November 18, 2014
Building a diversified producer in a challenging resource market
LONDON, ONTARIO, Fortune Minerals Limited (TSX: FT) (OTCQX: FTMDF) (“Fortune” or the “Company”) ( is pleased to provide an update of its Revenue Silver Mine operations and progress towards building a diversified producer with the development of its organic growth assets. The Company also reports that its consolidated financial statements and Management Discussion and Analysis for the period ended September 30, 2014 have been filed and are available on the SEDAR ( and Company’s websites.
“Mining is a cyclical business,” commented Robin Goad, Fortune’s President and CEO, “Despite very challenging capital markets for the resource sector, we have demonstrated our ability to grow both internally and through acquisitions. We successfully transformed Fortune Minerals into a producer with the purchase of the Revenue Silver Mine, financing this acquisition through an innovative US$ 35 million production prepay facility with Lascaux Resource Capital. We have also been able to advance our Arctos and NICO projects through joint venture and corporate investments of approximately CDN$ 41 million with strategic partnerships. We are well positioned for growth from our diversified assets when confidence returns to the capital markets for our sector.”
Building the next diversified producer
Fortune has established a platform for growth through development and acquisitions in mining friendly jurisdictions in North America. The Company’s work force has been expanded to approximately 180 employees with experience in acquiring, financing, developing and operating mines.
Fortune owns a portfolio of diversified mining assets that includes a 100% interest in the high-grade underground Revenue Silver Mine (“Revenue”) in southwest Colorado, U.S.A. that is ramping up to a planned 400 short ton per day production rate. Fortune also has two advanced development stage organic growth assets to contribute to the development of a diversified North American mining company. The NICO Gold-Cobalt-Bismuth-Copper Project has received its environmental assessment approval and key permits to construct a mine and concentrator in Canada’s Northwest Territories (“NT”) and its environmental assessment approval for the proposed refinery in Saskatchewan where it will process NICO concentrate to high value products. The Arctos Anthracite Metallurgical Coal Project in British Columbia, a joint venture with South Korean steel producer POSCO, is in the permitting process to construct a mine and railway extension to supply premium anthracite coal to the global steel and metals processing industries. With more than CDN$ 250 million dollars invested in developing its principal assets, Fortune is positioned to become a reliable North American producer of commodities critical to a growing world economy.
Revenue Silver Mine
Continuing with the ramp up to 400 short tons per day
Fortune completed the acquisition of a 100% interest in the Revenue Silver Mine in southwest Colorado on October 1, 2014 after acquiring an initial interest in May at which time it also became the Operator. Revenue is a historical producer of approximately 15 million ounces of silver in the prolific Sneffels Silver Mining District. The mine was reopened in 2013 and is the largest employer in Ouray County.
The Revenue mine produces silver (approximately 80% of revenues) and by-product gold, lead and zinc from high-grade, narrow epithermal veins that are mined using underground shrinkage methods. Mine production is then trammed in electric train sets to an underground mill and flotation concentrator that produces silver- and gold-bearing lead and zinc concentrates that are sold to smelters, and a gravity gold concentrate that will be sold to a refinery.
Since taking operational control of Revenue in May, Fortune has made significant investments to improve mine safety and approximately US$ 5 million is being spent to establish operations. The mine and safety leadership has been changed and structures put in place to improve safety awareness. The main haulage tunnels and access raises have also been systematically scaled, screened and re-bolted to improve ground conditions. In addition, track and ties have been upgraded and improvements made to the mine ventilation system. A new ventilation shaft is also being installed from the main haulage level to surface to improve air volume and quality while providing a secondary exit at the back of the mine. This shaft, expected to be completed by the end of November, will also serve as an ore pass to provide access to high-grade mineralized material located in surface stockpiles located outside of the historical entrance to the mine at higher elevations. Fortune is also driving a decline ramp from the Revenue Tunnel level to access lower levels of the Virginius Vein where there are stopes containing high-grade mineralized material that was not removed for processing during test mining in the 1980’s. The ramp will also provide access to high-grade stopes in Fortune’s new mine plans. Bottlenecks identified in the mill during commissioning are being corrected with equipment modifications and automation, including installation of higher capacity pumps, screens, replacing spargers in the column flotation cells, and improving ore handling on conveyors and ore bins. A thickener is also being installed to improve tailings filtering capacity and efficiency. Surface facilities include a new mine air heater and structures to improve tailings management.
