FORTUNE MINERALS ANNOUNCES APPOINTMENT OF PWC AS FINANCIAL ADVISOR TO ARRANGE NICO PROJECT FINANCING Lithium-ion battery demand for cobalt and supply chain concerns contribute to favorable financing environment
January 18, 2017 Issued Capital: 270,899,007
NEWS RELEASE
FORTUNE MINERALS ANNOUNCES APPOINTMENT OF PWC AS
FINANCIAL ADVISOR TO ARRANGE NICO PROJECT FINANCING
Lithium-ion battery demand for cobalt and supply chain concerns contribute to
favorable financing environment
LONDON, ONTARIO, Fortune Minerals Limited (TSX: FT) (OTCQX: FTMDF) (“Fortune” or the
“Company”) (www.fortuneminerals.com) is pleased to announce the engagement of
PricewaterhouseCoopers Corporate Finance Inc. (“ PwCCF”) as the Company’s Financial Advisor to
help secure financing for construction of the NICO Cobalt-Gold-Bismuth-Copper Project in Canada.
PwCCF has a global network of more than 2,500 pr ofessionals across 60 countries to provide in-
depth execution and expertise in cross border transactions and provide Fortune with the right blend of
transaction experience, sector insight and local relationships to drive strategic objectives and create
company value. The recent announcement of govern ment funding for a public road to the community
of Whati needed for mine operations, and the positive momentum in cobalt and gold markets, will
allow the Company to proceed with financing constr uction of the project. NICO is a vertically
integrated development comprised of a proposed mine and mill in the Northwest Territories and
hydrometallurgical refinery in Saskatchewan w here concentrates from the mine are planned to be
processed to value-added metals and chemicals.
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Stephen Mullowney, PricewaterhouseCoopers’ Managing Director of Corporate Finance commented,
“We are pleased to be working with Fortune to arrange the NICO project financing. NICO is uniquely
positioned as a shovel-ready asset to meet the needs of the lithium-ion battery industry as it enters
the next phase of commercialization with transformative automobile electrification and stationary
storage of power enabling renewable energy in grid base load.”
Robin Goad, Fortune’s President and Chief Executive Officer said, “Development of NICO would
make Fortune a reliable emerging producer of batte ry-grade cobalt chemicals and respond to the
significant growth in demand as the market transitions into supply deficit. As a new Canadian source
of cobalt, NICO mitigates some concerns over geographic concentration of supply in politically
unstable countries and ethical procurement of raw materials with supply chain transparency. With
cobalt metal trading above US$16 per pound and trending higher toward longer-term averages, it is
an opportune time to secure the project financing needed for construction.”
PwCCF Advisory Mandate:
PwCCF provides a full range of debt, capital and M&A advisory services, from acquisitions and
disposals, through to equity and debt raising, debt refinancing, public-private partnership
arrangements and complex procurement, across all industry sectors, to corporations, private equity
firms, public sector bodies, sovereign wealth and other investment funds. In the last 10 years, PwCCF
provided financial advice on over 4,000 transactions globally and in 2016, was ranked first by deal
count by Merger Market with over 350 deals completed.
Fortune has expended more than C$116 million advancin g NICO from an in-house discovery to a
development project with positive Feasibility and Front-End Engineering and Design Studies prepared
FORTUNE MINERALS LIMITED
148 Fullarton Street, Suite 1600, London, Ontario, Canada N6A 5P3
Tel. 519-858-8188 ~ Fax. 519-858-8155
by globally recognized engineering firms. Capital co sts to develop the asset are estimated at C$ 589
million, excluding working capital. With the assistance of PwCCF, Fortune plans to secure these funds
through a combination of strategic partnerships, conventional and supplier debt, product off-take
and/or forward sales of a portion of the contained gold. The key to realizing full value for any one
component is closing on the entire project financing concurrently.
Cobalt Market:
Cobalt is a critical metal used in a variety of me tal and chemical applications and annual consumption
of more than 100,000 metric tonnes. Cobalt demand has grown at an approximate 6% compounded
annual rate over the past 20 years, primarily due to its use in high performance rechargeable
batteries. Cobalt delivers superior energy density for power and performance and cobalt-bearing
lithium-ion batteries are expected to remain the industry standard for the foreseeable future. The first
phases of battery commercialization in portable el ectronic devices has driven cobalt used in batteries
to account for approximately 50% of the current market. The next phase of battery commercialization
is underway with transformative evolution of the automobile from internal combustion engines to
electric drive trains. Significant demand is also projected to come from stationary cells used to store
electricity from intermittent wind and solar generators and off-peak charging from the electrical grid. At
least 14 battery mega-factories have either been announced or are under construction to meet the
expected increase in demand, including the US$ 5 bill ion Tesla Gigafactory in Nevada that recently
commenced production. By 2018, the Gigafactory is expected to produce 35 GWh per year of lithium-
ion battery cells, nearly as much as the rest of the entire world’s combined production. Notably, Exane
BNP Paribas forecasts cobalt demand to double to approximately 200,000 metric tonnes by 2022,
primarily due to demand in electric vehicle batteries.
