NICO deposit contains 12% of global bismuth reserves
Issued Capital: 150,526,976
LONDON, ON, May 1, 2014 /PRNewswire/ - Fortune Minerals Limited (TSX: FT) (OTCQX: FTMDF) ("Fortune" or the "Company") (www.fortuneminerals.com) reports that the U.S. government's recently implemented Reduction of Lead in Drinking Water Act and similar global initiatives, such as the European Union's REACH Regulation and Restriction of Hazardous Substances Directive, are contributing to increased demand for bismuth as an environmentally safe replacement for lead. Bismuth is scientifically recognized as non-toxic and is used in medicines such as Pepto-Bismol®, medical devices and cosmetics. Demand for bismuth is increasing in a variety of new products as a result of legislation and also growing environmental awareness by manufacturers that wish to eliminate the use of toxic metals. These products include plumbing and electronic solders, plumbing fixtures, free-machining steel, aluminum and brass, paint pigments, automobile anti-corrosion coatings, hot-dip galvanizing alloys, glass, ammunition and fishing equipment. Bismuth also has traditional use in low melting temperature alloys, flame retardants and products designed to take advantage of its unique dimensional stability characteristics that are required in castings, sprinkler systems, and automobile windshield frits.
Fortune's NICO gold-cobalt-bismuth-copper project contains 12% of global bismuth reserves and is positioned to become a reliable North American source of bismuth in a market with supply concerns and China's dominant 80% of mine production position. NICO is a proposed vertically integrated project comprising a mine and mill in Canada's Northwest Territories ("NT") that will produce a bulk concentrate and a refinery in Saskatchewan to which the concentrate will be shipped for processing to high value products. Proposed products include bismuth metal and oxide, cobalt chemicals needed to manufacture rechargeable batteries, gold, and by-product copper.
Mike Romaniuk, Fortune's Vice President Operations and Chief Operating Officer, commented, "The world is entering an era of supply-chain transparency, where manufacturers wish to demonstrate association with sustainable sources of raw materials and a reduced environmental footprint. Our NICO project is positioned to become an important North American source of cobalt and bismuth products that meet these requirements."
The Reduction of Lead in Drinking Water Act came into effect nationally in the U.S. on January 4, 2014, and is intended to reduce the adverse health effects associated with lead exposure from drinking water by minimizing lead in wetted surfaces of pipes and plumbing fixtures that provide water for human consumption. Lead can enter drinking water from commonly used household plumbing materials and water service lines and cause a variety of adverse health effects. The Act allows a three-year timeframe for affected parties to transition to the new lead-free requirements: no more than 0.2% lead in solder and flux; and not more than a weighted average of 0.25% lead when used in the wetted surfaces of pipes, pipe fittings, plumbing fittings, and fixtures.
The REACH Regulation (Registration, Evaluation, Authorization, and Restriction of Chemicals) is a regulation of the European Union as of December 2006 and is intended to improve the protection of human health and the environment from the risks that can be posed by certain chemicals. This regulation is intended to allow authorities to restrict the use of substances where risks cannot be managed and encourage the substitution of the most hazardous substances with less dangerous alternatives. REACH came into force on June 1, 2007 and includes restrictions on lead used in paint, jewellery and other consumer products. Certain lead compounds are also included in the "list of substances of very high concern" that triggers legal obligations for importers, producers and suppliers of products containing these compounds. REACH is among the strictest laws to date and affects industries worldwide. Any company importing to the European Union is potentially impacted.
The European Union's Restriction of Hazardous Substances Directive ("RoHS") is often referred to as the "lead free directive" and restricts the use of six hazardous substances, including lead, found in electrical and electronic products. RoHS came into effect in 2006 and covers several categories of electrical and electronic equipment including household appliances and IT and consumer equipment. In 2011 it was expanded to include a much wider range of products and covers all electronic equipment, cables and spare parts. The electronics industry had traditionally relied on a tin-lead solder formulation, but with the maximum lead concentration by weight restricted to 0.1%, solder formulation has had to be reconfigured with alternatives like bismuth. RoHS is linked to the Waste Electrical and Electronic Equipment Directive that is focused on promoting the collection and recycling of electrical goods to solve the toxic e-waste problem.
Notably, South Korean steel producer POSCO is now producing free-machining steel with bismuth instead of lead in response to increasing regulations and environmental awareness. Free-cutting steel is used for heavily machined components found in car engine parts and electronics to improve processability and extend tool life. POSCO is selling bismuth free-machining steel to LG Electronics for its television products and proposes to also supply the product to Samsung.
In addition to gold, NICO is well positioned to be a reliable vertically integrated North American source of supply of cobalt and bismuth products in a market where the dominant producers are in countries where there are supply concerns. The Democratic Republic of the Congo is a politically unstable country and is responsible for 60% of cobalt mine production. China is responsible for 80% of bismuth production and mines that do not meet current environmental and safety regulations have been shut down. Both cobalt and bismuth are also on a list identified by the European Union of metals with supply concerns. The location of Fortune's Saskatchewan Metals Processing Plant ("SMPP") near Saskatoon provides proximity to the North American market and trade advantages from NAFTA as well as with the European Union.
Fortune has already received its environmental assessment approvals for the NICO mine and concentrator in the NT as well as the SMPP. The Company is currently awaiting receipt of its Land Use Permit and Class A Water License from the Wek'èezhìi Land and Water Board, which is expected this summer. Fortune also recently 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 currently in progress with potential strategic partners and their banks.
The disclosure of scientific and technical information contained in this press release has been approved by Robin Goad, M.Sc., P.Geo., President and Chief Executive Officer of the Company, who is a "qualified person" under National Instrument 43-101.
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 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 anticipated use of bismuth to replace lead in various products. 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 anticipated use of bismuth to replace lead). 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, the risk that manufacturers may not use bismuth to the extent anticipated 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