New Mineral Resource model and mine plan in
preparation - Tlicho Road construction advancing and company
progressing refinery site evaluation, including two brownfield
options
Fortune Minerals Limited (TSX:FT) (OTCQB:FTMDF)
(“Fortune” or the “Company”)
(www.fortuneminerals.com) is pleased to provide an update of
current activities toward development of the NICO
Cobalt-Gold-Bismuth-Copper Project (“NICO Project”) in
Canada. The NICO Project consists of a planned mine and
concentrator in the Northwest Territories, and a related refinery
in southern Canada where the Company plans to process concentrates
from the mine to value added metals and chemicals. The Mineral
Reserves of the NICO Deposit contain cobalt and bismuth, both
metals identified on the U.S. Government and European Union
Critical Minerals Lists, plus more than one million ounces of gold
and byproduct copper (see Fortune news release, dated April 2,
2014). Development of the NICO Project would provide a reliable
North American vertically integrated supply of cobalt and bismuth
to mitigate supply chain concerns from geopolitical risks and
geographic concentration of supply in the Democratic Republic of
Congo and China. Fortune is continuing discussions with potential
strategic partners interested in the NICO development and
participating in the supply chain for transformative automotive
electrification with cobalt chemicals required to make the cathodes
of lithium-ion batteries together with a highly liquid gold
co-product.
The NICO Project was assessed in a Feasibility Study prepared by
Micon International Limited in 2014, based primarily on the
Company’s Front-End Engineering and Design study by Aker Solutions.
After assessing a contemplated 30% expanded project in a 2019
study, Fortune has refocused on a NICO Project development strategy
similar to the one used for the 2014 Micon Feasibility Study based
on a smaller higher grade project with lower capital costs. The
Company is also pursuing a number of opportunities to improve
project economics before completing an updated Technical
Report.
Resource Modelling The NICO Deposit has open pit and
underground Mineral Reserves totaling 33.1 million tonnes,
averaging 1.03 grams of gold per tonne, 0.11% cobalt, 0.14% bismuth
and 0.04% copper.
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.
Fortune has been working on an updated Mineral Resource model
for the NICO Deposit and has retained P&E Mining Consultants
Inc. (“P&E”) to complete this work. P&E has
reinterpreted the mineralized domain wireframes used to estimate
tonnage and grade in the deposit using a more constrained approach
to the mineralized material boundaries and reduce external and
internal dilution and grade smearing. The wireframes have also been
extended to surface where the NICO Deposit is known to outcrop and
to include some mineralized material at the interface with
overlying volcanic rocks. Some high grade gold intersections that
were missing in the previous model have also now been included.
Dykes that crosscut the NICO Deposit have also been modelled in
greater detail to segregate this waste material and further reduce
dilution. The grade interpolation method has also been adjusted
based on updated geostatistical information. The overall objective
of this work is to produce a model with higher grades and gold
content and reduced waste rock stripping during early years of the
mine life.
New Mine Plan Fortune is now developing a new mine plan
and schedule based on the updated Mineral Resource model with focus
on early access to higher grade material using a combination of
open pit and underground mining methods that was also pursued in
the 2014 Micon Feasibility Study. Open pit optimization and
scheduling will likely be augmented during early years of the mine
life with higher-grade gold-rich material sourced from deeper parts
of the NICO Deposit in stopes designed close to the existing ramp
system that was constructed for earlier test mining and minimize
underground pre-production development. The mine plan will also
include a grade control and stockpiling strategy to defer
processing of lower quality ores that was being pursued in 2019
before the Company terminated the expanded project study.
Tlicho Road Construction Construction of the C$200
million Tlicho All-Season Road to the community of Whati for the
Northwest Territories (“NWT”), federal and Tlicho
governments commenced in September 2019 and is progressing at a
very rapid pace. As of mid-February NWT land-use inspection reports
indicate that road construction had advanced to kilometre 71 of the
97 km project, and temporary bridges had been established at two of
the three river crossings. Fortune plans to construct an all-season
spur road from Whati to the mine site as part of the NICO Project
development in order to enable truck haulage of metal concentrates
to the railway at Hay River and delivery to the refinery for
processing. With greater certainty of the availability of the
Tlicho All-Season Road, Fortune is now planning to align NICO
Project construction using all-weather roads instead of
constructing the mine using a winter ice road. This is expected to
reduce capital costs and supply chain risks during construction of
the mine.
Refinery Collaboration and Brownfield Site Options
Fortune is evaluating a number of sites in southern Canada to
construct the NICO Project refinery. The Company has one site in
Saskatchewan where it holds an option to purchase the lands, but is
also examining two brownfield sites with permitted
hydrometallurgical process equipment that could materially reduce
capital costs for the development. Fortune will provide an update
of these site options when appropriate after it completes further
evaluation.
Critical Minerals The Canadian and United States
governments have signed a Joint Action Plan on Critical Mineral
Collaboration (the “Joint Action Plan”) to enable more North
American production of certain minerals identified by the U.S.
government as critical to economic and national security. Minerals
considered critical for this purpose have essential use in
important industrial and security applications, cannot be easily
substituted by other minerals, and their supply chain is threatened
by geographic concentration of production and/or geopolitical
risks. Cobalt is one of the metals identified as critical because
of its use in lithium-ion rechargeable batteries powering electric
vehicles, portable electronic devices and stationary storage cells
to make electricity use more efficient. Cobalt is also needed in
aerospace and cutting tool alloys, magnets and catalysts. More than
70% of current cobalt mine production is sourced from the
Democratic Republic of the Congo (“DRC”) and China refines
approximately 68% of this material.
Bismuth is also identified as a critical mineral for purposes of
the Joint Action Plan and the NICO Deposit contains 12% of global
bismuth reserves. Bismuth is an eco-metal used in the automotive
and pharmaceutical industries and as a non-toxic and
environmentally safe replacement for lead. China currently controls
approximately 75% of bismuth mine and refinery production.
More North American production of cobalt and bismuth is needed
to diversify the supply of both critical minerals and governments
are contemplating financial support to projects that are potential
near-term producers. Irrespective of the risks to current
production, Fortune is well positioned to align the NICO Project
development schedule with the expected deficit in cobalt supply in
2022-23 when demand for batteries in electric vehicles is
anticipated to outstrip production from existing mines and known
development projects.
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 Northwest
Territories. The Company has an option to purchase lands in
Saskatchewan where it may build the hydrometallurgical plant to
process NICO metal concentrates. Fortune also owns the Sue-Dianne
Copper-Silver-Gold Deposit located 25 km north of the NICO Project,
which is a potential future source of incremental mill feed to
extend the life of the NICO Project 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 construction of
the Tlicho All-Season Road, the Company’s plans to develop the NICO
Project, the preparation of an updated Technical Report for the
NICO Project, the Joint Action Plan 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 timing of completion of the Tlicho
All-Season Road; the timing of the updated Technical Report for the
NICO Project and the results thereof; 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 Tlicho All-Season Road may not be completed in the anticipated
time frame, the updated Technical Report for the NICO Project may
take longer than anticipated and the results thereof may not be as
positive as anticipated, the NICO Project may not receive the
benefit of any financing under the Joint Action Plan or any other
benefits therefrom, 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 resources prove accurate
the risk that such resources may not be converted into 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/20200303005324/en/
Fortune Minerals Limited Troy Nazarewicz Investor
Relations Manager info@fortuneminerals.com (519) 858-8188
www.fortuneminerals.com
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