Development stage mining company Fortune Minerals has completed a fully subscribed $1.25-million nonbrokered private placement of units, with the proceeds allocated to general working capital purposes.
Fortune owns the Nico cobalt/gold/bismuth/copper development project, which is expected to become a Canadian vertically integrated producer of battery-grade cobalt chemicals for the lithium-ion battery industry, with gold and bismuth coproducts, and copper as a minor by-product.
“More than $115-million has been spent by the company on advancing this project from an in-house discovery in the mid-1990s to a development asset with a positive feasibility study and environmental-assessment approvals for both the mine and concentrator in the Northwest Territories and a refinery in Saskatchewan,” the company explains.
Moreover, Fortune notes that Nico has been test-mined and pilot-plant-processed to mitigate development risks. Front-end engineering and design studies have been completed with sufficient detailed engineering for procurement. Fortune has an execution plan for project delivery and the company is working to secure offtake agreements and project financing to start construction.
Fortune points out that Nico has proven and probable mineral reserves of more than 33-million tonnes that will support a 21-year mine life at a planned mill throughput rate of 4 650 t/d of ore.
“The project has a high concentration ratio that reduces this ore to about 180 wet tonnes of bulk concentrate a day containing the recoverable metals.”
The concentrate is to be shipped south to the refinery based in Saskatchewan for downstream processing into value-added metals and chemicals. Fortune adds that life-of-mine average yearly production is projected to be about 41 300 oz of gold, 1 615 t of cobalt contained in a battery-grade cobalt sulphate heptahydrate, 1 750 t of bismuth contained in metal ingots and oxide powder, and 265 t of copper.
Moreover, the company highlights that the cobalt market has grown at a compounded yearly rate of about 6% over the last two decades to almost 110 000 t at present.
“Most of the growth in demand is due to the need for cobalt in lithium-ion batteries used to store energy in portable electronic devices, electric vehicles and stationary storage cells attached to renewable energy, such as wind turbines and solar generators, and for off-peak charging from the electricity grid,” notes Fortune, adding that cobalt demand in batteries has grown from about 1% of a smaller cobalt market in the mid-1990s to about 50% of the market in 2015.
Demand growth is expected to increase with the proliferation of automotive electrification and stationary storage cells enabled for baseload, owing to improvements in battery technology and lower production costs.
Fortune asserts that Nico is planned to be a new Canadian supplier of cobalt with supply chain transparency and custody from the mining of the ore through to the production of battery chemicals, as well as tax advantages under the North American Free Trade Agreement.
The more than 1.11-million ounces of gold in the Nico deposit are also a highly liquid countercyclical hedge. Nico also contains 12% of global bismuth reserves, which also presents supply chain concerns owing to the concentration of mine and refinery bismuth production in China, Fortune concludes.