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Tesla validates EV demand while Fortune
completes second tranche of private placement
Issued Capital: 255,649,007 (including shares
issued pursuant to private placement below)
LONDON, ON, April 11, 2016
/CNW/ - Fortune Minerals Limited (TSX: FT) (OTCQX: FTMDF)
("Fortune" or the "Company")
(www.fortuneminerals.com) is pleased to announce that the
Government of the Northwest
Territories ("GNWT"), Department of Transportation has
submitted the requisite permit applications to the Wek'èezhìi Land
and Water Board, to build a public highway to the community of
Whati. The application package was developed by the GNWT, with the
support of the Tlicho Government for this 94-kilometre all-season
road which would follow a former all-land winter road route to
significantly reduce construction costs. Whati is 50 km south of
Fortune's proposed NICO gold-cobalt-bismuth-copper development that
has already received its environmental assessment approval for a
mine and concentrator, and a spur road from the public highway to
the mine.
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Key Highlights
- Public highway to the community of Whati advancing
- Tesla Motors announced 325,000 pre-production orders for its
Model 3 car validating electric vehicle growth and positively
impacting cobalt demand
- Discussions for off-take and NICO project financing
ongoing
- Fortune completes second tranche of $1 million private placement
Robin Goad, Fortune's President
and CEO commented, "Our Company has been working with the GNWT and
Tlicho government for many years to advance construction of a
public highway to the community of Whati near the NICO development.
With construction of this road, Whati will have reliable all-season
access for community re-supply, while lowering the cost of living,
improving, the quality of life and promoting economic development
and diversification. The Whati highway will also be a vital link to
the NICO mine for its transportation needs as well as provide
commutable employment to the nearby communities."
Fortune owns the vertically integrated NICO
gold-cobalt-bismuth-copper development, comprised of a planned mine
and concentrator in the Northwest
Territories and refinery near Saskatoon to process concentrates from the
mine to higher value products. The NICO project has already been
assessed in a positive feasibility study and has received its
environmental assessment approvals in the Northwest Territories and Saskatchewan. The NICO deposit mineral
reserves will support a 21-year mine life at a mill feed rate of
4,650 tonnes of ore per day to produce 180 wet tonnes of
concentrate per day for shipment to the refinery. Life of mine
average annual production is projected to be 41,300 ounces of gold,
1,615 tonnes of cobalt contained in a battery grade cobalt sulphate
heptahydrate, 1,750 tonnes of bismuth contained in ingots, needles
and oxide, and 265 tonnes of copper.
Cobalt market expanding; Tesla continues to validate
interest in vehicle electrification
The cobalt market has had compound annual growth of
approximately 5 to 6% for the past two decades and in 2015 grew by
5.4%, more than double recent global GDP growth of 2.4% for the
same period. Market growth has been driven primarily from the
demand for cobalt in chemicals used to make lithium-ion
rechargeable batteries needed to power portable electronic devices,
electric vehicles and stationary storage cells. Battery chemical
demand increased nearly 12% in 2015 and now accounts for
approximately half of the world's annual cobalt production. Double
digit growth of cobalt used in rechargeable batteries is expected
to continue for the foreseeable future.
Supporting the positive outlook for cobalt, Tesla Motors made
automotive history on March 31, 2016
with the launch of its Model 3 electric vehicle, receiving
US$325 million in deposits for
325,000 preorders of these cars in the first week. If these orders
are converted into annual sales, production of the Tesla Model 3
would be comparable to the top selling vehicles in the U.S.
Mainstream interest in electric vehicles has been validated by
thousands of people lining up to make a US$1,000 down payment for a car that will only be
available in late 2017.
Analysts familiar with the cobalt market are projecting a supply
deficit in 2016 because of the increased demand. Additionally, as
demand continues to grow, cobalt supply is under pressure from its
production primarily as a byproduct of nickel and copper mining –
some mines for which have recently closed as a result of low
primary metal prices. The risks to cobalt supply are further
exacerbated by geographic concentration of supply and 65% of mine
production currently sourced from the Democratic Republic of the Congo, a
politically unstable country, and 52% of refinery production in
China. This risk was recently
addressed in the Assessment of Critical Minerals report to the
U.S. Congress which identified cobalt as a critical mineral on a
list that "have a supply chain that is vulnerable to disruption,
and that serve an essential function in the manufacture of a
product, the absence of which would cause significant economic or
security consequences".
