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Fortune Minerals Limited has issued major update on ambitious NICO project

Published by
Global Mining Review,

Fortune Minerals Limited has an update of activities for the NICO Cobalt-Gold-Bismuth-Copper Project in Canada.

NICO is known as a vertically integrated development consisting of a planned mine and concentrator in the Northwest Territories and refinery near Saskatoon. That is where the concentrate will be processed to battery grade cobalt sulfate, gold, bismuth metal and oxide, and copper.

About 60% of NICO’s projected revenues is cobalt when based on current commodity prices with NICO reserving more than 1.1 m oz. of gold and roughly 12% of the global bismuth reserves. NICO was assessed in a positive Feasibility Study in 2014. This study is being updated by Hatch Ltd. and Micon International Limited in order to assess the economics for the project at current commodity price and exchange rate assumptions, and capital and operating costs. NICO has already received its environmental assessment approvals in the Northwest Territories and Saskatchewan and the major mine permits. Fortune has engaged PricewaterhouseCoopers Corporate Finance Inc. to arrange the project financing through a combination of strategic partnerships, debt and equity.

This comes as the market for cobalt receives a significant, 20-year compounded annual growth of approximately 6%. This is combined with the commodities research unit reports that show current annual mine production at 117 000 t. Demand growth for cobalt is expected to accelerate due to its use in lithium-ion batteries (which is currently 50% of the market), since they are needed to power portable electronic devices, electric vehicles and stationary cells to store electricity from renewable energy (primarily wind and solar), and off-peak charging from the electrical grid. Fortune are using examples of large firms to explain the increasing demand for cobalt, one being Exane BNP Paribas who project 300,000 t of cobalt will be required to satisfy the demand by 2025.

The NICO deposit underwent a feasibility study in 2013, headed by the company to examine the proven and probable mineral reserves. The report estimates the deposit totals 33 mil/t containing 82.3 mil/lbs of cobalt (37 341 mil/t), 1.11 mil/oz of gold, 102.1 mil/lbs of bismuth (46 325 mil/t) and 27.2 mil/lbs of copper (12 341 t). The Mineral Reserves are sufficient to support a 21-year mine life at the 4 650 t of ore per day production rate used in the 2014 Feasibility Study.

The study was recently updated by Hatch and Mitchon, and indicates that the NICO project is proceeding well for the initially planned scope of work for the mine and concentrator in the Northwest Territories. However, two metallurgical testwork programmes were required for Hatch to properly size equipment and conduct the detailed design work for the copper cementation circuit and the manganese removal step in the cobalt sulfate circuit for the refinery in Saskatchewan. This work is currently in progress at SGS Lakefield Research Limited, but due to laboratory congestion will not be completed until the end of October. The metallurgical flowsheet for NICO has previously been confirmed from piloting, and a high quality cobalt sulfate heptahydrate product has already been produced that meets the specifications of the rechargeable battery industry.

Finally, Fortune reports that it has completed the winter, spring and summer phases of field activities at the NICO mine site that were required by Wek'eezhii Land and Water Board prior to the commencement of construction of the mine. This additional baseline monitoring was required pursuant to the Company's water license and consisted of collecting additional water quality, sediment, benthic invertebrate and fish population data. The final water quality sampling for this programme will be completed in September.

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