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Tesla validates EV demand while Fortune completes second tranche of private placement

Issued Capital: 255,649,007 (including shares issued pursuant to private placement below)

LONDON, ON, April 11, 2016 /CNW/ - Fortune Minerals Limited (TSX: FT) (OTCQX: FTMDF) ('Fortune' or the 'Company') (www.fortuneminerals.com) is pleased to announce that the Government of the Northwest Territories ('GNWT'), Department of Transportation has submitted the requisite permit applications to the Wek'èezhìi Land and Water Board, to build a public highway to the community of Whati. The application package was developed by the GNWT, with the support of the Tlicho Government for this 94-kilometre all-season road which would follow a former all-land winter road route to significantly reduce construction costs. Whati is 50 km south of Fortune's proposed NICO gold-cobalt-bismuth-copper development that has already received its environmental assessment approval for a mine and concentrator, and a spur road from the public highway to the mine.

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Key Highlights

• Public highway to the community of Whati advancing
• Tesla Motors announced 325,000 pre-production orders for its Model 3 car validating electric vehicle growth and positively impacting cobalt demand
• Discussions for off-take and NICO project financing ongoing
• Fortune completes second tranche of $1 million private placement

Robin Goad, Fortune's President and CEO commented, 'Our Company has been working with the GNWT and Tlicho government for many years to advance construction of a public highway to the community of Whati near the NICO development. With construction of this road, Whati will have reliable all-season access for community re-supply, while lowering the cost of living, improving, the quality of life and promoting economic development and diversification. The Whati highway will also be a vital link to the NICO mine for its transportation needs as well as provide commutable employment to the nearby communities.'

Fortune owns the vertically integrated NICO gold-cobalt-bismuth-copper development, comprised of a planned mine and concentrator in the Northwest Territories and refinery near Saskatoon to process concentrates from the mine to higher value products. The NICO project has already been assessed in a positive feasibility study and has received its environmental assessment approvals in the Northwest Territories and Saskatchewan. The NICO deposit mineral reserves will support a 21-year mine life at a mill feed rate of 4,650 tonnes of ore per day to produce 180 wet tonnes of concentrate per day for shipment to the refinery. Life of mine average annual production is projected to be 41,300 ounces of gold, 1,615 tonnes of cobalt contained in a battery grade cobalt sulphate heptahydrate, 1,750 tonnes of bismuth contained in ingots, needles and oxide, and 265 tonnes of copper.

Cobalt market expanding; Tesla continues to validate interest in vehicle electrification

The cobalt market has had compound annual growth of approximately 5 to 6% for the past two decades and in 2015 grew by 5.4%, more than double recent global GDP growth of 2.4% for the same period. Market growth has been driven primarily from the demand for cobalt in chemicals used to make lithium-ion rechargeable batteries needed to power portable electronic devices, electric vehicles and stationary storage cells. Battery chemical demand increased nearly 12% in 2015 and now accounts for approximately half of the world's annual cobalt production. Double digit growth of cobalt used in rechargeable batteries is expected to continue for the foreseeable future.

Supporting the positive outlook for cobalt, Tesla Motors made automotive history on March 31, 2016 with the launch of its Model 3 electric vehicle, receiving US$325 million in deposits for 325,000 preorders of these cars in the first week. If these orders are converted into annual sales, production of the Tesla Model 3 would be comparable to the top selling vehicles in the U.S. Mainstream interest in electric vehicles has been validated by thousands of people lining up to make a US$1,000 down payment for a car that will only be available in late 2017.

Analysts familiar with the cobalt market are projecting a supply deficit in 2016 because of the increased demand. Additionally, as demand continues to grow, cobalt supply is under pressure from its production primarily as a byproduct of nickel and copper mining - some mines for which have recently closed as a result of low primary metal prices. The risks to cobalt supply are further exacerbated by geographic concentration of supply and 65% of mine production currently sourced from the Democratic Republic of the Congo, a politically unstable country, and 52% of refinery production in China. This risk was recently addressed in the Assessment of Critical Minerals report to the U.S. Congress which identified cobalt as a critical mineral on a list that 'have a supply chain that is vulnerable to disruption, and that serve an essential function in the manufacture of a product, the absence of which would cause significant economic or security consequences'.

