Issued Capital: 108,644,814
LONDON, ON, Aug. 9, 2011 /CNW/ - Fortune Minerals Limited (TSX-FT) ("Fortune" or the "Company") is pleased to report that the recently announced joint venture
agreement between its wholly-owned subsidiary, Fortune Coal Limited
("Fortune Coal"), and POSCO Canada Ltd. ("POSCAN") and its wholly-owned
subsidiary, POSCO Klappan Coal Ltd., to advance the Mount Klappan
anthracite metallurgical coal project in northwest British Columbia to
production, has now closed (see Fortune Minerals news release, dated
July 13, 2011). POSCAN's parent company, POSCO is based in South Korea
and is one of the world's premier steel producers.
Pursuant to the joint venture agreement, POSCAN acquired a 20% interest
in the Mount Klappan project by making its upfront cash payments to
Fortune Coal, totaling $30 million. Based on current capital cost
estimates, POSCAN is anticipated to make total payments and cash
contributions of $181 million to develop the Mount Klappan mine and
related railway infrastructure. POSCAN will also fund 20% of the
operating costs and receive 20% of the metallurgical coal products
produced from the mine and wash plant. The Mount Klappan joint venture
is owned 80% by Fortune and 20% by POSCAN and combines Fortune's local
development and operations expertise with POSCAN's market knowledge and
financial backing. Fortune will serve as Manager of the project and
will be compensated, on a recovery basis, for providing operational,
technical and administrative support over the life of the mine.
About POSCO:
POSCO, headquartered in Seoul, South Korea, is the world's 3rd largest steel producer by market value with a current market
capitalization of US$33.0 billion1. POSCO had crude steel production of 33.7 million tonnes in 2010 and
sales for the 12 months ended March 31, 2011, totaled US$62.2
billion. POSCO's Gwangyang Works is the largest steel mill in the
world, with capacity of 19.5 million tonnes. POSCO has investments and
operations across the globe, including in Korea, China, Japan, India,
Indonesia, United States, Australia, Canada, Brazil, Vietnam and
Thailand. It continues to expand its global operations towards a goal
of achieving a total crude steel production capacity of 50 million
tonnes. POSCO was founded in 1968 and is listed on the Korea Exchange
(KRX) and is also inter-listed on the New York, London and Tokyo Stock
Exchanges.
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 the Mount Klappan
anthracite metallurgical coal deposits in British Columbia and the NICO
gold-cobalt-bismuth-copper deposit in the Northwest Territories
("NT"). As part of the development of the NICO deposit, Fortune is
developing a metals processing plant in Saskatchewan and has acquired
the buildings and equipment from the Golden Giant Mine at Hemlo,
Ontario, which have been dismantled, moved, and stored for relocation
to NICO. In addition, the Company owns the Sue-Dianne
copper-silver-gold deposit and other exploration projects in the NT.
Fortune Minerals is focused on outstanding performance and growth of
shareholder value through assembly and development of high quality
mineral resource projects.
1Market capitalization based on the closing price of POSCO's stock on
August 4, 2011 on the Korea Exchange and current currency exchange
rates.
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 proposed development of and anticipated
production from the Mount Klappan project, the establishment of a
railway link to Prince Rupert and. 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 risk that the Company may not be able to
arrange the necessary financing to construct and operate the Mount
Klappan mine and/or the railway link to Prince Rupert, the risk that
the JV may be terminated in accordance with its terms, the risk that
the Company may not be able to conclude an agreement with CN for the
transportation of coal from Mount Klappan to Prince Rupert, the
possibility of delays in the commencement of production from the Mount
Klappan project, the inherent risks involved in the exploration and
development of mineral properties, the risk that actual capital and
operating costs for the Mount Klappan project may differ from those
anticipated, uncertainties with respect to the receipt or timing of
required permits and regulatory approvals, the uncertainties involved
in interpreting drilling results and other geological data, fluctuating
metal prices 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 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.