GOLD-COBALT FEASIBILITY – NICO study puts costs at $215.2 million

NORTHWEST TERRITORIES - The bankable feasibility study covering the NICO gold-cobalt-bismuth project indicates that...
NORTHWEST TERRITORIES - The bankable feasibility study covering the NICO gold-cobalt-bismuth project indicates that 90%-owner FORTUNE MINERALS of London, Ontario, will need $215.2 million to create a mine. The study further suggests that the mine would produce 69,000 oz of gold during its first two years of operation and 24,000 oz/year thereafter. Annual production would also include 3.25 million lb of cobalt cathodes and 3.23 million lb of bismuth contained in concentrates.

Both underground and open pit mines will be constructed. The underground proven and probable reserves total 1.2 million tonnes grading 5.07 g/t Au, 0.14% Co and 0.19% Bi. The open-pit portion of reserves contains 20.6 million tonnes grading 0.85 g/t Au, 0.13% Co and 0.16% Bi.

Development of the NICO deposit would include a preproduction period of two years, which includes construction of a camp to accommodate the 185-person workforce, and the process plant and related site infrastructure. A total of 10.0 million tonnes of wasterock prestripping is also required prior to commencing production, which will supply aggregate to build the plant site, roads and tailings dam structures. Lower grade ores also mined during prestripping will be processed during a six-month ramp-up period to commission the mill and downstream processing facilities.

The pit will use conventional truck and shovel mining methods with a 10-m diesel hydraulic shovel and 91-t haul trucks. The waste:ore strip ratio for the open pit averages 3.9:1 over the life of the mine. Average open pit mining costs are estimated to be Cdn$2.59/t of rock moved.

In the underground workings, trackless mining will be used to provide 1,650 t/d of high-grade ore to supplement the daily mill throughput. Access to the underground mine is by a 5- by 5-m ramp driven at a minus 15% gradient, much of which has already been constructed as part of a bulk-sampling program in 2006; that work will continue in 2007. A combination of longitudinal and transverse retreat mining methods will be used with the ore blasted from stopes into draw points for extraction using 7.6 m LHDs and then loaded into 40-t trucks for transport to the crushing plant on surface. Backfilling will be done with cemented and unconsolidated rockfill. Fortune will own and operate the production, loading and hauling fleet for the underground mine, while a contractor will provide mine development services. Total underground operating costs are estimated to be Cdn$34.02/t of ore mined.

Fortune has already purchased the Golden Giant mill, which will be moved from Hemlo, Ontario, to the NICO site 160 km northwest of Yellowknife. Plans call for processing 4,000 t/d of ore.

The company has provided a market outlook for the metals to be recovered at


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