Battery-grade product proven that sells for premium and lowers operating costs
Issued Capital: 117,076,976
LONDON, ON, May 30, 2012 /CNW Telbec/ - Fortune Minerals Limited (TSX-FT) (OTCQX-FTMDF) ("Fortune" or the "Company") (www.fortuneminerals.com) is pleased to announce successful results of pilot plant tests conducted at SGS Lakefield Research Limited ("SGS Lakefield") proving that a battery-grade cobalt sulphate product used to make high performance lithium ion and nickel metal hydride rechargeable batteries can be produced from the Company's NICO gold-cobalt-bismuth-copper project. These batteries are used in portable electronic devices, such as cellular telephones and computers as well as electric and hybrid-electric cars and are responsible for the greatest increase in the demand for cobalt. Battery-grade cobalt sulphate can be produced at a lower operating cost than the 99.9% high-grade cobalt cathode that can also be generated from the NICO project and sells for a 15 to 25% premium price over metal.
In light of the results from the pilot plant tests, the Company believes that it is well-positioned to satisfy the needs of electronics companies and other end users of cobalt sulphate who require reliable sources of cobalt that are less vulnerable to supply disruptions from resource nationalism and political instability. More than 50% of world cobalt production is currently sourced from the Democratic Republic of the Congo. NICO is poised to become a reliable Canadian-based cobalt supplier with 15% of global bismuth reserves, and a significant gold co-product as a counter cyclical hedge. Cobalt sulphate is the preferred product by many battery manufacturers that would otherwise need to re-process metals to produce the sulphate that Fortune can produce directly from solution.
SGS Lakefield conducted the cobalt sulphate pilot plant in March and April, 2012 at their facilities in Lakefield Ontario. Fortune already had 2000 litres of cobalt pregnant solution that had been processed by acid pressure leach in an earlier autoclave pilot plant test and was used to conduct the current test. Notably, most of the flow sheet that Fortune has already piloted and engineered to produce a 99.9% cobalt cathode product is also used to produce a high purity cobalt sulphate heptahydrate crystal product. However, after removing metal impurities from the cobalt solution using sequential neutralization, solvent extraction is used to reject metal impurities, leaving a pure cobalt sulphate solution, which is then evaporated and subjected to a three-stage crystallization process instead of electro-winning metal. Approximately 10 kg of high quality 20.9% cobalt sulphate heptahydrate product was produced in the test to prove the process flow sheet and product quality. Production of cobalt sulphate is now being added as a sensitivity option in the Front End Engineering and Design ("FEED") study nearing completion by Jacobs Minerals Canada Inc. ("Jacobs") and other engineering companies and was responsible for the delay completing this study. The pilot plant test was supervised by Alex Mezei, M.Sc., P.Eng., Director, Engineering Technical Services at SGS Lakefield and Keith Lee, B.Sc., Fortune's Senior Process Engineer. Alex Mezei is the Qualified Person under National Instrument 43-101 who supervised the preparation of the scientific and technical information that forms the basis for the disclosure contained in this press release.
The NICO project consists of a proposed mine and concentrator in the Northwest Territories ("NT"), located 160 km northwest of the City of Yellowknife and 50 km northeast of the community of Whati. A vertically integrated hydrometallurgical process plant, the Saskatchewan Metals Processing Plant ("SMPP") is planned to be constructed near Saskatoon, to process NICO concentrates to gold doré, 99.9% cobalt cathode and/or 20.9% cobalt sulphate, 99.99% bismuth ingot and a copper metal precipitate. Both sites are currently in advanced stages of the environmental assessment process for permitting. NICO has already been assessed in a positive definitive feasibility study by Micon International Limited that was updated in 2008 and shows an attractive rate of return for the development (see Fortune news release, dated May 8, 2008). NICO mineral reserves and economics are being updated in a new technical report and the FEED study by Jacobs, P&E Mining Consultants Inc., Golder Associates Ltd. and other engineering companies.
About Fortune Minerals:
Fortune is a diversified resource company with several mineral deposits and a number of exploration projects, all located in Canada. The Company is focused on the development of the Mount Klappan anthracite metallurgical coal deposits in British Columbia and the NICO gold-cobalt-bismuth-copper deposit in the NT. As part of the development of the NICO deposit, Fortune is developing the SMPP in Saskatchewan to process NICO concentrates to high value metal products. The Company has acquired and dismantled equipment from the Golden Giant Mine at Hemlo, Ontario for relocation to NICO. In addition, the Company owns the Sue-Dianne copper-silver-gold deposit and other exploration projects in the NT. Fortune is focused on outstanding performance and growth of shareholder value through assembly and development of high quality mineral resource projects.
This press release contains forward-looking information. This forward-looking information includes statements with respect to, among other things, proposed development of the NICO project, the potential for increasing reserves at the NICO project, the proposed development of the SMPP, the anticipated recoveries of metals from the NICO project and the anticipated sale of products from the NICO project. Forward-looking information is based on the opinions and estimates of management at the date the information is given, and 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 inherent risks involved in the exploration and development of mineral properties, the inherent volatility of metal prices, the risk that the Company may not be able to arrange the necessary financing to construct and operate the NICO mine and the SMPP, uncertainties with respect to the receipt or timing of required permits for the development of the NICO project and the SMPP, the possibility of delays in the commencement of production from the NICO project and construction of the SMPP, the risk that actual recoveries of metals from the NICO project may not be consistent with test results, the possibility that the Company may not be able to secure supply contracts with users of products generated from the NICO project and other factors. 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.
Image with caption: "Fortune Minerals' President and CEO, Robin Goad, and Senior Process Engineer, Keith Lee, observe the continuous production of cobalt sulphate at the SGS Lakefield pilot plant with Jacobs Minerals Canada Inc. engineers (CNW Group/Fortune Minerals Limited)". Image available at: http://photos.newswire.ca/images/download/20120530_C4072_PHOTO_EN_14374.jpg
For further information:
Fortune Minerals Limited
Robin Goad, President, or
Troy Nazarewicz Investor Relations Manager
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