FORTUNE MINERALS ANNOUNCES THAT THE MOUNT KLAPPAN JOINT
VENTURE WITH POSCO CANADA HAS CLOSED
London, ON - August 9, 2011 - Fortune Minerals Limited (TSX-FT) (�Fortune� or the �Company�) is pleased to report that the recently announced joint venture agreement between its wholly-owned subsidiary, Fortune Coal Limited (�Fortune Coal�), and POSCO Canada Ltd. (�POSCAN�) and its wholly-owned subsidiary, POSCO Klappan Coal Ltd., to advance the Mount Klappan anthracite metallurgical coal project in northwest British Columbia to production, has now closed (see Fortune Minerals news release, dated July 13, 2011). POSCAN�s parent company, POSCO is based in South Korea and is one of the world�s premier steel producers.
Pursuant to the joint venture agreement, POSCAN acquired a 20% interest in the Mount Klappan project by making its upfront cash payments to Fortune Coal, totaling $30 million. Based on current capital cost estimates, POSCAN is anticipated to make total payments and cash contributions of $181 million to develop the Mount Klappan mine and related railway infrastructure. POSCAN will also fund 20% of the operating costs and receive 20% of the metallurgical coal products produced from the mine and wash plant. The Mount Klappan joint venture is owned 80% by Fortune and 20% by POSCAN and combines Fortune�s local development and operations expertise with POSCAN�s market knowledge and financial backing. Fortune will serve as Manager of the project and will be compensated, on a recovery basis, for providing operational, technical and administrative support over the life of the mine.
About POSCO:
POSCO, headquartered in Seoul, South Korea, is the world�s 3rd largest steel producer by market value with a current market capitalization of US$33.0 billion1. POSCO had crude steel production of 33.7 million tonnes in 2010 and sales for the 12 months ended March 31, 2011, totaled US$62.2 billion. POSCO�s Gwangyang Works is the largest steel mill in the world, with capacity of 19.5 million tonnes. POSCO has investments and operations across the globe, including in Korea, China, Japan, India, Indonesia, United States, Australia, Canada, Brazil, Vietnam and Thailand. It continues to expand its global operations towards a goal of achieving a total crude steel production capacity of 50 million tonnes. POSCO was founded in 1968 and is listed on the Korea Exchange (KRX) and is also inter-listed on the New York, London and Tokyo Stock Exchanges.
About Fortune Minerals:
Fortune Minerals Limited is a diversified resource company with several mineral deposits and a number of exploration projects, all located in Canada. The Company is focused on the development of the Mount Klappan anthracite metallurgical coal deposits in British Columbia and the NICO gold-cobalt-bismuth-copper deposit in the Northwest Territories (�NT�). As part of the development of the NICO deposit, Fortune is developing a metals processing plant in Saskatchewan and has acquired the buildings and equipment from the Golden Giant Mine at Hemlo, Ontario, which have been dismantled, moved, and stored for relocation to NICO. In addition, the Company owns the Sue-Dianne copper-silver-gold deposit and other exploration projects in the NT. Fortune Minerals is focused on outstanding performance and growth of shareholder value through assembly and development of high quality mineral resource projects.
1Market capitalization based on the closing price of POSCO�s stock on August 4, 2011 on the Korea Exchange and current currency exchange rates.
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Forward-looking information
This press release contains forward-looking information. This forward-looking information includes, or may be based upon, estimates, forecasts, and statements as to management�s expectations with respect to, among other things, the proposed development of and anticipated production from the Mount Klappan project, the establishment of a railway link to Prince Rupert and. Forward-looking information is based on the opinions and estimates of management at the date the information is given, and is subject to a variety of risks and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking information. These factors include the risk that the Company may not be able to arrange the necessary financing to construct and operate the Mount Klappan mine and/or the railway link to Prince Rupert, the risk that the JV may be terminated in accordance with its terms, the risk that the Company may not be able to conclude an agreement with CN for the transportation of coal from Mount Klappan to Prince Rupert, the possibility of delays in the commencement of production from the Mount Klappan project, the inherent risks involved in the exploration and development of mineral properties, the risk that actual capital and operating costs for the Mount Klappan project may differ from those anticipated, uncertainties with respect to the receipt or timing of required permits and regulatory approvals, the uncertainties involved in interpreting drilling results and other geological data, fluctuating metal prices and other factors. Readers are cautioned to not place undue reliance on forward-looking information because it is possible that predictions, forecasts, projections and other forms of forward-looking information will not be achieved by the Company. The forward-looking information contained herein is given as of the date hereof and the Company assumes no responsibility to update or revise such information to reflect new events or circumstances, except as required by law. |
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