Fortune completes restructuring
Financial terms means NICO still a go
Karen K. Ho
Northern News Services
Monday, August 24, 2015
LONDON, ONT.
Fortune Minerals Ltd. has completed its restructuring agreement with Lascaux and its other secured creditors.
A load of ore is hauled during a test mining program at Fortune Minerals Inc.'s NICO gold-cobalt-bismuth-copper project, just north of Whati. Cobalt is anticipated to increase in demand as electric vehicles gain popularity. The company recently lost its gold mine in Colorado after being served a notice of default by New York-based Lascaux. - photo courtesy Fortune Minerals Ltd.
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The Canadian junior mining company is behind the NICO gold-cobalt-bismuth-copper project near Whati as well as the Sue-Dianne copper-silver-gold deposit 25 kilometres north of NICO.
Investor relations manager Troy Nazarewicz told News/North that the company's settlement agreement with capital financing firm Lascaux is essentially the same as what was announced in mid-July.
"There's no claims against NICO and we're moving it forward," he said.
The terms mean that going forward, Fortune will be debt-free, but will no longer own its silver mine in Colorado.
The company's news release also said that the amount that Fortune was to receive from its silver mine, now named Ouray, has been reduced from US$550,000 to $320,000 due to liabilities and other costs.
The main terms of the restructuring agreement include a type of long-term, unsecured debt called a debenture. It is a type of bond that isn't tied to any assets in order to guarantee repayment.
Fortune issued $5 million in unsecured debentures to Lascaux and $3.75 million to other secured creditors. These bonds will mature in seven years, and have an interest rate at 5 per cent per year.
Prior to Fortune being issued a notice of default from its creditors in July, the company had already received the land-use permit and water licences in the NWT as well as the environmental assessment approval for the processing facility in Saskatchewan.
By July 2014, Fortune had spent more than $110 million on developing NICO, which now has a projected 20-year life. But the company still needs approximately $600 million for the mine and mill in the territory as well as the refinery in Saskatchewan.
Approximately 300 people would be needed during mine construction, and 150 to 200 employees would be needed to work the mine for its productive life.
The company is also still waiting for an announcement from the territorial government on the all-weather road planned for Whati.
Right now, Nazarewicz said Fortune is working on the development plan and there is no physical work ongoing currently at NICO.
"As far as activities on the ground right now it's very minimal." he said. "The key focus is on project financing and bringing in partners who would provide funds that would allow us to basically get to that construction process. The company's very focused on NICO."
