Fortune Minerals Limited · TSX:FT

Fortune Minerals — Investor Presentation (December 2014)

46 slides from Fortune Minerals's investor presentation, December 2014

  1. Slide 1: Investor Presentation December 2014

    Investor Presentation December 2014 1

  2. Slide 2: Disclaimer and forward-looking information

     This management presentation(the “presentation”) was preparedas a summary overview of current information about Fortune Minerals Limited (the “Company”) only and is not a prospectus or other offering document intended to provide investors with the information requiredto make investment decisions.

  3. Slide 3: Technical information and qualified persons

     The scientific and technical information with respect to the RSM contained in this presentation is based on the technical report dated July 23, 2014 prepared by SRK Consulting entitled “NI 43-101 Technical Report Preliminary Economic Assessment The Revenue Mine, Sneffels, Colorado” (the “SRK Techn

  4. Slide 4: Corporate Information and Share Performance

    Corporate Information Share Performance Listings: TSX (Canada): FT 0.50 900,000 Volume 0.45 800,000 OTC QX (USA): FTMDF Close 0.40 700,000 Trading Volume (M) Share Price C$0.15 0.35 Share Price (C$) 600,000 0.30 Shares Out – Basic 212.3 500,000 0.25 Shares Out – Fully Diluted 223.8 400,000 0.20 0.15

  5. Slide 5: Two late-stage projects and Revenue Silver Mine

     Headquartered in London, Ontario, Canada  Operating in mining friendly jurisdictions  Strong management team with proven records Revenue Silver Mine  Historical 15 million oz silver producer in southwest Colorado, U.S.A.  Producing mine & ramping up to 400 tons per day Two late-stage projects

  6. Slide 6: More than C$250 million invested in key North American assets

    More than C$ 250 million invested in Fortune’s key North American assets • Producing underground high grade silver mine & mill with byproduct gold, Revenue Mine lead & zinc 38 M ozs Ag Eq. • Ramping up to 400 tons per day contained • Historical production of ~15 M ozs of silver 1876 - 1912 • Late st

  7. Slide 7: Multi-asset producer with forecast annual revenues and EBITDA

     Fortune will be a multi-asset producer once NICO enters production, with combined average annual revenues forecast at US$ 207 million & EBITDA of US$ 99 million LOM Forecast Average Annual US$ Revenue by Metal for Revenue & NICO Mines $250 $4 $1 $0.5 $207.5 $32 $200 $46 $150 $58 $100 $66 $50 $- US

  8. Slide 8: 100% interest in producing silver mine and mill

    100 % interest in producing silver mine & mill in historic Sneffels Silver District in southwest Colorado  Historical production of 15 million ozs of silver between 1876 and 1912  Commissioning & ramping up to 400 tons per day  Strong community support & pool of skilled underground miners  First

  9. Slide 9: Production of silver, gold, lead and zinc

     Production of silver, gold, lead & zinc  Lead & Zinc concentrates containing silver & gold sold to smelter  Gravity gold concentrate sold to Johnson Matthey in Salt Lake City, Utah  Potential to produce copper concentrate  Potential to negotiate recovery of other metals Annual Average Mining &

  10. Slide 10: Compact site layout and excellent infrastructure

     Compact site layout & excellent infrastructure  County maintained road to mine from highway  Connection to Colorado electrical grid with excess capacity  Underground workings serviced primarily with electric & air powered equipment  Underground mill & concentrator to reduce mine footprint  Ex

  11. Slide 11: Current resources in Yellow Rose and Virginius Veins

     Current resources are in Yellow Rose & Virginius Veins – Upside opportunities in 6 other veins  Steeply dipping, high-grade epithermal quartz-carbonate veins containing tetrahedrite & freibergite (silver), gold, galena (lead), sphalerite (zinc) & chalcopyrite (copper)  Surface & underground stoc

