As so often happens when the economy is edgy and uncertain, investors migrate to vehicles in which they can park their money until the smoke clears, and once again, gold appears to be remounting its throne.
New developments on the mining front invariably attract investors’ attention, and test results announced by London, Ontario-based Fortune Minerals Limited (TSX: FT) should be no exception.
This week, Fortune announced the results of recently completed studies for the configuration of four grinding mills it acquired as part of its purchase from Newmont Canada Ltd. of the Golden Giant Mine process plant.
Grinding plant simulation and optimization studies were conducted for Fortune's 100-per-cent owned NICO Gold-Cobalt-Bismuth-Copper deposit in the Northwest Territories.
Notably, these studies determined that minor modifications would boost grinding capacity from 185 to 215 tonnes per hour. This produces a 16-per-cent increase in the nominal daily grinding capacity for the NICO process plant for essentially the same operating cost.
The $5-million pilot plant test for NICO ores are mostly wrapping up, and the company says results have exceeded expectations.
Fortune Minerals, which trades on the TSX under the stock symbol FT, is a diversified natural resource company with several mineral deposits and a number of exploration projects, all located in Canada. These projects include, besides NICO, the Mount Klappan anthracite coal deposits in British Columbia, the Sue-Dianne copper-silver deposit and other base and precious metals exploration projects in the Northwest Territories.
The dipsy-doodle act performed by our currency of late, from US$0.97 to US$0.83, has worked in the company’s favour, given that costs of various mining projects are incurred in Canadian dollars, and revenues are generally derived from the sale of U.S. greenbacks.
Revenues picked up for Fortune in the third quarter of calendar 2008, the last period for which reporting is complete, from $405,000 in the first nine months of 2007 to $431,000. Even so, the losses for this fairly young company crowded the million-dollar mark Canadian, more than quadruple the amount for the three-quarter mark of 2007.
The company is only slightly off a 52-week low for its stock price of 38 cents Canadian. It’s been in the gully since October, after achieving a high of $2.60 last June, but recent news development like the one announced may brighten that perception and bring in bargain seekers.
