment required to bring the chromite to market. Ourschedule is to begin production in 2015. Achieving this goal

will require the support o our many partners who will alsobenet rom this multi-generational development.

The Cliffs Chromite Project

Clis Natural Resources Inc., through its afliates (Clis),is planning to develop the Black Thor chromite deposit in the McFaulds Lake area inNorthern Ontario.

Cliffs NaturalResources Inc.Clis Natural Resources Inc. isan international mining andnatural resources company. A

member o the S&P 500 Index,we are the largest producer oiron ore pellets in North America,a major supplier o iron ore outo Australia and a signicantproducer o metallurgical coal.

Our North American businessis comprised o seven iron oremines owned or managed inMichigan, Minnesota, Ontarioand Quebec and six coal mineslocated in West Virginia andAlabama. In May 2011, Clis

completed the acquisition oConsolidated Thompson IronMines Limited, an emergingword-class iron ore producerlocated in Eastern Canada whereClis has or decades operatedthe Wabush-Scully Mine andPointe Noire pellet plant andport. Other projects underdevelopment include a biomassproduction plant and iron nuggettechnology in Michigan and Ringo Fire chromite properties inOntario. Over recent years, Clis

has been executing a strategydesigned to achieve scale in themining industry and ocused onserving the worlds largest andastest growing steel markets.

The companys headquarters islocated in Cleveland, Ohio.


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Location of the Black ThorChromite deposit


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MineOre ProcessingFacility

IntegratedTransportation System

FerrochromeProduction Facility

Why a Base Case?Planning over the past year has progressed suciently that we are now positioned to develop the ClisChromite Project. These plans include the nature, size and location o the Mine, Ore Processing Facility,Integrated Transportation System, and Ferrochrome Production Facility. The contents o this summarybooklet are based upon a Base Case since it represents one set o realistic and viable options or all othe components o the Project, rom mining to errochrome production. The Base Case is not necessarilythe preerred or nal choice or each o the Project components, as this may change as planning continues.For example, availability o land or the services necessary or some o the Project components may avourother locations or options. The environmental assessment to be completed or the Clis Chromite Projectwill consider alternatives or the Project components using the Base Case as a point o reerence orcomparison.

Cliffs Chromite ProjectBase Case


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The Base Case or the Clis Chromite Project,described in the May 2011 Project Description thatClis submitted to the government agencies issummarized in this booklet. The Clis Chromite Projectconsists o the ollowing our inter-related components, twoo them colocated at the Mine Site.

1. An open pit/underground chromite Mine and theassociated waste rock and overburden surace stockpileslocated at the Mine Site.

2. An Ore Processing Facility and associated load-outacility and tailings management area also located at theMine Site.

3. An Integrated Transportation System, including anairstrip, seasonal winter roads and a permanent all-seasonroad to allow movement o people, equipment, suppliesand concentrate to and rom the Mine Site and the existingOntario road and rail inrastructure.

4. A Ferrochrome Production Facility and associatedinrastructure and slag stockpile located near Capreol in

the City o Greater Sudbury.

Above: Mine SiteBelow: Ferrochrome

Production Facility site


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The Mine Site

An on-site road network to allow people, equipment,materials and excavated ore and waste rock to betransported between site acilities.

Buildings and warehouses, including the administrationbuilding, maintenance shops, and lay down areas typical o

any Mine Site.

An electricity generating power plant to supplyapproximately 30 MW o electric power. The power plant,which will use low sulphur diesel, will be equipped withstate-o-the-art emission controls. The power plant will belocated in the northwest corner o the Mine Site adjacentto the Ore Processing Facility.

Fuel, chemical and explosive storage acilities orthe uels used at the Mine Site, including diesel, propane,and gasoline. In addition, chemicals and reagents will be

used in the Ore Processing Facility and in water treatment.Separate and isolated storage will be provided orexplosives. All uel and chemical storage tanks and areaswill be equipped with secondary containment. Separateand isolated storage will be provided or the explosivesneeded or mining.

