Entering a Key Phase Amid Critical Metals Momentum

• Strong Share Performance: FT is up 225% YoY, significantly outperforming the Sprott Critical Materials ETF (+136% YoY), driven by company-specific progress, and strong momentum in the critical metals sector. Rising western demand to reduce reliance on China, which dominates critical metals production, remains a key driver. The U.S. government is actively pursuing opportunities domestically, and abroad, to secure long-term, stable sources of critical minerals outside China.
• Inflection Point: We believe FT has reached an inflection point driven by strong sentiment in critical metals, increasing U.S. and Canadian government funding support, completion of the long-delayed Alberta refinery acquisition (announced in 2022, and closed in late 2025), successful metallurgical recovery test results, and a recent refinancing replacing near-term debt with a more flexible structure.

• Aiming to be a key supplier of critical minerals: FT’s NICO project in the Northwest Territories (NWT) hosts North America’s largest primary cobalt deposit, the world’s largest bismuth deposit, and 1.1 Moz of gold. Cobalt, bismuth, and copper are designated critical minerals in the U.S., EU, and Canada. FT’s plan includes a mine and concentrator in the NWT, with concentrates trucked and railed to a proposed refinery in Alberta, producing cobalt, gold, bismuth, and copper products.
• Updated Feasibility Study (FS): FT is advancing an updated advanced economic study (feasibility), targeted for completion in July 2026, incorporating higher metal prices, improved recoveries, a new Alberta refining facility, and an optimized production schedule. While inflation is expected to increase CAPEX and OPEX vs the 2014 study, we believe project enhancements and potential government support could help offset costs, with additional upside from potential third-party processing at the proposed refinery.
• Strategic Government Funding Pipeline: Fortune and the Tłı̨chǫ Government (an Indigenous government in the NWT) have applied for up to $50M in government funding to construct a mine access road, potentially covering up to 75% of road CAPEX. FT is also pursuing additional U.S. government funding. These efforts build on ~$17M in prior U.S. and Canadian government funding commitments, which we believe could improve the likelihood of securing additional support, though approvals remain uncertain.
• Upcoming Catalysts: Upcoming catalysts include an updated FS, permitting, potential government funding, and improving sentiment toward advanced-stage critical minerals projects.

Price and Volume (1-year)

* Qualified Persons: Robin Goad, M.Sc., P.Geo., President and CEO and Alex Mezei, Chief Metallurgist of Fortune Minerals. Fortune Minerals Limited has paid FRC a fee for research coverage and distribution of reports. See last page for other important disclosures, rating, and risk definitions. All figures in C$ unless otherwise specified.

Securing Critical Mineral Supply Chains (All figures in US$)

Critical minerals are essential for EVs , batteries, semiconductors, AI, and defense technologies. With global supply chains heavily concentrated in China, securing reliable access to these materials has become a strategic priority for Western economies, particularly the U.S. In response, the U.S. government is supporting a growing pipeline of mining, processing, and refining projects in safe jurisdictions through loans, grants, and strategic partnerships aimed at strengthening domestic and allied supply chains.

Source: USGS

The United States Geological Survey (USGS) maintains an official list of critical minerals considered essential to the U.S. economy, energy transition, and national security

Three of FT’s target metals, bismuth, cobalt, and copper, are included on the U.S. Critical Minerals List

The U.S. relies heavily on imports for most of its cobalt and bismuth

According to the Critical Minerals Institute, the U.S. government allocated ~ $26.2B to 33 publicly listed critical mineral companies between 2023 and 2026. While most projects are U.S.-based, funding has also supported companies operating in Canada, Australia, Greenland, and Africa. Notably, FT was the first Canadian project to receive support under the U.S. Defense Production Act Title III.

Top 10 U.S.-Funded Critical Mineral Projects

Source: FRC / Critical Minerals Institute

Funding commitments have ranged from several million dollars to over $2B per project

FT secured $6.4M in funding in 2024

In early 2026, the U.S. launched Project Vault, a ~$12B program to build a national stockpile of critical minerals, and FORGE, an international partnership with dozens of countries aimed at stabilizing global mineral supply chains

FT continues to engage with governments as a source of funding, including up to $50M from Canada’s Critical Minerals Infrastructure Fund for an access road in the NWT, and support from a U.S. defense-related program focused on bismuth supply chain security . These requests follow $17M in prior U.S. and Canadian funding commitments.

