Fortune Minerals and N.W.T. gov't sign agreement on mine benefits

A proposed mine in the Northwest Territories is closer to reality after a socio-economic agreement was signed Tuesday morning in Vancouver.

The government of the Northwest Territories and Fortune Minerals Limited — the company behind the proposed cobalt, bismuth, gold and copper mine near Whati, N.W.T. —  signed the agreement during the Association for Mineral Exploration convention.

The 48-page document lays out targets for Indigenous employment, local business contracts and spending on training and education, among other things.

According to the agreement, Fortune Minerals "shall use best efforts" to ensure 60 per cent of the mine's workforce during operations are N.W.T. residents, with at least half of those residents being Indigenous. During construction, at least 35 per cent of workers should be N.W.T. residents. Half of those should be Indigenous.

The agreement includes preferential hiring for Tlicho, Yellowknives Dene and North Slave Métis Alliance members. Fortune Minerals also agreed spending on N.W.T. businesses "should make up" 60 per cent of the "annual value of goods and services purchased associated with operations."

Limited employment pool

This is the fifth socio-economic agreement the territory has signed. The other four concern diamond mines that have operated or are still operating in the Northwest Territories: Ekati, Diavik, Snap Lake and Gahcho Kue.

Some territorial leaders have criticized socio-economic agreements for not going far enough to uphold and enforce hiring quotas.

Wally Schumann, minister of Industry, Tourism and Investment, signed the agreement Tuesday on behalf of the territorial government.

He said some of the employment targets were lower than those contained in other agreements, partly because the labour pool was already taxed by other projects in the territory.

"That puts a lot of pressure on the pool of people that are available," Schumann said. "We as a government continue to work on that ... But there's a limited amount of people that can be put towards these projects."

The matter of financing the mine remains.

According to Robin Goad, Fortune Minerals president and CEO, the construction of the mine alone comes with an approximate price tag of $500 million. A related refinery in Saskatchewan could add up to about $300 million.

"And then if we go to the full blown [production of] bismuth, ingots and cobalt sulfate, it's probably somewhere around $900 million," Goad said.

He said the company is looking to raise money through traditional channels, such as the stock market, and from a "strategic partnership" with a company interested in the mine's resources.

"We are negotiating with a number of different parties for strategic investment ... we have a metal that's absolutely essential for the transformation that's happening in automotive electrification," Goad said.

"We are looking for strategic investment in the project from companies that build batteries or build cars or private equity that supports that kind of investment."

News of the new socio-economic agreement did not appear to affect stock prices Tuesday. Fortune shares were trading at just over 10 cents a share, which has been the price for the last three and a half months.

The proposed NICO mine is 50 kilometres northeast of Whati, N.W.T., in the heart of land included in the 2005 Tlicho comprehensive land claim and self-government agreement.

No members of the Tlicho government leadership appeared to be present for the signing of the socio-economic agreement Tuesday.

But Goad said negotiations with the Tlicho government are underway.

"Our relationship has always been strong with the Tlicho," he said. 

"We meet with the Tlicho regularly. We have Tlicho people that work for our company and always have been working on the project."