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Recent article mentioning Fortune Minerals: http://m.scmp.com/business/commodities/article/2149027/china-goes-all-out-secure-lithium-cobalt-supplies-key
Great info in that presentation. Thanks
Fortune got their shit together
Good video on Fortune by CEO at Canadian Mining Symposium last month:
Great article out today. Last section covers FTMDF. Look for section titled: SOURCING COBALT CLOSER TO HOME.
http://www.chemengonline.com/lithium-battery-demand-drives-process-evolution-cobalt-li-ion/?printmode=1
Awesome news. Cheers
Great news: TASR clears major milestone:
http://www.cbc.ca/news/canada/north/tlicho-winter-road-green-lit-1.4601011
TASR and NICO discussed in recent article: http://s1.q4cdn.com/337451660/files/doc_downloads/articles/180301-Construction-North-of-60-Electrifying-time-for-Tlicho-Road.pdf
Cobalt price now at $95,250/MT = $43.20/lb: https://www.lme.com/Metals/Minor-metals/Cobalt#tabIndex=0
Cobalt price now at $90,250/ MT = $41.94/lb: https://www.lme.com/Metals/Minor-metals/Cobalt#tabIndex=0
Cobalt price now at $88,250/MT or $40.03/lb: https://www.lme.com/Metals/Minor-metals/Cobalt#tabIndex=0
Cobalt now trading at $38.22/lb ($84,250/MT): https://www.lme.com/Metals/Minor-metals/Cobalt#tabIndex=0
Just read an article that there is a 5 year projected cobalt shortage coming and the democratic republic of Congo has 60% of proven reserves. This should be enough to get the road and financing for NICO! Stock once traded about 3 bucks mining copper and gold but this they will have cooper gold and cobalt could see 5 bucks.....accumulate
Just read this article and did the math. Fortune owns NICO which has about 5 billion unproven reserves half or more in cobalt used in lithium ion batteries but their market cap in about 60 million? Lol. Even if the can’t start up mining which doesn’t seem like a problem they can sell it to the big boys and make a mint. 20 cents seems too low. Even with the uncertainty it should be a buck and when the mine starts up 2-5 bucks a shares would be fair value depending on how high cobalt gets.
3 Well-Valued Cobalt Miners To Buy Right Nowhttp://www.seekingalpha.com/article/4138649
Cobalt now at $36.51/lb ($80,500/MT):
https://www.lme.com/Metals/Minor-metals/Cobalt#tabIndex=0
Phase 1 construction of the “road” has been narrowed down to 3 contractors.
TD Ameritrade shows 333.44 million shares. Not sure about float.
Whats the OS and float here anyone?
TIA
The Case For Canadian Cobalt Companies
http://www.seekingalpha.com/article/4137525
FTMDF Racking up new 52 week highs today.
No news releases - wonder what's going on?
What lit the fire under this one the last couple days?
Well, rock on, baby!
Happy trading.
Cheers
FTMDF
FTMDF - new 52 week high before the open.
Could be another strong day for FTMDF
Rock on!!
Happy trading!
Cheers
FTMDF
FTMDF - Barcharts, 100% buy, a beautiful chart if I ever saw one!!
https://www.barchart.com/stocks/quotes/FTMDF/opinion
New 52 week high.
Wonder what's gotten under this little lift off ?
Happy trading
Cheers
FTMDF
FTMDF - new 52 week high
Might be something coming down the pike, or people just interested in their mine?
Rock on, FTMDF
Happy trading
CheersFTMDF
Looking good, now! 11% up! Something huge is coming?
Cobalt at Bid/Ask: 75,000/75,100 per MT ($34.06/lb)
https://www.lme.com/Metals/Minor-metals/Cobalt#tabIndex=0
IMO huge news are around the corner!
Soungs good. Fortune is already up 10% today!
Nice move today. Already 10% up!
Looks like something's up here!
