Former steel fabrication plant with buildings
and facilities to materially reduce capital costs
Fortune Minerals Limited (TSX: FT) (OTCQB: FTMDF)
(“Fortune” or the “Company”)
(www.fortuneminerals.com) is pleased to announce that it has
entered into an option agreement with JFSL Field Services ULC
(“JFSL”), a wholly-owned subsidiary of a large international
engineering company, to purchase its former steel fabrication
plant, located in Lamont County within Alberta’s Industrial
Heartland northeast of Edmonton. Pursuant to the agreement, Fortune
will have six months to carry out additional due-diligence and
complete the purchase of the JFSL facility for C$5.5 million.
Fortune intends to acquire this brownfield site in order to
construct the hydrometallurgical refinery for the planned NICO
Cobalt-Gold-Bismuth-Copper mine in the Northwest Territories
(“NWT”). The proposed refinery would process concentrates
from the mine and produce cobalt sulphate for the rapidly expanding
lithium-ion rechargeable battery industry and their use in electric
vehicles (“EV’s”), portable electronic devices, and
stationary storage cells to make electricity use more efficient. In
addition to cobalt, the unique mineral assemblage of the NICO
deposit includes a highly liquid 1.1 million ounce in-situ gold
co-product, 12% of global bismuth reserves, and copper. The
vertically integrated NICO development (“NICO Project”)
would provide a reliable North American source of three Critical
Minerals produced responsibly with Canadian environmental-social
governance (“ESG”) values that are essential to support the
transformation to new technologies and the growing green
economy.
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"Cobalt, lithium and nickel are all minerals with huge demand in
the modern world. Fortune’s new refinery is exactly the type of job
creating, diversifying investment we envisioned with our mineral
strategy and action plan.” Jason Kenney, Premier of
Alberta
“Fortune Minerals’ new facility will add to Alberta’s mineral
refining capacity and will bring exciting economic opportunities to
the province. Alberta’s mineral strategy and action plan
capitalizes on our untapped potential and helps meet demand for the
critical and rare earth minerals which are essential to supporting
a low-carbon economy. Fortune Minerals’ investment announcement
demonstrates that our strategy is working. Our province has the
experienced workforce, and the necessary infrastructure to support
continued growth in the minerals sector, and there is no better
place for a new Critical Minerals refinery than Alberta’s
Industrial Heartland.” Sonya Savage, Minister of Energy,
Government of Alberta
“I am pleased to see continued investment and diversification in
the Industrial Heartland with Fortune Minerals’ plan to establish a
new cobalt refinery which will also have the future potential to
recycle metals from post-consumer batteries from across Alberta.
This project will create well-paid jobs for Albertans and continued
prosperity for my constituency.” Jackie Armstrong-Homeniuk, MLA
for Fort Saskatchewan-Vegreville
“The planned NICO Project in Alberta’s Industrial
Heartland supports our region’s robust diversification efforts and
highlights our value proposition for companies looking to execute
their capital growth strategies, develop new technologies and
advance their ESG priorities. Fortune Minerals’ innovative vision
and metallurgical process technology for the NICO Refinery will
promote further energy supply chain integration within North
America, solidifying Alberta and Alberta’s Industrial Heartland as
a critical jurisdiction for Canada’s energy future.” Mark
Plamondon, Executive Director of Alberta’s Industrial Heartland
Association
“More economic growth and diversification in Alberta’s energy
and tech sectors shows our competitive edge in action. This
includes access to highly skilled labour, resources, and
transportation links from Alberta’s globally recognized Industrial
Heartland and combined with our business-friendly environment
thanks to the Alberta tax advantage and a streamlined regulatory
framework.” Rick Christiaanse, CEO of Invest Alberta
Corporation
Refinery Site
The JFSL facility is situated on 76.78 acres of land adjacent to
the Canadian National Railway (“CN Rail”) in Alberta’s
Industrial Heartland, an association of five municipalities
northeast of Edmonton with planning approvals and tax incentives
designed to attract heavy industry. This former steel fabrication
plant includes site improvements and more than 40,000 square feet
of serviced shops and buildings that are anticipated to materially
reduce capital costs for the planned NICO Project development.
