FORTUNE MINERALS PROVIDES NICO PROJECT UPDATE New Mineral Resource model and mine plan in preparation - Tlicho Road construction advancing and company progressing refinery site evaluation, including two brownfield options
March 3, 2020 Issued Capital: 359,553,220
NEWS RELEASE
FORTUNE MINERALS PROVIDES NICO PROJECT UPDATE
New Mineral Resource model and mine plan in preparation - Tlicho Road construction
advancing and company progressing refinery site evaluation, including two brownfield options
LONDON, ONTARIO, Fortune M inerals 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 Project (“ NICO Project ”) in Canada . The
NICO Project consists of a planned mine and concentrator in the Northwest Territories, and a related
refinery in southern Canada where the Company plans to process concentra tes from the mine to
value added metals and chemicals . The Mineral Reserves of the NICO Deposit contain cobalt and
bismuth, both metals identified on the U.S. Government and European Union Cr itical Minerals Lists,
plus more than one million ounces of gold and byproduct copper (see Fortune news release, dated
April 2, 2014 ). Development of the NICO Project would provide a r eliable North American vertically
integrated supply of cobalt and bismuth to mitigate supply chain concerns from geopolitical risks and
geographic concentration of supply in the D emocratic Republic of Congo and China. Fortune is
continuing discussions with potential strategic partners interested in the NICO development and
participating in the supply chain for transformative automotive electrification with cobalt chemicals
required to make the cathodes of lithium-ion batteries together with a highly liquid gold co-product.
The NICO P roject was assessed in a Feasibility Study prepared by Micon International Limited in
2014, based primarily on the Company’s Front-End Engineering and Design study by Aker Solutions.
After assessing a contemplated 30% expanded project in a 2019 study, Fortune has refocused on a
NICO Project development strategy similar to the one used for the 2014 Micon Feasibility S tudy
based on a smaller higher grade project with lower capital costs. The Company is also pursuing a
number of op portunities to improve project economics before completing an updated Technical
Report.
Resource Modelling
The NICO Deposit has open p it and underground Mineral Reserves totaling 33.1 million tonnes,
averaging 1.03 grams of gold per tonne, 0.11% cobalt, 0.14% bismuth and 0.04% copper.
For more detailed information about the NICO Mineral Reserves and c ertain technical information in thi s 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 Interna tional Limited which has been filed on SEDAR and is available under the
Company's profile at www.sedar.com.
Fortune has been working on an updat ed Mineral Resource model for the NICO D eposit and has
retained P&E Mining Consultants Inc. (“P&E”) to complete this work . P&E has reinterpreted the
mineralized domain wireframes used to estimate tonnage and grade in the deposit using a more
constrained approach to the mineralized material boundaries and reduce external and internal dilution
and grade smearing. The wireframes have also been extend ed to surface where the NICO Deposit is
known to outcrop and to include some mineralized material at the interface with overlying volcanic
FORTUNE MINERALS LIMITED
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rocks. Some high grade gold intersections that were missing in the previous model have also now
been included. D ykes that crosscut the NICO Deposit have also been modelled in greater detail to
segregate this waste material and further reduce dilution. The grade interpolation method has also
been adjusted based on updated geostatistic al information. The overall objective of this work is to
produce a model with higher grades and gold content and reduced waste rock stripping during early
years of the mine life.
New Mine Plan
Fortune is now developing a new mine plan and schedule based on t he updated Mineral Resource
model with focus on early access to higher grade material using a combination of open pit and
underground mining methods that was also pursued in the 2014 Micon Feasibility Study . Open pit
optimization and scheduling will likely be augmented during early years of the mine life with higher -
grade gold-rich material sourced from deeper parts of the NICO Deposit in stopes designed close to
the existing ramp system that was constructed for earlier test mining and minimize underground pre-
production development. The mine plan will also include a grade control and stockpiling strategy to
defer processing of lower quality ores that was being pursued in 2019 before the Company terminated
the expanded project study.
