Fortune Minerals provides update of NICO Project winter field programs
Issued Capital: 94,779,407
LONDON, ON, March 16 /CNW/ - Fortune Minerals Limited (TSX-FT) ("Fortune Minerals" or the "Company") is pleased to provide an update of ongoing winter programs for its NICO gold-cobalt-bismuth-copper deposit in the Northwest Territories ("NWT") and its proposed Saskatchewan Metals Processing Plant ("SMPP") near Saskatoon. Fortune Minerals plans to become a vertically integrated metal producer. The Company will mine and process ores at the NICO site in the NWT and produce a bulk concentrate for delivery to its proposed SMPP for refining to high value metal products, including gold-doré, and cobalt, bismuth and copper cathodes. NICO is undergoing an environmental assessment to permit the mine and concentrator in the NWT, and a concurrent permitting process for the SMPP in Saskatchewan. Field programs are being conducted at both sites to support permitting and planned construction activities, and optimize the project for production targeted in late 2012.
NICO Mine Site Field Programs:
The NICO gold-cobalt-bismuth-copper deposit is located in the southern part of the NWT, 160 km northwest of the City of Yellowknife and 50 km north of the community of Whati. Fortune Minerals contracted Tlicho Logistics to extend the Government winter road used to supply local communities to the NICO mine site. This ice road has been completed and Tlicho Logistics is now transporting fuel and other bulk supplies to the project to support the Company's winter and summer field programs.
FORACO Drilling Ltd. has been contracted to conduct additional geotechnical drilling at the mine to support ongoing engineering and the construction of the mill, mine buildings and airstrip. This work, together with engineering of the roads and plant site, is being supervised by EBA Engineering Consultants Ltd. Additional geotechnical drilling is also being conducted in the proposed impoundment area for management of co-mingled waste rock and mill tailings. Monitoring holes are also being installed to collect groundwater samples for base line characterization and to monitor seepage during mine operations. Golder Associates Ltd. is conducting the engineering work for the tailings and waste rock management area as well as the environmental work for the NICO mine site. Condemnation holes are being drilled beneath the proposed waste rock and tailings impoundment area to ensure that no potential unidentified open pit mineable ores are sterilized by the construction of these facilities.
Fortune Minerals is pleased to announce that it will conduct a significant additional drilling program this summer, currently estimated at 7,000 metres in 43 holes. The main objectives for this program are to extend the known mineral reserves for the deposit and provide better definition of the perimeter of the orebody for detailed mine operations and production scheduling. Notably, the Company believes there is good potential to expand the gold-rich zones of the deposit where they remain open for possible expansion at depth. The NICO deposit currently has Proven and Probable Mineral Reserves totaling 31 million tonnes containing 907,000 ounces gold, 82 million pounds of cobalt, 109 million pounds of bismuth and 27 million pounds of copper (See Fortune Minerals News Release, dated January 14, 2010 and the table below). The identification of additional reserves could extend the life of the mine beyond the currently contemplated 18 years and also has the potential to increase the gold reserves above 1 million ounces. The NICO deposit contains 4 million equivalent gold ounces with the conversion of the value of the contained cobalt, bismuth and copper at the metal price assumptions used in the reserve estimates.
NICO Mineral Reserves:
The mineral reserves for the NICO deposit are compiled in the following tables:
Underground Mineral Reserves
----------------------------
-------------------------------------------------------------------------
Class Tonnes Au (g/t) Co (%) Bi (%) Cu (%)
-------------------------------------------------------------------------
Proven 1,403,000 2.23 0.16 0.22 0.04
-------------------------------------------------------------------------
Probable 767,000 2.92 0.17 0.19 0.03
-------------------------------------------------------------------------
Total 2,170,000 2.47 0.16 0.21 0.03
-------------------------------------------------------------------------
Open Pit Mineral Reserves
-------------------------
-------------------------------------------------------------------------
Class Tonnes Au (g/t) Co (%) Bi (%) Cu (%)
-------------------------------------------------------------------------
Proven 15,019,000 0.85 0.12 0.16 0.04
-------------------------------------------------------------------------
Probable 13,797,000 0.71 0.12 0.15 0.03
-------------------------------------------------------------------------
Total 28,816,000 0.79 0.12 0.15 0.04
-------------------------------------------------------------------------
Combined Mineral Reserves
-------------------------
-------------------------------------------------------------------------
Class Tonnes Au (g/t) Co (%) Bi (%) Cu (%)
-------------------------------------------------------------------------
Proven 16,422,000 0.97 0.12 0.16 0.04
-------------------------------------------------------------------------
Probable 14,564,000 0.83 0.12 0.15 0.03
-------------------------------------------------------------------------
Total 30,986,000 0.91 0.12 0.16 0.04
-------------------------------------------------------------------------
Total 907,000 82 million 109 million 27 million
Contained ounces pounds pounds pounds
Metal
-------------------------------------------------------------------------
The mineral reserves for the NICO deposit were estimated in compliance with National Instrument ("NI") 43-101 and CIM guidelines by P&E Mining Consultants Inc. using metal price assumptions of US$900/oz gold, US$20/lb cobalt, US$10/lb bismuth and US$2.75/lb copper. Mr. Eugene Puritch, P.Eng. and Fred H. Brown, CPG PrSciNat, both of P&E, are the Qualified Persons responsible for the updated mineral reserves as defined by NI 43-101.
