Addition of gravity, regrind and secondary flotation increases metal recovery to bulk concentrate and eliminates the need for cyanide facilities in the NWT

Issued Capital: 107,219,427

LONDON, ON, March 16 /CNW/ - Fortune Minerals Limited (TSX: FT) ("Fortune Minerals" or the "Company") is pleased to announce successful results for mini-pilot plant, gravity, and confirmatory flotation tests conducted at SGS Lakefield Research Limited ("SGS Lakefield") on samples of ores from the Company's 100% owned NICO gold-cobalt-bismuth-copper deposit in the Northwest Territories ("NWT").   The Company concluded that the addition of gravity, regrind and secondary flotation facilities at the Company's proposed NICO concentrator increases metal recovery during flotation and eliminates the need to construct cyanide leaching and smelting facilities in the NWT.  This mitigates the duplication of similar unit operations that are planned to be constructed at the Company's proposed Saskatchewan Metals Processing Plant ("SMPP") near Saskatoon where bulk concentrates from the proposed mine will be processed to high value metal products. Elimination of cyanide use at the concentrator will also reduce the potential for environmental impacts in the NWT related to tailings storage and effluent treatment, and the change is in keeping with the wishes of the Tlicho people who own the lands surrounding the Company's mining leases and are stakeholders for the proposed development.

The test work at SGS Lakefield consisted of investigations to maximize the incremental recovery of gold to the bulk concentrate that is planned to be shipped from the concentrator in the NWT to the SMPP for processing to high value metal products.  Prior to the Company's decision to move the downstream hydrometallurgical processing facilities to Saskatoon, all of the processing was planned to be conducted at the NICO site, including cyanide leaching to recover gold from the cleaner flotation tailings, autoclave residues, and bismuth leach residues.  Following the 2007 flotation pilot plant, the data was analyzed by the Company's consultants, and approximately 6% of the overall recoverable gold contained in NICO ores reported to the cleaner flotation tailings, and this material represents 8% of the concentrator ore feed and would be cost prohibitive to ship to Saskatchewan for processing.  As a result, recovery of the gold that reports to the cleaner flotation tailings necessitated duplication of the cyanide recovery circuit and smelting components in the NWT at additional capital cost.  To maintain planned gold recovery, it was necessary to undertake testing of alternate recovery routes to incrementally increase the gold recovery to the bulk concentrate without significantly increasing the volume.

First, SGS Lakefield completed Gravity Recoverable Gold ("GRG") testing on two sub-composite ore samples mined during the Company's 2007 underground bulk sampling program representing medium gold grade cobalt-associated and bismuth-associated gold.  GRG testing is an industry accepted approach for predicting the available amount of gold that can be recovered in a gravity centrifuge and the results indicated GRG recoveries of 11% and 18% from the cobalt- and bismuth-associated composites, respectively.  These results were then utilised by a third party gravity centrifugal concentrator supplier to model the predicted benefit of gravity recovery within the NICO grinding circuit upstream of flotation by benchmarking the proposed NICO circuit against the response of existing circuits with similar known GRG profiles.  Because some of the gold would have otherwise been recovered during flotation, the modelling predicted that the recovery benefit would be approximately 1-4% depending on the mineralization and grade.  Fortune Minerals is using a conservative 2% increase in incremental gold recovery using gravity for future reserve and resource modelling for the deposit and its financial model.

Second, using composite samples created for the 2007 pilot test, SGS Lakefield completed standardized kinetic flotation testing and modelling to optimize the bulk rougher and cleaner circuit in an effort to minimize the amount of gold that reported to the cleaner tailings.  These SGS Lakefield proprietary programs are referred to as "MinnovEx" flotation tests for kinetics and the "Flotation Economic Evaluation Tool" for simulation.  The kinetic parameters were utilized to evaluate different flotation configurations through the simulation using the proposed NICO flow sheet and equipment sizing.  The model confirmed that continued use of the primary grinding targets, followed by flotation in the base case primary circuit, was optimum to maintain overall recovery of cobalt to the bulk concentrate for shipment to the SMPP because cobalt recovery decreases with over-grinding.  However, additional incremental gold recovery would be possible by the addition of a re-grind circuit treating the smaller cleaner flotation tailings stream, followed by secondary rougher and cleaner flotation, using the same flotation reagents used in the primary circuit.  This secondary regrind-flotation circuit configuration was tested by locked cycle tests using a new 50 tonne composite sample prepared from ore mined during the 2007 NICO underground bulk sampling program.  Results of this testing confirmed base case recovery assumption in the primary circuit, as well as the incremental increase in recovery of gold through the secondary-regrind circuit to the bulk concentrate.  Further pilot testing at 400 kg per hour confirmed that the regrind-secondary flotation circuit could conservatively achieve additional gold recovery of 2% with only an additional 0.3 to 0.7% increase in the volume of the bulk concentrate for shipment south.  In addition to the increase in gold recovery, the pilot test also indicated a minor recovery increase of approximately 1% for cobalt, bismuth, and copper to the concentrate.

