FORTUNE MINERALS PROVIDES NICO PROJECT UPDATE Canadian cobalt-gold development project positioned for rapidly expanding use of lithium-ion batteries in portable electronic devices, automotive electrification & stationary storage
August 24, 2017 Issued Capital: 302,085,257
NEWS RELEASE
FORTUNE MINERALS PROVIDES NICO PROJECT UPDATE
Canadian cobalt-gold development project positioned for rapidly expanding use of lithium-ion
batteries in portable electronic devices, automotive electrification & stationary storage
LONDON, ONTARIO, Fortune Minerals Limited (TSX: FT) (OTCQX: FTMDF) (“Fortune” or the
“Company”) (www.fortuneminerals.com) is pleased to provide an update of activities for its 100%
owned NICO Cobalt-Gold-Bismuth-Copper Project in Canada. NICO is a vertically integrated
development consisting of a planned mine and concentrator in the Northwest Territories and refinery
near Saskatoon where concentrate will be processed to battery grade cobalt sulphate, gold, bismuth
metal and oxide, and copper. NICO is a primary cobal t project with approximately 60% of projected
revenues from cobalt at current commodity prices , The NICO Mineral Reserves also contain more
than 1.1 million ounces of gold and 12% of world bism uth reserves. NICO was assessed in a positive
Feasibility Study in 2014. This study is being updated by Hatch Ltd. (“ Hatch”) and Micon International
Limited (“Micon”) in order to assess the economics for the project at current commodity price and
exchange rate assumptions, and capital and operating costs. NICO has already received its
environmental assessment approvals in the Northwest Territories and Saskatchewan and the major
mine permits. Fortune has engaged PricewaterhouseCoopers Corporate Finance Inc. (“ PwC”) to
arrange the project financing through a combination of strategic partnerships, debt and equity.
Cobalt Market Update
The market for cobalt has had significant, 20-year compounded annual growth (“ CAGR”) of
approximately 6% and Commodities Research Unit (“CRU”) reports current annual mine production at
117,000 metric tonnes (“mT”). Demand growth for cobalt is expected to accelerate due to its use in
lithium-ion batteries (~50% of the current market), which are needed to power portable electronic
devices, electric vehicles (“ EV’s”) and stationary cells to store electricity from renewable energy
(primarily wind and solar), and off-peak charging from the electrical grid. Transformative evolution of
automobiles from internal combustion engines to electric drivetrains is expected to dramatically impact
future cobalt demand. Whereas a typical smart phone battery contains between 5 and 20 grams of
cobalt, EV batteries usually contain between 4,000 and 14,000 grams. Tesla’s first US$5 billion, 35
gigawatt-hour (“GWh”) Gigafactory in Nevada started commercial production earlier this year and will
require approximately 7,000 tonnes of cobalt per annum when it reaches full production in 2018. More
than 16 battery mega-factories are either under c onstruction or announced, including an even larger
100 GWh plant for CATL in China. Exane BNP Paribas is projecting 300,000 mT of cobalt will be
required to satisfy the demand by 2025. Cobalt is also used in superalloys for aerospace applications,
high strength alloys for cutting tools and cemented carbides, permanent magnets, surgical implants,
pigments, catalysts, and additives in food and agricultural products.
The cobalt market transitioned into a supply deficit in 2016 that is expected to continue for the
foreseeable future. Future supply is also at risk due to geographic concentration of mine and refinery
supply and because 98% of current non-artisanal cobalt production is a by-product of either copper or
nickel mining. Low primary metal prices have c aused some copper-cobalt and nickel-cobalt mines to
close. More than 60% of current mine production is from the politically unstable Democratic Republic
of the Congo (“ Congo”) and China controls 52% of cobalt refinery production and 84% of refined
cobalt chemical supply. Ethical sourcing of raw material has become an issue for the Electronics
Industry Citizens Coalition (“ EICC”) because of child labour and unsafe working conditions in some
Congo mines. There are also concerns about metals being used to finance conflicts under U.S. Dodd-
FORTUNE MINERALS LIMITED
148 Fullarton Street, Suite 1600, London, Ontario, Canada N6A 5P3
Tel. 519-858-8188 ~ Fax. 519-858-8155
Frank and European Union Ethical Sourcing legislation. The price of cobalt metal has escalated to
approximately US$30 per pound, well in excess of the US$16 per pound used in Fortune’s 2014
Feasibility Study.
NICO Mineral Reserves & Mine Plan
The Proven and Probable Mineral Reserves for the NI CO deposit were determined for the Company’s
2013 Front-End Engineering and Design (“ FEED”) study and 2014 Feasibility Study. They total 33
million mT containing 82.3 million pounds of cobalt (37,341 mT), 1.11 million ounces of gold, 102.1
million pounds of bismuth (46,325 mT) and 27.2 million pounds of copper (12,341 mT) (see Fortune’s
news release dated April 2, 2014 for details). The Mineral Reserves are sufficient to support a 21-year
mine life at the 4,650 mT of ore per day production rate used in the 2014 Feasibility Study. The study
also identified several million tonnes of sub-economic mineralized material that was planned to be
separately stockpiled for processing when metal prices permit and may be economic to process at
today’s metal prices. Given the positive outlook for cobalt, Fortune is re-evaluating the NICO Mineral
Reserves and considering a higher production rate to achieve greater economies of scale and earlier
access to the deeper higher grade parts of the deposit.