  12. Slide 12: Revenue Virginius resource estimate

    Contained Metal Ag Au Pb Cu Zn Area Category Tons (opt) (opt) (%) (%) (%) Ag Au Pb Cu Zn (M oz) (oz) (M lb) (M lb) (M lb) Revenue Indicated 485,600 26.95 0.044 4.30 0.25 1.37 13.1 21,000 41.8 2.4 13.3 Virginius Revenue Inferred 646,100 14.93 0.038 3.04 0.13 0.99 9.65 24,500 39.25 1.6 12.8 Virginius

  13. Slide 13: Yellow Rose resource estimate

    Contained Metal Ag Au Pb Zn Area Category Tons (opt) (opt) (%) (%) Ag Au Pb Zn (M oz ) (oz) (M lb) (M lb) Yellow Rose Measured 215,300 10.08 0.034 1.71 1.69 2.17 6,400 7.37 7.28 Yellow Rose Indicated 100,700 10.92 0.036 1.96 1.74 1.10 4,000 3.95 3.5 Yellow Rose Measured & Indicated 316,100 10.35 0.0

  14. Slide 14: Mine Plan Resources

     Mine Plan Resources of 888,283 tons (diluted), averaging 14.6 ounces of silver per ton, 0.02 ounces of gold per ton, 2.26 percent lead, and 0.90 percent zinc  Subset of the total mineral resource inventory Description Tons (kt) Ag (oz/t) Au (oz/t) Pb (%) Zn (%) Measured Indicated 369.8 19.68 0.03

  15. Slide 15: Silver equivalent grade for comparable companies

    Silver Equivalent grade (Troy oz/t) for comparable companies 20.0 18.8 17.7 17.7 18.0 16.5 16.0 15.2 14.0 AgEq Grade (oz/t) 12.0 10.0 8.8 8.3 7.7 8.0 6.5 6.0 5.0 4.7 4.0 3.4 2.1 2.2 2.3 1.8 2.0 1.3 0.0  Source: SNL Metals & Mining, Company Reports & SRK Technical Report  Silver equivalent ounces f

  16. Slide 16: Veins accessed from Revenue Tunnel

     Veins accessed from ~7400 foot (2.3 km) long tracked Revenue Tunnel, plus ~5600 feet (1707 m) of drifting on 2 main veins  Internal winze ~710 feet deep (216 m) & planned ramp to access 6 additional levels Mine Portal UG Mill Revenue Virginius Vein Yellow Rose Vein Existing Portal, Revenue Tunnel

  17. Slide 17: Mining methods and drift development

     Drift development using track mounted jumbo & muck machines  Mining methods depend on vein width to limit dilution & maximize ore recovery - Stopes wider than 3 feet are mined by shrinkage stoping - Stopes less than 3 feet are mined by sublevel stoping with split shooting technique  Driving a de

  18. Slide 18: Ball Mill and Flotation concentrator

    Ball Mill & Flotation Bulk Flotation Crushing Gallery  Underground crushing & grinding plant & flotation concentrator with gravity gold circuit ramping up to 400 tons per day production rate 18

  19. Slide 19: SRK PEA Preliminary Economic Assessment Highlights

     Attractive economics indicated from SRK PEA using SRK Preliminary Economic Assessment Highlights Mine Plan Resource & excluding surface & 8 years based on Mine Plan Resource underground stockpiles Mine Life including ramp up & ramp down  Underground mining using shrinkage methods LOM Sustaining C

  20. Slide 20: Cash cost among the lowest of TSX silver peer group

     Average C1 cash cost of US$10.28/oz will be among the lowest of TSX silver peer group $20.00 Cash Costs per Silver Oz net of By-Products $18.65 $18.77 $17.76 $18.00 $16.00 $14.32 $13.76 $14.00 Cash cost per EqAg/oz $12.00 $11.32 $10.28 $10.42 $10.00 $7.65 $8.00 $6.53 $6.00 $4.00 $2.00 $- Fortuna -