Today's cobalt price B/A: $69,500/$70,000 per MT ($31.50/$31.75)
https://www.lme.com/Metals/Minor-metals/Cobalt#tabIndex=0
On November 9 FTMDF made this comment in a press release:
"The current price of cobalt metal is approximately US$30 per pound, well above the US$16 per pound used in Fortune's 2014 Feasibility Study"
https://www.bloomberg.com/press-releases/2017-11-09/fortune-examines-higher-production-rate-in-nico-feasibility
Thanks! When BMW decided it was strategic to begin building vehicles using carbon fiber, they did a JV with SGL and invested heavily in infrastructure to produce carbon fiber and convert it into automotive components to thereby becoming highly integrated in the conversion process. I see such an opportunity at this point in time where it makes sense to bring in a strategic partner and end user.
Anyone aware of the reason behind the moves this week?
Fortune examines higher production rate in NICO feasibility
Accelerating cobalt demand in lithium-ion batteries for electric vehicles is driving decision to examine the feasibility of expanding production by 20 to 30% to produce more cobalt units
Issued Capital: 302,085,257
LONDON, ON, Nov. 9, 2017 /CNW/ - Fortune Minerals Limited (TSX: FT) (OTCQX: FTMDF) ("Fortune" or the "Company") (www.fortuneminerals.com) is pleased to announce a change in scope for the updated Feasibility Study in progress for its 100% owned NICO Cobalt-Gold-Bismuth-Copper Project in Canada ("NICO Project"). Responding to positive feedback from potential strategic partners, Fortune is examining the feasibility of a 20 to 30% increase in the planned NICO production rate over the 4,650 metric tonnes ("t") of ore per day used in the previous 2014 Feasibility Study and produce between 1,700 and 2,000 t of cobalt units per year in a battery grade cobalt sulphate heptahydrate.
Robin Goad, President and CEO of Fortune commented, "Transformative electrification of the automotive industry is accelerating as cost parity with internal combustion engines is being reached and as more governments announce future bans on gasoline and diesel-powered vehicles. Forecasts of electric vehicle adoption are increasing with estimates of up to 25% penetration of global vehicle sales by the mid 2020's. Fortune is increasing its planned cobalt production to in response to the growing cobalt supply chain bottleneck".
The NICO Project consists of a planned mine, mill and concentrator in the Northwest Territories and refinery near Saskatoon where concentrates will be processed to cobalt sulphate, gold, bismuth, and copper. NICO has already been assessed in a positive Feasibility Study in 2014, which is being updated by Hatch Ltd. ("Hatch"), P&E Mining Consultants Inc. ("P&E") and Micon International Limited ("Micon") using updated costs, commodity price and exchange rate estimates, and recent project improvements, including the examination of the proposed expanded production rate. NICO has received environmental assessment ("EA") approval and the major mine permits for the facilities in the Northwest Territories and EA approval for the refinery in Saskatchewan. NICO is attracting attention from potential partners that need reliable supplies of ethically procured cobalt with preference for a Canadian primary producer with supply chain transparency and custody control of metal from a vertically integrated project. Fortune has engaged PricewaterhouseCoopers Corporate Finance Inc. ("PwC") to arrange the project financing for the construction and operation of the project through a combination of strategic partnerships, debt and equity.
Highlights of Items Being Examined in the Updated Feasibility Study:
Accelerating demand for lithium-ion batteries in electric vehicles and stationary storage;
Examining a response to market demand with a 20 to 30% increase in the planned production rate and annual cobalt production of between 1,700 and 2,000 t per annum;
Mineral Reserves being updated using higher cobalt prices and greater economies of scale from a higher production rate;
Mine plan and schedule optimization to increase cobalt and gold production in early years of the mine life;
Grade control and stockpiling strategy to better align bismuth output with market conditions as they evolve within a growing green economy;
Additional metallurgical testwork completed to improve process for manganese removal from cobalt sulphate and indicating a potential cobalt recovery improvement;
Improved copper cementation process;
Design engineering and cost estimation proceeding for expanded production rate;
Project Execution Plan being refined to construct the Northwest Territories facilities using existing winter roads and align mine operations with the timeline for availability of the government road to Whati;
Cobalt Market
Cobalt is an essential commodity used in the manufacturing of cathodes in lithium-ion batteries to store energy in portable electronic devices, electric vehicles ("EV's") and stationary cells for the electrical grid. Battery demand has driven cumulative annual growth in the market of approximately 6% over the last 20 years and production of refined cobalt is now approximately 110,000 t per year. Adoption rate forecasts for EV's are accelerating and between 12 and 25% of all vehicles sold by 2025 are projected to be electric according to analysts, major automotive manufacturers and parts suppliers. Exane BNP Paribas has indicated that it anticipates cobalt demand to triple during this period to 300,000 t as the world moves to a less carbon intensive green economy. Current worldwide government policy shifts aimed at reducing greenhouse gas emissions are being imposed to mitigate the impacts of climate change with intensifying policies to increase EV's and renewable energy from wind and solar generation and off-peak charging of the electrical grid. Cobalt is also used in superalloys for aerospace applications, high strength alloys for cutting tools and cemented carbides, permanent magnets, surgical implants, pigments, catalysts, and additives in food and agricultural products.
