Fortune Minerals (TSX-FT) reported a 43% increase in the mineral reserve for its 100% owned NICO gold-cobalt-bismuth-copper project ("NICO") in the Northwest Territories, Canada.

Proven and probable mineral reserves for NICO increased to 31 million tonnes, which also boosted the mine life of the project from 15 years to 18 years. As a sign of the times, Fortune Minerals noted that the gold content in the reserve would now represent the largest source of revenue for the project the first two years.

"The tonnage available from the underground part of the mine has been increased by 83% to 2.2 million tonnes as a result of higher projected revenues from higher metal prices and metal recoveries, and also from lower underground mining costs achieved by the significant reduction in the amount of back filling that will be required in mined out stopes," Fortune Minerals stated, "Gold-rich, higher grade ores from the underground part of the mine are now projected to contribute 60% of the mill feed at the higher 4,650 tonnes per day production rate, as compared to 30% of 4,000 tonnes per day in the Micon feasibility study."

Gold content increased by 147,000 ounces to 907,000 ounces, while cobalt content increased by 21 million pounds to 82 million pounds, bismuth content increased by 32 million pounds to 109 million pounds and copper content not totals 27 million pounds. The mineral reserve assumed the following metal prices: $900/oz gold, US$20/lb cobalt, US$10/lb bismuth and US$2.75/lb copper.

Fortune Minerals also reported that the study had identified 6.5 million tonnes of marginal material which would stockpiled for "potential future processing", and could potentially add an additional four years to the mine life.

The study additionally confirmed a new open pit mine plan which will cut the initial capital costs by eliminating 10 million tonnes of waste pre-stripping; "The open pit part of the mine will be a conventional truck and hydraulic shovel operation, accomplished in 4 phases at an average strip ratio of 3.4:1. The mine plan for the open pit has been re-scheduled with the identification of a low strip ratio starter pit."

Recoveries are projected to be approximately 52% for copper, 70% for bismuth, 83% for cobalt and between 56% and 84% for gold depending on head grade. Fortune Minerals is proposing to produce a bulk concentrate that will shipped by truck and rail to a refinery near Saskatoon, Saskatchewan.

"The decision to move the downstream processing of metals to Saskatchewan was driven primarily by the availability of lower cost power and the proactive support of the Government of Saskatchewan, which has also proposed attractive tax legislation to encourage processing of raw materials that have been sourced from outside of the province. This legislation is expected to be passed in the spring of 2010 and will benefit NICO project economics," Fortune Minerals stated.

The update from Fortune Minerals was received well, with shares in the company climbing nearly 5%.