NICO is well positioned to become a reliable, vertically
integrated North American source of battery grade cobalt chemicals
with supply chain custody transparency and tax advantages under the
North American Free Trade Agreement (NAFTA). Earlier in 2016 the
Company delivered an ultra-pure cobalt sulphate sample for testing
by a potential customer. Discussions for offtake agreements and
project financing are ongoing.
The NICO deposit also contains a significant gold co-product
from more than 1.1 million ounces of gold in its Mineral Reserve
statement, as well as 12% of global bismuth reserves. Bismuth is a
metal used in a broad range of industrial applications,
particularly in the automotive and pharmaceutical sectors. It is an
environmentally safe replacement for lead, which is subject to
lead-toxicity concerns and legislation banning its use in potable
drinking water sources and consumer products in solders, brasses,
steel, aluminum and zinc galvanizing alloys, paint pigments and
ceramic glazes. Notably, bismuth was also identified in the
Assessment of Critical Minerals report to the U.S. Congress.
Fortune completes second tranche of $1 million private placement
Fortune has completed the second tranche of its previously
announced $1 million private
placement (see news release, dated March
9, 2016). A total of 14,285,713 newly issued common
shares were placed with arm's length private investors at a price
of $0.035 per share. Proceeds of this
financing will be used for general working capital purposes.
This press release does not constitute an offer to sell or a
solicitation of an offer to buy nor shall there be any sale of any
of the securities in any jurisdiction in which such offer,
solicitation or sale would be unlawful. The securities have
not been and will not be registered under the United States
Securities Act of 1933, as amended (the "U.S. Securities Act"), or
the securities laws of any state of the
United States and may not be offered or sold within
the United States unless
registered under the U.S. Securities Act and applicable state
securities laws or pursuant to an exemption from such registration
requirements.
The disclosure of scientific and technical information contained
in this press release has been approved by Robin Goad, M.Sc., P.Geo., President and CEO of
Fortune, who is a "Qualified Person" under National Instrument
43-101. The technical report on the feasibility study referred to
above, entitled "Technical Report on the Feasibility Study for the
NICO-Gold-Cobalt-Bismuth-Copper Project, Northwest Territories, Canada", dated
April 2, 2014 and prepared by Micon
International Limited, has been filed on SEDAR and is available
under the Company's profile at www.sedar.com.
About Fortune Minerals
Fortune is a Canadian development stage mining company focused
on advancing the vertically integrated NICO
gold-cobalt-bismuth-copper project in the Northwest Territories and a related refinery
the Company plans to construct in Saskatchewan. Fortune also owns the Sue-Dianne
copper-silver-gold deposit located 25 km north of NICO and a
potential future source of incremental mill feed to extend the life
of the NICO mill. The Company also maintains the right to
repurchase the Arctos anthracite coal deposits in northwest
British Columbia that were
recently purchased by a provincial Crown corporation.
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This press release contains forward-looking information and
forward-looking statements within the meaning of applicable
securities legislation. This forward-looking information includes
statements with respect to, among other things, the Company's plans
to develop the NICO project, anticipated growth in the demand for
cobalt, anticipated constraints on the supply of cobalt and the
plans of the plans of the GNWT and the Tlicho Government to
build an all-season road to Whati. Forward-looking information is
based on the opinions and estimates of management as well as
certain assumptions at the date the information is given
(including, in respect of the forward-looking information contained
in this press release, assumptions regarding the Company's ability
to arrange the necessary financing to continue operations and
develop the NICO project, growth in the demand for cobalt,
restrictions on the supply of cobalt and the proposed construction
of the all-season road to Whati). However, such forward-looking
information is subject to a variety of risks and uncertainties and
other factors that could cause actual events or results to differ
materially from those projected in the forward-looking information.
These factors include the risks that the Company may not be able to
arrange additional financing to continue operations, the Company
may not be able to finance and develop NICO on favourable terms or
at all, the demand for cobalt may not grow to the extent
anticipated, the supply of cobalt may not be restricted to the
extent anticipated and the construction of an all-season road to
Whati may not be completed in a timely fashion or at all. Readers
are cautioned to not place undue reliance on forward-looking
information because it is possible that predictions, forecasts,
projections and other forms of forward-looking information will not
be achieved by the Company. The forward-looking information
contained herein is made as of the date hereof and the Company
assumes no responsibility to update or revise it to reflect new
events or circumstances, except as required by law.
SOURCE Fortune Minerals Limited