NICO is well positioned to become a reliable, vertically integrated North American source of battery grade cobalt chemicals with supply chain custody transparency and tax advantages under the North American Free Trade Agreement (NAFTA). Earlier in 2016 the Company delivered an ultra-pure cobalt sulphate sample for testing by a potential customer. Discussions for offtake agreements and project financing are ongoing.

The NICO deposit also contains a significant gold co-product from more than 1.1 million ounces of gold in its Mineral Reserve statement, as well as 12% of global bismuth reserves. Bismuth is a metal used in a broad range of industrial applications, particularly in the automotive and pharmaceutical sectors. It is an environmentally safe replacement for lead, which is subject to lead-toxicity concerns and legislation banning its use in potable drinking water sources and consumer products in solders, brasses, steel, aluminum and zinc galvanizing alloys, paint pigments and ceramic glazes. Notably, bismuth was also identified in the Assessment of Critical Minerals report to the U.S. Congress.

Fortune completes second tranche of $1 million private placement

Fortune has completed the second tranche of its previously announced $1 million private placement (see news release, dated March 9, 2016). A total of 14,285,713 newly issued common shares were placed with arm's length private investors at a price of $0.035 per share. Proceeds of this financing will be used for general working capital purposes.

This press release does not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the 'U.S. Securities Act'), or the securities laws of any state of the United States and may not be offered or sold within the United States unless registered under the U.S. Securities Act and applicable state securities laws or pursuant to an exemption from such registration requirements.

The disclosure of scientific and technical information contained in this press release has been approved by Robin Goad, M.Sc., P.Geo., President and CEO of Fortune, who is a 'Qualified Person' under National Instrument 43-101. The technical report on the feasibility study referred to above, entitled 'Technical Report on the Feasibility Study for the NICO-Gold-Cobalt-Bismuth-Copper Project, Northwest Territories, Canada', dated April 2, 2014 and prepared by Micon International Limited, has been filed on SEDAR and is available under the Company's profile at www.sedar.com.

About Fortune Minerals

Fortune is a Canadian development stage mining company focused on advancing the vertically integrated NICO gold-cobalt-bismuth-copper project in the Northwest Territories and a related refinery the Company plans to construct in Saskatchewan. Fortune also owns the Sue-Dianne copper-silver-gold deposit located 25 km north of NICO and a potential future source of incremental mill feed to extend the life of the NICO mill. The Company also maintains the right to repurchase the Arctos anthracite coal deposits in northwest British Columbia that were recently purchased by a provincial Crown corporation.

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This press release contains forward-looking information and forward-looking statements within the meaning of applicable securities legislation. This forward-looking information includes statements with respect to, among other things, the Company's plans to develop the NICO project, anticipated growth in the demand for cobalt, anticipated constraints on the supply of cobalt and the plans of the plans of the GNWT and the Tlicho Government to build an all-season road to Whati. Forward-looking information is based on the opinions and estimates of management as well as certain assumptions at the date the information is given (including, in respect of the forward-looking information contained in this press release, assumptions regarding the Company's ability to arrange the necessary financing to continue operations and develop the NICO project, growth in the demand for cobalt, restrictions on the supply of cobalt and the proposed construction of the all-season road to Whati). However, such forward-looking information 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 risks that the Company may not be able to arrange additional financing to continue operations, the Company may not be able to finance and develop NICO on favourable terms or at all, the demand for cobalt may not grow to the extent anticipated, the supply of cobalt may not be restricted to the extent anticipated and the construction of an all-season road to Whati may not be completed in a timely fashion or at all. 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 made as of the date hereof and the Company assumes no responsibility to update or revise it to reflect new events or circumstances, except as required by law.

SOURCE Fortune Minerals Limited

Fortune Minerals Limited, Troy Nazarewicz, Investor Relations Manager, [email protected], Tel.: (519) 858-8188, www.fortuneminerals.com