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.
Like our news? Click-to-Tweet.
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 Riverfor railway delivery to the proposed Saskatchewan refinery, and/or a third-party processor in North America …read more
From:: Investing News Network