Nico Feasibility StudyFortune Minerals announces NICO bankable feasibility study
Thursday September 23, 8:30 am ET
TSX, Symbol "FT" Issued Capital: 26,955,570
TORONTO, Sept. 23 /CNW/ - Fortune Minerals Limited is pleased to announce that the bankable feasibility study to assess the economics of the Company's 81% owned NICO gold-cobalt-bismuth deposit in the Northwest Territories is currently in progress. Micon International Ltd. was selected as the lead consultant to conduct this study. They will be assisted by a number of additional firms and industry professionals that have been retained to work on specific areas of the project. The NICO bankable feasibility study is being prepared to +/- 15% precision, requisite for satisfying the external scrutiny of financial lending institutions. The study is expected to be complete in the first quarter of 2005.
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ABOUT MICON
Micon is a company that provides consulting and engineering services to the international mining industry and specializes in the areas of financial and technical analysis, production feasibility studies, project monitoring and environmental management. Micon's clients include mining and exploration companies, financial institutions and government agencies from around the world. Micon has developed a particular expertise in economic evaluations of mining properties, including studies in support of bank and equity financings.
OTHER ENGINEERING AND CONSULTING COMPANIES:
Micon has contracted Met-Chem Canada Inc., a full services engineering company with procurement capabilities, to conduct the design and costing for the NICO site infrastructure and processing facilities. Klaus Konigsmann, P.Eng. (KVK Consulting Associates Inc.) is continuing to assist Fortune with the design and process flow sheet in the areas of crushing, grinding and flotation. Al Hayden, P.Eng. (EHA Engineering Ltd.) is also continuing to assist Fortune on the hydrometallurgical facilities, including pressure oxidation, cyanide circuit, solvent extraction and electro winning. Micon has also retained the services of Jack Irvine, P.Eng., an independent consultant with expertise in pressure oxidation and high-pressure acid leach circuits. Eugene Puritch, P.Eng., who has been working with Fortune and Micon preparing estimates of the NICO resources, is currently preparing the new mine plan for underground workings and pit optimizations. Golder Associates Ltd. has been conducting geotechnical, and hydrogeology assessments for the NICO mine workings, collecting environmental baseline data, and is assisting Fortune with permitting. EBA Engineering Consultants Ltd. is designing the tailings impoundment areas and access road, and is also responsible for geotechnical issues and aggregate resources for the surface infrastructure. Fortune is pleased to have assembled this respected group of industry experts to assist in the assessment and development of the NICO project.
LOCATION ACCESS AND BACKGROUND INFORMATION:
Fortune discovered the NICO gold-cobalt-bismuth deposit in 1995 using an Olympic Dam model for exploration. The deposit is located 160km northwest of the City of Yellowknife, Northwest Territories and 22km west of the Snare hydro complex. It is currently accessed from the winter road to the communities of Rae Lakes and Wha Ti, although plans are in progress to re-align this road to provide all-weather access to the site.
NICO is a large near surface deposit with mineralization occurring in stacked, gently inclined lenses of ironstone, collectively locally in excess of 100 metres in thickness. Although the deposit geometry is well suited for open pit mining, cash flow scheduling in a 2002 scoping study determined a more attractive rate of return for the development using a combination of underground and open pit mining. Additional drilling in 2003 expanded and increased the grade of the deposit and improved its mineability.
The NICO bankable feasibility study is assessing a 3,000 tonnes of ore/day production rate (~1 million tonnes/year), half of which would be produced from underground mining and half from open pits. Measured and Indicated resources for the deposit are 15.5 million tonnes using a metal price scenario of US$375/oz gold, US$10/lb cobalt and US$3.25/oz bismuth. They increase to 28.2 million tonnes using a US$15/lb cobalt price. Prices for gold, cobalt and bismuth are currently quoted at approximately US$405/oz, US$24/lb and US$3.70/lb, respectively. Estimates of the NICO resources were prepared by Micon earlier this year and Terrence Hennessey, P.Geo. acted as Qualified Person in compliance with National Instrument 43-101 (see press release dated May 27, 2004).
SITE INFRASTRUCTURE:
The NICO site would be accessed from the highway between Yellowknife and Edmonton by an all-weather road extending from Rae-Edzo and Wha Ti. Power would be supplied by a connection to the grid at the Snare hydro complex with backup by diesel generation. A camp would be constructed at the site to accommodate employees working on a rotational basis.
MINING:
The feasibility study contemplates underground mining by "blasthole with delayed cemented rock fill" methods with access and haulage from a decline ramp using trackless mining equipment. Open pit mining would use conventional diesel-powered truck and shovel equipment. Waste rock from the pits would be used to backfill the underground workings.
PROCESSING:
The NICO process plant contemplates conventional crushing and grinding, followed by two-stage flotation to produce gold-cobalt and gold-bismuth sulphide concentrates. The gold-bismuth concentrates would be sold to smelters in North America, Asia and Europe. The gold-cobalt concentrates conversely, would be processed at the site using acid pressure oxidation in an autoclave. Cyanidation of the residue followed by carbon in leach would produce gold as doré. Cobalt-bearing solutions would be purified and cathode cobalt metal recovered by electro winning.
As part of the feasibility study, a small-scale pilot plant is currently in progress at Lakefield Research Ltd. to optimize the processing flow sheet and recoveries. Work completed to date has been very positive and the Company expects to be able to release a progress report in early October. Drilling is also in progress at the NICO site to provide geotechnical information for the tailings dams and site infrastructure. Additional environmental baseline studies and installation of a weather station are also in progress. Fortune will be providing regular updates of its activities as work progresses on the project.