Fortune readies Nico for development

Fortune Minerals Ltd. July 11 is pleased to provide an update on the progress of environmental work and rezoning efforts needed to support construction of the Nico cobalt-gold-bismuth-copper project in Canada, which could begin as early as next year.

Over the past two decades, Fortune has invested more than C$115 million advancing Nico from an in-house discovery to a development stage project that includes a planned mine and concentrator in the Northwest Territories and refinery in Saskatchewan.

According to a feasibility study published in 2014, mineral reserves at Nico will support a 21-year mine that would average 1,615 metric tons of battery-grade cobalt; 41,300 ounces of gold; 1,750 metric tons of bismuth; and 265 metric tons of copper per year.

Fortune has already received its environmental assessment approval and the major permits needed to build the mine and refinery and is working to secure financing for the development.

With the assistance of residents of Whati, a community about 50 kilometers (30 miles) south of Nico, Fortune completed additional studies on hydrology, water quality, aquatic invertebrates, sediment chemistry, fish population and fish flesh chemistry in the Marian River and lakes near the Nico project mine site. The data collected has been analyzed and compiled into an aquatic baseline summary report, which will be an integral part of an aquatic effects monitoring plan and requires approval prior to construction.

Fortune is now modelling the quality of the seepage water expected to be generated from a disposal facility it plans to build at Nico to permanently store waste rock and tailings generated from the mine. The results of this modelling will be used in the design of a management plan and pilot wetland studies required prior to construction.

Pursuant to the requirements of the water license, Fortune is also in the process of completing a geochemical characterization and management plan to determine the best options for cover material to be placed at closure.

Earlier this year, Fortune reported federal funding for the construction of an all-season road from Highway 3 west of Yellowknife to Whati.

Fortune has engaged Tetra Tech Inc. to conduct additional geotechnical work for the Nico access road from the community of Whati to the mine site and for the proposed airstrip. This work is being completed to provide more detailed information on the amount of fill and civil works required to construct these facilities and enable construction companies to provide more detailed quotes.

Saskatchewan refinery

Fortune currently plans to ship the concentrates it produces in the Northwest Territories by truck and rail to its own refinery in Saskatchewan, where it plans to further refine the concentrates to cobalt sulfate; gold bars; bismuth ingots, needles and oxide powder; and copper cement.

Earlier this year Fortune submitted a comprehensive development report to rezone the lands it owns in Saskatchewan to industrial, which is required to construct and operate the Nico refinery.

The Saskatchewan Ministry of Economy and the Saskatoon Regional Economic Development Authority worked with Fortune to identify these lands to encourage the company to locate the refinery in Saskatchewan. Fortune held an information session in the community of Langham on July 5, as part of the rezoning process that is expected to be completed later this year.

Provided Fortune receives the requisite financing for Nico and the remaining regulatory approvals this year, the company said construction of the mine facilities could begin in 2019 and is expected to take roughly two years depending on ice-road logistics, which are required for construction. The all-season road is expected to be available for the commencement of production and transportation of metal concentrates during operations.

The refinery requires about 18 months for construction. The company, however, indicated that it may defer development of the refinery and initially sell metal concentrates directly to the market.

This construction timeline would allow the Nico project to be in commercial production in the early 2020s. This timing would be welcomed by a global automotive industry that is increasing electric vehicle production and will need new sources of cobalt for the batteries that power them.

–SHANE LASLEY