FORTUNE BAY ANNOUNCES POSITIVE PEA FOR GOLDFIELDS PROJECT, SASKATCHEWAN Average Annual Gold Production of 101 koz, After-Tax NPV5% of C$285M, and IRR of 35.2%
TSXV: FOR | FWB: 5QN | OTCQX: FTBYF
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NEWS RELEASE
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FORTUNE BAY ANNOUNCES POSITIVE PEA FOR GOLDFIELDS PROJECT, SASKATCHEWAN
Average Annual Gold Production of 101 koz, After-Tax NPV5% of C$285M, and IRR of 35.2%
Highlights:
• Robust economics with after-tax net present value (“NPV”) (discount rate 5%) of C$285M, internal rate
of return (“IRR”) of 35.2% and payback of 1.7 years estimated with gold price of US$1,650 per ounce
• Average annual gold production of 101,000 ounces over life of mine (“LOM”), with an average of
122,000 ounces per year in the first 4 years
• 8.3 year LOM producing 835,000 ounces of gold
• Average cash cost of US$778/oz and all-in sustaining cost (“AISC”) of US$889/oz gold
• Initial capital expenditure of C$234M
• Mill capacity of 7,500 tonnes per day (2.7 Mt per annum) with average gold recovery of 95.3%
• Over 80% of mineable ounces coming from the Box deposit
HALIFAX, NS November 1, 2022 – Fortune Bay Corp. (TSXV:FOR, FWB:5QN, OTCQX: FTBYF) (“Fortune
Bay” or the “Company”) is pleased to announce positive results from the independent Preliminary Economic
Assessment (“PEA”) for its 100% owned Goldfields Project ( “Goldfields” or the “Project”) located near
Uranium City, Saskatchewan. The PEA provides a base case assessment for developing the Goldfields
mineral resource by conventional open pit mining methods, and gold recovery with a standard free milling
flowsheet, incorporating gravity and leaching of the gravity tails. The economic model supports an operation
with low capital cost and high rate of return over an 8.3 year mine life, with average annual production of
101,000 ounces of gold. The PEA was prepared by Ausenco Engineering Canada Inc. (“Ausenco”) in
accordance with National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43- 101”).
The PEA NI-43-101 Technical Report will be filed on SEDAR (www.sedar.com) within 45 days of this News
Release.
Dale Verran, CEO of Fortune Bay, commented, “Goldfields shows potential to become a highly profitable
gold mine supported by a PEA produced by Ausenco, one of the most experienced and reputable
engineering firms working on gold projects in Canada. Goldfields has now established itself as a leading
gold development project in Saskatchewan, which is significant given it is the top-ranked mining jurisdiction
in Canada and ranked number two globally. The PEA, based upon 99% of Indicated Mineral Resources,
together with the substantial repository of project data, lays a solid foundation for the advancement of the
Project.”
Mr. Verran, further commented, “The Project has numerous desirable attributes including a low strip ratio,
simple mineralogy and free- milling gold. The robust PEA economics are highlighted by low initial capital
costs, competitive all -in sustaining costs, a relatively short payback period and a favorable NPV:CAPEX
ratio. In addition, the established infrastructure in a historical mining area, including a powerline to site, and
a valid development permit is expected to facilitate the timeline towards construction and operations. The
Project continues to present numerous opportunities, including exploration potential, and additional mining
and processing opportunities to be further investigated during a pre-feasibility stage.”
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Description of the Goldfields Project and PEA
The 100% owned Goldfields Project (“Goldfields” or the “Project”) is located approximately 13 kilometres
south of Uranium City in northern Saskatchewan, as shown in Figure 1. The Project comprises 12 mineral
dispositions, covering approximately 5,000 hectares, and is host to the Box and Athona gold deposits and
numerous other gold prospects and occurrences.
The Project is located within a historical mining area and benefits from established infrastructure, including
a road and hydro-powerline to the Box deposit. Nearby facilities and services in Uranium City include bulk
fuel, civil contractors , and a commercial airport. The Project has a history of gold production (64,000 oz
produced between 1939 to 1942), numerous exploration drilling campaigns (over 1,000 drill holes) and
historical mining studies by previous owners of the Project.
The current total gold resource for Box and Athona stands at 979,900 ounces of gold in the Indicated
category (23.2 million tonnes at an average grade of 1.31 g/ t gold) and 210,800 ounces of gold in the
Inferred category (7.1 million tonnes at an average grade of 0.92 g/t gold), as defined in Table 8. The PEA
considers conventional open-pit mining at both the Box and Athona gold deposits.
Ausenco was appointed as lead consultant in April 2022 to prepare the PEA in accordance with NI 43-101.
The PEA was completed in collaboration with Moose Mountain Technical Services (“MMTS”) for the mine
design, and SRK Consulting (Canada) Inc. (“SRK”) for the updated Mineral Resource Estimate (“ MRE”)
and Environmental, Permitting and Social aspects of the Project plan. The PEA comprised a Phase 1 Mine
to Mill Optimization to determine the best business case for the Project, including social and environmental
considerations, followed by a Phase 2 which included the PEA study based on a 7,500 tpd production case.
