Global electric car company could source cobalt from new Langham, Saskatchewan facility
Tesla to minimize environmental impact
Issued Capital: 150,526,976
LONDON, ON, April 4, 2014 /PRNewswire/ - Fortune Minerals Limited (TSX: FT) (OTCQX: FTMDF) ("Fortune" or the "Company") (www.fortuneminerals.com) is pleased with the recent reports that Tesla Motors Inc. ("Tesla") plans to source its critical raw materials as close as possible to its planned $5 billion lithium-ion battery "gigafactory" in the southwest U.S. - with a preference for North America suppliers to minimize environmental impacts and material costs. Fortune's proposed refinery near Saskatoon in western Canada, the Saskatchewan Metals Processing Plant ("SMPP"), will be constructed in the community of Langham, and will stand out as a North American facility dedicated to the production of cobalt chemicals needed to manufacture rechargeable batteries used in electric vehicles like Tesla's as well as in portable electronic devices. The Tesla Model S uses Nickel Cobalt Aluminum cathode chemistry from Panasonic containing 9% cobalt by weight. Lithium-ion batteries using other cathode chemistries can contain up to 60% cobalt by weight.
The SMPP will also produce gold, bismuth metals and chemicals, and byproduct copper. Notably, the bismuth market is experiencing significant demand growth as a non-toxic, environmentally safe replacement for lead in a number of products, including automotive anti-corrosion coatings, windshield frits, pearlescent paints and electronic solders. Fortune envisions that the SMPP could also be expanded to include battery and metal recycling as a future business opportunity in Langham.
Tesla spokesperson, Liz Jarvis-Shean, has noted that the electric car manufacturer will look for North American suppliers of cobalt and other materials needed to "establish a supply chain that is local and focused on minimizing environmental impact." She further commented, "One of the key reasons is to more completely consider the total environmental impact of the supply chain while significantly reducing battery cost. Our goal is to build batteries with the lowest environmental impact possible and that necessitates looking at where the raw materials come from and how much impact there was in mining, processing and transporting them."
"Tesla's approach is a positive development for the future of our SMPP," said Mike Romaniuk, Fortune's Vice President Operations and Chief Operating Officer. "Our NICO gold-cobalt-bismuth copper project comprised of a mine and mill in the Northwest Territories and the processing facility in Saskatchewan will make us a vertically integrated North American supplier of the cobalt chemicals needed by battery manufacturers like Tesla."
Cobalt is a critical metal used in a number of important metallurgical and chemical products, but susceptible to supply concerns with more than 60% of mine production currently sourced from the Democratic Republic of the Congo ("DRC"). China is currently responsible for approximately 40% of refined cobalt production, primarily from DRC material.
"Our company has been very aware of the pending proliferation of electric vehicle use. It is gratifying to hear Tesla's recent announcement confirming Fortune's NAFTA advantage as a future Canadian supplier of the cobalt chemicals required by the automotive and rechargeable battery industries", said Romaniuk. "We expect the economic impact of this demand to create over 100 new jobs in surrounding communities and millions in other spin-off benefits for the area."
Fortune has already received its environmental assessment approvals for the NICO mine and concentrator in the Northwest Territories ("NT") as well as the refinery in Saskatchewan. Earlier this week, the Company announced the results of an updated Feasibility Study for the project by Micon International Limited (see Fortune news release, dated April 2, 2014) that is being used to advance negotiations with potential strategic partners and their banks. The development would make the Company very well positioned to become a reliable North American source of cobalt and bismuth to the automotive industry with a very valuable gold co-product.
About Fortune Minerals
Fortune is a diversified resource company with several mineral deposits and a number of exploration projects, all located in Canada. The Company is focused on the development of the Arctos Anthracite Project in British Columbia and the vertically integrated NICO gold-cobalt-bismuth-copper project that is comprised of a mine and mill in the NT that will produce a bulk concentrate for shipment to a refinery for processing to high value metal products. In addition, the Company owns the Sue-Dianne copper-silver-gold deposit and other exploration projects in the NT. Fortune is focused on outstanding performance and growth of shareholder value through assembly and development of high quality mineral resource projects.
This press release contains forward-looking information. This forward-looking information includes statements with respect to, among other things, the proposed financing and development of the NICO project and the SMPP, the permitting process for the NICO project and the SMPP, the anticipated production from the SMPP and the number of jobs and the economic benefits expected to be created by the SMPP. Forward-looking information is based on the opinions and estimates of management as well as certain assumptions at the date the information is given (including, in respect of the forward-looking information contained in this press release, assumptions regarding the Company's ability to arrange necessary financing for the NICO project and the SMPP, obtain all necessary permits for the NICO project and the SMPP and assumptions regarding the production from the SMPP and the number of jobs and the economic benefits to be created by the SMPP. However, such forward-looking information is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. These factors include the inherent risks involved in the exploration and development of mineral properties, the risk that the Company may not be able to arrange the necessary financing to construct and operate the NICO mine or the SMPP, uncertainties with respect to the receipt or timing of required permits for the development of the NICO project or the SMPP, the possibility of delays in the commencement of production from the NICO project or construction of the SMPP and other factors. Readers are cautioned to not place undue reliance on forward-looking information because it is possible that predictions, forecasts, projections and other forms of forward-looking information will not be achieved by the Company. The forward-looking information contained herein is made as of the date hereof and the Company assumes no responsibility to update or revise it to reflect new events or circumstances, except as required by law.
SOURCE Fortune Minerals Limited