/NOT FOR DISSEMINATION IN THE UNITED STATES OR TO UNITED STATES NEWSWIRE
SERVICES/
Fortune and Procon will work together to advance the development of the
NICO Gold-Cobalt-Bismuth-Copper Project in the Northwest Territories
Issued Capital: 121,276,976
Excluding shares issued pursuant to agreement
LONDON, ON, June 27, 2013 /CNW/ - Fortune Minerals Limited (TSX: FT) (OTCQX: FTMDF) ("Fortune" or the "Company") (www.fortuneminerals.com) is pleased to announce that Procon Resources Inc. ("Procon") has
agreed to make a strategic investment of C$11.7 million in the capital
stock of Fortune at a price of $0.40 per common share for a total of
29,250,000 newly issued common shares. The private placement will be
completed in two tranches of $5,850,000 and will result in Procon
holding a 19.4% ownership stake in the Company on a non-diluted basis.
The issue price represents a 14% premium over Fortune's closing price
on The Toronto Stock Exchange ("TSX") on June 26, 2013.
Procon is a full-service mining contracting company headquartered in
Vancouver, Canada. It is majority owned by China CAMC Engineering Co.,
Ltd. ("CAMCE"), a leading provider of international engineering,
procurement and construction ("EPC") services based in Beijing, China.
Pursuant to the private placement agreement, Procon will have the right
to appoint one nominee to the board of directors of Fortune upon
closing of the first tranche of the placement. Closing of the private
placement is subject to customary closing conditions including the
approval of the TSX. The first tranche is anticipated to close on July
25, 2013 and the second tranche is expected to close on October 1,
2013.
Fortune and Procon have also agreed to work together to advance the NICO
Gold-Cobalt-Bismuth-Copper Project ("NICO" or the "Project") in the
Northwest Territories ("NT"), Canada towards the objective of
commencing construction activities in 2014, including completing
project financing arrangements, detailed engineering, and a project
execution plan. Fortune will use the proceeds of the private placement
financing to advance the Project and for working capital.
Mr. Robin Goad, CEO of Fortune commented, "We are very proud to welcome
Procon as a strategic investor. Their expertise in construction,
engineering and mining services will be highly beneficial as Fortune
advances its mining projects and becomes a multi-asset producer."
Mr. Ed Yurkowski, CEO of Procon, "We are very familiar with Fortune and
its projects, having conducted the underground test mining for the NICO
mine in 2005 and 2006. We look forward to leveraging our experience
and working with Fortune's management team to make the NICO Project a
success."
Fortune's financial advisor is Deloitte Corporate Finance Inc. and its
legal advisors are Norton Rose Fulbright Canada LLP. Procon's financial
advisor is PricewaterhouseCoopers and its legal advisors are Dentons
Canada LLP.
This news release does not constitute an offer to sell or the
solicitation of an offer to buy, nor shall there be any sale of these
securities, in any jurisdiction in which such offer, solicitation or
sale would be unlawful prior to registration or qualification under the
securities laws of such jurisdiction. The securities have not been and
will not be registered under the United States Securities Act of 1933,
as amended, or any state securities laws and may not be offered or sold
within the united Sates unless an exemption from such registration is
available.
About NICO
The NICO deposit in Canada's NT contains open pit and underground Proven
and Probable Mineral Reserves totalling 33 million tonnes containing
1,085,000 ounces of gold, 82 million pounds of cobalt, 102 million
pounds of bismuth, and 27 million pounds of copper (see News Release,
dated July 2, 2012). At the planned mill throughput rate of 4,650
tonnes of ore per day, the mineral reserves will sustain operations for
19.8 years. More than $110 million of work has already been conducted
for the NICO project to delineate and engineer the deposit and reduce
risks from the development, including completion of Front-End
Engineering and Design studies by Jacobs Minerals Canada Inc. and other
engineering companies, underground test mining, and several pilot plant
tests. Site preparations are expected to be conducted this summer to
prepare for construction activities anticipated to begin in 2014,
subject to completion of the Project Financing and receipt of
applicable permits.
The disclosure of scientific and technical information contained in this
press release has been approved by Robin Goad, M.Sc., P. Geo.,
President and CEO of the Company, who is a "qualified person" under
National Instrument 43-101.
About Procon
Procon is a full service mining contractor providing a comprehensive
range of expertise to meet the growing needs of the mining and civil
industries. Procon provides services in underground and open pit
mining, mill construction and rehabilitation, heavy equipment rental
and maintenance, and industrial services for infrastructure for the
mining, forestry, and construction industries. Procon has one of the
largest owned fleets of mining equipment and has ranked as one of the
leading mining contractors in North America and one of the top thirty
general contractors in Canada. Well respected in the mining industry,
Procon also has an impressive performance record in both safety and
operations.
Procon is majority owned by CAMCE, a Fortune China 500 company with
revenues of RMB 10.2 billion (USD 1.6 billion) in 2012. CAMCE's core
business is international EPC services, contracting, trading, and
domestic and overseas project investment. With extensive experience in
international project management, CAMCE has completed large turnkey
projects in Asia, Africa, Europe, Latin America and the Caribbean in
the fields of transportation, municipal engineering, irrigation and
water works, power development, construction materials, food
processing, textiles, petrochemicals, agricultural and construction
equipment and telecommunications.
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 Arctos Anthracite Project
in British Columbia ("BC") and the NICO gold-cobalt-bismuth-copper
deposit in the NT. 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 news release contains forward-looking information. This
forward-looking information includes statements with respect to, among
other things, the financing from Procon referred to herein (the
"Financing), proposed production of gold and specialty metals, and the
proposed development of 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 complete the Financing or arrange the necessary additional
financing to construct and operate the NICO mine, uncertainties with
respect to the receipt or timing of required permits for the
development of the NICO project, the possibility of delays in the
commencement of production 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.