Fortune Bay Eyes a Faster, Lower Cost Start at Goldfields

Trevor Hall (0:16)

Today, Fortune Bay released a study from Ausenco comparing a dory plant with a lower capital concentrate option. Dory recovers modestly more gold, concentrated simpler to build and could be staged. So how does the company decide on what option is best? Dale Verran, he is CEO of Fortune Bay. Dale, welcome back to Mining Stock Daily.

Dale Verran (0:36)

Hi Michael, thanks very much. Good to be here.

Trevor Hall (0:39)

Now, Dale, you released a PA last fall where you outlined a 4,950 ton per day dory plant with $301 million Canadian initial capital, delivering $610 million in after-tax and TV at $2,600 gold. Now, you released a study today that looks at producing a gold concentrate for sale off-site instead. Simpler plant, a lower upfront capital.

But tell us your own words. What are the key trade-offs that you're looking at between the two approaches?

Dale Verran (1:13)

Yeah. So I mean, firstly, there's nothing wrong with that PA plan we produced. It produces fantastic economics. It's a really robust development option for the project, which we still like and know it's feasible.

But we are, during this, as we build up toward PFS here, we are looking at better ways to build the project. The project offers a lot of optionality. And the key trade-offs there is really, if one goes a concentrate route instead of producing a Dore on site, we're looking at a slightly lower gold recovery. Obviously, we've got to transport the concentrates, but the significant savings in initial capex. And obviously, that's a key thing to get projects going.

Once the project's going under a smaller concentrate scenario with low capex, there's always the ability to build out the rest of the plant and at a later stage, start to produce Dore. So we're just looking at the best way to go about getting this project in production. And obviously, a key advantage for us is our approved EIS for the project, which does contemplate an open pit mine at the box deposit of 5,000 ton per day mill. There's a permitted tailings there already. So under this concentrate scenario, there's also ability to scope that so it conforms to the existing approval. And that helps also not only in less capital upfront, but also more timely path toward actually building this. So really excited by the results and obviously a lot to consider here as we move the project forward.

Trevor Hall (2:48)

Now that EIS that you have, the approval is something that you have flagged in your deck as kind of a key value. Maybe you could talk a little bit more about that in terms of conforming that. Do you think that that is likely if you go down the concentrate route? But also do you have some numbers on that? What's the cost advantages and also what's the timeline advantages in terms of actually being able to make it fit in those environment permits?

Dale Verran (3:15)

Yeah. So obviously, it's all subject to regulatory approval where this concentrate scenario actually conforms. But the way we're looking at it in terms of certainly the throughput 5,000 ton per day is permitted. So we got lots of room there to do that. There's a permitted tailings already at the old, there's a little bit of production around the World War II era and there's a tailing storage facility right next to the box deposit. That's approved for future. So we're looking at using that initially in production. And obviously, from a timing point of view, with an approved EIS, if it conforms, then we're really moving directly into approvals to construct and approvals to operate. There are certain things the government will ask for. They'll say, well, the existing EIS approval dates back to 2008, has anything changed in the baseline conditions? Well, we've really been collecting data for that.

We've been doing ongoing baseline studies. So we really have that data in hand. So we're looking at a very, I don't want to commit to exact timeline, but it could be a year or so before we actually in a position to get the approvals to construct and operate and move the project forward. So it's a really exciting option. Obviously, gold prices have moved up considerably since our PEA in late 2025

Our base case there, as you mentioned, was $2,600 an ounce. So there's lots of optionality, and we're just looking at the best and quickest path forward to develop this mine. And obviously, capex is a key feature for us, and obviously, looking at ways to get it going with lower upfront requirements.

Trevor Hall (5:01)

Now, you did note that with the Dore, that was the option in the PA, that there was modestly higher recovery. A gold course was priced at $2,600 in that PEA. Now, we're looking at, I think probably, people are putting in a base of about $3,600, but we're still north of $4,000.