As the demand for cobalt grows there are also concerns about limitations on current supply due to geographic concentration of mine and refinery production in countries with political instability and/or policy risks. Ethical sourcing of raw materials has also become an issue that can damage the brands of major automotive, electronics and technology companies from suppliers with poor labour and environmental practices. With 98% of non-artisanal cobalt supply currently produced as a by-product of copper and nickel mining there are concerns about producers being able to respond to demand growth when production criteria are focused on the primary metals. The cobalt market has transitioned into deficit and shortages of supply are expected to persist for the foreseeable future with few new deposits in the development stream. The current price of cobalt metal is approximately US$30 per pound, well above the US$16 per pound used in Fortune's 2014 Feasibility Study and more in line with the US$25 per pound, 20-year inflation adjusted average price reported by Commodities Research Unit ("CRU"). New cobalt deposits are required as the market enters its most significant demand pull in history.
The existing NICO Mineral Reserves also contain 1.1 million ounces of gold and approximately 12% of global bismuth reserves. Bismuth is an Eco-metal used in the automotive and pharmaceutical industries and as a non-toxic environmentally safe replacement for lead in solder, steel, brass and aluminum alloys needed in a growing green economy.
Mineral Reserves
The Proven and Probable Mineral Reserves for the NICO deposit were determined for the Company's 2014 Feasibility Study and are 33.1 million t containing 82.3 million pounds of cobalt (37k t), 1.11 million ounces of gold, 102.1 million pounds of bismuth (46k t) and 27.2 million pounds of copper (12k t) (see Fortune's news release dated April 2, 2014 for details). The Mineral Reserves were sufficient to support a 21-year mine life at the 4,650 t of ore processed per day in the 2014 Feasibility Study. Several million tonnes of marginally sub-economic mineralized material were also identified in 2014 that would be stockpiled for processing during periods of higher metal prices. Mineralized material was also identified beneath the open pit design, but was insufficient to warrant a push back of the pit high wall and deepening of the pit or the additional development work required to mine it from underground at that time. At today's higher cobalt prices and greater economies of scale through an increased production rate, Fortune expects to be able to apply a mine cut-off net smelter return ("NSR") value that may make some of this higher grade mineralized material economic to process. Accordingly, the Mineral Reserves are being updated by P&E for the updated Feasibility Study.
Mine Plan and Schedule
The Mine Plan and Schedule for the updated Feasibility Study will examine the feasibility of a 20 to 30% increase in production rate and economies of scale from a larger mining and processing rate. The Mine Schedule is also being optimized to target cobalt-rich parts of the deposit in earlier years of the mine life to increase revenues, accelerate payback, and maximize cobalt production to address market demand and the needs of potential strategic partners. The pit design is not expected to change significantly because any additional mill feed will likely be generated from lower grade mineralized material within the pit shell that may become economic in the updated Mineral Reserve statement.
A grade control and stockpiling strategy will also be pursued to schedule ores through the process plant that are better aligned with metal market conditions. Specifically, lower grade ores will be stockpiled to defer processing until later in the mine life and align processing of bismuth-rich ores with market demand as it evolves in a growing green economy focused on environmentally safe metals and its unique physical properties.
