NICO optimizations and refinery site
negotiations advancing for Project Finance study
Fortune Minerals Limited (TSX: FT) (OTCQB: FTMDF)
(“Fortune” or the “Company”)
(www.fortuneminerals.com) is pleased to report the results of its
Annual Meeting of Shareholders held on June 22, 2021 (the
“Meeting”), and provide a summary of work on its 100% owned
NICO Cobalt-Gold-Bismuth-Copper project (‘NICO Project”) in
Canada. The NICO Project is a planned vertically integrated
Critical Minerals development comprised of a mine and concentrator
in the Northwest Territories (“NWT”) and a
hydrometallurgical refinery at a site in Alberta or Saskatchewan,
producing cobalt sulphate, gold, bismuth ingots and oxide, and
copper cement. The NICO Project is one of the most advanced cobalt
development assets outside of the Democratic Republic of Congo
(“Congo”) to meet the growing demand in lithium-ion
batteries powering electric vehicles, portable electronics and
stationary storage cells, and mitigate supply issues from
geographic concentration of production and policy risks associated
with the current supply sources. The unique metal assemblage of the
NICO Deposit includes primary cobalt, a 1.1 million ounce in-situ
gold co-product, 12% of global bismuth reserves, and by-product
copper. Fortune also owns a 100% interest in the nearby Sue-Dianne
Copper-Silver-Gold satellite deposit (“Sue-Dianne
Deposit”).
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NICO Project Development: The focus of NICO Project work
has been directed at development activities, assessing various
optimizations and refinery sites to produce a more financially
robust project since the completion of the Micon International
Limited (“Micon”) Feasibility Study in 2014. The NICO
Project has received environmental assessment approval and the
major mine permits for the facilities in the NWT and the Company
has completed a Socio-Economic Agreement with the NWT Government.
The preferred refinery site is also permitted and has existing
facilities to materially reduce capital costs for the planned
vertically integrated development. The NICO Project work is
summarized as follows:
NWT Mine Infrastructure The C$200
million, government funded Tlicho Highway to the community of Whati
is nearing completion and is expected to open to the public later
this year. The NICO Project includes construction of a 50-kilometre
spur road from Whati to the mine to allow metal concentrates to be
trucked to the railway at Hay River or Enterprise, NWT for delivery
to the refinery by train. Fortune has completed an Access Agreement
with the Tlicho Government, setting out the terms and conditions
for construction of this road. With the completion schedule of the
Tlicho Highway certain, construction of the mine and concentrator
can now be planned with all-season road access, reducing equipment
redundancy and the costs for facilities that are no longer
required, and mitigate supply chain risks.
A new transload facility is under construction at Enterprise,
NWT, providing Fortune with a second railway loading option. This
would also eliminate 80 km of round trip trucking of metal
concentrates, and reduce the transportation costs for other
materials delivered to the mine during construction and
operations.
The NWT Government is proposing to connect the Yellowknife grid
to the Talston grid south of Great Slave Lake where there is
surplus hydro power. If this is completed, Fortune could construct
a 25-km powerline to Snare Hydro instead of building its own power
plant using liquid natural gas-fueled generators.
Mineral Resource Optimization The
NICO Deposit contains Proven and Probable Open Pit and Underground
Mineral Reserves totaling 33 million tonnes containing 1.1 million
ounces of gold, 82.3 million pounds of cobalt, 102.1 million pounds
of bismuth, and 27.2 million pounds of copper. In 2020, Fortune and
P&E Mining Consultants Inc. completed an updated Mineral
Resource model with more constrained mineralization boundaries to
reduce grade smearing from internal and external modelling dilution
and providing better differentiation between high and low grade
Mineral Resource blocks for mine planning. In addition, the Mineral
Resource model was extended to surface where the NICO Deposit is
known to outcrop and also now includes some higher grade drill
intersections that were previously omitted.
Mine Plan and Scheduling In 2020,
Fortune prepared a new Mine Plan and Schedule focused on earlier
access and processing of higher margin ores. The 2014 Micon
Feasibility Study contemplated combined open pit and underground
mining during the first two years of the 20-year mine life to
augment lower grade open pit ores with processing of gold-rich,
higher grade ores mined by underground methods close to the
existing decline ramp. With better differentiation between high and
low grade resource blocks the underground part of the mine has been
expanded from two years to three to accelerate processing of higher
grade ores.
The open pit Mine Plan has been re-optimized to provide earlier
access to ores with higher cobalt and gold content, lower bismuth,
and targeting sulphide ores that produce higher cobalt concentrate
grades. A grade control and stockpiling strategy has also been
developed to defer processing of ores with lower cash flow margins.
The identification of additional near-surface ores will reduce
waste rock pre-stripping in the initial years of the mine life.
Mining operating costs were also updated to incorporate the new
open pit design with shorter cycle times reducing equipment
operating costs.