The Company believes that an additional advantage to recovering this gold in the bulk concentrate is that it will be subjected to pressure oxidation during downstream processing at the SMPP, which allows for an improvement in the recovery of gold during leaching.  The downstream metallurgical recovery of gold, cobalt, bismuth, and copper from the increased mass pull to the bulk concentrate demonstrated by this program has not been proven, but is strongly supported by results of previous hydrometallurgical pilot testing.   Fortune Minerals therefore concluded that with the addition of a gravity circuit, regrind circuit, and secondary flotation for the cleaner flotation tailings, the need to construct standalone cyanide leaching and smelting facilities in the NWT is eliminated. 

Further, SGS Lakefield also conducted confirmatory flotation tests at different head grades on NICO ore sub-composite samples to determine the impact of cobalt and bismuth recovery from ores with very low cobalt or bismuth grades, which is predicted to occur in the mine plan infrequently.  Sub-composites were tested at 0.02% feed grade for cobalt and bismuth, and bismuth recovery was not significantly affected by processing lower grade ore.  The recovery of cobalt to the bulk concentrate from a sub-composite at a feed grade of 0.02% cobalt was approximately 5% less than the global recovery utilised to generate the 2007 reserve calculation that resulted in a life of mine average of 0.12% cobalt.  Gold recovery was not impacted in either case based on locked-cycle tests.

The SGS Lakefield gravity, regrind and secondary flotation, and confirmatory tests were conducted under the supervision of Michael Samuels, B.Eng., Director of Technical Services, Fortune Minerals and Alex Mezei, M.Sc., P.Eng., Director, Engineering Technology Services, the Qualified Person for the purposes of NI 43-101 on behalf of SGS.  The flow sheet changes described herein have already been incorporated into front-end engineering and design studies completed by Aker Metals, a division of Aker Solutions that was recently sold to Jacobs Engineering.

Fortune Minerals had been waiting for the results of the aforesaid test work in order to use the updated recovery estimates together with the results of the 37 new drill holes completed at NICO in the 2010 drill program to prepare an updated Mineral Reserve estimate.  P&E Mining Consultants Inc. is preparing the new Mineral Reserve estimate which is expected to be completed by mid-April.  Based on existing data, NICO contains Mineral Reserves of 31 million tonnes, averaging 0.91 g/t gold, 0.12% cobalt, 0.16% bismuth and 0.04% copper, containing 907,000 ounces of gold, 82 million pounds of cobalt, 109 million pounds of bismuth, and 27 million pounds of copper (see Fortune news release, dated January 14, 2010¹).

¹For additional information on the NICO mineral reserves, please see Fortune Minerals' News Release, dated January 14, 2010 and the information posted for the Company on the SEDAR website at www.sedar.com.  Eugene Puritch, P.Eng. and Fred H. Brown, CPG PrSciNat, both of P&E Mining Consultants Inc., are the Qualified Persons responsible for the NICO mineral reserves under NI 43-101.

Fortune Minerals has recently completed a small winter program of condemnation drilling beneath the NICO mill and camp site, plus geotechnical drilling at the proposed NICO airport site.  No significant mineralization was identified immediately beneath the NICO plant site.

The NICO project consists of a proposed mine and concentrator in the Northwest Territories, located 160 km northwest of the City of Yellowknife.  A vertically integrated hydrometallurgical process plant will also be constructed near Saskatoon, Saskatchewan where NICO concentrates will be processed to gold doré, 99.8% cobalt cathode, 99.99% copper cathode and 99.99% 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, moved, and stored 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 statements with respect to, among other things, proposed development of the NICO project, the potential for increasing reserves at the NICO project, the proposed development of the Saskatchewan Metals Processing Plant ("SMPP") and the anticipated recoveries of metals from the NICO project . 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, the risk that actual recoveries of metals from the NICO project may not be consistent with test results and other factors. 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.