Fortune is pleased with the progress being made at the Revenue Silver Mine. The focus on Safety and Improvements has positioned the operation to achieve the planned production rates. Four concentrate shipments have already been delivered to a smelter for processing. Fortune’s goal is to have the Revenue Mine operating at 300 short tons per day by the end of November and is targeting 400 short tons per day by year-end. In order to reflect the reality of lower commodity prices, the mine plan is also being adjusted to focus production from the higher grade Virginius Vein.
NICO Gold-Cobalt-Bismuth-Copper Project
Shovel ready mine positioned to supply the rapidly expanding rechargeable battery market
The NICO project is a vertically integrated project consisting of a proposed mine and concentrator in the NT and refinery in Saskatchewan to produce gold, cobalt sulphate, bismuth metals and chemicals, and copper cement. NICO was discovered by Fortune in 1996 and has had more than CDN$ 110 million of expenditures to date to delineate the deposit, conduct test mining, and complete pilot plant processing, engineering and feasibility studies to verify project economics. Environmental assessment approvals and the principal permits have been received to construct the mine and mill, and the refinery in Saskatchewan has also received its environmental assessment approval. Negotiations are ongoing with the Tlicho Government for an impact benefit agreement that will create employment and business opportunities for the life of the NICO Project.
The feasibility study for NICO by Micon International Limited shows an attractive rate of return from the development with average annual production of approximately 41,360 ounces of gold, 1,615 metric tonnes of cobalt contained in sulphate, 1,750 metric tonnes of bismuth contained in ingots, needles and oxide and 265 metric tonnes of copper in cement (see Technical Report filed on SEDAR and Fortune news release, dated April 2, 2014). NICO is uniquely positioned to be a reliable Canadian-based supplier of cobalt and bismuth products with cost advantages under the North American Free Trade Agreement (NAFTA) as well as trading relationships with the European Union. With 61% of primary cobalt mine supply coming from the politically unstable Democratic Republic of the Congo and 42% of refinery production sourced from China, NICO will be strategically positioned to be a reliable vertically integrated North American supplier of cobalt chemicals to service the rapidly expanding rechargeable battery industry. With 12% of global bismuth reserves, NICO will also be an important new supplier of bismuth ingots, needles and oxide to diversify a market where 80% of supply is currently sourced in China. Bismuth has unique applications in the automotive, pharmaceutical, aerospace, electronics and plumbing industries and is experiencing significant demand growth as a non-toxic and environmentally safe replacement for lead in products now being impacted by legislation and policies banning or restricting the use of lead.
In 2013, Procon Resources Inc. made a strategic CDN$ 11.7 million investment in Fortune to help advance NICO towards development and proposed arrangement of project financing. As Fortune continues discussions with potential partners and its banks it is also actively pursuing alternative solutions and off-take agreements to help finance the project. The Company is also waiting for the Government of the Northwest Territories (“GNWT”) to provide a schedule for the all-weather road planned to the community of Whati, which Fortune would use to construct a spur to the mine. The GNWT has applied for an increase to its borrowing limits from the federal government in order to allow it to make investments in infrastructure that will support both the community and future resource development, including roads and power.
Arctos Anthracite Coal Project
World Class anthracite metallurgical coal project in the Environmental Assessment process
Arctos is one of the world’s premier metallurgical coal projects with very large resources and reserves of high rank anthracite coal located in northwest British Columbia. The project is an international collaboration between Fortune (80%) and POSCAN (20%), the Canadian subsidiary of South Korea’s POSCO, a leading global steel producer. Substantial work totaling more than CDN$ 110 million has already been invested in the project by Fortune, POSCAN and the previous owner of the project to delineate the resources and conduct engineering, feasibility and environmental studies. Additionally, a large bulk sample was collected for pilot plant processing to produce 100,000 metric tonnes of finished coal products for trial cargoes to potential customers in North America, Asia and Europe. Arctos is currently in the British Columbia environmental assessment process. The feasibility study for the Arctos project by Marston & Marston Inc., a division of Golder Associates Limited, indicates an attractive rate of return for the development (see Technical Report filed on SEDAR and Fortune news release, dated October 15, 2013).