Capital Cost Review Fortune is
reviewing capital cost estimates from earlier engineering studies
and investigating strategies for reducing initial and sustaining
capital costs. The availability of the Tlicho Highway during
construction will allow the Company to eliminate some facilities
that are no longer required for winter ice road construction. The
all-season road is also expected to allow the construction
timelines to be reduced from three to two years. Equipment
selection is being reviewed and changes planned where there are
practical options requiring lower installation costs or, more
modest facilities. Capital costs associated with construction of
parts of the combined tailings and waste rock storage area have
also been deferred by two years to reduce initial capital
costs.
New Refinery Site Significant
efforts have been directed toward evaluation of various sites in
western Canada to construct the NICO Project hydrometallurgical
refinery. The priorities were focused on permitted brownfield
locations with existing facilities and personnel to materially
reduce the capital and operating costs for the refinery and to
accelerate development. Negotiations are in progress with the owner
of the preferred site and an announcement will be made if, and when
an agreement is completed. NICO concentrates are contemplated to
provide the base load feed for the new refinery circuit with
production augmented with feeds from other mines, waste residues
from chemical plants, and scrap metals. The future vision for this
facility is to diversify the business plan to also include the
collection and recycling of spent batteries to recover the
contained metals.
Process Residue Disposal A process
residue disposal solution was needed to accelerate development and
mitigate permitting risks for the preferred refinery site. Fortune
has received indicative terms from a large waste disposal and
environmental services company in western Canada to dispose of the
refinery process residue. This will also mitigate long-term legacy
issues associated with a Company-owned facility.
Critical Minerals: The cobalt and bismuth contained in
the NICO Deposit are identified as Critical Minerals by the United
States (“US”) and European Union (“EU”) governments,
having essential use in new technologies and defense, and concerns
about supply chains due to geographic concentration of production,
political uncertainty, and policy risks with the current supply
sources. In 2021, Natural Resources Canada released the Canadian
Critical Minerals list, which in addition to cobalt and bismuth,
also includes copper.
The cobalt market is about 150,000 tonnes per annum and
consumption is expected to more than double this decade from
accelerating demand in lithium-ion rechargeable batteries, enabling
the transformation to electric vehicles and stationary storage of
electricity. Cobalt is also used in aerospace alloys, cutting tools
and permanent magnets, as well as chemicals to make pigments and
catalysts for plastics, rubber and to refine petroleum.
Approximately 71% of global cobalt production is mined in the Congo
and more than half of this is controlled by Chinese companies.
China also controls 80% of the world’s refined cobalt chemical
supply.
Bismuth is used primarily in the automotive industry for
windshield and glass frits, anti-corrosion coatings and paints, and
it is also used to make pharmaceuticals and alloys and compounds
where dimensional stability or expansion during cooling is
required. Consumption of bismuth is also growing as a non-toxic and
environmentally safe replacement for lead in plumbing brasses and
solders used in potable drinking water sources, electronic solders,
free-machining steel and aluminum, paint pigments, ceramic glazes,
photovoltaics, ammunition and fishing weights. The bismuth market
is approximately 20,000 tonnes per annum and 80% of the supply is
controlled by China.
Canada and the US have announced a Joint Action Plan on Critical
Mineral Collaboration advancing both countries’ interest in
securing supply chains for the minerals needed in new technologies
and to promote more North American production. Following the G7
summit in June, 2021, Canada and the EU launched a new partnership
to secure supply chains for Critical Minerals and reduce dependence
on China, while also improving transparency of raw material
supply.
Government Engagement and Financing
Fortune is engaged with the Canadian and US governments, provincial
and territorial governments, and municipalities to accelerate
development of important near-term Critical Minerals projects. The
Company is interested in securing financial support for the
Feasibility Study update assessing the new refinery site and
optimizations. Governments are also being solicited to participate
in the project finance for the NICO project through various
programs and capital pools designed to promote economic growth,
western Canada diversification, process and product innovation, and
Critical Minerals supply. Fortune was recently invited by the US
Embassy in Ottawa to present at a virtual seminar later this month
to Tier 1 US manufactures involved in defense, mining, aerospace,
automotive, energy and technology, and to strengthen opportunities
for vertical supply chain integration with Canada.
Fortune continues to advance discussions with potential private
sector strategic partners that want a reliable, transparent and
sustainable supply of Critical Minerals for their business or, for
investment purposes.
Field Activities: The Covid-19 pandemic has presented
companies with a 15-month challenge for advancing mineral projects
due to lockdowns, travel restrictions, and employees working
primarily from home. Fortune was able to complete a geophysical
program in 2020 between lockdowns consisting of induced
polarization and magnetometer surveys over the east end of the NICO
Deposit, which identified five high-priority targets for follow-up
drilling and potential resource expansion. The 2020 program was
supported in part by a NWT Government Mineral Incentive Program
grant of C$144,000, and the Company was awarded the same amount for
work planned in 2021.
The NICO Deposit and the Sue-Dianne Deposit are classified as
iron oxide copper-gold (“IOCG”)-type mineral deposits where
global analogues typically occur in clusters of very large ore
bodies. They include the ‘super giant’ Olympic Dam Mine in South
Australia, the Carajas, Brazil deposits, and the Candelaria
District deposits in Chile, which indicate the significant
exploration potential of the NICO leases and surrounding areas.
