Fortune Minerals Provides Corporate Update
Fortune Minerals Provides Corporate Update
NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR DISSEMINATION IN
THE UNITED STATES
LONDON, Ontario--(BUSINESS WIRE)--March 23, 2023--Fortune Minerals Limited (TSX:
FT) (OTCQB: FTMDF) (“Fortune” or the “Company”) (www.fortuneminerals.com) is
pleased to provide an update of current activities toward development of the NICO cobalt-gold-
bismuth-copper critical minerals project (“NICO Project”) in Canada. The NICO Project
consists of a planned open pit and underground mine and concentrator in the Northwest
Territories (“NWT”) and a related refinery in Alberta where the Company will process
concentrates from the mine to value added metals and chemicals. The vertically integrated NICO
Project is an advanced development stage critical minerals asset that has received environmental
assessment approval and the major mine permits for the facilities in the NWT. The NICO Project
has also been assessed in positive Feasibility and Front-End Engineering and Design (“FEED”)
studies that will be updated to reflect recent project optimizations and the new proposed refinery
site.
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Land Use Permit Renewed:
On March 9, 2023, the Wek’èezhìı Land and Water Board accepted Fortune’s application to
renew its Land Use Permit (“LUP”). The LUP is required to maintain the NICO site where there
is a camp to accommodate workers, equipment shops, warehousing, and fuel storage as well as
heavy equipment used for exploration, quarrying, and road construction activities. The LUP has
a term of five years.
Private Placement:
Fortune recently closed a private placement of 7,892,356 units issued at a price of C$0.07 per
unit to raise gross proceeds of C$552,465. Each unit consists of one common share and a share
purchase warrant that can be exercised at a price of C$0.10 per warrant for a period of 24 months
after closing. The net proceeds of this financing will be used to fund further development work
for the NICO Project and for working capital and general corporate purposes, including audit
fees.
This press release shall not constitute an offer to sell or solicitation of an offer to buy nor shall
there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or
sale would be unlawful. The securities will not be and have not been registered under the United
States Securities Act of 1933 and may not be offered or sold in the United States absent
registration or applicable exemption from the registration requirements.
Critical Minerals Urgency:
The world is in the midst of a transformative energy transition enabled by a different suite of raw
materials used in new technologies and to support the growing green economy. They are
commonly referred to as “critical minerals” and have growing consumption in essential
industries, cannot be easily substituted by other metals, and their supply chains are commonly
threatened by geographic concentration of production, or sourced in countries with political
instability and/or policy risks, or poor Environmental-Social Governance (“ESG”) standards.
The NICO deposit (“NICO Deposit”) in the NWT contains cobalt, bismuth and copper, which
are identified on Canada’s critical mineral list, plus more than one million ounces of gold as a
highly liquid countercyclical co-product.
The competition for critical minerals supply is intense and is reversing decades of globalization
with renewed emphasis on shorter supply lines to where the minerals are consumed and
increasingly in geographical silos with reliable mining friendly jurisdictions that can deliver
supply chain transparency with high ESG values. The Canadian and U.S. governments have
signed a Joint Action Plan on Critical Mineral Collaboration to enable more North American
production of Critical Minerals. In August 2022, the U.S. also enacted the Inflation Reduction
Act (“IRA”) to promote clean energy solutions due to climate change. The IRA extends
incentives for domestic production of electric vehicles (“EV’s”) including tax credits for EV’s
with batteries that contain escalating amounts of minerals extracted or refined within the U.S., or
countries that have free-trade agreements with the U.S., including Canada. EV batteries require
significant amounts of lithium, nickel, and cobalt and most of the current sources of supply
would not qualify as domestic sources to access these U.S. government tax credits.
U.S. Treasury Secretary Janet Yellen, during recent testimony in the House Ways and Means
Committee said, “The global demand for these minerals in the years to come will be enormous.
And we’re highly dependent on China. One of the goals of the IRA is to broadly strengthen
supply chains for these critical minerals and their processing.”
Cobalt is a particularly important critical mineral due to its consumption in lithium-ion batteries
that power EV’s, portable electronic devices and stationary storage cells. Cobalt is also
consumed in aerospace, magnet and cutting tool alloys, pigments, and catalysts. More than 70%
of cobalt is currently mined in the Democratic Republic of the Congo, and more than half of this
production is controlled by Chinese state-owned enterprises. China also controls 76% of refinery
production and 91% of cobalt chemical supply.