Metallurgical Testwork
The processing of NICO ores has already been verified by pilot plant tests validating the flowsheet, metal recoveries and producing a high quality cobalt sulphate heptahydrate meeting the specifications of lithium ion battery manufacturers. Two metallurgical testwork programs were recently conducted at SGS Lakefield Research Limited to address gaps identified in the previous 2014 Feasibility Study. This testing indicates that the sequencing for manganese removal prior to cobalt sulphate heptahydrate crystallization can be changed without impacting cobalt recovery, and there is potential for a cobalt recovery improvement, subject to confirmation from METSIM modelling now in progress by Hatch. The results are also providing the information needed for equipment sizing, detailed engineering, and costing. An improved copper cementation flowsheet was also tested and confirmed for the updated Feasibility Study.
All-Season Road
Earlier this year, the Canadian, Northwest Territories and Tlicho governments announced conditional approval of federal funding for 25% of the construction costs for an all-weather road to the community of Whati through the P3 Canada Fund (See Fortune's January 12, 2017 News Release). In September, the Government of the Northwest Territories announced that it had completed the Request for Qualification phase for Private-Public-Partnership ("P3") funding for the remaining 75% cost of the road. Three consortiums of Canadian and International firms were short-listed to participate in the Request for Proposal stage commencing in December and submit bids to design, build, finance, operate and maintain this road and be repaid over time with interest by the Northwest Territories Government (see Fortune's September 19, 2017 News Release). Fortune has already received EA approval to build a 50km spur road from Whati to the mine site and the cost for the construction of this spur was included in the 2014 Feasibility Study. Fortune is now planning to construct the NICO mine, mill and concentrator from the existing winter ice road in order to align mine operations with the timeline for availability of the government road and mitigate schedule uncertainty.
Feasibility Study Update
The scope of the updated Feasibility Study was initially based on a simple re-statement of economics of the 2014 Feasibility Study based on current costs and updated commodity price and exchange rate estimates. No significant new engineering was required for this scope because the requisite engineering had already been largely completed in the Company's 2012 Front-End Engineering and Design ("FEED") and 2014 Feasibility studies. With the new plan to examine increasing production by 20 to 30% over the previously contemplated 4,650 t of ore processed per day, additional engineering will now be required to support the economic analysis and produce engineered designs to support project financing efforts and strategic partner due-diligence. Although it is expected that the higher production rate will increase capital costs for the development of the NICO Project, sensitivities prepared for the Company to assess the impact of such costs against the economies of scale of a larger project and an optimized mine plan schedule, indicate that this change may be warranted. The higher cobalt production target is also responding to the feedback received from a number of potential strategic partners interested in participating in the development. While these scope changes will delay completion of the updated Feasibility Study, they are not anticipated to impact the construction timeline for the project, which will be primarily subject to receipt of Project Financing.
About NICO
NICO is a planned Canadian, vertically integrated, primary producer of cobalt with supply chain transparency and uninterrupted custody of metal from ore through to the production of battery chemicals, gold, bismuth and copper. The existing 2014 feasibility study proposes that the NICO deposit will be mined primarily by conventional truck and shovel open pit methods. In the 2014 Feasibility Study, approximately one eighth of the process feed during the first two years of operations was planned to be mined using underground blast hole open stoping to process higher margin ores from deeper in the deposit in early years of the mine life. Most of the pre-production development for the underground portion of the mine has already been established from previous test mining operations.
Processing of ores in the proposed NICO mill and concentrator will be by simple flotation to produce a bulk concentrate containing the recoverable metals. The concentrate will be filtered, bagged and trucked to the rail head at Hay River for delivery by train to the Company's planned refinery straddling the Canadian National Railway near Saskatoon. The refinery will recover metals from the concentrate using a combination of secondary flotation, followed by pressure and atmospheric acid leaching, electro-winning and precipitation of value-add metals and chemicals. Should the proposed 20 to 30% increase in production rate prove feasible, cobalt production would target 1,700 to 2,000 t of units per year in a cobalt sulphate heptahydrate.
The disclosure of scientific and technical information contained in this news release has been approved by Robin Goad, M.Sc., P.Geo., President and Chief Executive Officer of Fortune, who is a "Qualified Person" under National Instrument 43-101. The Technical Report on the Feasibility Study referred to above, entitled "Technical Report on the Feasibility Study for the NICO-Gold-Cobalt-Bismuth-Copper Project, Northwest Territories, Canada", dated April 2, 2014 and prepared by Micon, from which certain information in this press release has been extracted, has been filed on SEDAR and is available under the Company's profile at www.sedar.com.
