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Fortune Minerals Ltd T.FT

Alternate Symbol(s):  FTMDF

Fortune Minerals Limited is a mining company. It is engaged in the exploration and development of mineral properties in Canada. It is focused on developing the NICO Cobalt-Gold-Bismuth-Copper Project in the Northwest Territories and Alberta that produces a bulk concentrate for shipment to a refinery that it plans to construct in southern Canada. It also owns the satellite Sue-Dianne copper-silver-gold deposit located 25 kilometers (km) north of the NICO Deposit and is a potential future source of incremental mill feed to extend the life of the NICO mill and concentrator. It also maintains the right to repurchase the Arctos anthracite coal deposits in northwest British Columbia. It also has a 100% interest in these 116 hectares of property south of Great Slave Lake with copper, silver, gold, lead and zinc showings. It has a 1% net smelter royalty covering 78 hectares of land positioned in a former silver mining district, located south of the Eldorado mining district at Great Bear Lake.


TSX:FT - Post by User

Comment by MoneyMan123456on Jan 18, 2022 1:03pm
152 Views
Post# 34329195

RE:fall / maybe

RE:fall / maybeNo worries, I was initially pretty positive on the NICO mine, however have soured considerably after reading some of the documentation.   I recommend reading the MD&A from the previous quarter, it does not give a huge amount of confidence on the direction and strategy of the company.

In particular they appear to have almost 15 million in secured debt coming due in the next 1-3 years.  How are they going to make that payment?  

Also they spent some time studying expanding the mining and concentrating operation in the NWT, but abandoned further study.  They probably understand that operating the mine will be very expensive and that if you can mine the deposit more quickly you save a huge amount of fixed operating costs.

In my opinion they have spent a lot of money developing a small sampling operation at the NICO site and related Underground portal.  Most of this infrastructure won't be useful when/if the deposit is developed (too small scale).  I think they should have bulk sampled using a RC drill and sent the material off-site for testing purposes.  They seem to have employed a sample camp strategy used by BHP at the Ekati mine, but the big difference is BHP is a giant miner with vast resources (which don't bankrupt the company if things don't pan out).  

I'm not sure I see a way forward without a big drill program win.  There is no way they get construction funding without a major partner to provide some cash and de-risk the investment (from the lender's perspective)

It would have been nice to have given a major player 80% of the deposit in exchange for developing and operating the mine.  If you assume 20 million in net profit per year (based on a 20% share), each share would pay a dividend of amost 5 cts/year.  Over 15 years you would receive 75 cents / share.   The nice thing about that is Fortune becomes just a dividend company with just minimal management oversite to distribute dividend and produce the financial reports.
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