Terms governing a 51-kilometre access road to a mine site outside Whatì have been agreed, with the company behind the mine estimating construction will take two more years.
Fortune Minerals, developer of the Nico mine project, announced last week it had signed an access agreement with the Tłı̨chǫ Government regarding construction of the spur road. The road will run from the new Whatì all-season highway to the mine.
Fortune’s president and chief executive, Robin Goad, said work is ongoing to negotiate an impact benefit agreement with the Tłı̨chǫ and secure financing for the project.
The Tłı̨chǫ Government said the agreement cannot take effect until that impact benefit agreement is in place.
Weak cobalt prices are not helping the pursuit of financing, though Fortune believes Nico’s cobalt deposits will be valuable as key components of the lithium-ion batteries that power cellphones, computers, and electric cars.
The project also plans to mine bismuth, which Goad called an “environmentally safe and non-toxic replacement for lead.”
“We have two metals that are currently in short supply, or their processing or mining production is being controlled in jurisdictions which are not necessarily in North America,” Goad said.
Fortune says the project area also contains one million ounces of gold.
That area was staked out prior to the signing of the Tłı̨chǫ Agreement, Goad said, “so we are effectively a doughnut hole within Tłı̨chǫ-owned lands.” That means any road to the mine must cross Tłı̨chǫ lands, necessitating the recently signed agreement.
The agreement outlines the physical details of the road itself plus a financial security for the Tłı̨chǫ Government to hold for reclamation. Goad said the road could form the start of a future all-season road to Gamètì.
Metal prices ‘very difficult’
While signing the spur road agreement is one crucial component of getting Nico’s future products to market, another is the building of the larger Whatì all-season road – a 97-kilometre, $150-million road that branches off to Whatì from Highway 3 at the location of the present winter road turnoff.
Together, the Whatì road and Nico access road will let the eventual mine ship out metal concentrates for processing. Without the all-season road, Whatì and the mine would be accessible by winter road or aircraft only.
Meanwhile, Fortune continues to search for a partner “with deeper pockets” to help fund construction of the mine itself.
Global cobalt prices took a sharp dip earlier this year, sliding from more than $30 to $20 per pound. Prices have since levelled out but did not rebound to their previous highs – a factor in Nico’s ability to attract financing.
“It’s an expensive project and metal prices on the capital markets right now are very difficult for building new mines,” said Goad. Fortune had been planning to expand its vision for Nico but, with prices weak, has announced it will stick with the original design.
Grand Chief George Mackenzie, who could not be reached by Cabin Radio, states in a recent Fortune Minerals news release that reaching the access agreement is “an important step.”
“We are now looking forward to concluding the required impact and benefits agreement with Fortune Minerals, thereby ensuring Tłı̨chǫ citizens, communities and companies will benefit from the construction and operation of the Nico mine,” Mackenzie added.
Though the Tłı̨chǫ Government has expressed dissatisfaction with the broader process several times this year – no-showing the signing of a socio-economic agreement and criticizing the NWT government over court filings – Goad insisted his company’s relationship with the Tłı̨chǫ is a good one.
“Any sort of disagreement between the Northwest Territories government and the Tłı̨chǫ government is really between them,” he said.
“We have no issues with the Tłı̨chǫ Government. We have a very positive relationship.”
Clarification: November 29, 2019 – 14:11. This article has been updated to more clearly state that the agreement is an access agreement regarding the use of Tłı̨chǫ lands. Further, the update adds the Tłı̨chǫ Government’s position that the access agreement cannot come into effect until an impact benefit agreement is signed.