Fortune gains EA approval for Nico mine and mill

2013-01-28 07:46 ET - News Release

 

Mr. Robin Goad reports

FORTUNE MINERALS RECEIVES ENVIRONMENTAL ASSESSMENT BOARD APPROVAL FOR THE NICO MINE & MILL

The Mackenzie Valley review board has concluded its environmental assessment (EA) and has recommended approval of Fortune Minerals Ltd.'s proposed Nico gold-cobalt-bismuth-copper mine and mill in the Northwest Territories. The Review Board concluded that a full environmental review of the NICO Project is not necessary and that it should proceed to the regulatory phase for approvals subject to the measures set out in its Report.

The Review Board, the primary authority responsible for all EA and review in the NT, issued its Report of Environmental Assessment and Reasons for Decision ("Report") for the NICO project on January 25, 2013. This Report found that, "while the NICO project has the potential to cause significant adverse impacts on the environment, the measures the Review Board has recommended will ensure that no significant adverse impacts will result from the development." The Report and recommendation has been submitted to the Honourable John Duncan, Minister of Aboriginal Affairs and Northern Development Canada ("AANDC") for his approval and signature, and to the Tlicho Government. Upon acceptance of the Report by the Minister and the Tlicho Government, the NICO project can progress to the licensing and permitting phase of the process.

Dr. Richard Schryer, Fortune's Director of Regulatory and Environmental Affairs stated, "This is a landmark decision for Fortune as we have successfully demonstrated to the Review Board that the NICO project can be constructed, operated and decommissioned without significant impact to the surrounding environment. The measures requested by the Review Board were developed primarily from pre-existing commitments already agreed to by the Company during the EA. Fortune is confident these measures can be successfully implemented since they were already part of the project development plan." Examples of the measures include the development of a Wildlife Effects Monitoring Program, a Wildlife and Wildlife Habitat Protection Plan, and the signing of a socio-economic agreement with the Government of the Northwest Territories ("GNWT") which are all standard practice for mines in the NT. One of the measures was directed to the GNWT and Tlicho Government, which are required to establish and co-chair, at their own expense, an expert working group to develop a response framework for managing cumulative impacts.

The Review Board stated that its recommendation assumes Fortune will implement all of the commitments it made during the EA process as well as the measures outlined in the Report. A number of suggestions were also proposed by the Review Board which Fortune will take into consideration in the development of the NICO project. Completion of the EA process is a significant milestone for the NICO project which will proceed to the regulatory approvals phase with the Wek'eezhAnoti Land and Water Board and other parties to develop the water license and land use permits upon acceptance of the Report by the Minister of AANDC and the Tlicho Government. Fortune has already begun preparations for this final stage of the permitting process and fully expects to progress in an efficient manner given the positive foundation already built during the EA process. The Company is also advancing discussions with the Tlicho Government toward completing agreements on the NICO development.

NICO is a planned vertically integrated project consisting of an open pit and underground mine and mill in the NT and a refinery in Saskatchewan where concentrates from the mill will be processed to high value metal products. The proposed mine is located 50 km north of the Tlicho community of Whati and 160 km northwest of the City of Yellowknife. The NICO project has already been assessed in a positive Front-End Engineering and Design study led by Jacobs Minerals Canada Inc. and other engineering companies, and the deposit has been test mined and the ores and concentrates subjected to pilot plant testing to verify the process flow sheet, and the production and recoveries of metal products.

With 33 million tonnes of Proven and Probable Mineral Reserves containing approximately 1.1 million ounces of gold, 82 million pounds of cobalt, 102 million pounds of bismuth and 27 million pounds of copper, the NICO mine can sustain operations for 20 years at the planned production rate of 4,650 tonnes of ore per day. The high concentration ratio of NICO ores allows this daily throughput to be reduced to only 180 tonnes of concentrate containing the valuable metals. The concentrate will be trucked to the rail head at Hay River for delivery by rail to the Saskatoon Metals Processing Plant ("SMPP") for further processing to high value metal products.

NICO is planned to be a reliable Canadian producer of gold dore, cobalt sulphate, bismuth ingot and copper metal precipitate. Notably, cobalt has growing consumption in superalloys and chemicals needed to manufacture high performance lithium-ion and nickel-metal hydride rechargeable batteries used in portable electronic devices and hybrid-electric cars. NICO contains approximately 15% of global bismuth reserves, demand for which is growing as an environmentally safe and non-toxic replacement for lead in a number of important metal alloys, industrial materials and specialized products that require its unique physical and chemical properties. The approximately 1.1 million ounces of gold contained in the NICO deposit is a counter cyclical hedge to the other metals that could sustain operations during periods of metal price volatility.

 

Underground Mineral Reserves  Class  Tonnes Au (g/t)Co (%)Bi (%)Cu (%) Proven 282,000  4.93   0.14  0.27  0.03 Probable94,000   5.60   0.11  0.19  0.01  Total  376,000  5.09   0.13  0.25  0.02 Open Pit Mineral Reserves  Class    Tonnes  Au (g/t)Co (%)Bi (%)Cu (%) Proven 20,513,000  0.94   0.11  0.15  0.04 Probable12,099,000  1.05   0.11  0.13  0.04  Total  32,612,000  0.98   0.11  0.14  0.04 Underground and Open Pit Combined Mineral Reserves          Class           Tonnes     Au (g/t)         Co (%)           Bi (%)           Cu (%)             Proven         20,795,000     0.99            0.11             0.15             0.04             Probable        12,193,000     1.09            0.11             0.13             0.04               Total         32,988,000     1.02            0.11             0.14             0.04      In-Situ Contained Metal          1,085,000Ounces82,268,000 pounds102,053,000pounds27,179,000pounds

 

Sums of the combined reserves may not exactly equal sums of the underground and open pit reserves due to rounding error. The geological block model consists of the aggregate of five metre cubed individual blocks with grades assigned by the interpolation of composited assay data using Indicator Kriging. The resource estimate was also verified using Nearest Neighbor interpolation, which generated similar results. The composite database was subjected to geostatistical analysis to limit the influence of grades that were considered statistically anomalous, and established grade caps of 24 grams/tonne ("g/t") for gold, 0.94% for cobalt, 1.40% for bismuth and 0.71% for copper. The mineral reserve estimates were prepared by Eugene Puritch, P.Eng., Fred H. Brown, CPG PrSciNat, and James L. Pearson, P.Eng. of P&E, who are the Qualified Persons responsible for the updated mineral reserves as defined by NI 43-101.

Concurrent with the permitting process, Fortune has been working with Deloitte & Touche Corporate Finance Canada to attract one or more strategic partners to provide the project financing for the NICO project. As a potential Canadian-based producer of cobalt and bismuth, NICO presents an attractive opportunity for prospective partners to secure a reliable supply of these metals with a highly liquid gold co-product. Discussions are ongoing with several parties interested in participating in joint venture development of the project.

The disclosure of scientific and technical information contained in this press release has been approved by Robin Goad, M.Sc., P. Geo., President and Chief Executive Officer of the Company, who is a "qualified person" under National Instrument 43-101.

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