NEW YORK Procon
Resources Inc. will invest Canadian $11.7 million ($11.1
million) in the capital stock of Fortune Minerals Ltd. for its
Nico gold-cobalt-bismuth-copper project.
Procon will hold a
19.4-percent stake in the company and will be part of a
financing plan for Nico that could include an offtake agreement
and other benefits, Fortune said June 27. Procon is buying
29.25 million shares at 40 cents per common share. The purchase
will occur in two payments of $5.85 million, closing July 25
and Oct. 1, respectively.
"The investment that
was provided was an interim step into arranging for the project
financing," Fortune president and chief executive officer Robin
Goad told AMM. "They have taken a minority
investmentthis is still a Canadian company controlled by
Columbia-based Procon, a mining contractor, is majority owned
by Beijing-based Camc Engineering Co. Ltd.
"If we can do a
project financing joint venture, they would have a
representative on our board of directors and were
certainly looking at various components of project financing
that might include issues on where the metals go," Goad said.
"Its safe to say China has significant interest in
requiring raw materials to satisfy manufacturing needs."
China already has a
majority of global supply of bismuth, used as an
environmentally safe replacement for lead. But Fortune, which
owns several mineral deposits and exploration projects, has 15
percent of the supply of bismuth, he said. There is also high
demand for cobalt, as the Democratic Republic of the Congo
holds more than 50 percent of the global supplywhich is
hampered by new regulations in the Congo such as a ban on
exports of copper and cobalt concentrates (
amm.com, May 21).
The Procon investment
is significant in allowing the company to push forward a
project that will increase its market supply, Goad said. "And
weve accomplished this in an environment that is
difficult for this sector. Its very difficult to find a
financing source," he added.
Nico is in the final
stages of permitting, which Procons investment will fund,
Goad said. The company estimates construction on Nico will
begin in 2014, although Goad said that could change depending
on permitting and other "outstanding issues" that he