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US, Canada back Fortune's NICO project

North of 60 Mining News - May 17, 2024

Marks first time ever that U.S. and Canadian governments co-invest in development of North American critical mineral projects.

The U.S. Department of Defense (DOD) and Natural Resources Canada (NRCan) are investing a combined $12 million into establishing a vertically integrated critical minerals supply chain in Canada that includes a mine at Fortune Minerals Ltd.'s NICO cobalt-gold-bismuth-copper project in Northwest Territories and associated hydrometallurgical refinery in Alberta.

Not only is this good news for Fortune and its plans to advance NICO to production, but this funding also marks the first time that the U.S. and Canadian governments have co-invested in the development of critical mineral projects in North America.

"Canada is positioning itself as a global leader in the supply of responsibly sourced critical minerals for the green and digital economy," said Canada Minister of Energy and Natural Resources Jonathan Wilkinson. "Through our work with the United States and other allies, we are developing secure critical minerals value chains that will power a prosperous and sustainable future."

Fortune was one of two Canadian companies to receive co-investments from DOD and NRCan. Lomiko Metals Inc., which is advancing a graphite supply chain centered on its La Loutre project in Quebec, is the other.

"As some of the first awards to Canadian public mining and mineral development companies, these grants exemplify the critical importance of DPA (Defense Production Act) funds, the department's partnership with Canada, and our shared commitment to strengthening North American material supply chains," said U.S. Assistant Secretary of Defense for Industrial Base Policy Laura Taylor-Kale.

Intriguing metals mix at NICO

Located about 160 kilometers (100 miles) northwest of Yellowknife, Northwest Territories, NICO is a near-development stage project that includes an intriguing mix of critical and precious metals.

According to a 2020 development plan based on optimizations of a 2014 feasibility study, a mine at NICO and an associated refinery in Alberta would produce an average of 1,800 metric tons of battery-grade cobalt sulfate, 1,700 metric tons of bismuth, 300 metric tons of copper, and 47,000 oz of gold annually over the first 14 years of mining.

"As a planned vertically integrated development, the NICO project covers the entire mineral production process from mining and concentrating ores to refining metals to final cobalt sulfate and bismuth ingot products with copper and gold co-products," the Pentagon inked in an announcement on its funding of the project.

The cobalt that would be produced at the vertically integrated NICO project is in high demand due to its use in lithium-ion batteries powering electric vehicles, storing renewable energy, and powering an untold number of electronic and household devices.

According to the U.S. Geological Survey, roughly 74% of the world's cobalt comes from mines in the Democratic Republic of Congo (DRC), a country known for being politically unstable and which has come under global scrutiny for human rights and safety issues related to the mining of cobalt there.

China controls more than half of the cobalt mined in DRC and currently accounts for roughly 76% of the global refined cobalt.

NICO also happens to host 10% of the world's reserves of bismuth, a critical mineral used in a wide variety of automotive and metallurgical applications.

Adding to the potential commercial uses of bismuth, U.S. Department of Energy national laboratories have made breakthroughs on powerful manganese-bismuth permanent magnets that could serve as an alternative to rare earth magnets in EV motors, wind turbines, military hardware, and other applications.

Much like cobalt, however, the production of bismuth is dominated by China, which accounted for roughly 80% of global production during 2023, according to the USGS.

What makes NICO even more intriguing is the mine in Northwest Territories and refinery in Alberta would also produce appreciable quantities of the copper critical to the clean energy transition and gold that offers a built-in hedge against inflation alongside the bismuth and cobalt.

"The demand for critical minerals needed for the energy transition requires new vertically integrated domestic production from non-traditional ores and concentrates," said Fortune Minerals President and CEO Robin Goad.

Fortune Minerals Ltd.

Fortune Minerals has the option to acquire this steel fabrication plant in Alberta, which it plans to repurpose as a refinery to process concentrates from a future NICO cobalt-gold-bismuth-copper mine and potentially recover bismuth and cobalt from Rio Tinto's Kennecott refinery.

U.S-Canada joint vision

To help develop an updated feasibility study for NICO and advance the Canadian critical minerals project to a construction decision, DOD is providing Fortune with a $6.5 million (C$8.8 million) Defense Production Act grant, and NRCan is investing an additional C$6.4 million (C$4.7 million) into the project.

Both the U.S. and Canadian governments said this co-investment in Fortune, along with the associated investment in Lomiko, is a landmark example of the close bilateral collaboration under the Canada-U.S. Joint Action Plan on Critical Minerals Collaboration and the Canada-U.S. Energy Transformation Task Force.

"These announcements by the United States and Canada demonstrate our commitment to implementing a joint vision of developing sustainable, integrated critical mineral supply chains that will serve North American advanced manufacturing, clean energy, and defense sectors," the two countries penned in a May 16 joint briefing on the investments.

The Pentagon says the DPA funding will enable Fortune to complete an updated feasibility study, secure the remaining permits, and obtain the required authorizations to accelerate its vertically integrated NICO project to a construction decision.

"It has been difficult attracting investment funding for essential critical minerals projects in traditional capital markets," said Goad. "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."

Author Bio

Shane Lasley, Publisher

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Over his more than 16 years of covering mining and mineral exploration, Shane has become renowned for his ability to report on the sector in a way that is technically sound enough to inform industry insiders while being easy to understand by a wider audience.


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