In our view, the project’s previous government backing suggests it has already passed initial due diligence, which may improve the likelihood of additional support, though no outcome is guaranteed.

FT's Target Metals: A Brief Overview  (All figures in US$)

Gold supported by safe-haven demand; copper remains strong on tightening supply and rising demand

Cobalt

Source: FRC / Various

Cobalt prices remain supported by tightening supply, export controls, and rising battery demand, with the market expected to shift to a deficit in 2026

Bismuth

China’s dominance in refining remains a key structural constraint, amplifying price volatility, and reinforcing the strategic importance of non-Chinese supply chains

Source: FRC / Various

NICO Cobalt-Gold-Bismuth-Copper Project

Location Map

Located 160 km northwest of Yellowknife, and 50 km north of Whati 

The project benefits from strong regional infrastructure, including nearby hydro dams, an electric grid within 22 km, the Tlicho highway, and a new rail terminal at Enterprise, 400 km away

Concentrates are expected to be trucked via a proposed mine access road, and the recently completed Tłı̨chǫ highway to Enterprise, then railed to Alberta for refining

Mineral Reserves 

Source: Company

The largest primary cobalt deposit in North America

In addition, the deposit hosts 1.1 Moz gold, and the world’s largest bismuth deposit, representing 12% of global reserves 

Recent  Developments

• Earlier this year, tests confirmed that the NICO project can produce high-quality, higher-purity cobalt sulphate for lithium-ion batteries, a premium-value product ; optimized processing to potentially improve recoveries and lower costs; evaluating a lower-cost start-up option using a cobalt intermediate product.

Positive metallurgical results 

• In December 2025, FT completed the $6M acquisition of a former steel fabrication plant in Lamont county, Alberta, within a major petrochemical and critical minerals processing hub ; t he 42,000 ft² facility is planned for conversion into a hydrometallurgical refinery producing cobalt, gold, bismuth, and copper products; secured waste disposal agreements, reducing a key permitting risk.

Long-delayed acquisition finally closed, removing a key project overhang

Planned Alberta Refinery Site

Source: Company

A 77-acre land package located 30 km northeast of Edmonton, and 15 km from Sherritt’s (TSX: S) nickel-cobalt processing plant

We believe the site’s location is ideal, offering close proximity to a rail line, and key resources such as water, natural gas, power, sulfuric acid, and other reagents

• Received approval for a land use permit and water licence for an access road connecting the mine to the territorial highway system, a key infrastructure milestone supporting mine construction, operations, and concentrate transport; permitting for the mine and the processing facility continues to advance.
• With the previous feasibility study completed in 2014 at lower metal prices, FT is advancing an updated study targeted for completion in July 2026.

Source: Company

The 2014 FS returned an AT-NPV7% of $224M, using $16/lb cobalt (spot: $26/lb)

While costs have risen significantly since the previous study, we believe higher metal prices more than offset inflationary pressures, supporting stronger project economics

Updated Feasibility Study to Reflect Major Improvements

Source: FRC

We anticipate the ongoing updated feasibility study will reflect major improvements

Financials

FT recently refinanced its maturing debt with a new convertible financing, offering a more flexible equity-linked structure, and signaling institutional support and confidence in FT’s outlook.

At the end of Q1-2026, the company had $12M in debt maturing in April 2026

This was addressed through a new $10M convertible financing from the Lind Partners, an institutional fund manager

Source: FRC / Company

~$17M in government funding commitments, with $9M received to date

In-the-money options and warrants can bring in ~$5M

FRC Valuation  & Rating

Source: FRC

Our DCF valuation increased from $0.42 to $0.63/share, primarily driven by an increase in our long-term gold price forecast from $2,000 to $3,500/oz since our last report 

Sensitivity Analysis

Source: FRC

Our valuation remains highly sensitive to commodity prices 

We reiterate our BUY rating, and adjust our fair value estimate from $0.42 to $0.63/share. FT is entering a key phase, supported by strong critical metals momentum, advancing project fundamentals, and growing government focus on securing non-China critical mineral supply chains. We believe recent operational, financing, and permitting progress has strengthened FT’s outlook ahead of key catalysts, including an updated feasibility study, permitting milestones, and potential government funding support.

Risks 

We believe the company is exposed to the following key risks (not exhaustive):

• Project financing 
• Commodity prices
• Leveraged balance sheet
• Access to capital and share dilution 
• Delays in project development

We are maintaining our risk rating of 5 (Highly Speculative)