Issued Capital: 117,076,976
LONDON, ON, July 5, 2012 /CNW Telbec/ - Fortune Minerals Limited (TSX: FT) (OTCQX: FTMDF) ("Fortune" or the
"Company") (www.fortuneminerals.com) announces corrections to the operating cash costs for metals net of
by-product credits and for gold equivalent ounces that were reported in
its July 2, 2012 news release that announced the results of the Front
End Engineering and Design ("FEED") study for its 100% owned NICO
gold-cobalt-bismuth-copper project. NICO is a planned vertically
integrated project consisting of an open pit and underground mine and
mill near Yellowknife in the Northwest Territories ("NT") and a
hydrometallurgical refinery near Saskatoon, the Saskatchewan Metals
Processing Plant ("SMPP"), where Fortune will process concentrates from
the mill to high value metal products. Fortune plans to be a reliable
Canadian-based producer of gold doré, 99.8% cobalt cathode ("cobalt
metal") and/or cobalt sulphate heptahydrate, containing 20.9% cobalt
("cobalt sulphate"), 99.99% bismuth ingot, and a copper metal
precipitate.
The cash costs net of by-products and gold equivalent ounces that were
reported in the July 2 news release had minor errors due to application
of currency exchange rate assumptions and adjustments to the sale price
of copper to reflect a discounted copper precipitate product. In
addition, what was shown in the release as the cash cost for gold net
of by-products was in fact the cash cost for gold equivalent ounces,
the former being significantly lower and economically more attractive
than what was previously reported. NICO has very low operating costs
for all metals net of by-product credits. The cash costs net of
by-products and gold equivalent ounces were calculated subsequently to,
and independently from, the FEED internal rates of return ("IRRs") and
net present values ("NPVs") reported for the project at various metal
price and currency exchange rate assumptions, and accordingly the IRRs
and NPVs remain the same as reported July 2. The correct operating
cash costs for gold, cobalt and bismuth are shown in the table below.
Operating Cash Costs
|
Cash Cost Equivalent Gold Oz
|
Cash Cost Net of By-Product Credits
|
|
Gold
$US/equivalent oz
|
Gold
US$/oz
|
Cobalt
$US/lb
|
Bismuth
$US/lb
|
Metal Price Case &
Cobalt Product Option
|
Cobalt
Metal
|
Cobalt
Sulphate
|
Cobalt
Metal
|
Cobalt
Sulphate
|
|
Cobalt
Metal
|
Cobalt
Sulphate
|
Base Case
|
831.30
|
762.50
|
(356.70)
|
(738.75)
|
(0.81)
|
(8.63)
|
(12.78)
|
3-Year Trailing Average
|
859.94
|
788.54
|
(77.23)
|
(431.20)
|
1.98
|
(5.79)
|
(9.63)
|
Current
|
990.44
|
921.45
|
142.52
|
(148.42)
|
(1.07)
|
(4.83)
|
(7.99)
|
Escalated
|
943.87
|
868.38
|
(551.70)
|
(981.51)
|
(4.58)
|
(13.05)
|
(17.72)
|
Base Case Price assumptions are US$1,450/troy ounce ("oz") for gold,
US$20/pound ("lb") for cobalt, US$11/lb for bismuth and US$3.50/lb for
copper at an exchange rate of US$ 0.95 = C$ 1. The 3-year Trailing
Average Prices Case are as at May 31, 2012 and are US$1,359.94/oz for
gold, US$18.53/lb for cobalt, US$9.83/lb for bismuth and US$3.51/lb for
copper and an exchange rate of US$ 0.98 = C$ 1. The Current Price Case
uses prices as at May 31, 2012 and are US$1,558.00/oz for gold,
US$15.23/lb for cobalt, US$10.55/lb for bismuth and US$3.40/lb for
copper and an exchange rate of US$ 0.97 = C$ 1. The Escalated Price
Case uses metal price assumptions of US$1,800.00/oz for gold,
US$22.50/lb for cobalt, US$12.50/lb for bismuth and US$4.00/lb for
copper and an exchange rate of US$ 1 = C$ 1. Mr.
Alexander Duggan
,
P.Eng. and Mr.
Graham Peter Holmes
, P.Eng. of Jacobs are the Qualified
Persons for Jacobs and Mr.
Eugene Puritch
, P.Eng. is the Qualified
Person responsible for the work by P&E under NI 43-101.
About Fortune Minerals:
Fortune 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 NT. As part of the
development of the NICO deposit, Fortune is developing the SMPP in
Saskatchewan to process NICO concentrates to high value metal
products. The Company has acquired and dismantled equipment from the
Golden Giant Mine at Hemlo, Ontario for relocation to NICO. In
addition, the Company 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.
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 proposed
development of the SMPP, the anticipated production and recoveries of
metals from the NICO project and the anticipated sale of products 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 production and
recoveries of metals from the NICO project may not be consistent with
test results, the possibility that the Company may not be able to
secure supply contracts with users of products generated from the NICO
project 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.