The NICO Project is one of the few advanced
cobalt developments in the world to meet the growing demand in
lithium-ion batteries powering electric vehicles and portable
electronics
Fortune Minerals Limited (TSX: FT) (OTCQB: FTMDF)
(“Fortune” or the “Company”)
(www.fortuneminerals.com) is pleased to report on the C$3.8 billion
of financial support for Critical Minerals announced in last week’s
Government of Canada budget for 2022 (“2022 Budget”). The
funds are being allocated to accelerate domestic production and
processing of Critical Minerals, particularly cobalt, nickel and
lithium used in the manufacture of lithium-ion rechargeable
batteries for electric vehicles (“EV’s”), portable
electronics, and stationary storage cells to make electricity use
more eficient. Fortune’s 100%-owned NICO cobalt-gold-bismuth-copper
project (“NICO Project”) is a vertically integrated Critical
Minerals development comprised of a planned open pit and
underground mine and mill in Canada’s Northwest Territories
(“NWT”) and a planned hydrometallurgical refinery in
Alberta. The NICO Project is one of the few advanced cobalt
development assets in the world that can be developed in the
timelines required to meet current cathode chemistries and will
benefit from implementation of these programs. The Mineral Reserves
for the NICO deposit also include 1.1 million ounces of gold, 12%
of global bismuth reserves, and copper as a minor by-product.
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The 2022 Budget recognizes the importance of a stronger domestic
raw material supply chain for North American industries involved in
the transition to new technologies and the growing green economy.
Greater geographic vertical integration of raw material supplies
will capture more value-added processing in Canada, reduce risks
and costs associated with long and unreliable supply chains, and
will provide munafacturers with a transparent source of Critical
Minerals produced with Canadian environmental-social governance
(“ESG”) values. Critical Mineral developments can be
encumbered by higher capital costs due to the requirement for
downstream process plants that come with additional permitting and
regulatory risks. Some northern projects are also impacted by an
infrastructure deficit that requires additional investment by
companies to construct their own facilities. The 2022 Budget
provides financial supports to address many of these concerns.
2022 Budget Critical Mineral Support Highlights:
- C$1.5 billion to invest in new Critical Minerals projects, with
priorities for mineral processing, materials manufacturing, and
recycling for key mineral and metal products in the battery and
rare-earths supply chains;
- C$80 million for public geoscience and exploration programs to
help find the next generation of Critical Minerals deposits;
- Doubling of the Mineral Exploration Tax Credit (“METC”)
for targeted Critical Minerals, including nickel, copper, cobalt,
rare earths and uranium;
- C$1.5 billion for infrastructure investments to unlock new
mineral projects in key regions;
- C$144 million for research and development to support
responsible extraction and processing of Critical Minerals;
- C$10 million renewal for the Centre of Excellence on Critical
Minerals for three additional years;
- C$40 million to support northern regulatory processes to review
and permit Critical Minerals projects;
- C$70 million for global partnerships to promote Canadian mining
leadership;
- C$15 billion to support the Canada Growth Fund to restructure
supply chains in areas important to Canada's future prosperity
including the natural resources sector.
Fortune is encouraged that the 2022 Budget allocates significant
funding to align with government policy objectives to grow the
domestic Critical Minerals supply chain. The Company is currently
engaged with the Canadian and Alberta governments to secure their
support for an accelerated development of the NICO Project. Fortune
was recently invited by Invest In Canada to present at a an
investment conference in Dubai that included a pre-recorded
introduction to the NICO Project (access video here.).
NICO Project:
The NICO Project is an advanced development stage asset to
provide a reliable North American source of three Critical Minerals
(cobalt, bismuth and copper). Fortune has expended more than C$135
million to advance the NICO Project from an in-house discovery to a
near-term producer with a 20-year supply of Critical Minerals. The
Company has received environmental assessment approval and the Type
“A” Water License to construct and operate the NICO mine and
concentrator. Recent completion of the C$200 million Tlicho public
highway to the community of Whati is a key enabler for the NICO
development. This road, together with the spur road Fortune plans
to construct, will allow metal concentrates to be trucked to Hay
River or Enterprise, NWT for railway delivery to the Company’s
planned refinery in Alberta. An important economic attribute of
NICO ores is a high concentration ratio from simple flotation,
which allows the mill feed to be reduced to ~4% of the original
mass for lower cost transportation and downstream processing of a
homogeneous sulphide concentrate at the refinery.
