Fortune Minerals Ltd.’s [FT-TSX; FTMDF-OTCQX] previously announced plan to build a metals processing facility in Saskatchewan has been hit with a setback after the company’s application to change the zoning on the project site was rejected by the local municipality.
The rezoning is required for the construction and operation of a hydrometallurgical facility that Fortune wants to build in order to process metal concentrates from the company’s planned NICO cobalt-gold-bismuth-copper mine in the Northwest Territories.
Fortune said it is now considering its options with respect to its lands in the Municipality of Corman Park, Saskatchewan. These might include the identification of other sites in Saskatchewan and other jurisdictions that might welcome the economic opportunities and the potential spinoffs.
The company said it is also evaluating a lower-cost start-up option of selling metal concentrates and gold doré directly from the proposed mine to defer construction of the refinery.
Fortune shares reacted by falling 8.33% or $0.01 to 11 cents on Tuesday. The 52-week range is $0.065 and 28 cents.
During a telephone interview with Resource World magazine, Fortune President and CEO Robin Goad said the company has entered into approximately 30 confidentiality agreements with potential strategic partners from diverse business sectors.
He said several of these companies are interested in purchasing metal concentrates directly from the NICO mine for treatment in their existing process facilities.
Goad said NICO is getting attention as a result of investor interest in cobalt, which has benefitted from supply concerns stemming from its role as a key ingredient used in the production of batteries.
Goad said his company is one of only a handful of global companies that could be producing cobalt in the near future. He said Fortune could position itself as a possible supplier of “ethical cobalt” to consumers seeking an alternative to the Democratic Republic of Congo, currently the source of over 50% of the world’s production.
The NICO deposit is located 160 km northwest of the city of Yellowknife. It contains open pit and underground proven and probable reserves of 33 million tonnes, containing 1.1 million ounces of gold, 82 million pounds of cobalt, 102 million pounds of bismuth, and 27 million pounds of copper.
At a previously planned mill throughput rate of 4,650 tonnes of ore per day, that material was expected to sustain a mining operation for 20 years. An April 2014 technical report envisaged a scenario where the site would be mined by a combination of open pit and underground methods, producing a bulk gold-cobalt-bismuth-copper-concentrate in a processing plant located at the mine site.
Fortune has said a bulk concentrate would be bagged at the project site, transported by road to a rail head at Hay River, NWT, and then hauled by road to a metals processing plant in Saskatchewan. A key part of the plan involved the construction of a new hydrometallurgical facility at a site, approximately 26 km north of Saskatoon.
Products that the company plans to produce include cobalt compounds needed to manufacture the cathodes of lithium-ion batteries. Bismuth is an ecometal that can be applied as a non-toxic replacement for lead and is also used for medicinal purposes.