Key Site Attributes
- Brownfield location in the Edmonton area with geographic
synergies to the NICO mine in the NWT and existing facilities that
can be integrated into the planned refinery
- Aligns with key Canadian and Alberta government policy
objectives for western economic diversification, value-added
processing in Canada, and greater domestic participation in the
North American Critical Minerals supply chain for battery materials
and EV’s
- Complements the Alberta Government Mineral Resource Development
Act and the objectives identified in the new minerals strategy and
action plan
- Supports the Canada–U.S. Joint Action Plan on Critical Minerals
Collaboration
- Lowest combined federal and provincial tax rate in Canada
- Indicative interest from federal and provincial governments for
financial support
- Industrial Heartland planning approvals to attract heavy
industry and municipal tax incentives keyed to capital
investment
- Access to CN Rail and intermodal transportation hubs to receive
concentrate, reagents and other plant feeds, to ship products, and
facilitate future diversification into the recycling business
- Local services and utilities including power, natural gas,
process and potable water, and a third party-owned site to dispose
of the process residue
- Proximity to primary reagent suppliers including lime and
acid
- Commutable pool of engineers, trades and skilled labour to
construct and operate the refinery
- Proximity to other Critical Minerals sources and process
facilities to enable geographic vertical integration of the
Canadian battery materials supply chain and attract investment in
downstream industries
NICO Project
The NICO Project is comprised of a planned open pit and
underground mine and mill in Canada’s NWT and a related
hydrometallurgical refinery in Alberta. Fortune has expended more
than C$135 million to advance the NICO Project from an in-house
discovery to a near-term Critical Minerals producer. The Company
has received environmental assessment approval and the Type “A”
Water License to construct and operate the NICO mine and
concentrator. The recent completion of the Tlicho highway to the
community of Whati is a key enabler for the NICO development. This
C$213 million, 97-kilometre, public, all-season road, together with
the spur road Fortune plans to construct, will allow metal
concentrates to be trucked from the mine to the rail head at 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.
The NICO Project was assessed in a positive Feasibility Study in
2014 by Micon International Limited that demonstrated an attractive
rate of return for the development. Key economic metrics at that
time were capital costs of ~C$600 million, including ~C$250 million
for the refinery, annual revenues of ~C$200 million, C$100 million
in EBITDA, 50% margins, and a negative cash cost for cobalt net of
by-product credits. These estimates will be updated to reflect
current costs, escalation, and revised commodity prices after
completion of the refinery site purchase and incorporation of other
project optimizations that Fortune has recognized to produce a more
financially robust project.
The NICO development is anticipated to have direct employment
for 250 workers at the mine and an additional 100 jobs at the
refinery. Indirect jobs are expected to be double the direct jobs
using a standard 2:1 industry employment multiplier. The economic
spinoffs for the refinery would be greater if the refinery
processes additional feed sources and recycled materials and/or the
region attracts investment from the battery and automotive
industries.
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.
Critical Minerals
The Canadian and United States governments have signed a Joint
Action Plan on Critical Mineral Collaboration to enable greater
North American production of 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. Cobalt is an ‘Energy Metal’ and particularly
important Critical Mineral due to its 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 150,000 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 refinery
production and 80% of cobalt chemical supply.
Bismuth is also identified as a Critical Mineral with unique
properties, including a low melting temperature, high density and
it expands when cooled, properties that are leveraged by the
automotive industry for glass frits, anti-corrosion coatings and
metallic paints and pigments. Bismuth is also 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 solder, galvanizing and brass alloys,
free-machining steel and aluminum, paint, glass, ceramic glazes,
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 although the NICO deposit contains the World’s
largest known Mineral Reserve.
Additional North American production is needed to diversify the
supply chains for both cobalt and bismuth. Governments are
therefore supporting potential near-term producers and processors
to ensure availability of the key raw materials needed to sustain
domestic industries. Identification of the new refinery site was
one of the few remaining milestones needed to complete the NICO
Project development and solidify Fortune’s participation in the
geographic vertical integration of the North American battery
materials supply chain.
About Fortune Minerals:
Fortune is a Canadian mining company focused on developing the
NICO Cobalt-Gold-Bismuth-Copper 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 exercise of the
option by the Company and the purchase of the JSFL site, the
construction of the proposed hydrometallurgical refinery at the
JSFL site, 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 successful
completion of the Company’s due diligence investigations on the
JSFL site, the Company’s ability to secure the necessary financing
to fund the exercise of the option and complete the purchase of the
JSFL site, 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
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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220124005397/en/
For further information: Fortune Minerals Limited Troy
Nazarewicz Investor Relations Manager info@fortuneminerals.com Tel:
(519) 858-8188 www.fortuneminerals.com
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