The Company’s environmental field programs at the Arctos Project were disrupted by protestors and special interest groups in 2013 and the Company agreed to a request from the British Columbia Government to withdraw from the area to allow it to negotiate the Klappan Strategic Initiative with the Tahltan First Nation. The Company had intended to return to the field in 2014 to complete the work required for the environmental assessment and applied to the government for the requisite permits. Regrettably, the British Columbia Government unilaterally imposed a hold on issuing new permits until after December 1, 2014 after it had assured the Company that such permits would be issued after the Tahltan elections in July. The Arctos joint venture has therefore refocused work on optimization studies to improve project economics, while also conducting stakeholder engagement and low impact environmental monitoring required for the environmental assessment process. Fortune has also continued work to identify opportunities to attract additional strategic partners for Arctos with the aim of achieving a fully financed and permitted project for development.
With more than CDN$ 250 million invested in advancing its principal assets to date Fortune is building the next diversified mining company with a production profile of precious, base and specialty metals and premium coal. With concerns about the concentration of supply for some of these commodities, Fortune is well positioned to grow as a reliable North American producer with significant resources and reserves required by a growing world economy.
The disclosure of scientific and technical information contained in this press release has been approved by Robin Goad, M.Sc., P.Geo., President and Chief Executive Officer of Fortune Minerals Limited, who is a “Qualified Person” under National Instrument 43-101.
About Fortune Minerals:
Fortune is a diversified North American mining and development company that owns and operates the Revenue Silver Mine in Colorado. The Company is developing the vertically integrated NICO gold-cobalt-bismuth-copper project that is comprised of a proposed mine and mill in Canada’s Northwest Territories (“NT”) that will produce a bulk concentrate for shipment to a refinery in Saskatchewan for processing to high value metal and chemical products. Fortune is also developing the Arctos anthracite metallurgical coal project in British Columbia and owns the Sue-Dianne copper-silver-gold deposit and other exploration projects in the NT. Fortune is focused on outstanding performance and growth of shareholder value through assembly and development of high quality mineral resource projects.
Fortune Minerals Limited
Robin Goad, President, or
Troy Nazarewicz, Investor Relations Manager
Tel.: (519) 858-8188
Renmark Financial Communications
Barbara Komorowski: , or
Montreal Tel: (514) 939-3989, Toronto Tel. (416) 644-2020
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 planned ramp-up of Revenue to achieve a 400 short ton per day production rate; the anticipated completion of mine improvements at Revenue; the proposed development of the NICO project, including construction of a mine and concentrator thereat and estimated production therefrom and the development of the Arctos project including construction of a mine thereat and a railway extension thereto. 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 complete improvements at Revenue in a timely manner, and to complete the development of the NICO and Arctos projects as anticipated and in a timely manner). 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 inherent risks involved in the exploration and development of mineral properties, unexpected technical delays and associated timing delays in the ramp-up of
Revenue and associated production of silver and other metals; the risk that the Company may not be able to arrange the necessary financing to complete the NICO and Arctos projects; the risk that operating and/or capital costs may be materially higher than anticipated; the risk of decreases in the prices of relevant commodities; potential loss of key personnel; potential discrepancies between actual and estimated production; potential labour shortages; the risk of mining accidents; the risk of changes in applicable laws or regulations; uncertainties with respect to the timing and receipt of all necessary permits; and other factors. In addition, the risk factors described or referred to in Fortune’s Annual Information Form for the year ended December 31, 2013, which is available on the SEDAR website, should be reviewed in conjunction with the information contained in this news release. 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.

About prosperitysaskatchewan

Consultant on Saskatchewan's natural resources.

Posted on November 19, 2014, in other minerals. Bookmark the permalink. Leave a comment.

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