Hi All,
I received this yesterday and would have shared it with you all immediately. Unfortunately, due to a glitch on my pc, I was unable to post it yesterday. At last, we have the good news. Too bad we had to wait this long for it. To be sure, the patience of many has been tried severely. Anyway, the good news is here!!! For me, it's a great relief, and I hope it is for most of you, too.
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May 21, 2002
NEWS RELEASE
FORTUNE MINERALS ANNOUNCES RESULTS OF NICO STUDY
Fortune Minerals (TSE:FT) is pleased to announce results of a scoping level economic assessment of the Company’s 80% owned NICO cobalt-gold-bismuth deposit located 160km northwest of Yellowknife, Northwest Territories. NICO is a large near-surface deposit containing cobalt, gold and bismuth, amenable to open pit extraction for the low-grade resources, or selective mining of a higher-grade core by underground bulk mining methods. Simple flotation generates auriferous bismuth and cobalt concentrates for sale or subsequent processing to higher value products. A plant capable of processing cobalt concentrates from the property is located in Yellowknife. Surplus power is available from the Snare hydro complex 20km east of the property. NICO is presently accessed from an extension of the winter road to the communities of Wha Ti, and Rae Lakes. The Government of the Northwest Territories is planning to re-align this road to an all-land route with bridged water crossings. This will extend use of the road over a longer period of the year and allow for eventual upgrade to all-weather capability.
Fortune Minerals engaged Strathcona Mineral Services Limited (Strathcona) to update its earlier economic assessment of the NICO deposit based on revised mineral resource estimates after completion of the 30-hole drill program in 2000. The study was based on an open pit mine treating 10,000 tonnes of ore/day. A revised metallurgical flow sheet was contemplated with on-site conventional crushing and grinding followed by two-stage flotation to generate auriferous cobalt and bismuth concentrates. The new flow sheet recovers bismuth, which would be sold to the Teck Cominco smelter in Trail, British Columbia. Cobalt concentrates conversely, would be trucked to Yellowknife for processing in the Con Mine autoclave and gold circuit. Acid pressure oxidation at 160ºC breaks down the sulphide minerals allowing for cobalt dissolution. Metal or higher value cobalt compounds are produced by solvent extraction-electrowinning or precipitation by chemical reagents. Cyanidation of the leach residue recovers gold as doré. Arsenic is stabilized in the autoclave as ferric arsenate and can be disposed safely in surface tailings.
The Strathcona study was supervised by Henrik Thalenhorst, Ph.D. who is a Qualified Person pursuant to National Instrument 43-101. Further metallurgical test work for the study was conducted at Lakefield Research Limited under the supervision of Klaus Konigsmann of KVK Consulting Associates Inc. J.W. Hendry Engineering Inc. provided mine operating costs and open pit equipment specifications. Resource modelling and open pit optimization was done by Gene Puritch.
MINERAL RESOURCES
Indicated and inferred mineral resources were estimated for the NICO deposit using ordinary kriging for grade interpolation at incremental cut-off values. Top cuts for all metals were based on frequency distribution and statistical analysis. In-pit mineral resources were then calculated from the overall mineral resources using the Whittle 4X program for open pit optimization based on 10 metre bench composites, and predicted mining and processing costs and net smelter returns. Diluted In-pit resources were estimated at four cobalt prices (US$7.50, 10.00, 12.50, & 15.00) with gold and bismuth assumed constant at US$300/ounce and US$3.50/pound, respectively.
