WHATI/LAC LA MARTRE
When the Tesla Motors Inc. announced late last month that it planned to build a $4 to $5 billion lithium ion battery “Gigafactory” in the U.S. by 2020, it piqued the attention of Fortune Minerals Inc., the company behind the NICO gold/cobalt/bismuth/copper project 160 kilometres northwest of Yellowknife.

A Tesla Roadster under the hood. The demand for lithium ion batteries to run electric vehicles bodes well for Fortune Minerals' Nico mine project near Whati. - photo courtesy of Jyri Engestrom

Cobalt is an essential element of lithium ion battery production, and Tesla’s commitment to finding a North American sources for cobalt could be a bonus for Fortune, if Tesla’s project secures investors.

“Our goal is to build batteries with the lowest environmental impact possible,” said Tesla spokesperson, Liz Jarvis-Shean. “That necessitates looking at where the raw materials come from and how much impact there is in mining, processing and transporting them.”

The prospect of a lithium-ion battery plant that would double world production of the batteries was surprising news even for the proponents of the cobalt project, but it fits in with the larger trend the company has been following.

“Until recently, battery production has predominately been for use in portable electronics, like iPads and iPhones,” said Troy D. Nazarewicz investors relation manager for Fortune Minerals.

“We had been anticipating a proliferation of hybrid and electric vehicles. Tesla’s announcement just supports the argument that the next phase of growth will come from these kinds of vehicles.”

The NICO mine has a projected 20-year life, employing 300 people during construction, and requiring between 150 and 200 employees during its productive life.

Fortune has environmental approvals in hand for NICO, as well as permitting for an associated metal processing plant in Saskatchewan.

The Saskatchewan plant would be, according to Nazarewicz, the only processing plant in North America focused on making battery grade chemicals out of mined minerals.

“Most production in North America is focused on producing metal for the super alloys market, like jet engine turbines for Boeing,” Nazarewicz said.

Mike Romaniuk, Fortune Minerals VP of operations and CEO, said Tesla’s announcement could mean an additional 100 jobs between the mine and the processing plant.

To date, Fortune has spent more than $110 million on developing NICO. Total financing required for the mine and Saskatchewan processing facility is $589 million -- $347 million for the NICO mine, $242 million for the processing facility.

“We’re optimistic we’ll have the funds in place this year,” Nazarewicz said recently of the company's prospects for raising construction capital.

The company recently announced an increase in mineral reserves across their target minerals. An updated feasibility study released April 2, showed an increase in mineral reserves to 33.1 million tonnes across target minerals, including an increase in gold deposits to more than 1.1 million ounces.