The company had been evaluating an expanded mill throughput rate of 6,000 tonnes of ore per day, up from 4,650 tonnes of ore per day in a previous study.
The Ontario-based company had been evaluating an expanded mill throughput rate of 6,000 tonnes of ore per day, up from 4,650 tonnes of ore per day in a previous study.
But following months of weak cobalt prices, Fortune has decided that the financial benefits of an expansion will not justify the additional capital requirements of a larger project.
In a press release, Fortune President and CEO Robert Goad said that the current price environment, which has seen curtailments from the world’s largest cobalt mines, is not conducive to an expanded, capital-intensive project at this time.
“However, the world continues to transition to electric mobility and will require new sources of cobalt that are independent of the Congo to meet the increase in demand from the battery sector,” he added. Cobalt is a key element in the lithium-ion batteries used to power electric cars.
In August, top cobalt producer Glencore (LSE:GLEN,OTC Pink:GLCNF) announced plans to shut down the Mutanda mine in the Democratic Republic of Congo (DRC) at the end of the year, saying it is no longer economically viable. Mutanda is the world’s largest cobalt mine, with its cobalt output reaching more than 27,000 tonnes last year — a fifth of global cobalt supply.
The DRC is the world’s largest cobalt producer, but mining in the country has often been linked to child labor and human right abuses, prompting companies to develop projects outside the African country.
Currently there is no large-scale output coming from other countries, but developing new resources outside the DRC to gain control over the cobalt supply chain has been a key topic of discussion since the start of the year.
Looking ahead, Fortune said it is in talks with potential strategic partners interested in North American supply of cobalt, gold and bismuth. It also is optimizing the development plans for its project in the current environment of metal price volatility.
To optimize the NICO project, Fortune is evaluating options including working on a new mine plan based on low-cost open-pit mining, while increasing production in the early years of the mine with selective underground mining of gold-rich mineralized material.
The company is also considering aligning its development schedule with the expected deficit in cobalt supply, which most analysts agree could happen in 2022 to 2023.
The NICO deposit contains open-pit and underground proven and probable mineral reserves totaling 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 the planned mill throughput rate of 4,650 tonnes of ore per day, mineral reserves will sustain operations for 20 years.
Aside from NICO, Fortune owns the Sue-Dianne copper-silver-gold deposit, which is a potential future source of incremental mill feed to extend the life of the NICO project mill.
On Thursday (October 3), shares of Fortune Minerals were trading up 6.67 percent in Toronto at C$0.08.
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Securities Disclosure: I, Priscila Barrera, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: Fortune Minerals is a client of the Investing News Network. This article is not paid-for content.