Expanding domestic production of cobalt for the
battery supply chain & energy transition
Fortune Minerals Limited (TSX: FT) (OTCQB: FTMDF)
(“Fortune” or the “Company”)
(www.fortuneminerals.com) is pleased to announce that the United
States Department of Defense (“DoD”) has awarded the Company
a US$6,380,555 (~C$8.74 million) grant under the Defense Production
Act (“DPA”) Title III program to expand the domestic
capacity and production of cobalt for the battery and high strength
alloy supply chains. This non-dilutive source of capital will allow
Fortune to advance the vertically integrated NICO
cobalt-gold-bismuth-copper development asset in Canada (“NICO
Project”) toward a project construction decision.
The NICO Project is an advanced development stage Critical
Minerals asset comprised of a planned open pit and underground mine
and concentrator in the Northwest Territories (“NWT”) and a
related hydrometallurgical refinery in Alberta to process
concentrates from the mine to value-added metals and chemicals.
Once developed, the NICO Project would become a reliable North
American supplier of cobalt sulphate for the rapidly expanding
lithium-ion rechargeable battery industry, with gold, bismuth, and
copper co-products.
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Fortune has been awarded DoD funding to complete work in four
focus areas needed to advance the NICO Project to a project finance
decision:
- Metallurgical tests to optimize the Alberta Refinery site
hydrometallurgical processes.
- Secure the remaining authorizations and preparation of
management plans for construction and operation of the NICO mine
and concentrator in the NWT.
- Secure the requisite permits to construct and operate the
hydrometallurgical refinery at the planned brownfield site in
Alberta’s Industrial Heartland.
- Complete an updated Feasibility Study assessing NICO Project
economics with the new refinery site, recently completed Tlicho
all-season road, the new mine plan and production schedule and
other recent optimizations.
The Company’s goal is to deliver vertically integrated North
American production facilities to become a reliable domestic
producer of cobalt, bismuth, and copper Critical Minerals with more
than one million ounces of gold as a liquid and countercyclical
co-product. The cobalt sulphate production from the NICO Project
would provide a source of battery materials that is compliant with
the U.S. Inflation Reduction Act (“IRA”) and help qualify
U.S. customers of North American built electric vehicles for tax
credits supporting the transition to e-mobility.
The NICO Project is projected to have average annual production
of 1,800 metric tonnes of cobalt (~8780 tonnes of cobalt sulphate),
47,000 Troy ounces of gold, 1,700 tonnes of bismuth in ingots, and
300 tonnes of copper. One of the objectives of the metallurgical
test work program is to also validate the production of a clean
gypsum by-product from neutralization of the autoclave effluent to
be used in the local agriculture, cement and oil and gas
industries, while also reducing waste disposal costs. Fortune is
also collaborating with Rio Tinto, assessing the feasibility of
processing intermediate products produced from the Kennecott
smelter in Utah at the Alberta Refinery to increase cobalt and
bismuth production (see the Company’s news release dated September
29, 2023). This cross-border initiative is aligned with the U.S. –
Canada Collaboration on Critical Minerals Supply and Fortune has
identified other sources of materials that could also be processed
in the Alberta Refinery to augment metal production.
Cobalt is a particularly important Critical Mineral due to its
expanding consumption in lithium-ion batteries powering the
transition to e-mobility and high strength alloys used in the
aerospace industry. However, there are risks with the current
sources of supply due to geographic concentration of mine
production in the politically unstable Democratic Republic of the
Congo (77% of global cobalt mine production) and China’s dominant
position in refining (80% of the world’s refined cobalt supply). In
addition, some current cobalt production does not align with
western democratic environmental-social governance practices or
values. Cobalt is therefore identified on the U.S., Canadian,
European Union, and Japanese Critical Minerals Lists because of its
prominent role in the energy transition and the supply chain
concerns.
The U.S. has limited domestic capacity for cobalt production and
development of the NICO Project will help reduce the acute reliance
on imports from foreign nations of concern, while strengthening and
diversifying the supply chain for metals used in important new
technologies and defense applications.
Robin Goad, President and CEO of Fortune Minerals commented, “It
has been difficult attracting investment funding for essential
Critical Minerals projects in traditional capital markets. We are
therefore grateful for the U.S. Defense Department’s timely and
strategic financial support to enable Fortune Minerals to
accelerate development of the NICO Project to provide additional
domestic capacity and security of supply.”
The NICO Project is an advanced Critical Minerals development
that Fortune has already expended more than C$137 million to
advance from an in-house mineral discovery to a near shovel-ready
development asset with a positive Feasibility Study completed in
2014, and environmental assessment approval and the major mine
permits for the facilities in the NWT. The NICO Project is
primarily a cobalt-gold asset, but the deposit also contains 12% of
global bismuth reserves, another essential Critical Mineral used in
the automotive industry and with growing consumption in
environmental applications, including lead replacement, plugging
decommissioned oil and gas wells, and manganese-bismuth magnets to
make electric vehicle powertrains.
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. The Canadian to U.S. dollar exchange
rate used in the conversion is US$1 = C$1.37.
About Fortune Minerals:
Fortune is a Canadian mining company focused on developing the
NICO cobalt-gold-bismuth-copper Critical Minerals project in the
Northwest Territories 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 the DOD
funds, advancement of the NICO Project towards a project finance
decision, including the successful construction and completion of
the Company’s proposed hydrometallurgical refinery and the
successful development and construction of the planned NICO
cobalt-gold-bismuth-copper mine and concentrator NICO Project
becoming a reliable source of cobalt, sulphate, gold, bismuth and
copper, NICO Project providing a source of battery materials that
would be compliant with IRA and allow tax credits, and NICO
Project’s projected average annual production of cobalt, gold,
bismuth and copper. 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 actual receipt of funds from DOD, the
Company’s ability to complete construction of NICO Project mine,
concentrator, the hydrometallurgical refinery and advance the NICO
Project; the Company’s ability to arrange the necessary financing
beyond the DOD funding 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
hydrometallurgical refinery and the timing thereof; growth in the
demand for cobalt; the time required to construct the NICO Project;
the relevant laws and regulations in Canada and the U.S.; 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 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, relevant regulatory changes,
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 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20240515699215/en/
For further information: Fortune Minerals Limited Troy
Nazarewicz Investor Relations Manager info@fortuneminerals.com Tel:
(519) 858-8188 www.fortuneminerals.com
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