In January, 2022, Fortune entered into an option agreement with
JFSL Field Services ULC, a wholly-owned subsidiary of a large
international engineering company, to purchase a former steel
fabrication plant, located in Lamont County within Alberta’s
Industrial Heartland northeast of Edmonton. The plant has 40,000
square feet of serviced shops and buildings located close to
sources of reagents, services and a commutable labour pool to
materially reduce costs for the hydrometallurgical refinery.
Critical Minerals:
The Canadian and United States (“U.S.”) governments have
signed a Joint Action Plan on Critical Mineral Collaboration to
enable greater North American production of the minerals identified
as critical to economic and national security. Minerals considered
critical for this purpose have essential use in important
industrial and defense applications, cannot be easily substituted,
and their supply chains are threatened by geographic concentration
of production and/or geopolitical risks.
In addition to the support announced in the 2022 Budget, U.S.
President Joe Biden recently invoked the Defense Production Act
(“DPA”) to accelerate the build-out of a domestic battery
materials supply chain. The measure is being tailored to future
energy metals such as cobalt, lithium and nickel as energy
transitions from fossil fuels to renewables. "To promote the
national defense, the United States must secure a reliable and
sustainable supply of such strategic and critical materials," said
President Biden. The U.S. relies on imports for Critical Minerals,
often from what Biden termed "unreliable foreign sources". Demand
for battery materials is set to increase exponentially in the
coming years as automakers increase EV production and build out the
required capacity. The DPA is intended as a federal government
accelerator for a domestic battery metals supply chain that is
still in its infancy. The real significance of invoking the DPA,
however, is that it elevates battery metals to the top of the U.S.
critical materials supply list. Further, U.S. domestic investment
is expected to go hand in hand with mineral alliances, particularly
with the European Union, Australia and Canada, the latter which
itself is preparing a major investment drive into the battery
supply chain.
Cobalt is an ‘Energy Metal’ due to its primary consumption in
lithium-ion batteries. It is also consumed in aerospace, magnet and
cutting tool alloys, and pigments and catalysts needed in chemical
processes. The cobalt market is currently more than 160,000 tonnes
of refined metal, although analysts project that consumption will
grow to between 300,000 and 400,000 tonnes by the end of this
decade, primarily due to demand from EV’s. More than 70% of cobalt
mine production is currently sourced from the Democratic Republic
of the Congo, more than half of which is controlled by Chinese
state-owned corporations. China also controls 68% of cobalt
refinery production and 80% of cobalt chemical supply.
Bismuth is also a Critical Mineral with unique properties,
including low melting temperature, high density and it is one of
the few metals that expands when cooled, properties that are
leveraged by the automotive industry for glass frits,
anti-corrosion coatings, and metallic paints and pigments. Bismuth
is non-toxic and has anti-bacterial properties making it ideal for
use in pharmaceuticals such as Pepto-Bismol® and some medical
devices. The bismuth market is approximately 20,000 tonnes per
annum, but has growing demand as an ‘Eco-Metal’ and environmentally
safe replacement for lead in solders, galvanizing and brass alloys,
free-machining steel and aluminum, paint, glass, ceramic glazes,
radiation shielding, cosmetics, solar voltaics, ammunition, and
fishing sinkers. Many of these applications have been developed
because of legislation banning or restricting the use of toxic
metals including lead. China controls approximately 75% of current
bismuth mine and refinery production and the NICO deposit contains
the World’s largest known Mineral Reserve.
Copper is also identified as a Critical Mineral by Canada. The
gold contained in the NICO deposit provides a countercyclical and
highly liquid co-product.
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 Critical Minerals project in the
NWT and Alberta. Fortune also owns the satellite Sue-Dianne
copper-silver-gold deposit located 25 km north of the NICO deposit
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 development of
the NICO Project and the proposed hydrometallurgical refinery, the
potential for expansion of the NICO Deposit and the Company’s plans
to develop 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 complete
construction of a NICO Project refinery; the Company’s ability to
arrange the necessary financing to continue operations and develop
the NICO Project; the support of the federal and/or provincial
government for 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 2021 drill program may not result in a meaningful expansion of
the NICO Deposit, the COVID-19 pandemic may interfere with the
Company’s ability to conduct the drill program, the Company may not
be able to complete the purchase of the JSFL site and 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20220412005460/en/
Fortune Minerals Limited Troy Nazarewicz Investor
Relations Manager info@fortuneminerals.com Tel: (519) 858-8188
www.fortuneminerals.com
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