Fortune gets $35M for Nico road

Fortune Minerals (TSX: FT) and the Tłı̨chǫ government might receive up to C$50 million ($35 million) from Ottawa to help connect the long-delayed Nico project in the Northwest Territories to highways.

Natural Resources Canada’s First and Last Mile Fund will reimburse three-quarters of eligible costs for the road across Tłı̨chǫ private lands. The route is to link Fortune’s planned cobalt-gold-bismuth-copper mine to the territorial highway near Whatì, about 50 km south of the deposit. Nico sits about 160 km northwest of Yellowknife.

“The Northwest Territories has tremendous geological endowment with the potential to develop virtually any mineral commodity, but also suffers from an acute infrastructure deficit that raises the bar for economic viability,” Fortune president Robin Goad said in a Friday release. “This funding helps level the playing field.”

The award converts one of Nico’s biggest near-term gaps into a funded construction item as Fortune targets completing a feasibility update next month, front-end engineering by early next year and a possible construction decision after financing is secured. It also shows Ottawa moving critical-minerals policy towards the mining infrastructure investments required so northern deposits can be built.

Road link

The road funding follows a May permitting milestone, when the Wek’èezhìı Land and Water Board approved the land use permit and water licence needed to build and operate the access road. Fortune expects to renew its remaining Northwest Territories land and water permits within months, while permitting for its refinery in Alberta is anticipated early next year.

The Tłı̨chǫ government will receive another C$200,000 from the federal fund for community engagement and a traditional knowledge study tied to the road. Fortune and the Tłı̨chǫ government also plan to study whether the road could later extend all-season access farther north toward Gamètì.

Fortune discovered the deposit in 1996 and says it has spent more than C$150 million advancing the project toward a construction decision.

Mine plan

Fortune plans to mine and concentrate ore at Nico, then truck concentrate about 400 km south to Enterprise, NWT, for rail loading. The concentrate would then move about 1,000 km by rail to the company’s planned hydrometallurgical plant in Lamont County, Alberta, northeast of Edmonton.

That logistics plan depends on a low “mass pull” at the concentrator. Fortune says that means flotation captures the payable metals in about 180 tonnes of concentrate from 4,650 tonnes of ore a day, or about 4% of the mined material.

Metals case

Fortune is working from a 2014 reserve estimate of 33.1 million tonnes grading 1.03 grams gold per tonne, 0.11% cobalt, 0.14% bismuth and 0.04% copper. The estimate contains 1.1 million oz. gold, 82.3 million lb. cobalt, 102.1 million lb. bismuth and 27.2 million lb. copper.

The company forecasts annual output of about 8,780 tonnes of cobalt sulphate, 47,000 oz. gold, 1,700 tonnes of bismuth products and 500 tonnes of copper in cement precipitate over a 20-year mine life.

Cobalt and bismuth drive the critical-minerals strategy. Cobalt is a key raw material in lithium-ion batteries, while bismuth carries defence and electronics uses. Its refined supply is dominated by China. Gold gives the project a buffer against swings in battery and defence metal prices.

Funding gap

While the road award does not fund the mine or the Alberta refinery,  it removes a large piece from the capital stack as Fortune works toward updated costs.

In a recent interview, Goad said Nico’s 2014 capital estimate of about C$600 million would inflate to roughly C$1 billion today before updated engineering, infrastructure savings and government support. The coming feasibility study is expected to reset that figure.

Fortune has already lined up about C$17.5 million in grants and loans from Canadian, US and Alberta programs to help advance Nico toward an investment decision. That includes US Defense Production Act Title III support, Natural Resources Canada funding, Alberta Innovates funding and a Prosper NWT loan tied to the Alberta refinery site purchase.

Fortune moved the downstream plant to Alberta after the Rural Municipality of Corman Park in Saskatchewan rejected a zoning change for its first refinery site in 2019. Goad has said the decision cost the company about five years and C$5 million to C$10 million directly.