Third party refiners interested in
purchasing NICO concentrates directly from the mine
Issued Capital: 338,603,220
LONDON, ON, June 14, 2018 /CNW/ - Fortune Minerals
Limited (TSX: FT) (OTCQX: FTMDF) ("Fortune" or
the "Company") (www.fortuneminerals.com) is pleased to
provide an update for its 100% owned NICO
Cobalt-Gold-Bismuth-Copper Project in Canada ("NICO Project"). The NICO
Project is a development stage primary cobalt asset currently
consisting of a planned mine, mill and concentrator in the
Northwest Territories and
hydrometallurgical refinery in Saskatchewan to process concentrates from the
mine to cobalt sulphate, gold, bismuth ingot and oxide, and copper
precipitate. Fortune was recently approached by several global
mining and refining companies interested in purchasing metal
concentrates directly from the mine. If this is pursued, it would
enable the Company to defer the Saskatchewan refinery, reducing up-front
capital by about 50% and mitigating risks in commissioning and
downstream processing. Fortune is making the requisite adjustments
to the NICO Project engineering designs to allow flexibility to
accommodate all of its downstream process options.
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The cobalt industry has experienced more than 20-year,
approximately 6% compounded annual growth rates ("CAGR") and
at current prices for metal, the value of the market is greater
than US$10 billion. Accelerated
double digit CAGR is projected by most industry analysts in the
2020's, primarily due to cobalt demand in the cathodes of
lithium-ion batteries that power portable electronic devices,
electric vehicles and stationary storage cells to improve the
efficiency of the electrical grid.
Fortune is in discussions with a number of companies interested
in participating in the development of the NICO Project and/or
securing a reliable Canadian and ethical supply of cobalt. The
Company has entered into approximately 30 confidentiality
agreements with potential strategic partners from diverse business
sectors. Transformative automotive electrification and disruptive
evolution of energy supply and storage is motivating global mining
companies to align their product mix with these technological
advancements and participate in the value chain for battery
materials. Fortune is pleased to report that it has recently been
contacted by several of these companies interested in purchasing
metal concentrates directly from the NICO mine for treatment in
their existing process facilities. Fortune is advancing discussions
with a number of parties to secure indicative pricing under a
variety of potential development scenarios:
- Produce a single "Bulk Flotation Concentrate" at the mine as
currently envisioned for sale to a third party refinery or,
transport it to Saskatchewan for
downstream processing at the Company's planned refinery;
- Produce separate "Cobalt-Gold Concentrate" and "Bismuth-Gold
Concentrate" at the mine and sell either or both of these to third
party refineries or, transport either or both of these to
Saskatchewan for downstream
processing with facilities configured with only the required unit
operations needed to recover the desired metal(s);
- Defer the sale of some of the "Bismuth" to align production
with the market demand;
- Phase the development of the Saskatchewan refinery with market demand and
the needs of the potential strategic partners.
Although the sale of concentrates was previously investigated by
Fortune, the expanded cobalt market, strong future growth, and
attractive prices have collectively made this into a potentially
attractive development option to defer significant up-front
capital. Technologies are also being investigated that would enable
Fortune to upgrade the metal content of its concentrates and reduce
deleterious metals that are typically penalized by third party
process plants.
Updated Technical Report:
Fortune has engaged Hatch
Ltd. ("Hatch"), P&E Mining Consultants Inc.
("P&E") and Micon International Limited ("Micon")
to update the 2014 NI-43-101 Technical Report on the NICO project
Feasibility Study ("Technical Report") based on current
operating and capital costs, commodity prices and currency exchange
rates. The Technical Report is also assessing the economies of
scale of a 30% expanded mill throughput rate, higher mining rate,
and other mine, process and environmental improvements made to the
NICO Project over the past year. In order to allow for the
flexibility of selling metal concentrates directly from the mine,
Fortune has instructed Hatch to adjust the engineering design and
move the bulk concentrate regrind circuit and secondary flotation
concentration process back to the Northwest Territories site. With the
flexibility of proceeding with, or deferring the downstream process
plant in Saskatchewan, Fortune
would not only have the ability to reduce up-front capital costs,
but also to stage the various unit operations as required to reduce
commissioning risks.
Other than the afore-mentioned changes to the design
engineering, the Technical Report for the mine and concentrator
portions of the report is nearing completion. Fortune and its
consultants are in the process of conducting reviews of the capital
and operating costs for the proposed Northwest Territories operations to optimize
costs where appropriate. These value improvements are being
incorporated into the Technical Report concurrently with Fortune's
discussions with the third-party refineries to determine the best
development scenario.
The engineering for the refinery in the updated Technical Report
was commenced after the mine and concentrator and is still in
progress.
