Building a diversified producer in a
challenging resource market
Issued Capital: 194,578,180
LONDON, ON, Nov. 18, 2014 /CNW/ - Fortune Minerals
Limited (TSX: FT) (OTCQX: FTMDF) ("Fortune" or the "Company")
(www.fortuneminerals.com) 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 (www.sedar.com) and Company's
websites.
(Photo: http://photos.prnewswire.com/prnh/20141118/159350)
"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."
Like our news? Click-to-Tweet.
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.
Summary
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.
Follow Fortune Minerals:
Click here to subscribe to Fortune's email list.
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.
SOURCE Fortune Minerals Limited