Permitting Update for NICO Mine and Saskatchewan Metals Processing Plant
Issued Capital: 97,314,407
LONDON, ON, July 29 /CNW/ - Fortune Minerals Limited (TSX-FT) ("Fortune" or the "Company") is pleased to announce that it has successfully demonstrated the production of 99.99% bismuth ingot (metal) from its 100% owned NICO Gold-Cobalt-Bismuth-Copper Project in the Northwest Territories and Saskatchewan. High purity bismuth ingot with 99.99% purity is the standard product that is typically quoted for sale and traded on global metal markets. The ability to produce bismuth cathode and ingot is a significant improvement to the NICO project since completion of the definitive feasibility study for the project by Micon International Limited in 2007, and the 2008 economic update (see Fortune News Release, dated May 8, 2008)(1).
Fortune previously demonstrated the production of a minimum 99% bismuth cathode powder product. High purity metal ingots can now be poured after smelting this powder in an induction furnace with flux to remove other metal impurities. The metallurgical test work for the NICO project, including two pilot plant tests, has been conducted at SGS Lakefield Research Limited under the supervision of Alex Mezei, P.Eng. in compliance with NI 41-101.
As a result of this and other project improvements, NICO will have average annual production of approximately 34,000 ounces of gold as doré, 3.4 million pounds (~1,550 tonnes) of cobalt as 99.8% cathode, 3.65 million pounds (1,650 tonnes) of bismuth as 99% cathode or 99.99% ingot, and 770,000 pounds (350 tonnes) of copper as 99.995% cathode over the projected 18-year mine life. Fortune has a letter of intent to sell its bismuth production to MCP Group, a Belgium-based company with plants in Europe, North America and China and the world's largest producer of bismuth based products. Fortune is in discussions with other companies interested in purchasing the Company's cobalt production.
NICO is a proposed vertically integrated project consisting of a mine, mill and concentrator in the southern part of the Northwest Territories, 160 km northwest of the City of Yellowknife, and a hydrometallurgical process plant that will be located near Saskatoon, Saskatchewan. The NICO deposit contains 31 million tonnes of mineral reserves containing 907,000 ounces of gold, 82 million pounds of cobalt, 109 million pounds of bismuth and 27 million pounds of copper (see Fortune News Release, dated January 14, 2010)(1). The deposit will be mined by a combination of open pit and underground mining methods. The mill will operate at a planned production rate of 4,650 tonnes of ore per day. Because of the very high concentration ratio of NICO ores, most of the valuable metal would be recovered in only 180 tonnes of bulk concentrate produced per day. This concentrate will be transported by truck and rail to the Company's proposed Saskatchewan Metals Processing Plant ("SMPP") near Saskatoon for refining to high value metal products. Fortune already owns the equipment from the Golden Giant Mine at Hemlo, Ontario, which will be relocated to the Northwest Territories and Saskatoon to reduce initial capital for the NICO project.
(1) For further information regarding details of the NICO Mineral Reserves and Definitive Feasibility Study, please refer to the Company's disclosures on the Sedar website at www.sedar.com
The NICO project is currently in the Environmental Assessment ("EA") process in the Northwest Territories to permit the mine, mill and concentrator. Fortune has completed the collection of baseline environmental information required to prepare its Developers Assessment Report that will outline baseline conditions, assess impacts, and develop mitigation strategies as listed in the Terms of Reference and EA work plan already issued by the Mackenzie Valley Environmental Impact Review Board. The Company has also completed two rounds of community consultation for the project in Yellowknife and the nearby Tlicho communities of Behchoko, Gameti, Wekweeti and Whati.
Fortune has also collected most of the baseline environmental information required to permit the SMPP and has already submitted its Environmental Project Proposal ("EPP") to the Environmental Assessment Branch of the Saskatchewan Ministry of Environment. This EPP describes Fortune's plans for the construction, operation and closure of the SMPP. Meetings have been held with local town and rural municipality representatives to keep them informed of the project. Open houses for the general public will be held this fall as part of the EA and rural re-zoning processes. Fortune will also be working closely with Enterprise Saskatchewan and the Saskatoon Regional Economic Development Authority to streamline the permitting process.
Fortune has engaged BNP Paribas to arrange a US$ 250 million debt facility to finance the NICO project.
About Fortune Minerals:
Fortune Minerals is a diversified resource company with several mineral deposits and a number of exploration projects, all located in Canada. The Company is focused on the development of its NICO gold-cobalt-bismuth-copper deposit in the Northwest Territories and its metals processing plant in Saskatchewan. Fortune Minerals owns the buildings and equipment from the Golden Giant Mine at Hemlo, Ontario, which have been dismantled for relocation to NICO. Fortune Minerals also owns the Mount Klappan anthracite coal deposits in British Columbia, and the, the Sue-Dianne copper-silver deposit and other exploration projects in the Northwest Territories. Fortune Minerals is focused on outstanding performance and growth of shareholder value through assembly and development of high quality mineral resource projects.
This press release contains forward-looking information. This forward-looking information includes, or may be based upon, estimates, forecasts, and statements as to management's expectations with respect to, among other things, the proposed development of and anticipated production from the NICO Project, the proposed development of the SMPP, demand and market outlook for coal and future coal prices. Forward-looking information is based on the opinions and estimates of management at the date the information is given, and 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 risk that the Company may not be able to arrange the necessary financing to construct and operate the NICO mine and the SMPP, the possibility of delays in the commencement of production from the NICO project and construction of the SMPP, the inherent risks involved in the exploration and development of mineral properties, uncertainties with respect to the receipt or timing of required permits and regulatory approvals, the uncertainties involved in interpreting drilling results and other geological data, fluctuating metal prices and other factors. 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 given as of the date hereof and the Company assumes no responsibility to update or revise such information to reflect new events or circumstances, except as required by law.