An accommodations complex or workers and thosevisiting the site. Initially this acility will provide thesleeping, dining, and leisure needs or the estimated300-500 construction personnel. Once mining begins,the complex will meet the needs o the 300-500 workers

throughout the operations phase. The complex will besituated to the west o the Mine Site near the airstrip andwill be generally sel-sucient in the electrical, water andwaste management support required toservice it.

The Mine Site is the location o the Mine and Ore Processing Facility and theassociated material stockpiles and the tailings management area. The Mine Site willalso include the acilities inrastructure to support the construction and operation othese major components o the Project. This includes:

Above: Mine SiteBelow: Koper Lake

near Mine Site


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Preliminary Layout of the Mine Site

Water supply and treatment acilities tosupply the Mine, Ore Processing Facility andaccommodations complex. Process water romthe plant will be discharged to the tailingsmanagement area and recycled or plant use.Domestic wastewater will be managed withon-site treatment systems to meet applicablestandards prior to discharge. Surace waterdrainage and runo rom the mine, tailingsarea, material stockpiles, and disturbedareas will be directed to a settling pond andtreatment plant in the northeast corner o

the Mine Site. Following treatment to meetapplicable standards, any excess site runo orwater rom the tailings management area willbe discharged to Koper Creek or the MuketeiRiver.

A waste management system or wastesgenerated during operations, including oodwastes, non-hazardous wastes, oce wastes,

scrap metal and other wastes typical o anyMine Site. Reducing and recycling these wasteswill occur to the extent practicable. Foodwastes will be incinerated to avoid attractingwildlie. A small waste management acility willbe developed during the lie o the Mine Siteor the disposal o non-hazardous wastes thatcannot be recycled.

An airstrip to allow the movement o staand visitors to and rom the site. The existingexploration site is accessed by small charter

xed-wing aircrat (foat or ski landing onadjacent lakes) rom Thunder Bay and thesurrounding First Nations. Enhanced air accessis a critical part o the site development. Itis likely that the airstrip will serve the entireRing o Fire development and not the ClisChromite Project alone. Clis does not expectto own and operate the airstrip.


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Mining over the frst 10-15 years will be romtwo open pits using standard surace mining methods.The development o the open pit mines will begin withthe removal o the swampy material and surace soils or

overburden to expose the ore-containing bedrock. Theremoved organic and overburden materials will be stockpiledor uture use during rehabilitation o the mine ater mining iscompleted. The bedrock will be drilled, blasted, excavated andloaded onto large trucks or hauling to the crusher and OreProcessing Facility. The daily average will be 6,000 to 12,000tonnes o ore and 65,000 tonnes o waste rock.

The Northeast Pit ultimately will be approximately 1,500 mlong, 300 to 700 m wide and 300 m deep, with a total suracearea o approximately 74 hectares. The size o the SouthwestPit will be approximately 1,300 m long, approximately 500

m wide and approximately 200 m deep, with a total suracearea o approximately 52 hectares. A plan or the closure andrehabilitation o the pits will be developed beore miningcommences.

The majority o the waste rock rom the Project willbe generated in the frst 10-15 years during open pitmining and development o the underground mine access. Thewaste rock will be stored in a large stockpile adjacent to theopen pits (see page 11 or location). Waste rock will be usedin construction around the Mine Site, including on-site roads,providing it is environmentally acceptable to do so. The waste

rock stockpile will contain approximately 230 million tonnes orock and will have a maximum height o approximately 30 m.

Extracting the Chromite OreThe Mine

Clis Chromite Project begins with mining the Black Thor deposit.Ore is rock that contains a sufcient concentration or grade o chromite tohave economic value. All other rock excavated during mining is called waste rock.Mining attempts to extract the maximum amount o ore and the minimum amount owaste rock.


