TORONTO (miningweekly.com) – Canadian project developer Fortune Minerals on Friday said the Tlicho and Canadian governments had approved the new Nico mine and mill, located in the Northwest Territories (NT), where authorities accepted the Mackenzie Valley Review Board's environmental assessment and reasons-for-decision, and recommended approval.
This allowed the $441-million gold/cobalt/bismuth/copper project to proceed to the regulatory-approvals phase with the Wek'èezhìi Land and Water Board and other parties to develop the water licence and land use permits.
Fortune director of regulatory and environmental affairs Dr Richard Schryer told Mining Weekly Online that he would work diligently with the local water authority in the coming months to set up a schedule and goals marking the road to permitting, which was expected by the end of the year.
"Approval of the Nico mine and mill by the Minister and Tlicho government allows us to enter the regulatory phase of project permitting using information gathered during the review of the January environmental assessment. Our efforts over the last few months preparing for this final stage of the permitting process will facilitate receipt of the permits required to start construction in 2014,” he said.
Cobalt is expected to be the most valuable of the polymetallic output from the mine, given the supply pressure as a result of restrictions on importing the metal, used in the preparation of magnetic, wear-resistant and high-strength alloys, from its most prolific producer, the Democratic Republic of Congo.
Investor relations manager Troy Nazarewicz pointed out that the next significant goal in conjunction with permitting the project, which holds about 15% of the world’s bismuth resources, would be to finalise financing.
Fortune in June announced a strategic C$11.7-million investment by full-service mining contractor Procon Resources, which would be applied towards progressing the Nico project.
Procon bought 29.25-million newly issued shares at $0.40 apiece. Fortune said the private placement would be completed in two tranches of $5.85-million and would result in Procon holding a 19.4% stake in Fortune on a nondiluted basis.
The issue price represented a 14% premium over Fortune's closing price on the TSX on Wednesday.
Vancouver-based Procon is majority owned by China CAMC Engineering, which is an international engineering, procurement and construction services provider based in Beijing, China.
Under the terms of the private placement agreement, Procon could appoint one nominee to Fortune’s board at the closing of the first tranche of the placement, which was expected to be July 25. The second tranche was expected to close on October 1.
Fortune and Procon had also agreed to work together to advance the Nico project, including completing project financing arrangements, detailed engineering and a project execution plan.
The company said it was conducting site preparations at Nico this summer, expecting to start construction in 2014, subject to completion of the project financing and receiving all applicable permits.
Fortune is also currently developing the Arctos anthracite mine, in British Columbia.