LONDON, Ontario – Fortune Minerals has released the highlights of the front end engineering and design study for its Nico gold-cobalt-bismuth-copper mine and mill near Yellowknife, YT, and a hydrometallurgical refinery, the Saskatchewan Metals Processing Plant, near Saskatoon, SK. The company plans to market gold doré, 99.8% Co cathode and/or cobalt sulphate heptahydrate, containing 20.9% Co, 99.99% Bi ingot, and a copper metal precipitate.
The FEED study considered base case gold production with cobalt sulphate, bismuth and copper credits. The pre-tax internal rate of return is estimated at 14.0%, and the pre-tax 7% discounted net present value is C$309 million. Cash costs net of by-product credits are negative for cobalt and bismuth. Cash costs for gold will be US$943.04/AuEq oz at current metal prices. Pre-production capital costs are expected to be C$441 million.
The mineral reserve has also been updated. Reserves have increased 6.5% to 33.0 million tonnes. Contained gold increased 19.7% to 1.1 million oz and the grade was up 12.1% to 1.02 g/t Au. The open pit ore strip ratio has been lowered to reduce pit waste by 13.3%. These numbers mean the mine life can be increased to 19.8 years from 18 years, excluding marginal sub-economic material.
A summary of the FEED report is available in the press release dated July 2, 2012, posted at FortuneMinerals.com.