TSX-listed Fortune Minerals could potentially defer the construction of its downstream refinery, after recent tests have confirmed that it could achieve good gold recoveries from its cobalt and bismuth concentrates at the proposed Nico mine site.

The company, which had to find a new site for its proposed refinery in Saskatchewan after the rural municipality of Corman Park last month rejected the project, said on Friday that it was working on a number of development scenarios for the vertically integrated Nico project.

These included the sale of metal concentrates and gold doré from the mine site, as well as constructing a refinery and processing of the cobalt and bismuth concentrates to value added metals and chemicals, including cobalt sulphate or carbonate and bismuth ingot with gold doré also produced as the primary by-product.

The results of the recent gold recovery tests would be incorporated into the updated technical report. 

Fortune has been in discussions with potential strategic partners and buyers for its cobalt and bismuth concentrates, but had to demonstrate that it could recover gold contained in the concentrates at the mine site.

The metallurgical testwork was completed at the Lakefield, Ontario facilities of SGS Canada. The work was performed to confirm earlier tests that were carried out by Dundee Sustainable Technologies that had indicated attractive gold recoveries could be achieved by cyanidation of metal concentrates.

Fortune explained that the subsequent SGS programme included gravity and flotation tests to determine gold recovery into the bulk concentrate and confirmed that gravity would recover additional gold that was not captured by bulk flotation.

Nico is a primary cobalt deposit with mineral reserves that also contain more than one-million ounces of gold and about 12% of global bismuth reserves.