Fortune Minerals Announces Slurry Pipeline Transport Study Results for Mount Klappan Coal Project



    Updates Mount Klappan Development Progress

    Issued Capital: 49,546,407

    LONDON, ON, Jan. 15 /CNW/ - Fortune Minerals Limited (TSX-FT) ("Fortune")
is pleased to announce a summary of results from its preliminary economic
assessment of the viability of transporting coal using a slurry pipeline from
its proposed Mount Klappan anthracite coal mine in northwest British Columbia
to the ports of Stewart and Prince Rupert. This preliminary scoping study,
conducted by Marston Canada Ltd. (Marston) indicates that a slurry pipeline
could materially reduce transportation costs to the ports as compared to the
truck or rail transportation options evaluated in the Company's positive full
feasibility study (2005 FS) completed by Marston in 2005 (see News Release,
dated October 17, 2005). According to the scoping study report, such a
pipeline may reduce operating costs by as much as 34% (see tables below). For
example, the study estimates operating costs of $23.89/tonne involving truck
transportation to the port of Stewart compared with $15.75 per tonne using a
slurry pipeline to the same destination.
    A slurry pipeline would also help mitigate the future impacts of
increasing fuel and labour costs, and certain route options would reduce the
environmental footprint of the proposed development by using existing
transportation corridors. Finally, it is expected that using a buried slurry
pipeline to transport coal products from Mount Klappan would also reduce
environmental impacts of the project by eliminating the trucks that would have
been used for coal haulage.
    "Fortune continues its commitment to aggressively manage the costs and
profitability of developing our huge Mount Klappan asset, at the same time we
are determined to minimize the impact it has on our environment," said Robin
Goad, President and CEO of Fortune. "We are pleased to have this independent
engineering review that gives us some options that may allow Fortune to meet
all of these objectives."

    
    The scoping study included conceptual operating and capital cost estimates
prepared for two production scenarios and evaluations of three route options
to the ports of Stewart and Prince Rupert:

    1)  Slurry pipeline transport of 1.5 and 3 million tonnes
        per annum (Mtpa) west from Mount Klappan to Highway 37 and southwest
        along the existing highway to Stewart;

    2)  Slurry pipeline transport of 3 Mtpa west to Highway 37 as above and
        then south along the highway and existing forestry roads to
        Highway 16 and west to Prince Rupert; and,

    3)  Slurry pipeline transport of 3 Mtpa south from Mount Klappan along
        the existing BC Rail right-of-way to Minaret, west along the
        Stewart-Omenica Resource Road and then south along the Kispiox Road
        to Hazelton (320km) for rail transport to Prince Rupert (200km).
    

    Based on the study's positive findings, Fortune has commissioned Marston
and Pipeline Systems Incorporated (PSI) to conduct a more detailed
pre-feasibility level economic assessment of pipeline transportation using the
Stewart and Hazelton route options for more precise cost estimates for the
ongoing mine planning and permitting activities. This new study is expected to
be completed in the first quarter of 2008. It is worth noting that, while the
costs associated with the Prince Rupert are generally higher than those
involving Stewart, Prince Rupert already has an under-utilized world class
handling facility specifically designed for coal. The slurry pipeline option
being considered through Hazelton would allow the Company to use this handling
facility and would also offer railway access to North American coal markets.
    The preliminary scoping study was prepared assuming that the coal would
be transported as a 50%-solids coal slurry in which 95% would be less than
0.6mm and would be dewatered and pressed into pellets or briquettes at the
pipeline terminus for handling and delivery to overseas steel customers.
Marston is examining the building of a briquetting plant at the pipeline's
terminus capable of producing anthracite pellets for use in the global steel
manufacturing industry and testwork for the production of briquettes is in
progress. Notably, low ash content briquettes of suitable size, strength and
quality are likely to command premium prices on the international market and
would also facilitate loading and handling at the railway, port and receiving
steel plant. Richard Marston, P.E. is the Qualified Person responsible for the
scoping study for the purposes of National Instrument 43-101.

    
       Table 1: Comparison of costs for 2005 FS truck and rail options
                with preliminary pipeline transportation costs

    -------------------------------------------------------------------------
    Scenario           Truck to   Pipeline   Rail to    Pipeline   Pipeline
                       Stewart    to         Prince     to         to Prince
                       (2005 FS   Stewart    Rupert     Hazelton   Rupert
                       unesca-               (2005 FS   & rail to
                       lated)                unesca-    Prince
                                             lated)     Rupert
    -------------------------------------------------------------------------
    Tonnage             3 Mtpa     3 Mtpa     3 Mtpa     3 Mtpa     3 Mtpa
    -------------------------------------------------------------------------
    Capital
     (millions $)       152        308        235        287        388
    -------------------------------------------------------------------------
    Total Cost/t FOB
     vessel            $23.89/    $15.75/    $32.26/    $22.71/    $19.50/
                         tonne      tonne      tonne      tonne      tonne
    -------------------------------------------------------------------------


             Table 2: Preliminary Capital and Operating Costs for
                      Slurry Pipeline and Support facilities

