Included in the $3.3-million deal are a 3,000-tonne-per-day conventional crushing-and-grinding plant, flotation and paste fill equipment, buildings, structural steel, minor equipment, spare parts and inventory, and engineered designs.
Fortune would have three years to remove the facilities from the Hemlo property.
The proposed transaction is subject to due diligence by Fortune and the transfer of the assets from current owner
Meanwhile, completion of Micon International’s bankable feasibility study of Nico has been delayed to allow for the incorporation of the mill and surface facilities. The study is now due out in the second quarter of 2006.
Fortune says the acquisition of the used facilities will “very materially reduce projected capital costs and significantly reduce project risk.”
Capital costs were previously pegged at $77.3 million for construction of a mine, mill, camp and related facilities. The figure included modifications that would have allowed ore to be processed at
Plans at Nico call for underground and open-pit mining, with ore processed in a hydrometallurgical plant to produce gold dor, cobalt cathode and bismuth concentrate. Annual production is forecast at 1,200-1,500 tonnes contained cobalt, 50,000-100,000 oz. gold, and 1,000-1,500 tonnes contained bismuth.
Earlier this year, Fortune inked a letter of intent to sell all of Nico’s bismuth production under an off-take agreement with an undisclosed private company described as one of the world’s largest and most diversified producers and suppliers of bismuth-based products. Terms of the deal were not disclosed.
At last count, Nico was home to underground measured and indicated resources totalling 5.1 million tonnes running 3.4 grams gold per tonne plus 0.16% cobalt and 0.22% bismuth. Resources amenable to open-pit mining total 8.2 million tonnes at 0.5 gram gold, 0.13% cobalt, and 0.14% bismuth. The estimates are based on metal prices of US$375 per oz. gold, US$10 per lb. cobalt, and US$3.25 per lb. bismuth.
Fortune says Micon’s feasibility study will include updated reserve estimates based on more recent metal prices of US$510 per oz. gold, US$17 per lb. cobalt, and US$5 per lb. bismuth.
The remaining 19% of Nico is held by Candou Industries, a company controlled by Fortune chairman George Doumet.
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