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The transition to underground mining will beconsidered once it becomes necessary to extract ore romgreater depths. Underground mining would continue or theremaining lie o the mine, estimated to be a urther 15-20years. The underground mine will be reached rom a portaland ramp at the bottom o the open pit. Blasthole stopingmining methods will be used in which ore is blasted andexcavated and the resulting open section or stope is thenbacklled beore moving on to the next section. Each stopewill be developed rom the ramp by excavating horizontaltunnels or drits parallel to the ore body. Large loaders orscoop trams will move the ore to trucks or transportation to

the surace. On average, the underground mine will produce6,000 to 12,000 tonnes o ore per day.

A ventilation system will provide resh air to theunderground workings using electric powered anslocated at surace level. Air will reach the undergroundworkings through the portal and ramp or through a speciallyconstructed ventilation shat which will also allow thedischarge o used air. Air will be treated as required, includingheating in cold weather and cooling in warm weather.

Crushing o ore will be necessary to reduce its size.Crushing will occur in two stages: primary crushing will reducethe size to less than 20 cm and secondary crushing will urtherreduce it to less than 8 cm. Ore must be processed to increaseits chromite content to a level suitable or the FerrochromeProduction Facility and or sale to world markets.


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Making the Grade

The Ore Processing Facility

Ore that is not suitable or shipping directly to the FerrochromeProduction Facility will be processed at the Mine Site to produce concentrate. TheOre Processing Facility, located in the northwest corner o the Mine Site, will includea processing plant and a load-out acility. Ore processing will also result in theproduction o waste material or tailings. These will be isolated and contained inthe tailings management area located at the south o the Mine Site.

The processing o chromite ore separates andconcentrates the valuable chromite minerals. This involvesmechanical processes and gravity separation. The resultrom ore processing is (1) a concentrate suitable or rening,and (2) tailings that have no economic value. Tailings arethe by-product o ore processing and represent the residualmaterial rom the Ore Processing Facility ater the valuablechromite has been extracted rom the ore. Tailings will bemanaged over the long-term at the Mine Site in the tailingsmanagement area (see page 11 or its location).

Tailings are sand-sized material that will be mixedwith water and pumped as slurry to the tailings managementarea or long-term containment and isolation. In the tailingsmanagement area, the tailings will separate rom the water,

which will be treated and recycled to the Ore ProcessingFacility or reuse.

The tailings management area will consist o twocells, with containment being provided by encircling damsconstructed mainly o waste rock (see page 11 or location).They will occupy an area o 250 hectares to a maximum heighto 15 m. A closure plan or the tailings management area willbe developed beore mining begins.

Chromite Ore


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A load-out acility will enable the transport oconcentrate rom the Mine Site to the FerrochromeProduction Facility or or sale to world markets. The load-out acility will consist o equipment and activities to loadconcentrate rom on-site stockpiles onto road haul trucks.Approximately 3,600 to 7,200 tonnes o concentrate per daywill be loaded onto trucks or transport o site.

Some concentrate may be shipped directly to reneriesoutside o Canada. The Project will take advantage o theglobal market or chromite concentrate. Approximately onemillion tonnes o concentrate could be sold annually to world

markets.


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The remote location o the Black Thor chromite deposit, morethan 300 km north o the provinces existing road and rail networks, presents a majortransportation challenge. Planning, building and operating the Mine requires anIntegrated Transportation System to move people and materials to and rom the MineSite. A way is also needed or transporting the large quantity o concentrate rom theMine Site to the existing rail network.

The Integrated Transportation System identied orthe Base Case includes the ollowing components shown onthe map on the ollowing page.

Seasonal winter roads to allow access to the Mine Siteor heavy equipment and materials during the three-yearconstruction phase. This type o road is typically open ortwo or three months maximum each year.

An airstrip near the Mine Site or transportation oworkers to and rom the Mine Site and neighbouringcommunities, including Thunder Bay.

A permanent year-round road between the MineSite and the existing Ontario road and rail network. Thisinvolves northward extension o existing Anaconda Road.

