Fortune Minerals Ltd. (FT-TSX) said Monday it has entered into a binding letter of intent for a loan with a principal amount of $3.8 million from Prosper NWT, a public agency of the Government of the Northwest Territories. The loan will enable Fortune to purchase a brownfield industrial site in Lamont County, Alberta, where the company plans to construct a hydrometallurgical facility to process concentrates from its flagship NICO cobalt-gold-bismuth-copper project in the Northwest Territories.
On Monday, Fortune shares rose 5.5% or $0.005 to $0.095, and trade in a 52-week range of 12 cents and $0.04.
Fortune had previously signed an option agreement with JFSL Field Services ULC to purchase the industrial site, where the company also plans to make value-added critical mineral products for the energy transition, new technologies and defense. JFSL is a subsidiary of the Worley Group, an international engineering, construction management and environmental services company. Its shares are listed on the Australian Stock Exchange.
Under an agreement, Prosper NWT will provide a $3.8 million loan over a term of up to 60 months at a fixed 8.45% interest rate, with interest-only payments for the first 24 months, followed by a blended interest and principal amount for the remaining 36 months based on a 180-month amortization.
Fortune will provide the refinery site, buildings and equipment as security for the loan, which will also be guaranteed by the company, which has already made $3.04 million in installment payments towards the $6 million purchase of the refinery site and facilities. The Prosper NWT loan will enable Fortune to complete the purchase and is expected to close by year-end.
The JFSL site consists of 76.78 acres of land adjacent to the Canadian National Railway in Alberta’s Industrial Heartland, an association of five municipalities northeast of Edmonton with planning approvals already in place for industrial development and tax incentives keyed to capital investment.
The JFSL site is a steel fabrication plant with more than 42,000 square feet of serviced shops and buildings.
“With this key Alberta Refinery site secured, Fortune will be able to move the vertically integrated NICO cobalt-gold-bismuth-copper critical minerals project closer to a construction decision, while also removing a significant development risk,’’ said Fortune President and CEO Robin Goad.
The NICO project was assessed in a positive feasibility study in 2014 by Micon International Ltd. but is now out of date.
The NICO deposit is located in Tlicho Territory, approximately 160 kilometres northwest of Yellowknife. The deposit contains an open pit and underground proven and probable mineral reserve totalling 33.1 million tonnes containing 1.11 million ounces of gold, 82.3 million ounces of cobalt, 102.1 million pounds of bismuth and 27.2 million pounds of copper, material that could support a 20 year mine life.
