Fortune Minerals

Investor Insights

The NICO project’s receipt of substantial government funding to date and Fortune Minerals’ strong relations with the Indigenous and local communities in the Northwest Territories create a compelling case for investors considering critical minerals play with significant gold reserves.

Overview

Fortune Minerals (TSX:FT,OTCQB:FTMDF) is a Canadian mining company developing its wholly owned, vertically integrated NICO primary cobalt project in Canada to produce cobalt chemicals for the rapidly expanding lithium-ion battery industry. The NICO project includes a proposed mine and mill in the Northwest Territories that will produce bulk concentrates that will be shipped to a planned refinery in Alberta. The concentrates from the mine will then be processed into energy and eco-metals for the growing clean energy economy.

Cobalt is an often-overlooked critical mineral in the transition to clean energy, required to make the cathodes of many lithium-ion batteries used in electric vehicles (EVs), stationary storage cells and consumer electronics. Cobalt is also used in superalloys for the aerospace industry, cemented carbides, cutting tools, permanent magnets, surgical implants, catalysts, pigments and agricultural products.

The global cobalt market is expected to reach more than 469,000 metric tons by 2034, with the EV segment accounting for most of the growth.

Meanwhile, bismuth’s unique physical and chemical properties are difficult to substitute with other metals. Bismuth is used in automotive glass and steel coatings, paints and pigments, and brake pads. It is also used to make low-melting-temperature and dimensionally stable alloys and compounds, fire suppressant systems, cosmetics and pharmaceuticals. Bismuth consumption is increasing as an environmentally safe and non-toxic replacement for lead in brass, solder, free machining steel and aluminum, galvanizing alloys, glass, ceramic glazes and ammunition.

Bismuth-tin alloy is used to make environmentally safe plugs to properly seal decommissioned oil and gas wells. Bismuth is also used in high performance semiconductors, artificial intelligence data centers and supercomputers. Manganese-bismuth magnets are resistant to demagnetization from heat. In the nuclear industry, bismuth is used for radiation shielding, coolants in some reactor designs, and it is a collector for plutonium in fuel re-processing and enrichment. China controls ~80 percent of current bismuth mine production and ~90 percent of refinery supply in an annual market of ~23,000 metric tonnes.

While NICO is primarily a cobalt deposit, it is also the largest known deposit of bismuth in the world, with about 12 percent of global reserves. Bismuth is a critical mineral that China has imposed export restrictions on and is essential for AI.

The mineral reserves also contain 1.1 Moz of gold as a countercyclical and highly liquid co-product that can be easily converted to cash. The gold contained in the NICO deposit stands out among other cobalt projects, where the metal is produced primarily as a by-product of copper or nickel

The cobalt, bismuth and copper contained in the NICO deposit are all classified as critical minerals by Canada, as they have essential use in new technologies, cannot be easily substituted with other minerals, and because supply chains may be threatened by geopolitical issues.

The Government of Canada is providing funding of up to $714,500 for the planned cobalt sulphate process pilot and other metallurgical test work at the NICO project. Additionally, the Government of Alberta, through Alberta Innovates, has also approved additional funding contributions of up to $172,670 toward the budgeted program costs under its Clean Resources Continuous Intake Program. The funds will be used to support a mini-pilot at SGS Canada to confirm certain process design criteria and improvements to the NICO project metallurgical processes.

Fortune Minerals also received a C$8.74 million grant from the United States Department of Defense to expand the domestic capacity and production of cobalt for the battery and high strength alloy supply chains. The company has secured a total of C$17.5 million in financial support from the Canadian and US governments to advance the NICO project.

The company’s other assets include the Sue-Dianne deposit, which has near-surface, copper-silver-gold deposits that can feed into the NICO mill.

Company Highlights

• Fortune Minerals is building a reliable, vertically integrated North American critical minerals project to produce cobalt chemicals for the rapidly expanding lithium-ion battery industry.
• The NICO project is one of a few advanced-stage cobalt projects outside the Democratic Republic of the Congo, with an average annual production of approximately 1,800 tons of cobalt units in the first 14 years of the 20-year mine life.
• The company's flagship asset’s primary cobalt production is independent of nickel and copper mining and contains more than 1 million ounces (Moz) of in-situ co-product gold, and contains 12 percent of global bismuth reserves- another important critical mineral
• Fortune Minerals has received environmental assessment approval for the mine, concentrator and access road in the Northwest Territories.
• The company has developed strong relationships with Indigenous and local communities and governments, which paved the way for federal, Northwest Territories and Tlicho Governments' approval of the project and financial support for local infrastructure. This includes the $200 million Tlicho all-season highway project to Whati and more than $17.5 million in Canadian and US government funding for advancing the NICO project.
• Collaboration with Rio Tinto to assess options to improve recovery of bismuth and cobalt contained in Rio Tinto’s Kennecott smelter waste streams.
• An experienced management team leads Fortune Minerals towards fully developing and capitalizing on its assets.