About Hatch
Hatch has over six decades of business and technical experience in the mining, energy, and infrastructure sectors. The firm has 9,000 staff with experience in over 150 countries and is well known for the design and construction of mineral beneficiation process plants and supporting infrastructure, including projects in remote and cold climate regions and Arctic regions of Canada.
About P&E
P&E provides geological and mine engineering consulting, Mineral Resource Estimate Technical Reports, Preliminary Economic Assessments and Pre-Feasibility Studies and is affiliated with major Toronto based consulting firms for the purposes of joint venturing on Feasibility Studies. P&E's team has experience in geological interpretation, 3D geologic modeling, Technical Report writing, Mineral Resource and Mineral Reserve Estimates, property evaluations, mine design, production scheduling, operating and capital cost estimates and metallurgical engineering.
About Micon
Micon is a mining consultancy providing independent professional advice to mining companies and their providers of capital, law firms and government agencies worldwide. Micon is staffed by senior mineral industry consultants with extensive international experience in the fields of geology, mining engineering, metallurgy, processing, environmental management, market analysis and mineral economics.
Fortune Minerals Reports All-Season Road Milestone
Fortune Minerals Limited has added a new press release to its web site. For full details please visit the Fortune web site at:
Fortune Minerals Reports All-Season Road Milestone
Critical Enabler for NICO Mine Operations Advancing to RFP Stage
Issued Capital: 302,085,257
LONDON, ON, Sept. 19, 2017 /CNW/ - Fortune Minerals Limited (TSX: FT) (OTCQX: FTMDF) ("Fortune" or the "Company") (www.fortuneminerals.com) reports that the Government of the Northwest Territories ("GNWT") has recently announced completion of another milestone toward construction of the Tlicho All-Season Road ("TASR") to the community of Whati. GNWT Minister of Finance, Robert C. McLeod, stated in March 2017 that, "Construction of the Tlicho All-Season Road is a priority of the 18th Legislative Assembly. The project is a critical piece of infrastructure that will result in significant benefits for the Tlicho region and facilitate growth for the NWT economy." Fortune has already received environmental assessment ("EA") approval to construct a spur road from Whati to its proposed NICO mine site as part of its proposed development. All-season road access is required for mine operations to allow metal concentrates to be transported south for processing.
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The GNWT announced that it has completed the Request for Qualification phase of the proposed Private-Public-Partnership ("P3") to design, build, finance, operate and maintain the TASR and has selected three consortiums of large Canadian and International firms to advance to the Request for Proposal ("RFP") stage, subject to progress of the EA. Earlier this year, the Canadian, GNWT and Tlicho governments announced conditional approval of federal funding for 25 per cent of the construction costs for the TASR through the P3 Canada Fund (See Fortune's January 12, 2017 News Release). The winning consortium will fund the remaining 75 per cent of the cost of the road and will be repaid with interest over the life of the contract by the GNWT.
Fortune's NICO Cobalt-Gold-Bismuth-Copper development consists of a planned mine, mill and concentrator in the Northwest Territories ("NWT") and refinery in Saskatchewan where it will process concentrates to value-added products. When NICO is developed, Fortune will be an important new producer of battery grade cobalt sulphate to the rapidly expanding lithium-ion rechargeable battery industry and support the use in portable electronic devices, transformative automotive electrification, and stationary storage cells enabling renewable energy for base load and off-peak charging from the grid. Fortune will also produce environmentally friendly bismuth metals and oxide needed in a growing green economy, as well as gold and minor amounts of copper. As a Canadian vertically integrated producer, Fortune will be able to demonstrate custody control of metals from ores through to the production of value added products. This will help mitigate the supply chain concerns that apply to the dominant supply of cobalt and bismuth from the Congo and China.
The NICO development project has already received EA approvals in the NWT and Saskatchewan. A 2014 Feasibility Study demonstrated attractive rates of return for the development and is currently being updated by Hatch Ltd. and Micon International Limited ("Micon") in order to revise capital and operating costs and assess the economics based on current commodity price and exchange rate assumptions. Fortune has engaged PricewaterhouseCoopers Corporate Finance Inc. ("PwC") to arrange the project financing through a combination of strategic partnerships, debt and equity.
