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.