Fortune Minerals reports correction to operating cash costs for gold equivalent ounces and metals net of by-products for previously reported NICO FEED study

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.

 

SOURCE Fortune Minerals Limited

For further information:

Fortune Minerals Limited
Robin Goad, President, or
Troy Nazarewicz
Investor Relations Manager
info@fortuneminerals.com
Tel.: (519) 858-8188
Fax: (519) 858-8155
www.fortuneminerals.com

Renmark Financial Communications
Barbara Komorowski: bkomorowski@renmarkfinancial.com, or
Peter Mahzari: pmahzari@renmarkfinancial.com
Montreal Tel: (514) 939-3989, Toronto Tel. (416) 644-2020
Montreal Fax: (514) 939-3717, Toronto Fax. (416) 644-2021
www.renmarkfinancial.com


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