Key Project

NICO Cobalt Project and Reserves

The NICO project is a vertically integrated critical minerals development in Canada, owned 100 percent by Fortune Minerals. It is located in the Northwest Territories (NWT), approximately 160 km northwest of Yellowknife and 50 km from Whati. The project includes a planned mine and concentrator, supported by a proposed hydrometallurgical refinery in Lamont County, Alberta.

NICO is classified as an iron oxide-copper-gold (IOCG)-type deposit and hosts significant reserves of cobalt, gold, bismuth and copper. The mineral reserves for the NICO deposit were estimated in compliance with NI-43-101 and total 33.1 Mt, containing 82.3 Mlbs (37,341 tons) of cobalt, 1.1 Moz of gold, 102.1 Mlbs (46,325 tons) of bismuth and 27.2 Mlbs (12,296 tons) of copper. These reserves support a projected 20-year mine life at a processing rate of 4,650 tons per day. Cobalt production is expected to average 1,800 tons per year during the first 14 years.

More than C$145 million has been invested to date in technical, environmental and social studies. The project has received environmental assessment approval and all major mine permits. The all-season, government-funded Tlicho Highway is now operational, and Fortune has EA approval for a 50-kilometer spur road to connect the mine site to the Tlicho Highway and a new rail transload terminal at Enterprise, NWT, enabling efficient transport of concentrate to its Alberta refinery.

Project Highlights:

• Excellent Infrastructure: All-season road access via the $200-million Tlicho Highway; 50-kilometer spur road EA-approved; proximity to Snare hydro complex and electrical grid.
• Strategic Transport Links: Ability to truck concentrates to the new rail terminal at Enterprise for delivery to the Alberta refinery.
• Large, Well-defined Deposit: NICO and Sue-Dianne are IOCG-type deposits with significant expansion potential.
• Exploratory Drilling Success: 2021 drill results confirmed additional zones with high-grade cobalt, gold, and bismuth.
• Feasibility and Engineering Advancements: Updated study by Worley to include project optimizations, cost updates and refined processing plans.
• Refinery Site Secured: Option agreement in place for a brownfield site in Lamont County, Alberta for value-added critical mineral processing.
• Strategic Partnerships: Ongoing collaboration with Rio Tinto for secondary feedstock and metallurgical recovery improvements.

The Alberta refinery site is secured under option and is located on a brownfield industrial property near CN Rail. It benefits from proximity to skilled labor, utilities and existing infrastructure.

The project is advancing toward a construction decision, supported by more than C$17.5 million in funding from Canadian and US government critical minerals programs.

Management Team

Mahendra Naik - Chairman and Director

Mahendra Naik is a chartered accountant and was one of the founding directors and key executives who started IAMGOLD Corporation, a TSX and NYSE-listed gold mining company. As chief financial officer from 1990 to 1999, he was involved in the negotiations of the Sadiola and Yatela mine joint ventures with Anglo American, and the US$400 million project debt financing for the development of the mines. In addition, he was involved in more than $150 million in equity financings including the IPO for IAMGOLD.

Robin E. Goad - President, CEO and Director

Robin Goad is a professional geologist with 30 years of experience in the mining and exploration industries. Before founding Fortune in 1988, Goad worked for large companies, including Noranda and Teck, as a consultant in the resource industry. Goad is a director of the NWT and Nunavut Chamber of Mines and has served as president and director of other TSX-listed mineral exploration and development companies.

Patricia Penney - Interim CFO

Patricia Penney is a chartered accountant with 20 years of accounting and audit experience. Before Fortune, she was a senior manager with Caceis Canada, an alternative fund administrator.

Richard Schryer - Vice-president of Regulatory and Environmental Affairs

Richard Schryer is an aquatic scientist with more than 25 years of experience in mine permitting, environmental assessments, environmental studies and monitoring. Schryer also worked with Golder Associates.

Alex Mezei - Chief Metallurgist

Alex Mezei is an independent metallurgical consultant with 40 years of international process engineering experience, providing general and specialized services in metallurgical process flowsheet testing, design, development, derisking and implementation. Mezei has been involved in process economics assessment for several projects. Specific technical expertise includes hydrometallurgy, liquid-solid separation, rheology, and mineral processing. Mezei is a Qualified Person for the purposes of National Instrument 43-101.

David Knight - Corporate Secretary

David Knight is a partner with WeirFoulds LLP. David is widely recognized for his more than 30 years of experience. He specializes in securities law, including public and private financings, mergers and acquisitions, stock exchange listings and regulatory compliance and acts for investment dealers and issuers. Knight is a member of the Law Society of Upper Canada.

Troy Nazarewicz - Investor Relations Manager

Troy D. Nazarewicz has 30 years of experience in the capital markets as a portfolio manager with MacDougall, MacDougall & MacTier and in his investor relations role at Fortune. He also worked as a business development manager with a design and marketing firm.