Issued Capital: 107,549,427

LONDON, ON, July 13, 2011 /CNW/ - Fortune Minerals Limited (TSX: FT) ("Fortune" or the "Company") is pleased to announce that its wholly-owned subsidiary, Fortune Coal Limited. ("Fortune Coal") has entered into a definitive agreement to form a joint venture (the "JV") with 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 ("Mount Klappan" or the "Project") to production.  POSCAN's parent company, POSCO is based in South Korea and is one of the world's largest steel producers. Pursuant to the agreement, POSCAN will acquire a 20% interest in Mount Klappan, and based on current capital cost estimates, is anticipated to make total payments and cash contributions of $181 million, including $30 million in upfront funding upon closing.

JV Highlights:

• Formation of a JV to be owned 80% by Fortune and 20% by POSCAN to accelerate development of Mount Klappan by combining Fortune's local development and operations expertise and POSCAN's market knowledge and financial backing;
• At closing POSCAN will provide $30 million in upfront funding to Fortune Coal, $20 million of which Fortune Coal will contribute directly to the JV;
• POSCAN will provide funding for 20% of the total development and capital cost of the Project, which under current estimates will equal a total contribution of $154 million to the JV;
• POSCAN will provide $17.2 million in additional payments to Fortune Coal based on future milestones;
• POSCAN will fund 20% of operating costs and receive 20% of the product produced from the Project;-and-
• Fortune will serve as Manager of the JV and will be compensated, on a recovery basis, for providing operational, technical and administrative support over the life of the mine.

Mount Klappan Highlights:

• One of world's largest undeveloped deposits¹ of metallurgical coal with Measured Resources of 107.9 million tonnes, Indicated Resources of 123.0 million tonnes, Inferred Resources of 359.5 million tonnes and Speculative Resources² of 2.2 billion tonnes;
• Robust economics from a Definitive Feasibility Study³ ("DFS") on the Lost Fox deposit with Run-of-Mine Coal Reserves of 106.3 million, representing only 3.6% of the total resources (See Fortune News Release, dated November 4, 2010);
• $1.03 billion pre-tax NPV (8%) and 25.4% IRR from Lost Fox DFS at a base case price of US$175 / tonne of 10% ash Ultra-Low Volatile Pulverized Coal Injection ("PCI") product;
• 3 million tonnes per annum planned initial production rate;
• Expansion potential via the mining of additional resources in the Lost Fox deposit and the adjacent Hobbit Broach, Nass and Summit deposits;
• Canadian National Railway ("CN") collaboration to extend railway infrastructure to the mine site, providing a scalable transportation solution to the port of Prince Rupert;
• Reduced shipping times to Asia by exporting the coal products through the port of Prince Rupert, positioning Mount Klappan as a key supplier to the overseas steel industry;
• Ability to use Ridley Terminals to load efficient Capesize vessels for ocean transport, and potentially share cargos and blend with other western Canadian coal producers;
  -and -
• Advanced stage project with $86 million of work already competed.

Mr. Robin Goad, President and CEO of Fortune, commented, "We are extremely proud that Mount Klappan has attracted a world-class organization like POSCO as a major investor and strategic partner.  This transaction will allow for accelerated development of the Project and is anticipated to provide 100% of required funding to complete more detailed engineering and design studies as well as permitting and stakeholder consultations.  It is anticipated that Fortune will not be required to contribute any further funding until permitting is complete and prior to the commencement of construction.  Additionally, our post-transaction levered after-tax NPV (8%) of Fortune's 80% share of Mount Klappan is estimated at $601 million at a $175 per tonne PCI price, and represents only a fraction of the total resource."

Mr. Yong Keun Kim, President of POSCAN, commented, "We are very pleased to invest in the Mount Klappan Project, which we see as one of the world's premier coal development projects and a future key supplier of premium coal products to the global steel industry.  This transaction expands our presence in North America, which already includes investments in the Mount Hope Molybdenum Project and Elk Valley Coal."