A load-out acility at the Mine Site where haul truckswould be loaded with concentrate.

A transload acility west o Highway 643 and the FirstNation Community o Aroland where the haul trucks wouldbe unloaded and the concentrate transerred to rail carsor transportation to the Ferrochrome Production Facilityand world markets.

From Mine to Market

Integrated Transportation System

Typical Haul Road


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Overview of the Integrated

Transportation System

The all-weather access road link between the TransloadFacility and the Mine Site allows transport o concentrate tothe east-west CN transcontinental rail line. Several optionshave been considered or transporting concentrate to the railline. These include rail and road options accessing the MineSite rom either the south or the west. We have discussedthese options with First Nations and others over the past year.These discussions have included consideration o a potentialrail line that is not economically viable at this time.

A permanent year-round road has been identied asthe Base Case surace transportation link between the Mine

Site and the CN rail line. The road will be constructed byadvancing northward rom the existing Anaconda Road andHighway 643. These roads currently extend approximately80 km north o Nakina. To reach the Mine Site it will benecessary to construct approximately 260 km o new roadway.Sand, gravel and aggregate construction materials will beobtained rom pits along the route. The necessary materialslikely can be ound within approximately 10 km o the roadalignment.


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The road will consist o a 12 m wide gravel suracedroadway within a 100 m wide right o way. Whilethe road alignment will be selected to stay on high ground tothe extent possible, it will be necessary to pass through low-lying areas and cross small and large watercourses, includingthe Ogoki, Albany and Attawapiskat Rivers.

Large haul trucks will be used to transportconcentrate rom the Mine Site. Each truck will carryapproximately 70 tonnes. It will be possible or a driverto make one round trip daily between the Mine Site andthe transload acility west o Aroland First Nation. At ull

production, there will be 50 to 100 truckloads o concentrateleaving the Mine Site each day. On reaching the transloadacility, the concentrate will be transerred into rail cars andtransported to the Ferrochrome Production Facility or worldmarkets by rail in trains o up to 100 rail cars. One importantrequirement o the Ferrochrome Production Facility is that it isaccessible by rail.

Road versus Rail

Clis has conducted a pre-easibility study o various year-round surace transportationlinks. This has included acomparison o road andrail options and severaltransportation corridors. Possibleroutes approaching the Mine

Site rom the south and westwere considered in the study.The assessment o alternativesincluded consideration ooverall route distance, easeo constructability, economics(capital costs and operatingcosts), the environment, land-use, and preerences o FirstNations.

The results o the pre-easibility

study o options identied thenorthern extension o AnacondaRoad rom west o ArolandFirst Nation as a realistic andviable option. Accordingly, it isidentied as the Base Case orthe Project Description. Furtherwork is required to conrm thispreliminary evaluation.

Initial eedback rom the localcommunities indicates that an

all-weather access road would bean excellent and desirable benetrom the Project.


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The Transload FacilityThe transload acility is an important part o the Integrated Transportation System. It is the key link inthe transportation o concentrate rom the Mine Site to the existing CN rail line. Once the concentrate istranserred to rail cars at the transload acility it can be transported to the Ferrochrome Production Facilityor shipped to world markets.

The transload acility will include loading and unloading equipment to transer the concentrate romtrucks to rail cars. In addition, it will house equipment maintenance and services to support the road haul,including diesel uelling and an accomodations oce. The acility will also serve as the point o access andwarehousing or materials and equipment transported to and rom the Mine Site during operations. Therecould be up to 200 to 300 jobs associated with the Integrated Transportation System including drivers,mechanics and support personnel.


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Processing the Final Product

Ferrochrome Production Facility

Refning the concentrate will occur at the FerrochromeProduction Facility located or the Base Case on privately-owned lands near Capreol within a rural area o the City oGreater Sudbury. The size o the site will be approximately1.5 km by 1 km. The site is currently designated as Rural,

allowing a variety o land uses, especially those that providerural economic benets that are balanced with protection othe natural environment and the agricultural resource base.

