Shares of Fortune Minerals (TSX: FT) hit a 52-week high on Thursday after the critical minerals developer announced it has secured additional funding from both the Canadian and US governments for its flagship NICO project.
The domestic funding, courtesy of Natural Resources Canada, amounts to C$7.5 million ($5.5 million). This is expected to cover 75% of the C$10 million in additional engineering and testwork for the project, Fortune said.
Separately, the company has been awarded $6.38 million by the US Department of Defense to expand the capacity and production of cobalt for the battery and high-strength alloy supply chain.
This grant was delivered under the Defense Production Act Title III program. The total amount of non-dilutive funding that Fortune expects to receive is C$16.2 million ($12 million).
This important cross-border initiative, says the company, is aligned with the Canada-US joint action plan on critical minerals.
“The demand for critical minerals needed for the energy transition requires new vertically integrated domestic production from non-traditional ores and concentrates. Bi-lateral Canadian and US government investment is therefore important to align mineral production with changes in new technologies, ensure security of supply, and support North American industrial competitiveness,”
Fortune CEO Robin Goad stated. Shares in Fortune Minerals shot up 41.7% to C$0.085 by 11:50 a.m. ET, having earlier hit C$0.095 apiece, its highest in over two years. Its market capitalization is C$45 million ($33 million).
Advanced-stage asset
The NICO project is an advanced-stage asset consisting of a proposed open pit and underground mine and concentrator in the Northwest Territories. Anchoring the mine is a cobalt-gold-bismuth-copper deposit containing 33.1 million tonnes in reserves at grades of 0.11% cobalt, 1.03 g/t gold, 0.14% bismuth and 0.04% copper.
Fortune, which first discovered the asset in 1996, aims to deliver a vertically integrated production of these minerals by building a hydrometallurgical refinery in Alberta that will process concentrates from the NICO mine to produce cobalt sulphate, gold doré, bismuth ingots and copper.
To date, Fortune has expended more than C$137 million to advance the NICO project to a near shovel-ready project with a positive feasibility study in 2014, which it expects to update this year, and environmental assessment approval and the major mine permits for the facilities in the NWT.
Fortune’s goal is to become a reliable producer of cobalt for the North American lithium-ion rechargeable battery industry. As a domestic source, its NICO project would be compliant with the terms of the IRA. With 12% of global bismuth reserves, the NICO project would also provide a domestic alternative for products used in the automotive and pharmaceutical industries. It also contains more than 1 million oz. of gold as co-product to mitigate critical mineral price volatility.
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