Fortune Minerals secures $16M in Canada, US government funding

Shares of Fortune Minerals (TSX: FT; US-OTC: FTMDF) hit a 52-week high on Thursday after the critical minerals developer announced it has secured additional funding from the Canadian and United States governments for its flagship NICO project.

The domestic funding, courtesy of Natural Resources Canada, amounts to $7.5 million for the cobalt-gold-bismuth-copper project in the Northwest Territories. This is expected to cover 75% of the $10 million in additional engineering and test work for the project, Fortune said.

Separately, the company has been awarded US$6.3 million ($8.6 million) by the US Department of Defense to expand the capacity and production of cobalt for the battery and high-strength alloy supply chain. This grant was delivered under the Defense Production Act Title III program. It also received $714,500 of federal investment in March to help it produce cobalt sulphate and bismuth.

The total amount of non-dilutive funding that Fortune expects to receive is $16.2 million. This important cross-border initiative, says the company, is aligned with the Canada-U.S. joint action plan on critical minerals.

“The demand for critical minerals needed for the energy transition requires new vertically integrated domestic production from non-traditional ores and concentrates. Bi-lateral Canadian and U.S. government investment is therefore important to align mineral production with changes in new technologies, ensure security of supply, and support North American industrial competitiveness,” Fortune CEO Robin Goad stated.

The funding injection comes as explorers and developers in North America continue hunting for minerals essential for the energy transition, with the Northwest Territories in particular emerging as an important region for critical minerals. Lithium projects near the capital Yellowknife continue to gather momentum, and a site east of the city hosted until recently Canada’s only producing rare earths mine. 

Shares in Fortune Minerals shot up 41.7% to 8¢ on Thursday, having earlier hit 9¢ apiece, its highest in over two years. Its market capitalization is $45 million.

Advanced-stage asset

The NICO project is an advanced-stage asset consisting of a proposed open pit and underground mine and concentrator, located 160 km northwest of Yellowknife. Anchoring the mine is a cobalt-gold-bismuth-copper deposit containing 33.1 million tonnes in total reserves grading 0.11% cobalt, 1.03 gram gold per tonne, 0.14% bismuth and 0.04% copper.

Fortune, which first discovered the asset in 1996, aims to deliver a vertically integrated, domestic production source of these minerals by building a hydrometallurgical refinery in Alberta that will process concentrates from the NICO mine to produce cobalt sulphate, gold doré, bismuth ingots and copper. Its goal is to produce cobalt for the North American lithium-ion rechargeable battery industry. As a domestic source, its NICO project would be compliant with the terms of the IRA.

To date, Fortune has expended more than $137 million to advance NICO to a near shovel-ready project with a positive feasibility study in 2014, which it expects to update this year, and environmental assessment approval and the major mine permits for the facilities in the territory.

With 12% of global bismuth reserves, the NICO project would also provide a domestic alternative for products used in the automotive and pharmaceutical industries. It also contains more than 1 million oz. of gold as co-product to mitigate critical mineral price volatility.