Published: June 16, 2020 |

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Fortune Minerals Limited released an update of cost saving measures it has taken to preserve working capital during the market uncertainty caused by the Coronavirus pandemic.

Fortune continues to make progress with a number of NICO Cobalt-Gold-Bismuth-Copper Project optimizations completed using internal resources to enhance project economics at prevailing metal prices. The company said construction has resumed on the Tlicho All-Season Road for the Government of the Northwest Territories.

The NICO Project is an advanced development asset comprised of a planned mine and concentrator in the Northwest Territories and a related refinery in southern Canada where metal concentrates would be processed to cobalt sulphate, gold doré, bismuth ingots and oxide, and copper precipitate. The cobalt and bismuth contained in the NICO Project mineral reserves are identified on the United States and European Union Critical Mineral Lists based on their essential use in important manufacturing and defense industries, the fact that they cannot be easily substituted with other minerals, and the vulnerability of their supply chains to geographic concentration of production and geopolitical risks. The mineral reserves also contain more than one million ounces of gold, providing a liquid, countercyclical co-product to mitigate technology metal price volatility. The NICO Project has already been assessed in a positive feasibility study by Micon International Limited in 2014.

Earlier this year, Fortune implemented preliminary cost saving measures of reducing expenditures to outside consultants and preserving working capital to advance optimizations to the NICO Project. Consulting expenses to some senior executives were also reduced. Due to the ongoing impact of the Covid-19 pandemic, effective May 20, Glen Koropchuk stepped down from his position as vice president and chief operating officer, but will continue to serve on the company’s board of directors. Also, Dave Massola transitioned from his previous part-time position of vice president of finance and chief financial officer to an advisory role, assisting Fortune with its project finance activities.

Fortune has appointed Patricia Penney, B.Comm (Hon. Accounting), C.P.A., C.A., previously Fortune’s controller, as interim chief financial officer. Penney has been primarily responsible for the financial reporting for the company over the past several years.

“Glen Koropchuk and Dave Massola will continue to be associated with the company to provide their expertise. The changes will position the company financially to continue advancing development of our vertically integrated NICO Project. I would also like to personally congratulate Patricia Penney on her appointment to her new position and am confident that she will continue to provide excellent results in this role,” said Fortune’s President Robin Goad.

Fortune recently provided an update of the work being done to optimize NICO Project economics, including completion of an updated mineral resource model, and preparation of a new optimized open pit shell and preliminary underground stope designs. The company is pursuing a development strategy that is similar to the one used in the 2014 Feasibility Study, based on a mill throughput rate of 4,650 tonnes of ore per day and combined open pit and underground mining during early years of the mine life. A new mine plan and schedule has been developed that will incorporate grade control, selective mining and a stockpiling strategy to defer processing of lower grade ores.

Work continues on the review and analysis of capital and operating costs for the NICO Project, including reconciliation of recent estimates from Hatch Ltd. for the contemplated expansion study in 2019 against estimates obtained from the company’s earlier 2012 Front-End Engineering and Design study by Aker Solutions, the 2014 feasibility study, and quotes recently obtained directly from suppliers. This work is still in progress; however, the company has identified several opportunities to reduce capital and operating costs, based on new information from suppliers and market trends. Fortune is also continuing its review of various downstream refinery sites with a focus on permitted brownfield options with existing facilities that could materially reduce capital costs for the planned development.

The Government of the Northwest Territories and North Star Infrastructure recently announced that construction of the 97-kilometre Tlicho All-Season Road from Highway 3 to the community of Whati resumed in mid-May. The NICO Project includes construction of a 50-kilometre spur road from Whati to the mine to enable truck haulage of metal concentrates to the railway at Hay River and delivery to the refinery for processing during operations.

About Fortune Minerals
Fortune is a Canadian mining company focused on developing the NICO Cobalt-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 the 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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