The future supply of cobalt is at risk due to various factors, including geographic concentration of
supply and the predominant cobalt production as a by-product of copper and nickel mining. The
Democratic Republic of the Congo is responsible for more than 60% of cobalt mine supply and is a
politically unstable country that could erupt in violence as a result of the reluctance of the current
President to cede power pursuant to the constitutional mandate in 2016. China controls more than
52% of cobalt refinery production and 85% of refined cobalt chemical supply after purchasing control
of the Tenke-Fungurume Cobalt-Copper Project in the Congo. Near surface oxide deposits in the
Congo are also becoming depleted, requiring mines to transition into deeper sulphide ores that
require more expensive downstream processing. Nickel-cobalt laterite deposits in other counties also
have very high capital and operating costs and there have been mine closures due to low copper and
nickel prices. Ethical sourcing of raw materials has become an issue for the electronics industry
because of the use of child labour in some Congolese artisanal mines and concerns about metals
being used to finance conflicts under U.S. Dodd-Frank and European Ethical Sourcing legislation.
NICO is planned to become an important new Canadian ve rtically integrated producer of cobalt with
supply chain transparency and uninterrupted custody of metal from ores through to the production of
battery chemicals. The more than 1.11 million ounces of gold contained in the NICO mineral reserves
is also a highly liquid co-product whose price is commonly countercyclical to the other contained
metals to mitigate cobalt and bismuth price volatility. NICO contains approximately 12% of global
bismuth reserves, a critical metal that also ha s supply chain concerns from dominant Chinese
production and growing consumption as an environm entally friendly and non-toxic replacement for
lead.
About NICO:
The NICO deposit contains Proven and Probable Mineral Reserves totaling more than 33 million
tonnes that will support a 21-year mine life at a planned mill throughput rate of 4,650 metric tonnes of
ore per day. Approximately 180 wet tonnes per day of bulk concentrate will be produced by flotation in
the mill containing the recoverable metals and will be trucked from the site on the new road to the rail
head at Hay River for railway delivery to the re finery in Saskatchewan and downstream processing to
value-added metals and chemicals. Life of mine average annual production is projected to be 41,300
ounces of gold, 1,615 tonnes of cobalt contained in a battery grade cobalt sulphate, 1,750 tonnes of
bismuth contained in metal ingots and oxide powder, and 265 tonnes of copper.
The disclosure of scientific and technical information contained in this news release has been
approved by Robin Goad, M.Sc., P.Geo., President and Chief Executive Officer of Fortune, who is a
“Qualified Person” under National Instrument 43-101. The technical report on the feasibility study
referred to above, entitled “Technical Report on the Feasibility Study for the NICO-Gold-Cobalt-
Bismuth-Copper Project, Northwest Territories, Canada”, dated April 2, 2014 and prepared by Micon
International Limited, from which certain informat ion in this press release has been extracted, has
been filed on SEDAR and is available under the Company’s profile at www.sedar.com.
About Fortune Minerals
Fortune is a Canadian development stage mining company focused on advancing the vertically
integrated NICO gold-cobalt-bismuth-copper project in the Northwest Territories and a related refinery
the Company plans to construct in Saskatchewan. Fortune also owns the Sue-Dianne copper-silver-
gold deposit located 25 km north of NICO and a potential future source of incremental mill feed to
extend the life of the NICO mill. The Company also maintains the right to repurchase the Arctos
anthracite coal deposits in northwest British Columbia that were recently purchased by a provincial
Crown corporation.
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For further information please contact:
Fortune Minerals Limited
Troy Nazarewicz
Investor Relations Manager
Tel.: (519) 858-8188
www.fortuneminerals.com
This press release contains forward-looking informat ion and forward-looking statements within the meaning of
applicable securities legislation. This forward-looking information includes statements with respect to, among
other things, the Company’s plans to develop the NICO project (including the Company’s plans to secure off-
take agreements and project financing to start construction), estimated future production, anticipated growth in
the demand for cobalt, anticipated constraints on the suppl y of cobalt and plans for the construction of an all-
season road needed for operations at the NICO Project. Forward-looking information is based on the opinions
and estimates of management as well as certain assumptions at the date the information is given (including, in
respect of the forward-looking information contained in this press release, assumptions regarding the
Company’s ability to arrange the necessary financing to continue operations and develop the NICO project,
growth in the demand for cobalt, restrictions on the supp ly of cobalt and the proposed construction of the all-
season road, the economic environment in which the Company will operate in the future, including the price of
gold, cobalt and other by-product me tals, anticipated costs and the volumes of metals to be produced at the
NICO Project). However, such forward-looking information 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 risks that the Company may not be able to finance and develop
NICO on favourable terms or at all, the market for re chargeable batteries and the use of stationary storage cells
may not grow to the extent anticipated, the future s upply of cobalt may not be as limited as anticipated, the
Company’s production of cobalt and other metals may be less than anticipated and other operational and
development risks, market risks and regulatory risks. Readers are c autioned 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 fo rward-looking information contained
herein is made as of the date hereof and the Company assumes no responsibility to update or revise it to reflect
new events or circumstances, except as required by law.