    -------------------------------------------------------------------------
                                                         Pipeline
                                                         to
                                                         Hazelton    Pipeline
                                Pipeline    Pipeline     & Rail to   to
                                to          to           Prince      Prince
    Item           Scenario:    Stewart     Stewart      Rupert      Rupert
    -------------------------------------------------------------------------
    Route Distance               254 km      254 km       320 km      555 km
    -------------------------------------------------------------------------
    Pipeline Capacity            1.5 Mtpa    3 Mtpa       3 Mtpa      3 Mtpa
    -------------------------------------------------------------------------
               Capital Cost Estimate (millions of 2007 dollars)
    -------------------------------------------------------------------------
    Pipeline                     154         199          219         303
    -------------------------------------------------------------------------
    Service Road                 50          50           28          50
    -------------------------------------------------------------------------
    Briquette Plant, Water
     Treatment & Land            25          30           30          35
    -------------------------------------------------------------------------
    Rail Loadout                 0           0            10          0
    -------------------------------------------------------------------------
    Stewart Port Improvements    16          29           0           0
    -------------------------------------------------------------------------
    Total Capital Costs          245         308          287         388
    -------------------------------------------------------------------------
         Operating Cost Estimate per tonne transported (2007 dollars)
    -------------------------------------------------------------------------
    Pipeline Transport Cost     $5.76       $4.45        $3.31       $6.59
    -------------------------------------------------------------------------
    Plant, Loading & Water
     Treatment                  $10.00      $8.00        $9.00       $8.00
    -------------------------------------------------------------------------
    Rail Haulage                 -           -           $5.60        -
    -------------------------------------------------------------------------
    Service Road Maintenance    $0.30       $0.30        $0.20       $0.30
    -------------------------------------------------------------------------
    Port Charges                $3.00       $3.00        $4.61       $4.61
    -------------------------------------------------------------------------
    Total Operating Cost        $19.06      $15.75       $22.72      $19.50
    -------------------------------------------------------------------------
    


    Mount Klappan: Project Update
    -----------------------------

    CORPORATE & OPERATIONS

    In addition to the slurry pipeline assessment and the ongoing engineering
and environmental studies, the Company is conducting discussions with
potential joint venture partners over the development of the Mount Klappan
coal project. Notably, the price of coking coal, the best proxy for
metallurgical anthracite pricing, is now being quoted on the spot market in
the range of US$180 to US$190/tonne a 100% increase over the 2007 contract
price. The price of ultra-low volatile PCI coal from anthracite for the steel
industry is currently quoted at approximately US$150/tonne and premium
anthracite products used in metallurgical processing are being quoted in
excess of US$200/tonne. The 2005 Marston full feasibility study for Mount
Klappan, which used a base case price of US$100/tonne with sensitivities at
higher and lower prices, had already shown attractive rates of return for
several production rate and truck and rail transportation options.

    ENVIRONMENT

    The Company is active in the environmental assessment process at Mount
Klappan to develop an export metallurgical coal mine producing ultra-low
volatile pulverized coal injection (PCI) products for the overseas steel
industry. Rescan Tahltan Environmental Consultants (RTEC), Fortune's
environmental consultants for the project, are also continuing to conduct
environmental work at the Mount Klappan site and are now also conducting
studies in support of the pipeline route options. All-North Engineering is
also completing the road engineering and an updated cost estimate for the
proposed haul roads that would service either of the pipeline route options.

    About Mount Klappan:

    Fortune's wholly-owned Mount Klappan anthracite coal project is located
in northwest British Columbia and straddles the B.C. Railway right-of-way
150 km northeast of the port of Stewart and 330 km northeast of the port of
Prince Rupert. The Company is advancing the environmental assessment process
to develop an export metallurgical coal mine producing ultra-low volatile
pulverized coal injection (PCI) products for the overseas steel industry.

    About Fortune Minerals

    Fortune Minerals is a diversified natural resource company with six
mineral deposits and a number of exploration projects, all located in Canada.
They include the Mount Klappan anthracite coal deposits in British Columbia,
and the NICO cobalt-gold-bismuth deposit, the Sue-Dianne copper-silver deposit
and other base and precious metals exploration projects in the Northwest
Territories. Fortune Minerals is focussed 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, or may be based upon, estimates,
forecasts, and statements as to management's expectations with respect to,
among other things, the size and quality of the Company's mineral resources,
progress in development of mineral properties, timing of scoping,
pre-feasibility, feasibility, engineering, environmental or other studies or
reports, demand and market outlook for metals and future metal prices.
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 uncertainties involved
in interpreting drilling results and other geological data, fluctuating metal
prices, equipment and personnel being available as and when required, the
possibility of project cost overruns or unanticipated costs and expenses,
uncertainties relating to the availability and costs of financing needed in
the future and other factors. Mineral resources that are not mineral reserves
do not have demonstrated economic viability. Inferred mineral resources are
considered too speculative geologically to have economic considerations
applied to them that would enable them to be categorized as mineral reserves.
There is no certainty that mineral resources will be converted into mineral
reserves. 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.





For further information:

For further information: Fortune Minerals Limited: Robin Goad,
President, Tel: (519) 858-8188, Fax: (519) 858-8155, info@fortuneminerals.com,
www.fortuneminerals.com; Greg Taylor, Investor & Public Relations, Tel: (905)
337-7673, Fax: (905) 844-6532, gtaylor@fortuneminerals.com

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