Refinery Lands Rezoning:
Fortune has already received
its Environmental Assessment approvals for both the Northwest Territories and Saskatchewan sites where it has proposed to
build the mine/concentrator and refinery, respectively. The Company
has submitted its Comprehensive Development Report to change the
zoning for the lands for the refinery that Fortune owns in
Saskatchewan to Industrial. The
rezoning is required to construct and operate the refinery. The
lands purchased in Saskatchewan
were identified in consultation with the Saskatchewan Ministry of
Economy and the Saskatoon Regional Economic Development Authority.
The rezoning process is expected to be completed later this
year.
Tlicho All-Season Road:
The Government of the
Northwest Territories
("GNWT") is working in partnership with the Tlicho
Government to develop the 97-kilometre Tlicho All-Season Road
("Tlicho Road") and provide access from Highway 3 west of
Yellowknife to the community of
Whati. Fortune's NICO deposit and proposed mine is located
approximately 50 km north of Whati and the Company has already
received its Environmental Assessment approval for a spur road that
will service the mine. The Tlicho Road is required for mine
operations to allow metal concentrates to be trucked south to the
rail head at Hay River for railway
delivery to the proposed Saskatchewan refinery, and/or a third-party
processor in North America and/or
a Canadian port for export overseas. Construction of the NICO mine
facilities will be accomplished using the existing GNWT winter ice
road and an airstrip the Company plans to construct.
The Mackenzie Valley Environmental Impact Review Board has
already recommended that the Tlicho Road be approved, subject to
measures designed to mitigate potential environmental, social and
cultural impacts. The Responsible Ministers are expected to release
their decision on the Tlicho Road Environmental Assessment this
summer.
The Government of Canada has
agreed to provide 25% of the construction costs for the Tlicho Road
and the GNWT is funding the remaining 75% through a P3 funding
structure with one of three short-listed international construction
consortiums. The GNWT is expected to announce the selection of the
winning proponent this fall to construct, operate and maintain the
road. Construction of the Tlicho Road is expected to commence in
2019.
Provided Fortune receives the requisite financing for the NICO
Project and the remaining regulatory approvals in 2018,
construction of the mine facilities could begin in 2019 and is
expected to take approximately two years depending on ice-road
logistics. The refinery requires about 18 months for construction
unless it is deferred. This construction timeline would allow the
NICO Project to be in commercial production in the early 2020's as
the global automotive industry intensifies electric vehicle
production.
The disclosure of scientific and technical information
contained in this news release has been approved by Robin Goad, M.Sc., P.Geo., President and Chief
Executive Officer 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, from which certain information in this press release has
been extracted, has been filed on SEDAR and is available under the
Company's profile at www.sedar.com.
About Fortune Minerals
Fortune is a Canadian mining
company focused on developing the vertically integrated NICO
cobalt-gold-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 potentially
extend the life of the NICO mill.
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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, the timing and results of the updated
Technical Report, the completion of the TASR and timing thereof,
the Company's plans to secure project financing and offtake
agreements for the NICO Project, the rezoning of the Saskatchewan refinery lands and the timing
thereof, anticipated growth in the demand for cobalt and the
estimated timing for construction of the NICO Project .
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; the construction
of the TASR and the timing of its completion; the results of the
updated Technical Report; the rezoning of the Saskatchewan refinery lands and the timing
thereof; growth in the demand for cobalt; the time required to
construct the NICO Project; and the economic environment in
which the Company will operate in the future, including the price
of gold, cobalt and other by-product metals, anticipated costs and
the volumes of metals to be produced at the NICO Project). 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 finance and develop NICO on
favourable terms or at all, the updated Technical Report may take
longer than anticipated, uncertainties with respect to the receipt
or timing of required permits and agreements for the development of
the Nico Project, the Technical Report may not generate improved
economics for the NICO Project to the extent anticipated, the TASR
may not be constructed in a timely fashion or at all, the
construction of the NICO Project may take longer than anticipated,
the Company may not be able to secure offtake agreements for the
metals to be produced at the NICO Project, the inherent risks
involved in the exploration and development of mineral properties
and in the mining industry in general, the market for rechargeable
batteries and the use of stationary storage cells may not grow to
the extent anticipated, the future supply of cobalt may not be as
limited as anticipated, the risk of decreases in the market prices
of cobalt and other metals to be produced by the NICO project,
discrepancies between actual and estimated mineral resources or
between actual and estimated metallurgical recoveries,
uncertainties associated with estimating mineral resources and the
risk that even if such resources prove accurate the risk that such
resources may not be converted into mineral reserves, once economic
conditions are applied, the Company's production of cobalt and
other metals may be less than anticipated and other operational and
development risks, market risks and regulatory risks. 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