Bismuth is also identified as a critical mineral with unique physical and chemical properties used
primarily in the automotive industry for glass and anti-corrosion coatings, metallic paints and
pigments, and abrasives for brakes and clutch pads. Bismuth consumption is growing as a non-
toxic and environmentally safe replacement for lead in free-machining steel and aluminum,
solders and brasses used in potable drinking water sources and electronics, radiation shielding,
ceramic glazes, ammunition and fishing weights. Demand is also increasing in decommissioning
oil and gas wells with permanent, high-density metal alloy plugs that prevent blowouts and
methane leakage. Recently the U.S. Department of Energy (“DOE”) also determined that
manganese-bismuth magnets have similar performance to magnets made with Rare Earth
Elements and can be used in the powertrains for EV’s with a lower cost and more sustainable
alternative. Fortune has a customer list for its future bismuth production, most of which are
looking for a vertically integrated North American source of supply. China currently controls
approximately 75% of bismuth mine and refinery production. The NICO Deposit is the world’s
largest bismuth resource with Mineral Reserves containing approximately 12% of global
reserves.
Government Support:
Fortune has been in discussions with the Canadian, U.S. and E.U. governments to secure
financial support for the development of the NICO Project. The Government of Canada
announced $3.8 billion in financial support for critical minerals in the 2022 Budget to accelerate
domestic production and processing. This was followed later last year by the Canadian Critical
Minerals Strategy which identifies the areas where financial support will be focused. Cobalt,
nickel, and lithium are a priority for support because of their use in lithium-ion rechargeable
batteries. In an interview at PDAC 2023, Canada’s Natural Resources Minister, Jonathan
Wilkinson noted that the Canadian government is now considering taking equity stakes and
advancing loans to Canadian critical minerals companies. Fortune currently has a grant
application with Natural Resources Canada to support pilot tests to provide additional data for
detailed engineering. Alberta Innovates has also indicated that it could support the bismuth
component of this work. Fortune has also applied to the U.S. Department of Defense for
matching grants of up to US$25M, primarily for detailed engineering. This application was
submitted further to the Defense Production Act Title III Presidential Directive supporting North
American battery materials production due to the war in the Ukraine.
For more detailed information about the NICO Mineral Reserves and certain technical
information in this news release, please refer to the Technical Report on the NICO Project,
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 which has been filed on SEDAR and is available under the Company's
profile at www.sedar.com. 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.
About Fortune Minerals:
Fortune is a Canadian mining company focused on developing the NICO cobalt-gold-bismuth-
copper critical minerals project in the NWT and Alberta. Fortune also owns the satellite Sue-
Dianne copper-silver-gold deposit located 25 km north of the NICO Deposit and is a potential
future source of incremental mill feed to extend the life of the NICO mill and concentrator.
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This press release contains forward-looking information and forward-looking statements within
the meaning of applicable securities legislation. This forward-looking information includes
statements with respect to, among other things, the use of net proceeds from the Private
Placement, the Company’s plans to develop the NICO Project, including the successful
development and construction of the planned NICO cobalt-gold-bismuth-copper mine and
concentrator, the government support in the development of the NICO Project, and the NICO
Deposit. 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: no other
urgent project or expense would arise which may need the net proceeds of the Private
Placement, the Company’s ability to meet all requirements imposed by the government in order
to receive government support, accuracy of the studies on NICO Deposit, the Company’s ability
to complete construction of a NICO Project refinery; the Company’s ability to arrange the
necessary financing to continue operations and develop the NICO Project; the receipt of all
necessary regulatory approvals for the construction and operation of the NICO Project,
including the planned NICO cobalt-gold-bismuth-copper mine and concentrator and the timing
thereof; growth in the demand for cobalt; the time required to construct the NICO Project; and
the economic environment in which the Company will operate in the future, including the price
of gold, cobalt and other by-product metals, 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 COVID-19 pandemic or global geopolitical situations may interfere with the
Company’s ability to continue development of the NICO Project, the Company may not be able
to finance and develop NICO on favourable terms or at all, uncertainties with respect to the
receipt or timing of required permits, approvals and agreements for the development of the
NICO Project, including the related hydrometallurgical refinery, the construction of the NICO
Project may take longer than anticipated, the Company may not be able to secure offtake
agreements for the metals to be produced at the NICO Project, the Sue-Dianne Property may not
be developed to the point where it can provide mill feed to the NICO Project, the government
may enact legislation preventing it from providing support in its 2022 Budget, the study which
provided results on NICO Deposit may not have been conducted accurately, the inherent risks
involved in the exploration and development of mineral properties and in the mining industry in
general, the market for products that use cobalt or bismuth may not grow to the extent
anticipated, the future supply of cobalt and bismuth may not be as limited as anticipated, the risk
of decreases in the market prices of cobalt, bismuth and other metals to be produced by the
NICO Project, discrepancies between actual and estimated Mineral Resources or between actual
and estimated metallurgical recoveries, uncertainties associated with estimating Mineral
Resources and Reserves and the risk that even if such Mineral Resources prove accurate the risk
that such Mineral Resources may not be converted into Mineral Reserves once economic
conditions are applied, the Company’s production of cobalt, bismuth and other metals may be
less than anticipated and other operational and development risks, market risks and regulatory
risks. 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 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.
Contacts
Fortune Minerals Limited
Troy Nazarewicz
Investor Relations Manager
Tel: (519) 858-8188
www.fortuneminerals.com