The disclosure of scientific and technical information contained in this news release has been approved by Robin Goad, M.Sc., P.Geo., President and Chief Executive Officer of Fortune, who is a "Qualified Person" under National Instrument 43-101. The technical report on the feasibility study referred to above, entitled "Technical Report on the Feasibility Study for the NICO-Gold-Cobalt-Bismuth-Copper Project, Northwest Territories, Canada", dated April 2, 2014 and prepared by Micon, from which certain information in this press release has been extracted, has been filed on SEDAR and is available under the Company's profile at www.sedar.com.
About Fortune Minerals
Fortune is a Canadian mining company focused on developing the vertically integrated NICO cobalt-gold-bismuth-copper project in the NWT and a related refinery the Company plans to construct in Saskatchewan. Fortune also owns the Sue-Dianne copper-silver-gold deposit located 25 km north of NICO and a potential future source of incremental mill feed to extend the life of the NICO mill. The Company also maintains the right to repurchase the Arctos anthracite coal deposits in northwest British Columbia that were purchased by a provincial Crown corporation.
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This press release contains forward-looking information and forward-looking statements within the meaning of applicable securities legislation. This forward-looking information includes statements with respect to, among other things, the Company's plans to develop the NICO Project (including the Company's plans to secure project financing to start construction), the updated feasibility study for the NICO Project, anticipated growth in the lithium-ion rechargeable battery industry and plans for the construction of the TASR for operations at the NICO Project. Forward-looking information is based on the opinions and estimates of management as well as certain assumptions at the date the information is given (including, in respect of the forward-looking information contained in this press release, assumptions regarding the Company's ability to arrange the necessary financing to continue operations and develop the NICO Project, growth in the lithium-ion rechargeable battery industry and the proposed construction of the TASR, the economic environment in which the Company will operate in the future, including the price of gold, cobalt and other by-product metals, anticipated costs and the volumes of metals to be produced at the NICO Project). However, such forward-looking information is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. These factors include the risks that the Company may not be able to finance and develop NICO on favourable terms or at all, the updated feasibility study may take longer than anticipated and may not demonstrate improved economics for the NICO Project to the extent anticipated, the TASR may not be built within the anticipated time frame, the market for rechargeable batteries and the use of stationary storage cells may not grow to the extent anticipated, the future supply of cobalt may not be as limited as anticipated, the Company's production of cobalt and other metals may be less than anticipated and other operational and development risks, market risks and regulatory risks. Readers are cautioned to not place undue reliance on forward-looking information because it is possible that predictions, forecasts, projections and other forms of forward-looking information will not be achieved by the Company. The forward-looking information contained herein is made as of the date hereof and the Company assumes no responsibility to update or revise it to reflect new events or circumstances, except as required by law.
SOURCE Fortune Minerals Limited
Fortune Minerals Limited, Troy Nazarewicz, Investor Relations Manager, info@fortuneminerals.com, Tel.: (519) 858-8188, www.fortuneminerals.com
In the money we will be !....Holding tight to FTMDF, ECSIF, CTEQF and AMYZF. With electric cars and solar storage coming on strong, these metals will be in huge demand. I want to be early to the party....Bluetick
Nice Find Bluetick!
About time we heard something to lift this up.
The problem with this (and Frontier Lithium)is that they are not
yet in production. Investors want quick results, production reports etc these days and they will not be forthcoming for some while yet.
Still, keep the faith. The article shows that once FTMDF starts producing we will be in the money!
https://seekingalpha.com/article/4061069-cobalt-weak-link-teslas-supply-chain A good read on Cobalt. Long FTMDF and ECSIF....Bluetick
Fortune Minerals Ltd CEO Robin Goad on Cobalt Supply for Tesla Inc, Volkswagen
Fortune Minerals Ltd CEO Robin Goad on Cobalt Supply for Tesla Inc, Volkswagen
Lithium Mining Recommended
March 2, 2017 ?James West 0
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Fortune Minerals Limited (TSE:FT) (OTCMKTS:FTMDF) (FRA:FMP) CEO Robin Goad says world cobalt supply is going into deficit, which puts Tesla Inc (NASDAQ:TSLA), Volkswagen (AMS:VWA) and other major electric car manufacturers in a tough spot when it comes to lithium-ion batteries.
