Mining isn't just about finding the right commodity and digging it out of the ground. If your project is in a first nation’s territory there's a lot more to it than that. In the case of Fortune Minerals, its NICO project is in Canada's Northwest Territories, fifty kilometers north of the Tlicho community of Whati, and it's putting a lot of time and effort into ensuring everything is done properly.
“We are confident in our exceptional Canadian based assets and committed to becoming a leading producer of gold specialty metals and metallurgical coals.”
Dr Rick Schryer- M.Sc., Ph.D., Saskatoon, Saskatchewan (Director of Regulatory & Environmental Affairs)
One thing that is being undertaken by the community is a Traditional Knowledge Study, which looks at how people have used the land. “It concerns the traditional land use practices of the people in their traditional land,” explains Director of Regulatory and Environmental Affairs Richard Schryer. “It's a look at not only how they use the land but also how they perceive the land in terms of sacred areas of spiritual importance.”
The study identifies areas with cultural significance in order to avoid disturbing them through mining or other activities. “We've already done a traditional knowledge study," says Richard. “We're confident that there isn't anything of concern, but they wanted to proceed with a study of their own.”
Fortune has been in discussion with the Tlicho people for a number of years and has reached the stage of signing a co-operative relationship agreement with the Tlicho government. This agreement facilitates further discussions with a working group with respect to the impacts of the mine.
The main subject of discussion is the Developer's Assessment Report (DAR) that was submitted in May. Richard says: “We're now in the review stage for the DAR, specifically the Technical Meetings Stage. Everyone’s had a look at the DAR and the parties have submitted questions about what they saw in the document. We have responded to these questions and will be meeting with the interested parties to answer their questions in terms of the potential impacts and how we're going to mitigate those impacts. It's not only about water quality, wildlife and air, it's about people.”
An EA Funding Agreement has also been signed, which allows the funds Fortune has provided to the Tlicho government to be used to review the DAR. “They don't have a lot of technical expertise in-house,” remarks Richard. “They've got to go out and purchase those services and get opinions on what we've submitted so they can evaluate it themselves. We provided the EA funding so they can go ahead and do that.”
The NICO project is a 31 million tonne gold, cobalt, bismuth and copper deposit where large bulk samples were collected in 2006-7 and processed in a number of pilot plants. The planned processing rate is 4,650 tonnes of ore per day and the intention is to ship 180 tonnes of concentrate each day by truck and rail to a proposed hydrometallurgical plant in Saskatchewan. There are several reasons for splitting the project over two locations: the scarcity of power in the Northwest Territories, the lack of required processing chemicals locally and the ability to match the skill sets of the labour force in both regions to the activities at the respective facilities.
Fortune is currently at an advanced stage in the permitting process, the Technical Meetings Stage. The hope is to have construction completed by 2014. Before that can start, a Federal minister has to sign off on the project and then water licensing has to be obtained. The aim is to start producing as both an underground and open pit mine, transitioning to a fully open pit mine. The project will, as Richard points out, have products that are in demand: “Cobalt and bismuth, especially, are ones you could almost call green products. Cobalt is used in a lot of batteries for hybrid and electric cars. Bismuth is being used as a replacement for lead in things like paint. There are a lot of good applications for the products we're going to be producing.”
Richard believes the proposed hydrometallurgical plant has a lot of potential beyond simply processing the NICO concentrate: “It will basically be a giant chemistry set. We could do custom processing of ore from other locations and look at other things like the recycling of hybrid car batteries, which have a limited life. Once the Saskatchewan Metals Processing Plant established, the possibilities are endless in how we use the facility.”
A possible downside to the NICO project is that people aren't familiar with cobalt and bismuth, which Richard feels holds the company's stock price back. This is despite there being almost one million ounces of gold at NICO and the potential to explore for other mineral resources in the area once the initial deposit has been worked out. Fortune is, therefore, undertaking an education process with current and potential investors to explain the products and their markets.
Fortune's other main property is the Mount Klappan anthracite coal project in northwestern British Columbia. “We've just done a joint venture with Posco, which is the world's third largest steel producer,” recounts Richard. “They've bought 20% of the project and we're moving forward with that one as well.”
Several junior companies, including Fortune, have been identified as possible targets for steel producers. Analysts Jackie Przybylowski and Jennifer Tkachuk-Tremblay have said: "We expect that one or more of these large producers will look to increase reserves and production from the region. We would also consider steel producers or other global trading houses as potential acquirers."
Metallurgical coal is in scarce supply so the pulverized coal injection product (PCI) that will be produced at Mount Klappan should receive an attractive price. Richard feels the company has two exciting projects that are moving towards production. On the NICO project, Fortune has built a solid relationship with the Tlicho government, knowing this is critical to its success. Richard says: “We feel we're now in a position to move things forward with them. We've signed the first two agreements and we feel that will move us forward to a more formal agreement. That will allow us to get to a stage where we can sign a participation agreement and be fully involved with the Tlicho people and government on the project. We feel we're very much on the right path and we're excited to be here.”