FORTUNE MINERALS ANNOUNCES AGREEMENT TO PURCHASE
LANDS
NEAR SASKATOON, SASKATCHEWAN FOR NICO REFINERY
Due-diligence in progress to close
transaction
LONDON, ON, November 3, 2009 - Fortune Minerals Limited (TSX-FT)
(�Fortune Minerals� or the �Company�) is pleased to announce that it has entered into an agreement to
purchase lands near Saskatoon, Saskatchewan on which the Company proposes
to construct its Southern Hydrometallurgical Facility (�SHMF� or
�refinery�) for the NICO gold-cobalt-bismuth-copper project. NICO
is a planned vertically integrated project to mine and concentrate ores
from the Company�s deposit in the Northwest Territories. Bulk
concentrates will be transported by truck and rail to the Saskatoon area
for processing to high-value metal products, including gold dor�, cobalt, copper and bismuth cathodes, and a
nickel precipitate by-product. Earlier this year, Fortune Minerals
announced that it was evaluating a number of sites in southern Canada to
construct this facility (see Fortune Minerals News release, dated July
28, 2009). The relocation of the metal refining part of the project
from the mine site to the Saskatoon area is being done to reduce capital
and operating costs for the project, mitigate exposure to increasing
energy costs, accelerate the construction schedule, reduce environmental
impacts at the mine site, and speed the permitting process already in
progress. Fortune Minerals believes that the selection of this site
is an important step forward in its planned development of the NICO
project and reduces project risk.
The
purchase of lands in the Saskatoon area is subject to certain conditions,
including completion of satisfactory due-diligence of the site and
appropriate rezoning. Enterprise Saskatchewan and the Saskatoon
Regional Economic Development Authority have been working with Fortune
Minerals personnel over the last several months to identify a
Saskatchewan location for this state of the art metallurgical processing
plant in the province. Enterprise Saskatchewan Minister Ken Cheveldayoff said, �We are very pleased that Fortune
Minerals has chosen Saskatchewan over other potential locations for this
new and exciting project that means jobs and investment in the Saskatoon
area.�
The proposed Saskatoon refinery site includes access to the main line of
the Canadi an National
Railway, which can accommodate a spur for delivery of concentrates from
the mine, reagents and other supplies, and ship metal products to
industrial centres in North America or points of export. The
property is in close proximity to the Trans-Canada Highway and other
services including power, natural gas, and water supply. Saskatoon
is the fastest growing city in Canada and the commercial centre for the
province of Saskatchewan. �With a diversified economy, a highly
skilled work force and respected post-secondary institutions, Saskatoon
can accommodate everything that is required to construct and operate this
refinery� said Fortune Minerals President, Robin Goad.
Based on the Company�s current mine plan, the Saskatoon refinery will
process approximately 80,000 tonnes of NICO sulphide concentrates each
year, producing average annual production of approximately 4 million
pounds of 99.8% cobalt cathode, 4.2 million pounds of 99.5% bismuth ca thode, as well as 81,000 ounces of gold in each of
the first two years of the mine life, followed by 27,000 ounces of annual
gold production in subsequent years. Approximately 760,000 pounds
of 99.9% copper cathode and a nickel precipitate will also be produced as
by-products of the cobalt refining process. Notably, the process
flow sheet, production of high value metal products and metal recoveries
have all been proved by pilot plant testing.
When it enters production, NICO is expected to be a significant global
producer of cobalt to service increasing demand in high performance
rechargeable batteries used in portable electronic devices and electric-
and hybrid-electric cars. Cobalt is also used in superalloys, magnets, high strength steels,
catalysts, pigments and food additives (Vitamin B12). NICO is also
expected to be the largest independent producer of bismuth in the world
to service growth in the demand for traditional products (medicine s,
flame retardants, fusible alloys, castings, cosmetics, lubricants,
dimensionally stable compounds / alloys, and chemicals). Due to
concerns about lead-toxicity, the market is also growing for a variety of
new products that have been developed because bismuth is an
environmentally safe replacement for lead. The gold contained in
the NICO deposit is an attractive counter cyclical hedge, which is
primarily recovered during early years of the mine life.
Fortune Minerals has determined that relocating its refinery to Saskatoon
produces positive net impacts for the entire NICO development for the
benefit of all stakeholders. It may also provide the Company with
an opportunity to source materials from other projects for custom
processing and also to participate in the metals recycling
business. Undertaking such business activities would provide for a
sustainable project extending beyond the anticipated life of the NICO
mine. The Saskatoon ref inery is expected
to employ 85 people over a 15 to 20 year period based on the anticipated
life of the NICO deposit alone. Investment in the refinery is
estimated at $150 million and construction is anticipated to commence
upon receipt of the NICO mine permits and project financing. NICO
is in the second phase of environmental assessment for mine permitting
and is under review for senior project financing by BNP Paribas, a world
class bank and highly ranked market leader in global mine finance.
About Fortune Minerals
Fortune Minerals Ltd. is
a diversified natural resource company with several mineral deposits and
a number of exploration projects, all located in Canada. They
include the Mount Klappan anthracite coal
deposits in British Columbia, and the NICO gold-cobalt-bismuth-copper
deposit, the Sue-Dianne copper-silver deposit and other base and precious
metals exploration projects in the Northwest Territories. Fortun e Minerals owns the buildings and equipment
from the Golden Giant Mine at Hemlo, Ontario,
which have been dismantled for relocation to NICO. Fortune Minerals
is focused on outstanding performance and growth of shareholder value
through assembly and development of high quality mineral resource
projects.
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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 completion of the purchase of the SHMF and
production from the NICO project and the SHMF. 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 inherent
risks involved in the exploration and development of mineral
properties, the uncertainties involved in the receipt of necessary
permits and approvals, the uncertainties involved in interpreting
drilling results and other geologic data, fluctuating metal prices, the
possibility of project cost overruns or unanticipated costs and
expenses, uncertainties related to metal recoveries and other
factors. 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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