The refning process consists o the ollowing:

Raw material receiving and storage, including theconcentrate, reductant, and fux materials required orrening. These eedstockmaterials will be transported tothe site by rail and stored in stockpiles.

Ferrochrome production in enclosed electric arc

urnacesoccurs at a high temperature (~1,700 degrees

C) to separate and produce a molten errochrome metalproduct or matte. The separation process uses fuxingagents such as quartzite. The resulting waste material iscalled slag. (The management o this slag is discussedon page 21)

Product handling, storage and loading is the nalactivity in the production o errochrome. Moltenerrochrome matte rom the urnaces will be cooled andprepared or nal shipping by rail to customers. Storagecapacity will be provided at the site or up to our monthsproduction.

The fnal step in the Project is the refning o the concentrate toerrochrome metal in enclosed electric arc urnaces. The granulated errochromemetal will be sold or use in stainless steel manuacturing in North America andworldwide. At ull capacity, the Ferrochrome Production Facility is expected toproduce between 1,250 and 1,750 tonnes o errochrome per day.

Current aggregate operationat Ferrochrome Production

Facility site


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Slag generation, recycling and management. Theslag will be cooled with water to produce a coarse sand-like inert material. Approximately 2,100 tonnes o slag isexpected to be produced per day. The slag will be removedrom the urnaces and transported via truck or conveyerto the slag stockpile. Similar to the slag rom other metalrening, the slag may be useul as aggregate or otherindustrial purposes. The slag stockpile will occupy an areao approximately one square kilometer located to thenorth o the site.

Inrastructure and services will be required to support

construction and operation o the Ferrochrome ProductionFacility. It is estimated that 350-450 people will work at thesite during construction and 350-450 during operations. Theseworkers will commute daily to the site rom the surroundingarea. The availability o skilled labour is a signicantconsideration in selecting the location o the FerrochromeProduction Facility. The principal inrastructure and servicesinclude:

Road access to the site will be rom Regional Road84, which currently connects the site with Highway 545and Capreol, approximately 20 km distant. The paved

two-lane road ends at the site and will be upgraded asnecessary.

Rail access to the site will be by reinstating theormer rail line and siding rom the CN mainline tothe site. The rail bed still exists and is used as a haul roadby the current site operator. Proximity and connectionwith the CN transcontinental rail line is an importantconsideration in the selection o a site or the FerrochromeProduction Facility.

Electrical power will be provided to the site byconstructing a new 230 kV power line parallel to existing

500 kV and 44 kV power lines. The 500 kV line runs northor approximately 14 km rom the Hanmer TransormerStation. The 44 kV line runs northwest or approximately10 km rom the larger line directly towards the site. Thenew line will be constructed within the existing rights-o-way to the extent possible.

Electricity A KeyInput

The arc urnaces at the hearto the Ferrochrome ProductionFacility will be heated electrically.The availability o a large,reliable, long-term and cost-competitive supply o electricity isa key consideration in siting the

Ferrochrome Production Facility.Current estimates o the urnacerequirements are approximately300-350 MW, about the amounto electricity used to supply a cityo 300,000 people. There areonly a ew places in NorthernOntario where this power isconsistently available with agrid system capacity that cansaely and reliably support thefuctuating power requirements.


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First NationsRoles and Responsibilities

First Nations people have rights that may be aected bythe Project. The Mine Site and road are in Ontarios Far North in traditionalFirst Nation territory. The potential site identifed or the Ferrochrome ProductionFacility is located near the Wahnapitae First Nation. First Nations must be consultedon the Project and involved in local land use planning in the areas o the Far North.Consultation is the duty o the Crown and cannot be undertaken by a third party.However, Clis is working with the aected First Nations to ensure they beneft romany successul development.