Next Steps: Fortune’s near-term priorities are to
complete the site selection and negotiations for the NICO Project
refinery collaboration. Engagement with governments are continuing
to secure financial support for the updated feasibility study and
project finance. Discussions are also continuing with potential
strategic partners and are expected to accelerate once the refinery
site is finalized.
Fortune is now looking at options to reprocess NICO mill
tailings to recover a portion of the gold that is not already
captured in the gravity and flotation circuits. A drill program is
also planned for later this year to test the high priority targets
identified in the 2020 geophysics program.
Annual Meeting Results: Fortune reports that the nominees
listed in the management information circular for the Meeting were
elected as directors. Detailed results of the vote based on proxies
received are set out below:
Nominee
Votes For
% For
Votes Withheld
% Withheld
Carl Clouter
72,906,551
91.09%
7,135,747
8.91%
Robin E. Goad
73,602,797
91.95%
6,439,501
8.05%
Glen Koropchuk
73,204,256
91.46%
6,838,042
8.54%
John McVey
74,935,597
93.62%
5,106,701
6.38%
Mahendra Naik
73,567,097
91.91%
6,475,201
8.09%
David Ramsay
73,459,818
91.78%
6,582,480
8.22%
Edward Yurkowski
74,092,447
92.57%
5,949,851
7.43%
Shareholders also approved the appointment of Fortune’s
auditors.
Due to Ontario government restrictions on the size of group
gatherings to reduce the risk of spreading the Coronavirus, there
was no corporate presentation provided at the Meeting. Shareholders
wishing to speak with management can contact the Company through
Troy Nazarewicz, Fortune’s Investor Relations Manager at
info@fortuneminerals.com .
For more detailed information about the NICO Mineral Reserves
and certain technical information in this news release, please
refer to the Technical Report on the NICO Project, 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 which has been filed on SEDAR and is available under the
Company's profile at www.sedar.com.
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.
About Fortune Minerals: Fortune is a Canadian mining
company focused on developing the NICO Cobalt-Gold-Bismuth-Copper
Project in the NWT. The Company has an option to purchase lands in
Saskatchewan where it may build the hydrometallurgical plant to
process NICO metal concentrates and is also evaluating other
brownfield locations with existing facilities to reduce project
capital and operating costs. In addition, Fortune owns the
satellite Sue-Dianne Copper-Silver-Gold Deposit located 25 km north
of the NICO Project mine site and is a potential future source of
incremental mill feed to extend the life of the NICO mill and
concentrator.
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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 potential for
expansion of the NICO Deposit, the Company’s plans to conduct a
drill program during 2021, the planned opening of the Tlicho
Highway, the construction of a new transload facility at
Enterprise, NWT, the possible connection of the Yellowknife
electrical grid to the Talston grid south of Great Slave Lake, the
planned update to the 2014 Feasibility Study, the possibility of
obtaining financial support for the NICO Project through various
government capital pools, the Company’s plans to develop the NICO
Project and the potential for the Sue-Dianne property to provide
incremental mill feed to 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 conduct and complete the planned drill program; the timing of
the opening of the Tlicho Highway, the Company’s ability to secure
a site in southern Canada for the construction of a NICO Project
refinery; the Company’s ability to arrange the necessary financing
to continue operations and develop the NICO Project; the receipt of
all necessary regulatory approvals for the construction and
operation of the NICO Project and the related hydrometallurgical
refinery 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 planned 2021 drill program may not
result in a meaningful expansion of the NICO Deposit, the new
transload facility at Enterprise, NWT may not be completed when
anticipated, , the Yellowknife electrical grid may not be connected
to the Talston grid south of Great Slave Lake, the planned update
to the 2014 Feasibility Study may take longer than anticipated to
be completed and the economic benefits to be reflected in such
update may be less than anticipated, the COVID-19 pandemic may
interfere with the Company’s ability to conduct the drill program,
the NICO Project may not receive the benefit of any financing under
the published initiatives of the United States and European Union
with respect to critical minerals or from any other government
sources, the Company may not be able to secure a site for the
construction of a refinery, the Company may not be able to finance
and develop NICO on favourable terms or at all, uncertainties with
respect to the receipt or timing of required permits, approvals and
agreements for the development of the NICO Project, including the
related hydrometallurgical refinery, 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 Sue-Dianne Property may not be developed to
the point where it can provide mill feed to 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 products that use cobalt or bismuth may not grow to the
extent anticipated, the future supply of cobalt and bismuth may not
be as limited as anticipated, the risk of decreases in the market
prices of cobalt, bismuth 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
Reserves and the risk that even if such Mineral Resources prove
accurate the risk that such Mineral Resources may not be converted
into Mineral Reserves once economic conditions are applied, the
Company’s production of cobalt, bismuth 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210623005482/en/
For further information please contact: Fortune Minerals
Limited Troy Nazarewicz Investor Relations Manager
info@fortuneminerals.com Tel: (519) 858-8188
www.fortuneminerals.com
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