Figure 1: Location of the Goldfields Project
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Financial Analysis
The economic analysis was performed assuming a 5% discount rate and a gold price of US$1,650 per
ounce based on long-term consensus pricing. On a pre- tax basis, the NPV5% is C$401 million, the IRR is
45.5% and the payback period is 1. 4 years. On an after-tax basis, the NPV5% is C$285 million, the IRR is
35.2% and the payback period is 1.7 years. A summary of the Project economics, and the projected annual
gold production is provided in Table 1 and Figure 2, respectively.
Table 1: Summary of Project Economics
Units LOM Total / Avg.
General
Gold Price US$/oz $1,650
Exchange Rate US$:C$ 0.77
Mine Life years 8.3
Total Waste Tonnes Mined kt 69,139
Total Mill Feed Tonnes kt 22,708
Strip Ratio Waste : Resource 3.0 : 1
Production
Mill Head Grade g/t 1.20
Mill Recovery Rate % 95.3%
Total Mill Ounces Recovered koz 835
Total Average Annual Production koz 101
Operating Costs
Mining Cost C$/t Mined $3.90
Mining Cost C$/t Milled $15.27
Processing Cost C$/t Milled $15.02
G&A Cost C$/t Milled $5.07
Total Operating Costs C$/t Milled $35.36
Refining & Transport Cost C$/oz $5.00
Royalty NSR % 2.0%
Cash Costs US$/oz Au $778
AISC US$/oz Au $889
Capital Costs
Initial Capital C$M $234
Sustaining Capital C$M $129
Closure Costs C$M $9
Salvage Costs C$M $18
Financials Pre-Tax
NPV (5%) C$M $401
IRR % 45.5%
Payback Years 1.4
Financials Post-Tax
NPV (5%) C$M $285
IRR % 35.2%
Payback Years 1.7
Notes:
Cash costs consist of mining costs, processing costs, mine-level G&A and refining charges and royalties
AISC includes cash costs plus sustaining capital, closure costs, and salvage value.
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Payback is defined as achieving cumulative positive free cashflow after all cash costs and capital costs, including
sustaining capital costs and is calculated from the start of production.
Refer to "Non-IFRS Financial Measures" below.
Cautionary Statement: The reader is advised that the PEA summarized in this news release is intended to provide only
an initial, high-level review of the Project potential and design options. The PEA mine plan and economic model include
numerous assumptions and the use of both indicated and inferred mineral resources. Inferred mineral resources are
considered to be too speculative to be used in an economic analysis except as allowed for by NI 43-101 in PEA studies.
Mineral resources are not mineral reserves and do not have demonstrated economic viability.
The PEA is based upon a subset of the mineral resources which incorporates 9 8.6% of indicated mineral resources
and 1.4% of inferred mineral resources.
Projected gold production is 835,000 ounces over the 8. 3 year LOM. G old production averages
101,000 ounces per year, with an average of 122,000 ounces per year in the first four years. Attributable
recovered ounces from Box and Athona over LOM are 81% and 19%, respectively.
Figure 2: Annual Gold Production
Mine Design and Production Schedule
The PEA considers open -pit mining from the Box and Athona gold deposits over a project mine life of
8.3 years. Mine planning is based on conventional open pit methods suited for the Project location and local
site requirements. The subset of Mineral Resources contained within the designed open pits are
summarized in Table 2, with a 0.30 g/t gold cut -off, and form the basis of the mine plan and production
schedule. A total of 98.6% of the Mineral Resources subset used in the PEA are classified as Indicated.
Table 2: PEA Mine Plan Production Summary
PEA Mill Feed 22,708 kt
Mill Feed Gold Grade 1.20 g/t
Waste Overburden and Rock 69,139 kt
Waste : Resource Ratio 3.0 : 1
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Notes:
1. The PEA Mine Plan and Mill Feed estimates are a subset of the September 1, 2022 Mineral Resource estimates and are
based on open pit mine engineering and technical information developed at a Scoping level for the Box and Athona
deposits.
2. PEA Mine Plan and Mill Feed estimates are mined tonnes and grade, the reference point is the primary crusher.
3. Mill Feed tonnages and grades include open pit mining method modifying factors, such as dilution and recovery.
4. Cut-off grade of 0.30 g/t assumes US$1,650/oz. Au at a currency exchange rate of 0.77 US$ per C$; 99.95% payable gold;
C$5/oz offsite costs (refining, transport and insurance); a 2.0% NSR royalty; and a 95% metallurgical recovery for gold.
5. The cut-off grade covers processing costs of C$12.00/t, administrative (G&A) costs of C$6.20/t, and low grade stockpile
Rehandle costs of C$1.00/t.
6. Estimates have been rounded and may result in summation differences.
Optimized ultimate pit limits for each deposit have been split into phases or pushbacks to target higher
economic margin material earlier in the mine life. The Box deposit is split into three phases, and the Athona
deposit is split into two phases (Figure 3). Pit designs are configured on five meter bench heights, with eight
meter wide berms placed every four benches, or quadruple benching.
