7 May 2020
Fortune Minerals Limited is providing an update of current work to advance the NICO Cobalt-Gold-Bismuth-Copper Project (“NICO Project”) in Canada during the Coronavirus pandemic. Fortune is complying with government protocols, including temporary closure of the Company’s head office, prohibiting non-essential travel, and employees are social distancing and working remotely from their homes. Technical work has advanced on the NICO Project during this period, primarily by employees with some assistance from engineering consultants. Fortune has also received financial assistance through government programs available to it, and has outstanding applications pending for additional support. The Company is also reducing costs where it can to preserve cash until confidence returns to the capital markets, which it normally depends upon for its source of working capital.
The NICO Project was assessed in a Feasibility Study prepared by Micon International Limited (“Micon”) in 2014, based primarily on the Company’s Front-End Engineering and Design study led by Aker Solutions and a proposed project financing with Procon Group which was not completed. The Mineral Reserves for the NICO Project total 33.1 million tonnes, averaging 1.03 grams of gold per tonne, 0.11% cobalt, 0.14% bismuth and 0.04% copper (see News Release, dated April 2, 2014). Cobalt and bismuth are both metals identified on the United States (“U.S.”) and European Union Critical Minerals Lists. Minerals considered critical 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. The Canadian and U.S. governments have signed a Joint Action Plan on Critical Mineral Collaboration to enable more North American production of minerals identified as critical to economic and national security, The Mineral Reserves for the NICO Project also contain more than one million ounces of gold, a highly liquid and countercyclical co-product that makes this project stand out relative to other cobalt producers and development projects.
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.
After assessing a contemplated 30% expansion of the NICO Project in 2019, Fortune has refocused the development strategy using a plan similar to the one used in the 2014 Micon Feasibility Study. This plan was based on combined open pit and underground mining transitioning to only open pit mining, a mill throughput rate of 4,650 tonnes of ore per day, and processing of metal concentrates at a hydrometallurgical refinery in southern Canada. With development of the NICO project, Fortune would become a Canadian producer of cobalt sulphate, gold doré, bismuth ingots and copper precipitate with supply chain transparency and custody control of the metals from ore through to the production of value-added products. Before completing an updated Technical Report, Fortune is pursuing opportunities to improve project economics and this work is summarized in the full release.