Feasibility Study Update
The Feasibility Study update by Hatch and Micon is pr oceeding well for the initially planned scope of
work for the mine and concentrator in the Northwest Territories. However, two metallurgical testwork
programs were required for Hatch to properly size equipment and conduct the detailed design work
for the copper cementation circuit and the manganese removal step in the cobalt sulphate circuit for
the refinery in Saskatchewan. This work is currently in progress at SGS Lakefield Research Limited,
but due to laboratory congestion will not be completed until the end of October. The metallurgical
flowsheet for NICO has previously been confirm ed from piloting, and a high quality cobalt sulphate
heptahydrate product has already been produced that meets the specifications of the rechargeable
battery industry.
Completion of the Feasibility Study update has therefore been delayed until after this metallurgical
testwork and optimization of the Mineral Reserves, production rate and mine schedule if and as
required.
2017 Field Activities
Fortune has completed the winter, spring and summer phases of field activities at the NICO mine site
that were required by Wek’eezhii Land and Water Board prior to the commencement of construction
of the mine. This additional baseline monitoring was required pursuant to the Company’s water
license and consisted of collecting additional water quality, sediment, benthic invertebrate and fish
population data. The final water quality sampling for this program will be completed in September.
While environmental work was carried out at NICO this summer, Fortune was also able to improve
and expand roads and lay-down areas at the mine site in preparation for the arrival of supplies and
materials on the winter ice road. Fortune plans to conduct the first year of construction of the NICO
mine using winter road access while the Government of the Northwest Territories (“ GNWT”)
Department of Transportation constructs a new all-weather gravel road to Whati. Fortune will
construct a 50-kilometre gravel spur road to connect with the government road as part of its
development. Fortune and the GNWT are also negotiating a Socio-Economic Agreement.
About NICO
NICO is a planned Canadian, vertically integrated, primary producer of cobalt with supply chain
transparency and uninterrupted custody of metal from ore through to the production of battery
chemicals, gold, and bismuth metal and oxide. The NICO deposit will be mined primarily by
conventional truck and shovel open pit methods. Approximately one third of the mill feed during the
first two years of operations are planned to be mined using underground blasthole open stoping to
process higher margin, gold-rich ores from deeper in the deposit in early years of the mine life and
improve project economics. Most of the preproduction development for the underground portion of the
mine has already been established from previous test mining operations.
Ores will be processed in the mill using simple flotation to produce approximately 180 tonnes per day
of concentrate containing the recoverable metals. The concentrate will be filtered, bagged and trucked
to the rail head at Hay River for delivery by train to the Company’s planned refinery straddling the
Canadian National Railway near Saskatoon. The refinery will recover metals from the concentrate
using a combination of secondary flotation, followed by pressure and atmospheric acid leaching,
electro-winning and precipitation of value-add metals and chemicals. Life of mine average annual
production in the 2014 Feasibility Study was projected to be 1,615 tonnes of cobalt, 41,300 ounces of
gold, 1,750 tonnes of bismuth, and copper cement.
The disclosure of scientific and technical informatio n 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 t he feasibility study referred to above, entitled "Technical
Report on the Feasibility Study for the NICO-Gold-Cobalt-Bismuth-Copper Project, Northwes t Territories,
Canada", dated April 2, 2014 and prepared by Micon, from which certain information 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 Hatch
Hatch has over six decades of business and technical experience in the mining, energy, and
infrastructure sectors. The firm has 9,000 staff with experience in over 150 countries and is well
known for the design and construction of mineral beneficiation process plants and supporting
infrastructure, including projects in remote and cold climate regions and Arctic regions of Canada.
About Micon
Micon is a mining consultancy providing independent professional advice to mining companies and
their providers of capital, law firms and government agencies. Staffed by senior mineral industry
consultants with extensive international experience in the fields of geology, mining engineering,
metallurgy, processing, environmental management, market analysis and mineral economics.
About Fortune Minerals
Fortune is a Canadian mining company focused on developing the vertically integrated NICO cobalt-
gold-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 r epurchase the Arctos anthracite coal deposits in
northwest British Columbia that were 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 project
financing to start construction), the anticipated timing for the updated feasibility study for the NICO Project, the
estimated capital costs for the construction of the NICO Project estimated future production, anticipated growth
in the demand for cobalt, anticipated constraints on the su pply 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 updated feasibilit y study may take longer than anticipated, the capital
costs for the construction of the NICO Project may be greater than anticipated, the all-season road may not be
built within the anticipated time frame, the market for rechargeable batteries and t he use of stationary storage
cells may not grow to the extent anticipated, the future supply 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.