Dismantling and demolition of buildings successfully completed -
Equipment and structures moved to staging points for reconditioning and
mobilization
LONDON, ON, Oct. 14 /CNW/ - Fortune Minerals Limited (TSX-FT) ("Fortune Minerals" or the "Company") is pleased to announce that it
has completed the salvage of buildings and equipment from the Golden
Giant Mine at Hemlo, Ontario. The Golden Giant Mine facilities were
purchased, dismantled and removed from the Hemlo site at an approximate
net cash cost of $18 million in order to reclaim valuable assets for
their relocation and use at the Company's proposed NICO
gold-cobalt-bismuth-copper mine and concentrator in the Northwest
Territories and refinery in Saskatchewan. The Golden Giant Mine
project demonstrates Fortune Minerals' ability to plan and execute a
significant project on budget and on schedule.
Fortune Minerals acquired the Golden Giant Mine buildings, equipment and
an inventory of spare parts from Newmont Canada Limited ("Newmont") and
Mindecom Industrial Constructors Limited in 2006 and 2008 after the
mine had closed. Dismantling and demolition of the mine site
facilities was undertaken to reclaim valuable equipment for re-use at
NICO and includes certain buildings, grinding mills, the crushing
plant, flotation cells, compressors, boilers, generators, conveyors,
pumps, motors, overhead cranes, transformers, assay laboratory,
electrical switch gear and other equipment. These assets have now been
moved to strategic locations in Manitoba and Ontario in preparation for
refurbishment and mobilization to NICO and Saskatoon. The net cash cost
of this project includes significant proceeds from the sale of surplus
equipment, scrap metals, and gold recovered from the equipment.
Fortune Minerals is pleased to report completion of the Golden Giant
Mine project five months ahead of the April 1st 2011 deadline and the Company has now fulfilled all of its
responsibilities pursuant to the purchase agreement to the satisfaction
of Newmont. Notably, the final phase of work was conducted at a
significant reduction to the budget, and in accordance with all
environmental requirements and safety protocols. "We thank our
employees, many from the surrounding communities and First Nations, as
well as local businesses that helped us to make this project a
success", said Fortune Minerals' President Robin Goad. The Golden
Giant Mine assets are anticipated to have a material impact on managing
the capital costs for the NICO development. Fortune Minerals is well
positioned to efficiently begin construction of the mine, concentrator
and refinery upon receipt of the requisite permits.
The NICO deposit is located in the south part of the Northwest
Territories, 160 km northwest of the City of Yellowknife and 50 km
north of the community of Whati. The deposit will be mined using a
combination of open pit and underground mining methods at a daily
production rate of 4,650 tonnes of ore per day. Simple flotation
produces approximately 180 tonnes of bulk concentrate per day for
delivery by truck and rail to the Company's proposed hydrometallurgical
process plant near Saskatoon, Saskatchewan. At this refinery, NICO
concentrates will be processed to gold doré, 99.8% cobalt cathode,
99.99% copper cathode and 99.9% bismuth ingot or 99.5% cathode. Both
sites are currently in the environmental assessment process for
permitting. NICO has already been assessed in a positive definitive
feasibility study by Micon International Limited that was updated in
2008 and shows an attractive rate of return for the development (see
Fortune news release, dated May 8, 2008).
About Fortune Minerals:
Fortune Minerals 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 its NICO
gold-cobalt-bismuth-copper deposit in the Northwest Territories and its
metals processing plant in Saskatchewan. Fortune Minerals owns the
buildings and equipment from the Golden Giant Mine at Hemlo, Ontario,
which have been dismantled for relocation to NICO. Fortune Minerals
also owns the Mount Klappan anthracite coal deposits in British
Columbia, the Sue-Dianne copper-silver deposit and other exploration
projects in the Northwest Territories. Fortune Minerals is focused on
outstanding performance and growth of shareholder value through
assembly and development of high quality mineral resource projects
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, proposed development of the NICO project and
the proposed development of the hydrometallurgical processing plant in
Saskatchewan (the "SMPP"). 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 inherent volatility of metal prices, the
risk that the Company may not be able to arrange the necessary
financing to construct and operate the NICO mine and the SMPP,
uncertainties with respect to the receipt or timing of required permits
for the development of the NICO project and the SMPP, the possibility
of delays in the commencement of production from the NICO project and
construction of the SMPP 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.