Transcript:
James West: Robin, thank you for joining us today.
Robin Goad: Thank you, James. Happy to be with you.
James West: Robin, let’s start with an overview: What is the value proposition for investors in Fortune Minerals?
Robin Goad: So Fortune Minerals Ltd. has a development asset that’s primarily a cobalt project. Cobalt is an essential metal that’s used in lithium ion batteries for cathodes, and delivers the power and the charge life, essentially, for a lithium ion battery.
So we have the fourth generation of transformation of the lithium ion battery going on right now, which is the use of lithium ion batteries in the automobile. This is, we’ve had the first two transformations basically being use in portable electronic devices and use in hybrid electric cars, but now in electric automobiles, fully electric automobiles, and stationary cells.
James West: Sure. Okay, so first thing that comes to mind is, we’re pretty much told throughout the media universe in mining that primary cobalt mines are few and far between. In fact, I don’t know of a single one. Could you elaborate on the mine that you’re referring to, and exactly what is the volume of cobalt relative to other minerals?
Robin Goad: Sure. So our project is principally a cobalt project. Most cobalt is produced either as a by-product of copper or nickel; in particular, in the African copper belt, cobalt is produced as a by-product of copper in Zambia and also in the Congo, and then also nickel mines, sulphide deposits like Sudbury, Norilsk, have by-product cobalt production as well as laterite projects.
So our project is a little bit unique. It’s an IOCG, or Olympic Dam-style deposit, but its metal assemblage is a little bit odd in that cobalt is the dominant metal. We also have reserves containing 1.1 million ounces of gold; the cobalt content is 82 million pounds. And then the third commodity that we have in the deposit is bismuth, which is an unusual metal that has a variety of different applications in pharmaceuticals and principally in the automotive sector. But the growth in bismuth is coming as a non-toxic replacement for lead.
Having a project that is independent of both copper and nickel is very important, because depending on who you talk to, but some people would suggest that the copper production globally would have to double in order to satisfy the current growth in cobalt consumption from typical copper belt-type deposits. So that’s a non-starter.
James West: Yeah, that’s interesting. It’s been suggested to me by major mining executives that even the gigafactory in the Nevada desert that Tesla is developing, is going to be threatened by chokepoints in the cobalt aspect of the supply chain, especially in view of all of the gigafactory-sized plants being developed in the world. And I guess that puts you in a good position to capitalize on that?
Robin Goad: Yeah, that puts us in a very good position. Tesla’s plant alone will require about 7,800 tonnes of cobalt when it achieves full production. There are at least 15 megafactories either announced or under construction right now, so it’s not just a Tesla story, but LG’s building a couple of plants, Samsung, Boston Power, BASF. Daimler just announced one for the end of 2016. So we’re going to see huge factories being built all over the world, all of them requiring significant amounts of cobalt.
Now, the cathode chemistry that Tesla’s using is an NCA chemistry, which is a nickel-cobalt-aluminum. And most of the other automobile manufacturers are using NMC, which is nickel-manganese-cobalt. Traditional batteries in your portable computer, your cellular telephone, those are using LCO, or lithium-cobalt-oxide. So the principal battery chemistries all contain cobalt, but there are some batteries that don’t contain cobalt, but you use those at the expense of the performance of the battery.
James West: Okay. So your primary project is the NICO cobalt-gold-bismuth-copper project in British Columbia, correct?
Robin Goad: It’s actually in the Northwest Territories.
James West: Oh, okay.
Robin Goad: Up near Yellowknife, it’s about 160 kilometres northwest of Yellowknife. This is a project that we’ve expended more than $116 million to date. So it’s not something that’s been reactive to the popularity of cobalt; it’s a project that we’ve been advancing, it has positive environmental assessments in both the Northwest Territories and where we’re going to build the refinery for the project in Saskatchewan. It’s got a positive bankable feasibility study, it’s been test mined, it’s been pilot plant processed. So significant de-risking has happened.
The fact that we are vertically integrated, meaning that we’re going to go right through from the production of ores through to concentrate and then to produce a high quality cobalt sulphate that’s needed in these batteries, is something that’s very attractive to automobile companies and chemical companies, because they don’t quite care if you’re just mining a product; they want to know that you can actually produce the product they need.
