First & Second Quarter 2024
August 9, 2024
Dear Shareholders and Followers,
I’m pleased to provide some commentary on Fortune Bay’s first half of 2024.
The junior mining market has continued to face significant headwinds, presenting challenges even for juniors holding gold and/or uranium assets with buoyant commodity prices and positive outlooks. With exposure to these commodities, in projects with high potential, we believe Fortune Bay remains well positioned to advance both our exploration-stage and development-stage projects.
Juniors, particularly in the Canadian market, continued to trade at significant discounts to commodity prices, presenting a significant buying opportunity. I believe we will soon see juniors with quality projects, particularly those in commodities such as gold and uranium, start to re-rate to more appropriate levels. Growing commodity demand will inevitably turn investment attention toward the developers, and ultimately explorers with quality projects.
Fortune Bay, with a current market cap of only C$10 million, is in a unique position amongst the multitude of juniors, with around 3 million ounces of gold in current and historical mineral resources on its advanced gold projects, and recent intersections of strong radioactivity on one of its Athabasca Basin uranium exploration projects.
Gold
A Preliminary Economic Assessment completed in late 2022 on our flagship Goldfields Project demonstrated robust project economics at a gold price of US$1,650/oz. With gold prices continuing to rise (today at US$2,430/oz) the project gets better and better. Our PEA upside case, at US$1,950/oz, produced an after-tax NPV5% of C$459 million and after-tax IRR of 50.5%, explaining why the project is attracting attention from developers and miners. Part of the project’s appeal is the significant repository of engineering and environmental data, an approved Environmental Assessment, and a positive, constructive relationship with the local communities. Combined, this significantly streamlines the pathway toward construction and production.
As owners of Goldfields we are accountable for ensuring the project advances, responsibly and sustainably, to the benefit of our all our stakeholders. We have continued an active process of engaging with various reputable parties to seek the most appropriate means to achieve this through a suitable and beneficial transaction that honors the inherent value of the project.
Uranium
Our technical team was exceptionally busy over the second quarter operating a drilling program on the Murmac Uranium Project, on behalf of the project’s optionee Aero Energy Limited.
Over the past couple years we developed the concept of testing the potentially graphite-rich rocks across the project, the favoured host for high-grade uranium typical of the Athabasca Basin. These rocks are not found in outcrop at surface, as they are very soft and are obscured by cover sediments and lakes. Electromagnetic surveying had highlighted the potential of these graphitic horizons, extending for over 30 kilometres on the project. Our initial drilling in 2022 encountered abundant thick graphitic units, plus we found evidence of favorable mineralizing fluids and discovered uranium in several drill holes. Aero, technically-led by two of the geologists that were involved in the discovery of Nexgen’s giant Arrow uranium deposit, saw the potential for a similar type of discovery at Murmac and optioned the project.
In our second drill hole this season we encountered strong radioactivity (1,309 counts per second over 8.7 metres) a mere 70 metres below surface. This represents the strongest and widest interval of radioactivity ever intersected on the project. Although follow-up drilling was unsuccessful in producing similar, or better, results down-dip and along strike, this demonstrates proof of concept and upgrades the potential of making a significant discovery. These types of uranium deposits occur along graphitic units like pearls on a string. This particular string (graphitic unit) is over 1 kilometre long, providing ample opportunities for additional drilling and discovery. We look forward to receiving assay results for confirmation of uranium mineralization and, together with Aero, planning a follow-up drilling program in this target area and across numerous other high priority targets on the project.
With this context, we trust you will understand why our team at Fortune Bay is excited about the future. Please reach out at any time if you need any more information, and continue to make use of our website to ‘Book an Investor Call’ or ‘Ask a Question’. If you’re not signed up please subscribe on our website and follow us on Facebook, Twitter, Instagram, YouTube and LinkedIn to ensure you catch all the Fortune Bay action.
As always, we encourage you to read this newsletter in conjunction with our material news items, provided in our news releases, and our quarterly financial statements and MD&A. This update does contain Forward-Looking Statements so please refer to the Company’s Cautionary Note appended below.
Yours sincerely,
Dale Verran
Chief Executive Officer
Cautionary Note and Technical Disclosure:
Information set forth in this letter ‘From the CEO’s Desk’ contains forward-looking statements that are based on assumptions as of the date of this letter. These statements reflect management's current estimates, beliefs, intentions, and expectations. They are not guarantees of future performance. Words such as “expects”, “aims”, “anticipates”, “targets”, “goals”, “projects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, “continues”, “may”, variations of such words, and similar expressions and references to future periods, are intended to identify such forward-looking statements. Fortune Bay Corp. (“Fortune Bay” or the “Company”) cautions that all forward-looking statements are inherently uncertain, and that actual performance may be affected by a number of material factors, many of which are beyond Fortune Bay's control. Such factors include, among other things: risks and uncertainties relating to metal prices, changes in planned work resulting from weather, COVID-19 restrictions, availability of contractors, logistical, technical or other factors, the possibility that results of work will not fulfill expectations and realize the perceived potential of Fortune Bay's mineral properties, uncertainties involved in the interpretation of drilling results and other tests, the possibility that required permits may not be obtained in a timely manner or at all, risk of accidents, equipment breakdowns or other unanticipated difficulties or interruptions, the possibility of cost overruns or unanticipated expenses in work programs, the risk of environmental contamination or damage resulting from the exploration operations, the need to comply with environmental and governmental regulations and the lack of availability of necessary capital, which may not be available to Fortune Bay, acceptable to it or at all. Fortune Bay is subject to the specific risks inherent in the mining business as well as general economic and business conditions. Accordingly, actual, and future events, conditions and results may differ materially from the estimates, beliefs, intentions, and expectations expressed or implied in the forward-looking information. Except as required under applicable securities legislation, Fortune Bay undertakes no obligation to publicly update or revise forward-looking information. Fortune Bay does not intend, and does not assume any obligation, to update these forward-looking statements, except as required under applicable securities legislation. For more information on Fortune Bay, readers should refer to Fortune Bay's website at www.fortunebaycorp.com.
Information set forth in this letter ‘From the CEO’s Desk’ is intended to summarize or highlight the Company’s results for the previous half based upon previously disclosed results provided in the Company’s news releases. Readers of this letter should refer to the Company’s news releases, available on the Company’s website or SEDAR.com, to obtain important additional technical information and disclosure in accordance with the requirements of National Instrument 43-101. The technical and scientific information provided in this letter has been reviewed and approved by Dale Verran, M.Sc., P.Geo., Chief Executive Officer of the Company, who is a Qualified Person as defined by NI 43-101. Mr. Verran is an employee of Fortune Bay and is not independent of the Company under NI 43-101.