Saskatchewan Metals Processing Plant Field Programs:
Fortune Minerals has an agreement to purchase lands adjacent to the CN Main Railway Line near Langham, 26 km northwest of Saskatoon, where it plans to construct its SMPP. The Company contracted MDH Engineered Solutions Corp. ("MDH") to conduct a hydrogeology assessment of the plant site groundwater for process water supply and to assess any potential impacts the Company might have on the Dalmeny Aquifer. Drilling for this assessment is now complete and MDH will conduct a pump test in May before completing its report in support of permitting. Geotechnical drilling is also being conducted for the design of the plant foundations, and also to determine soil conditions and permeability for construction of the water storage ponds and process residue storage facility. MDH is also conducting environmental base line studies to support ongoing permitting activities.
About the Projects:
The NICO project consists of a mine and concentrator in the NWT and the SMPP consists of a hydrometallurgical process plant in Saskatchewan to make Fortune Minerals a near-term reliable Canadian based producer of gold, cobalt, bismuth and copper metals.
The NICO deposit contains mineral reserves that will sustain operations for a minimum 18 years at a planned production rate of 4,650 tonnes of ore per day. The deposit will utilize a combination of both open pit and underground mining in the first two years of the mine life, and then only open pit mining in years 3-18. As a result of underground bulk sampling already conducted in 2006 and 2007, a significant amount of pre-production development and the decline access ramp to the underground part of the mine has already been completed. A mill and concentrator will be constructed at the NICO site with a conventional crushing and grinding circuit and flotation cells to produce a bulk concentrate. NICO ores have a very high concentration ratio producing only 180 tonnes of bulk concentrate per day containing the recoverable economic metals. Fortune Minerals owns buildings and equipment from the Golden Giant Mine at Hemlo Ontario, which have been dismantled for relocation to NICO for construction of the mill and concentrator.
Bulk concentrate produced at the NICO site will be trucked to the rail head at Hay River, NWT for loading onto rail cars and delivery to the Company's proposed SMPP located on the CN Main Line near Saskatoon. The concentrate will undergo further grinding and flotation to produce gold-bearing cobalt and bismuth concentrates for refining by acid leach and then electro-winning to high value metal products, including gold doré, 99.8% cobalt cathode, 99.5% bismuth cathode and 99.99% copper cathode.
The NICO Project has already been assessed in a positive definitive feasibility study by Micon International Limited that was updated in 2008 and indicates an attractive rate of return for the development. Front-end engineering and design for NICO and the SMPP are nearing completion by Aker Metals Canada, a division of Aker Solutions, P&E Mining Consultants Inc., SGS Lakefield Research Limited, Dan Mackie & Associates, Hydroproc, EHA Engineering Ltd. and Golder Associates Limited, and updated economics for the combined projects are expected to be available in the third quarter of 2010.
Fortune Minerals is very pleased to continue reporting operational improvements for the NICO project that will extend the employment and economic opportunities for the project for the benefit of all stakeholders.
About Fortune Minerals:
Fortune Minerals is a diversified resource company with several mineral deposits and a number of exploration projects, all located in Canada. The Company is focused on the development of its NICO gold-cobalt-bismuth-copper deposit in the Northwest Territories and its metals processing plant in Saskatchewan. Fortune Minerals owns the buildings and equipment from the Golden Giant Mine at Hemlo, Ontario, which have been dismantled for relocation to NICO. Fortune Minerals also owns the Mount Klappan anthracite coal deposits in British Columbia, and the Sue-Dianne copper-silver deposit and other exploration projects in the Northwest Territories. Fortune Minerals is focused on outstanding performance and growth of shareholder value through assembly and development of high quality mineral resource projects.
The contents of this press release have been reviewed and approved by Eugene Puritch, P.Eng., President of P&E Mining Consultants Inc. and Robin Goad, P.Geo., President of Fortune Minerals Limited.
This press release contains forward-looking information. This forward-looking information includes statements with respect to, among other things, projected rates of production and sources of revenue for the NICO project, the projected mine life of the NICO project, the proposed purchase and development of the site for the SMPP, and the proposed implementation of corporate income tax incentives by the Saskatchewan government. Forward-looking information is based on the opinions and estimates of management at the date the information is given, and 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 inherent risks involved in the exploration and development of mineral properties, the inherent volatility of metal prices, the risk that the Company may not be able to arrange the necessary financing to construct and operate the NICO mine and the SMPP, uncertainties with respect to the receipt or timing of required permits for the development of the NICO project and the SMPP, the possibility of delays in the commencement of production from the NICO project and construction of the SMPP, uncertainties related to the implementation of the proposed tax incentives and other factors. 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.
For further information: Fortune Minerals Limited: Robin Goad, President, or Lindsay Simmons, IR Coordinator, [email protected], Tel.: (519) 858-8188, Fax: (519) 858-8155, www.fortuneminerals.com; Renmark Financial Communications: Dan Symons, [email protected], or Barbara Komorowski, [email protected]; Media Contact: Guy Hurd, [email protected], Tel: (514) 939-3989, Fax: (514) 939-3717, www.renmarkfinancial.com
Share this article