Fortune Minerals (FT-T) has inked a deal to acquire the Golden Giant mill in Hemlo, Ont., for use at its 81%-owned Nico gold-cobalt-bismuth deposit, 160 km northwest of Yellowknife.
Included in the $3.3-million deal are a 3,000 tonne-per-day conventional crushing and grinding plant, flotation and paste fill equipment, buildings, structural steel, minor equipment, spare parts and inventory, and engineered designs.
Fortune would have 3 years to remove the facilities from the Hemlo property.
The proposed transaction is subject to due diligence by Fortune and the transfer of the assets from current owner Newmont Mining (NMC-T, NEM-N) to Mindecom, which specializes in the decommissioning of mines. Closing is expected no later than the end of August, when operations at Golden Giant will have wrapped up.
Meanwhile, completion of Micon International’s bankable feasibility study of Nico has been delayed to allow for the incorporation of the mill and surface facilities. The study is now due out in the second quarter of 2006.
Fortune says the acquisition of the used facilities will “very materially reduce projected capital costs and significantly reduce project risk.”
Capital costs were previously pegged at $77.3 million for construction of mine, mill, camp and related facilities. The figure included modifications which would have allowed ore to be processed at Miramar Mining (MAE-T) Con mine process plant in Yellowknife.
Plans at Nico call for underground and open-pit mining, with ore processed in a hydrometallurgical plant to produce gold dor, cobalt cathode and bismuth concentrate. Annual production is forecast at 1,200-1,500 tonnes of contained cobalt, 50,000-100,000 oz. of gold, and 1,000-1,500 tonnes of contained bismuth.
Earlier this year, Fortune inked a letter of intent to Nico’s all of its bismuth production under an off-take agreement with an undisclosed private company described as one of the world’s largest and most diversified producers and suppliers of bismuth based products. Terms of the deal were not disclosed.
At last count, Nico was home to underground measured and indicated resources totalling 5.1 million tonnes running 3.4 grams gold per tonne plus 0.16% cobalt and 0.22% bismuth. Open-pitiable resources total 8.2 million tonnes at 0.5 gram gold, 0.13% cobalt, and 0.14% bismuth. The estimates are based on metal prices of US$375 per oz. gold, US$10 per lb. cobalt, and US$3.25 per lb. bismuth.
Fortune says Micon’s feasibility study will include updated reserve estimates based on more recent metal prices of US$510 per oz. gold, US$17 per lb. cobalt, and US$5 per lb. bismuth.
The remaining 19% of Nico is held by Candou Industries, a company controlled by Fortune chairman George Doumet.
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