Tlicho Road Construction
Construction of the C$200 million Tlicho All -Season Road to the community of Whati for the
Northwest Territories (“NWT”), federal and Tlicho governments commenced in September 2019 and is
progressing at a very rapid pace. As of mid-February NWT land -use inspection reports indicate that
road construction had advanced to kilometre 71 of the 97 km project, and temporary bridges had been
established at two of the three river crossings. Fortune plans to construct an all -season spur road
from Whati to the mine site as part of the NICO Project development in order to enable truck haulage
of metal concentrates to the railway at Hay River and delivery to the refinery for processing. With
greater certainty of the availability of the Tlicho All -Season Road, Fortune i s now planning to align
NICO Project construction using all-weather roads instead of constructing the mine using a winter ice
road. This is expected to reduce capital costs and supply chain risks during construction of the mine.
Refinery Collaboration and Brownfield Site Options
Fortune is evaluating a number of sites in southern Canada to construct the NICO Project refinery.
The Company has one site in Saskatchewan where it holds an option to purchase the lands , but is
also examining two brownfield sites with permitted hydrometallurgical process equipment that could
materially reduce capital costs for the development. Fortune will provide an update of these site
options when appropriate after it completes further evaluation.
Critical Minerals
The Canadian and United States governments have signed a Joint A ction Plan on Critical Mineral
Collaboration (the “Joint Action Plan”) to enable more North American production of certain minerals
identified by the U.S. government as critical to economic and national security. Minerals considered
critical for this purpose have essential use in important industrial and security applications, cannot be
easily substituted by other minerals, and their supply chain is threatened by geographic concentration
of production and/or geopolitical risks. Cobalt is one of the metals identified as critical because of its
use in lithium-ion rechargeable batteries powering electric vehicles, portable electronic devices and
stationary storage cells to make electricity use more efficient. Cobalt is also needed in aerospace and
cutting tool alloys, magnets and catalysts. More than 70% of current cobalt mine production is
sourced from the Democratic Republic of the Congo (“DRC”) and China refines approximately 68% of
this material.
Bismuth is also identified as a critical mineral for purposes of the Joint Action Plan and the NICO
Deposit contains 12% of global bismuth reserves. Bismuth is an eco-metal used in the automotive and
pharmaceutical industries and as a non -toxic and environmentally safe replacement for lead. China
currently controls approximately 75% of bismuth mine and refinery production.
More North American production of cobalt and bismuth is needed to diversify the supply of both
critical minerals and governments are contempla ting financial support to projects that are potential
near-term producers. Irrespective of the risks to current production, Fortune is well positioned to align
the NICO Project development schedule with the expected deficit in cobalt supply in 2022 -23 when
demand for batteries in electric vehicles is anticipated to outstrip production from existing mines and
known development projects.
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 C obalt-Gold-Bismuth-
Copper Project in the Northwest Territories. The Company has an option to purchase lands in
Saskatchewan where it may build the hydrometallurgical plant to process NICO metal concentrates.
Fortune also owns the Sue -Dianne Copper-Silver-Gold Deposit located 25 km north of t he NICO
Project, which is a potential future source of incremental mill feed to extend the life of the NICO
Project mill.
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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 information and forward -looking statements within the meaning of
applicable securities legislation. This forward -looking information includes stat ements with respect to, among
other things, the construction of the Tlicho All-Season Road, the Company’s plans to develop the NICO Project,
the preparation of an updated Technical Report for the NICO Project , the Joint Action Plan and the potential for
the Sue-Dianne property to provide incremental mill feed to 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 f orward-looking information contained in this press release, assumptions
regarding: the timing of completion of the Tlicho All-Season Road; the timing of the updated Technical Report for
the NICO Project and the results thereo f; the Company’s ability to arr ange 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 and the related hydrometallurgical refinery and the timing thereof; g rowth 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 volum es 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 forw ard-looking information. These factors
include the risks that the Tlicho All-Season Road may not be completed in the anticipated time frame, the
updated Technical Report for the NICO Project may take longer than anticipated and the results thereof may not
be as positive as anticipated, the NICO Project may not receive the benefit of any financing under the Joint
Action Plan or any other benefits therefrom, the Company may not be able to finance and develop NICO on
favourable terms or at all, uncertainties w ith 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 Compan y 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 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 est imating mineral resources and
reserves and the risk that even if such resources prove accurate the risk that such resources may not be
converted into reserves once economic conditions are applied, the Company’s production of cobalt , bismuth and
other metal s 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 cir cumstances, except as
required by law.