MINERAL RESOURCE ESTIMATE BY CUT-OFF GRADE
Cut-Off Grade Co (%) Millions of Tonnes Co
(%) Au
(g/t) Bi
(%)
INDICATED MINERAL RESOURCES 0.01 113.0 0.05 0.28 0.05
0.03 64.1 0.07 0.38 0.08
0.05 37.5 0.09 0.45 0.10
0.07 21.3 0.11 0.51 0.13
0.10 9.3 0.14 0.60 0.17
INFERRED MINERAL RESOURCES 0.01 5.6 0.03 0.11 0.01
0.03 1.5 0.06 0.22 0.03
0.05 0.6 0.09 0.12 0.03
0.07 0.4 0.10 0.14 0.04
The continuity of the mineralization at the higher cut-off grades has not been determined for mining purposes
SUMMARY OF DILUTED IN-PIT MINERAL RESOURCES
Cobalt Price Highwall Angle Ore
(Millions of Tonnes) Co (%) Au (g/t) Bi (%) Strip Ratio
US$7.50 39 34.4 0.083 0.4 0.12 1.7
US$10.00 39 51.7 0.073 0.4 0.09 1.4
US$10.00 45 52.1 0.073 0.4 0.09 1.3
US$12.50 39 65.3 0.065 0.4 0.08 1.2
US$15.00 39 75.2 0.061 0.4 0.07 1.2
ECONOMIC ANALYSIS
Strathcona’s economic analysis determined that NICO contains a large undeveloped resource of cobalt and bismuth with significant gold credit. Because of recent cobalt price volatility, production and operating cash flow summaries were prepared for five scenarios with the prices at US$7.50, 10.00, 12.50, 15.00, and at 20.00/pound (the latter using the US$7.50/pound pit). Results on an average life of mine operating basis were very encouraging indicating average operating costs of between US$5.28 and US$7.76 per pound of cobalt net of by-product credits. The current cobalt price is approximately US$8.75/pound. Cumulative cash flows at prices above US$10.00/pound are $98 million increasing to $551million at US$15/pound. Detailed mine scheduling however, identified that mining by open pit would be impaired in the early to middle years of production by a number of characteristics unique to the upper part of the deposit. They include significant pre-stripping to expose sufficient ore to feed the large mill throughput, and lower cobalt and bismuth grades for near-surface ores with little gold contribution. Recent metallurgical testing also revealed that near-surface cobalt sulphides contain comparatively lower cobalt and produce a lower grade cobalt concentrate than those sourced from deeper parts of the deposit. This would result in higher processing costs to produce the same amount of saleable cobalt. All of these characteristics are significantly improved at depths below 100 metres in the deposit. Consequently, development of the NICO deposit using the large open pit approach would require significantly increased metal prices during early years of production and/or unique financing terms.
OUTLOOK
The NICO deposit contains a higher-grade core with substantially greater gold concentrations at depth. This part of the deposit also has favourable cobalt mineral characteristics that would produce a higher-grade concentrate. Preliminary investigations identified a part of the deposit with good continuity that would be amenable to underground bulk mining methods. Additional higher-grade mineralization is also exposed at or near the surface at the ends of the deposit that could be extracted in smaller pits. A predominantly underground approach to developing NICO would preclude having to mine through the low-grade ores overlying the central part of the deposit. Other advantages include lower capital costs, little to no pre-stripping, and early access to the highest grade, gold-rich parts of the deposit for accelerated capital repayment. Fewer modifications would be required to the processing facilities in Yellowknife. A lower production rate would also have less of an impact on the cobalt and bismuth markets. Environmental impacts would be reduced from a smaller operation without significant disposal of mineralized waste rock and a smaller tailings pond. There has been a recent period of very strong cobalt prices, which could have supported the large open pit mine originally contemplated for NICO. However, rather than waiting for metal prices to recover, the collective advantages of underground bulk mining are compelling and Fortune will focus further investigations on this approach. The core of the NICO deposit contains some high-grade gold intersections in excess of 10g/t and the recent increase in the price of gold will also influence the direction of future work.
ABOUT FORTUNE MINERALS
Fortune Minerals is a diversified natural resources company with 17,586,669 common shares issued and traded on The Toronto Stock Exchange. Fortune recently entered into an agreement to acquire the Mount Klappan district anthracite coal deposits in British Columbia. Upon completion of this transaction, Fortune will have a diverse portfolio of deposits and exploration projects in Canada. They include the NICO cobalt-gold-bismuth deposit and the Sue-Dianne copper-silver deposit, as well as other base and precious metals and diamond exploration projects in the Northwest Territories. Fortune is also the operating partner in Formosa Environmental Aggregates Ltd., an industrial mineral company developing the Greenock high calcium limestone quarry in Ontario.
Fortune Minerals Limited
[signed]
Robin E. Goad,
President.
Further information can be obtained from Fortune Minerals at: Tel: 519-858-8188, Fax: 519-858-8155, Email: info@fortuneminerals.com, and website:www.fortuneminerals.com |