Box phased pit design Athona phased pit design
Figure 3: Mine Plan Overview
The mill will be fed with material from the pits at an average rate of 2.7 Mtpa (7.5 ktpd). Waste rock will be
placed in one of three identified waste rock storage facilities (“ WRSF”). Waste rock will also be used for
construction of the haul roads and the tailings dam located north of the process facilities. Topsoil and
overburden encountered at the top of the pits will be placed in a dedicated area and kept salvageable for
closure at the end of the mine life. Cut-off grade optimization is employed, stockpiling lower grade material
in the initial years and rehandling this material to the mill towards the end of mine life.
Mining cost estimates are built up from first principles based on the selected mining methods, assuming an
owner managed operation. Mining operations will be based on 365 operating days per year with two twelve-
hour shifts per day. An allowance of twelve days of no mine production per year has been built into the
mine schedule to allow for adverse weather conditions.
The mine production schedule is summarized in Figure 4.
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Figure 4: Mine Production Schedule Summary
Metallurgy and Mineral Processing
Goldfields has been the subject of extensive metallurgical testwork programs and previous studies, dating
back to 1939. This work has determined that there are no significant metallurgical or environmental
hindrances associated with the mineralization. Based on the latest test work conducted by SGS Canada
Inc. (“SGS”) in 2015, gold can be effectively recovered from the mineralization at both Box and Athona by
gravity and leaching methods.
The Goldfields process flowsheet was designed based on previous testwork and preliminary financial
evaluations, with key process design criteria derived from testwork conducted at SGS in 2015. The process
plant employs gravity concentration, and standard leaching with carbon-in-pulp (“CIP”) technology for gold
recovery. The plant includes three stages of crushing followed by ball milling, classification, gravity
concentration, leach and CIP. Tailings will be subjected to cyanide detoxification before being pumped to
the tailings storage facility.
The process plant will treat 2.7 Mt of material per year at an average throughput of 7.5 ktpd based on mill
availability of 92%. The crusher plant circuit design is set at 65% availability and the gold room availability
is set at 52 weeks per year. The plant will operate two shifts per day, 365 days per year and will produce
doré bars.
The plant has been designed to realize an average recovery of 95.3 % of the gold (95.9% Box and 93.5%
Athona) over LOM. Of this, 24.5% of the gold will be extracted by gravity and a further 70.8% by the
leach/CIP process. The proposed process flowsheet is shown in Figure 5.
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Figure 5: Goldfields Simplified Process Flowsheet
Site Infrastructure
Goldfields benefits from an existing gravel road from Uranium City ( Highway 962) and high- voltage
powerline to the Box site from hydropower stations located approximately 40 kilometres to the northwest.
Both the gravel road and powerline will require minor upgrades and refurbishment. Stoney Rapids, the
regional business hub, is located approximately 150 kilometres to the east and is accessible along Lake
Athabasca by boat or barge during the summer, and by an ice-road during winter, built and maintained by
the Provincial Government.
Figure 6 shows the site layout, including pits for Box and Athona, stockpiles, waste rock storage facility
(“WRSF”), Tailings Storage Facility (“TSF”), onsite roads, processing plant and mining infrastructure areas
such as offices and truck shops. This infrastructure has been kept at least 30 meters from the surveyed
edge of Lake Athabasca and located to minimize disturbance to existing waterbodies and watercourses.
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Figure 6: Goldfields Site Layout
The site location selection for the WRSF, TSF, processing plant and other mining infrastructure considered
various factors including social, environmental, topographic, accessibility, proximity to existing
infrastructure and overall flow of the mining operation. Administration facilities, truck shop, wash bay, tire
store, fuel storage, assay laboratory and warehousing are centralized near the process plant.
Accommodations are planned for Uranium City in a permanent camp with personnel transport to the mine
on a shift basis.
The primary design objectives of the TSF are the secure confinement of tailings and the protection of the
regional groundwater and surface water during mine operations and closure. Based on preliminary
environmental characterization and the geolo gy of the two deposits, it can be considered that the waste
rock, mineralized material and tailings are not acid- generating nor metal leaching. These desirable
characteristics for the Project (simplified operation, easier water management and reduced closure risks)
were incorporated into the Project design.
Tailings at Goldfields will be pumped from the process plant to the TSF and will be stored behind a tailings
dam. The TSF has been designed in accordance with CDA guidelines (2013, 2019) to safely accommodate
the life of mine tailings production as described in the PEA.
Topsoil and overburden encountered during site excavations will be placed in a dedicated area and kept
salvageable for closure at the end of the mine life to facilitate revegetation of the TSF and WRSF.
Capital Costs
Initial capital costs are estimated at C$234M with allowances for indirect costs, including a contingency of
C$34M. Sustaining capital costs are estimated at C$129M which includes cost of mine expansion,
payments of mining fleet, expansion of TSF, financing of the permanent camp facilities and associated
indirect costs. The down payment and initial financing payments for the mining fleet and camp are included