James West: Right. So does Fortune – when would Fortune envision seeing production at this mine?
Robin Goad: Well, we’re effectively shovel-ready right now. So we’ve just announced the appointment of PWC as our financial advisor to help secure the project financing for the project. We need about $600 million CDN to be able to build this fully vertically integrated project, so that’s a mine, concentrator up in the Northwest Territories, and then the hydrometallurgical refinery in Saskatoon, Saskatchewan.
So we expect that the securing the financing can be accomplished. We had a fully financed project two years ago from a large Chinese EBC provider; then when outbound Chinese investment dried up a couple of years ago, and the commodity price went south, we’ve been more or less waiting for this opportunity to secure the project financing and build the asset.
James West: The obvious question is, have you talked to anybody at Tesla?
Robin Goad: I can tell you that we talk to companies, large manufacturers of electric cars, on a regular basis, and I have confidentiality agreements with some of those companies, so I can’t name any specific companies. But needless to say that Tesla is going to need 7,800 tonnes of cobalt. They’re going to need a lot of lithium, they’re going to need graphite. But I can’t tell you if we’ve had specific discussions.
James West: Sure. So also, 15 other gigafactories are going to need all that cobalt as well?
Robin Goad: The one I’m actually kind of excited about too is Volkswagen. Volkswagen, following Dieselgate, has gone fully electric; they’re going to have 20 models by 2020, 25 by 2025. They’re the largest car company in the world. But it’s everybody. I mean, General Motors, there’s a quote from the President of General Motors Canada saying that the future of the automobile is going to be far different than it is today. There’ll be electric, there’ll be shared, and they’ll be autonomous, as well.
James West: Okay. So let me ask you, Robin: I’m looking at your chart here, and it certainly looks like the market has failed to grasp, at this point, the imminent chokepoint that is directly in front of all of these gigafactories. I mean, if you look at the amount of cobalt being mined versus the future demand, if you were to assume that 15 gigafactories are going to need roughly 7,800 tonnes each of new cobalt production, there’s just no possibility of that in the whole global scenario.
So, at what point does the market reflect the imminent shortage in the share prices of companies that can deliver some cobalt?
Robin Goad: Well, I think you’re seeing that right now. our share price was beaten up pretty badly in the five years preceding where we are right now, but our stock is up about 10 times, for example, where it was about a year ago. The cobalt price has also just started to move at the end of 2016; this was something that had been forecast. Most people were – most credible analysts were projecting a cobalt deficit at that time, and about 1,600 tonnes per year, and then accelerating. Because we’ve had 6 percent compounded annual growth in the consumption of cobalt for 20 years now, primarily based on the use in batteries.
But up until this time, most of that cobalt has been able to be sourced either from the Congo or from existing nickel sulphide and laterite projects. Laterite has been a disaster; they were extremely expensive. The last one to be built that I’m aware of cost about 7.5 billion to build, and is only just starting to eke out an operating profit. It’s highly unlikely they’re going to be able to repay the capital.
The Congo is beset by all kinds of problems. It’s also a very high-cost jurisdiction. In addition to the political issues, which are significantly of concern, there’s also the near-surface oxide ores are largely depleted; they’re transitioning now into deeper sulphide ores that require more expensive downstream processing, and the President of the Congo has defied the Constitution and failed to sort of hand over power last year. There’s a truce that’s been negotiated for a transition in 2017; if that doesn’t happen, you could see a significant impact on the current supply, which right now is 60 to 65 percent of global mine production.
The other thing that’s quite interesting about cobalt supply is that 52 percent of the refining is done in China. 85 percent of the cobalt chemicals are refined in China. So again, we have to have a reliable North American sort of alternative.
So we are seeing this transition. So cobalt prices last year were about $10, $11 per pound; long-term average prices for cobalt are typically around $20 per pound, and we’ve seen the price recovering now to about $17 a pound. So we’re just starting to get up to historical averages right now, and when it does go through that, I think some of these battery clients are going to have a challenge getting material.
James West: You bet. All right, Robin, that’s a great introductory overview. We’re going to come back to you in due course and see how you’ve progressed. Thank you very much for your time today.
Robin Goad: Thanks very much for having me, James.
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