Clis will continue to engage potentially

aected Aboriginal communities on theProject. This includes a progression o protocolsand agreements so that First Nations peoplebenet appropriately rom the Project. Keyaspects are including First Nations in the Projectand creating opportunities to enhance the socialwell being and economic prospects or First Nationmembers.

Partners in planning. The Black Thor depositand much o the proposed road lie withinthe traditional territory o local First Nations.

These Project components are in Ontarios FarNorth. All proposed activities within the FarNorth must meet the requirements o the FarNorth Act that ensures that First Nations areengaged and working with government in landuse planning.

Partners in business. There are manybusiness opportunities associated with thedevelopment o the Project. Many will occurat the Mine Site throughout the constructionand operation o the Mine, Ore Processing

Facility and Integrated Transportation System.Clis will encourage and support newly createdpartnerships or business opportunities or localFirst Nations. These may include operation othe airstrip and accommodations complex. Aswell, Clis expects to provide on-going trainingand employment or First Nations people.

Partners in environmental protection.

Clis will continue to involve local First Nationsin eld investigations, traditional land usestudies and the development o mitigatingmeasures or the Project. Clis agreed in2010 to conduct eld sampling programs atthe Mine Site only when a First Nation personaccompanies scientists and engineers. Thisapproach will be ollowed throughout theenvironmental assessment. Clis recognizesthe value in working closely with First Nationmembers, whose knowledge o the land andenvironment is immense. Clis also recognizes

First Nations unique connection to the land,and possession o Traditional EcologicalKnowledge (TEK). We hope to gain thetrust and respect o community members byencouraging them to take a meaningul rolethroughout the environmental assessment.


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Environmental Assessment

Clis is conducting a thorough environmental assessment(EA) o the Project. The many permits needed or construction and operationmay be issued by government agencies only afterthe EA is successully completed.

The purpose o the EA is to:

Minimize or avoid adverse environmentaleects beore they occur.

Incorporate environmental actors intodecision making.

The EA also provides opportunity orpeople who have an interest in the Project to ndout more about it and to express their views. TheEA will examine the likely eects o the Projecton all aspects o the physical environment (air,water, soils), biological environment (sh, wildlie,vegetation) and human and cultural environment(health and saety, community, economics). Itwill consider all phases o the Project duringnormal operations and in the event o possiblemalunctions and accidents.

The EA or the Project must satisy bothederal and provincial requirements set outin the Canadian Environmental Assessment Actandthe Ontario Environmental Assessment Act. Thegovernments o Canada and Ontario have agreedto coordinate the EA process or projects that aresubject to both jurisdictions. Clis is continuingdiscussions with ederal and provincial ocialson the way the EA requirements can be met ina ulsome, timely and cooperative manner whileavoiding unnecessary duplication.

The frst ormal step was to fle a ProjectDescription with the Canadian EnvironmentalAssessment Agency and the Ontario Ministry oNorthern Development, Mines and Forestry whichClis did in May 2011. This allows a decision to bemade on the nature and scope o the EA. Clis

anticipates that a comprehensive study will berequired.

Some aspects o the EA have alreadybegun. Over the past year Clis has beenconducting research and eld investigations tocharacterize the existing environmental conditionsat the Mine Site. These baseline studies providethe starting point or predicting the likely eectso the Project, including whether or not eectsmay be signicant.


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Continuing the Conversation

You can help us to develop the Black Thor chromite depositby participating in the EA that will begin shortly. Clis is committed to listening toand openly discussing your suggestions. We want to hear your views.

To learn more and/or provide comments on ourBase Case Plan you may:

Attend a presentation by Clis in your community

Request a presentation to your group or organization

Visit our website: http://www.cliffsnaturalresources.com Write or email Clis with a specic concern or question

(see contact below)

For more inormation please contact:

KIMBERLY REGAN

Senior Manager-Public Aairs

Clis Natural Resources Inc.

1100 Superior Avenue

Suite 1500

Cleveland, OH 44114

Telephone: 1-855-353-4766

Facsimile: 1-216-694-4035

[email protected]


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