Mount Klappan consists of 15,866 hectares of coal exploration licenses in northwest British Columbia, located 150 km northeast of the port of Stewart and 330 km northeast of the port of Prince Rupert.  The licenses straddle the BC Railway right-of-way and its partially constructed roadbed, 150 km north of the current terminus of track at Minaret where CN is operating under a long-term lease.  The 2010 DFS by Marston & Marston Inc. ("Marston") is based on an open pit mine and wash plant producing 3 million tonnes of PCI product per annum for the overseas steel industry with the ability to diversify production into other metallurgical coal products.  The cost of upgrading and extending the railway infrastructure is included in the DFS.

Anthracite is a premium coal with the highest carbon and energy content of all coals, which together with other unique properties, allows for versatile usage in a number of important metallurgical, chemical, manufacturing, agriculture and thermal applications.  The very low volatile (gas) content of anthracite makes it ideal for PCI, allowing for high injection rates to minimize consumption of coke and improve efficiency in steel manufacturing, and also for pelletizing and sintering in the steel industry.  Coarse anthracite is used as a blend coal to replace coke, and also with hard coking coal to make metallurgical coke.  Anthracite reductants are used in ferro-chrome, titanium and aluminum processing, and as charge carbon in electric-arc steel manufacturing.  Anthracite is also gasified to make urea fertilizers used for agriculture and other chemicals.  Carbon filters for water purification and carbon composite materials are commonly made from anthracite coal.  Thermal uses include fuels for space heating, cooking and heating briquettes, kiln fuels to make cement and lime, and in thermal power plants to generate electricity.  The rising cost of oil is making gasification and coal-to-oil liquefaction economically attractive to make synthetic fuels.

World annual production of anthracite is approximately 565 million tonnes.  China produces approximately 85% of the world's supply, but has been a net importer since 2004.  Vietnam, the world's second largest producer with 43 million tonnes of annual production, is curtailing exports in order to preserve its remaining reserves for its own domestic steel and energy requirements.  Diminishing world supplies of metallurgical coals, combined with continued growth in the global steel industry, has contributed to a shortage of high quality metallurgical coals resulting in strong prices that are expected to prevail for the foreseeable future.

Development and Financing Strategy:

As part of the agreement, the JV partners have approved a program and budget focused on rapidly advancing Mount Klappan to production. The initial budget will focus on engaging with communities and building stakeholder support for the Project, securing permits, and conducting more detailed engineering to support permitting and mine planning.  POSCAN's upfront contribution is expected to fund 100% of activities through to completion of permitting.

The funding required to construct the Lost Fox Mine and railway infrastructure is estimated at $768 million, which would result in POSCAN's total contribution to the JV being $154 million, or 20%, and Fortune's contribution being $614 million, or 80%.  Based on a financing scenario of 70% debt and 30% equity, Fortune's equity requirement is anticipated to be $184 million over the life of the construction phase, of which $80 million is to be arranged by December 31, 2015.  Fortune plans to concurrently advance Mount Klappan and continue discussions with potential debt and equity providers, with the aim of announcing a fully financed, permitted project at the conclusion of its currently planned programs.

The JV parties plan to consider expansion options - expected either through increased production at Lost Fox or development of other Mount Klappan deposits - in due course.  Fortune anticipates its proportionate share of funds for such expansions would be funded from Project cash flows.

Transaction History:

Fortune began its search for a strategic partner in 2010 with an objective of attracting a world-class partner with metallurgical coal market knowledge and significant financial strength.  To assist the company with this objective, Fortune engaged Deloitte & Touche Corporate Finance Canada Inc. as its financial advisor.

About POSCO:

POSCO, headquartered in Seoul, South Korea, is the world's 3^rd largest steel producer by market value with a current market capitalization of US$32.6 billion⁴.  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.

¹The Mount Klappan mineral resource and mineral reserve estimates were prepared in 2004, 2005 and 2010, by Marston in compliance with National Instrument 43-101.  Richard Marston, P.E. is the Qualified Person responsible for the estimates.

²Speculative Resources estimated in 2004 in compliance with National Instrument 43-101 are no longer used as a compliant resource class.

³Further information regarding the Mount Klappan Mineral Resource and Mineral Reserve estimates and DFS is available from the Company's disclosures under the Company's profile on the SEDAR website at www.sedar.com.

⁴Market capitalization based on the closing price of POSCO's stock on June 24, 2011 on the NYSE stock exchange.

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.