Mining and exploration review north of the 60th parallel

Shovels in Ground – Fortune Minerals Limited works towards secure bismuth source

17 - Aerial view of Aerial view of Fortune Minerals NICO gold-coblat-bismuth-copper project in Canada's Northwest Territories

Bismuth, a soft metal with a high density but low melting temperature, is primarily utilized in the automotive and medical sectors. Already widely recognized as the active ingredient in Pepto-Bismol, its use is becoming steadily more common as an environmentally-friendly lead substitute. One example of this latter is in a development by South Korean steel producer POSCO, where bismuth serves as a lead substitute in the world’s first mass-produced and bismuth-added free-cutting steel.

Bismuth is seen in most of the 80 million cars produced annually in the black compound protecting the adhesive around the perimeter of the windshield and in anti-corrosion coatings on automobiles, both taking advantage of the dimensional stability properties of this metal. In addition, it expands on cooling, as distinct from most elements.

The importance of bismuth is acknowledged by the British Geological Survey, which classifies it as economically important and at very high-risk to supply disruption. Further proof lies in China having been the dominant supplier, with 60 per cent of world reserves and 80 per cent of world production. Having a reliable North American source is therefore highly attractive to manufacturers who need security of supply.

Fortune Minerals Limited, headquartered in London, Ontario, NICO deposit in the Northwest Territories (NWT) contains 12 per cent of the world’s bismuth reserves, underpinning its status as a potential secure and reliable North American source for global customers. To underline the diversity of Fortune’s operations, NICO also hosts significant gold and cobalt reserves, the latter required to manufacture rechargeable batteries used in portable electronic devices and electric vehicles – not to mention the company’s Arctos anthracite deposit in British Columbia, the Revenue Silver Mine in Colorado and the Sue-Dianne copper-silver-gold deposit, which is also located near NICO in NWT.

“It is an exciting time for us with the acquisition of the Revenue Silver Mine transitioning us to a producing mining company that is developing two strategic assets. NICO is essentially shovel ready and is positioned to be an important North American source gold, bismuth and cobalt chemicals need to manufacture rechargeable batteries,” says Robin Goad, Fortune’s president and CEO.

Fortune’s gold reserves can serve as a hedge against bismuth and cobalt price volatility. In all, NICO is to become a fully vertically integrated project; ores will be mined and concentrated before being transported to a refinery for ultimate conversion to a high-value product.

17 - Fortune Minerals prepares the site for targeted construction activities at its NICO gold-cobalt-bismuth-copper project in the Northwest Territories (2)Working with Deloitte Corporate Finance Canada Inc, Fortune is now in negotiations with a strategic partner and its banks for the project financing that NICO requires for construction. There has already been corporate level investment by Procon Resources Inc, a subsidiary of China CAMC Engineering Co Ltd, and the firms are working together to advance NICO towards its construction activities.

More than $110 million of work has already been conducted for the NICO project to delineate and engineer the deposit and reduce risks from the development, including completion of front-end engineering and design and feasibility studies, underground test mining, and several pilot plant tests to verify the process methods and products the company plans to produce.

Detailed engineering and design work has recently been conducted by Hatch Ltd., which has been coordinating engineering for the mine, processing plant and other facilities such as tailings, water and power, and site access.

Location

NICO is situated 160 kilometres northwest of Yellowknife and 85 kilometres north of Highway 3 to Edmonton: access will be by a proposed all-weather road which will also serve the nearby Tlicho Aboriginal communities. The CN railway terminates at Hay River on the south shore of Great Slave Lake and provides a rail link to ship the concentrate from the mine to Saskatchewan for further processing.

The resource

NICO is an Iron Oxide Copper Gold class deposit. Ore is hosted in three, 40-50 degree dipping stratabound lenses of brecciated ironstone up to 1.3 kilometres in length, 550 metres in width and with individual lenses up to 70 metres in true thickness. The recoverable metals are associated with the approximate five per cent sulphide fraction consisting primarily of cobaltian arsenopyrite, cobaltite, bismuthinite, chalcopyrite, pyrite and pyrrhotite, as well as native gold and native bismuth.

The deposit contains open-pit and underground proven and probable mineral reserves totaling 33 Mt containing 1.1 Moz of gold, 82 Mlb of cobalt, 102 Mlb of bismuth, and 27 Mlb of copper. The planned mill throughput rate of 4,650 t/d for the ore will sustain operations for 20 years.

Planning goes smoothly

Environmental Assessment for the NICO mine and mill have been completed in both NWT and Saskatchewan. Fortune has also received its Class A Water License and the Land Use Permit required to construct and operate the NICO mine and concentrator – the final step in the permitting process.

Financially, what stands between Fortune and the construction of the mine is the receipt of the project financing. In addition, Tlicho participation agreements are currently being negotiated and are expected to conclude successfully.

With growth in the markets for both cobalt and bismuth in new environmentally sustainable applications (electric cars and lead-free  products), and due to the concerns with the dominance of supply of both metals from the Congo and China, NICO presents an opportunity to capitalize on a reliable Canadian source of supply for both metals. A highly liquid and important gold co-product, along with the other metals found at NICO, make for a resource highly valuable in its own right in financial terms and of great importance in respect of Canadian self-sufficiency.

 

 

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