  21. Slide 21: Virginius Vein ore production zones and upside

     High grade gold shoots not modelled separately in resource model & likely understate gold grade & content  Potential production of copper concentrate  Upside to add tonnage from horizontal & vertical projection of Virginius & Yellow Rose Veins  Process broken mineralized material in surface & u

  22. Slide 22: Advancing mine plan to ensure sufficient mill feed

     Advancing mine plan & development to ensure sufficient mill feed for 400 tons per day  Develop minimum of 10 working faces  Raise bore completed for additional escape way & improved ventilation  Decline ramp to access ores below the Revenue Tunnel level  Includes developed stopes with broken o

  23. Slide 23: NICO vertically integrated shovel-ready project

     Vertically integrated shovel-ready project to recover gold, cobalt, bismuth (12% of global reserves) & by-product copper  Mine & concentrator in NT  Saskatchewan Metals Processing Plant (SMPP) will process concentrates from mine to high value metals & chemicals  Bulk flotation concentrate (<4%

  24. Slide 24: Proven flow sheet for high value metal and chemical products

     Proven flow sheet to produce high value metal & chemical products  Gold: Average annual production of 41,360 ozs in doré bars  Cobalt: Average annual production of 1,615 tonnes in cobalt sulphate heptahydrate (~20.9% Co)  Bismuth: Average annual production of 1,750 tonnes in ingots & needles (>

  25. Slide 25: Cobalt consumption by end use

     Wide chemical & metallurgical markets  Cobalt sulphate & oxide used in lithium ion & Cobalt Consumption by End Use nickel metal hydride batteries for portable 2013 electronic devices & hybrid / electric vehicles Battery Chemicals 3% 7%  Chemicals account for 58% of worldwide 7% 4% (42%) cobalt d

  26. Slide 26: Cobalt: battery use drives demand

    Cobalt: Battery Use Drives Demand 159 UP TO 15% 6 UP 0.60% ‘> GOBALT BY WEIGHT COBALT BY WEIGHT 1-4 1-4kg OF COBALT 2-8 2-8KG OF COBALT k IN ACAR BATTERY kg INACAR BATTERY Cobalt is recognized as strategically important by both the US and European Union as it is critical to a number of metallurgical

  27. Slide 27: Tesla battery plant and cobalt demand

     Tesla has started construction of its $5 billion lithium-ion battery plant in Nevada  By 2020 anticipated to produce more lithium-ion batteries annually than were produced globally in 2013  Model S uses Nickel Cobalt Aluminum (NCA) cathode chemistry from Panasonic (contains ~9% cobalt)  Tesla n

  28. Slide 28: World bismuth production and reserves

     World market ~20,000 tonnes per year  China principal source of bismuth & accounts for 60% of world reserves & 80% of world production  China closed 20% of its production due to environmental & mine safety issues & has policies to restrict exports  NICO is World’s largest deposit - 12% of globa

  29. Slide 29: Bismuth: automotive and health use

    Bismuth: Automotive & Health Use =e per vehicle ut 2 ounces of bismuth in the windshield frit. This black hicle 80 million cars pi ind around the hield to e that secures th Automotive Health Pepto-Bismol? & Rust protection similar stomach Lea ei settling medicines Paint pigments & Cosmetics pearlesc

  30. Slide 30: Bismuth applications and lead replacement

     Traditional uses in low temperature & fusible alloys, cosmetics, chemicals, fire retardants & sprinkler systems  New markets focus on non-toxic, environmentally safe replacement for lead in plumbing & electronic solders, brass, steel & aluminum, ceramic glazes, hot dip galvanizing, pigments & aut

  31. Slide 31: NICO mineral reserves and IOCG deposit

    The NICO mineral reserves are based on 327 drill holes, test mining & surface trenches  Iron Oxide Copper Gold (“IOCG”) class (Olympic Dam-type) deposit  Ore hosted in 3 lenses of ironstone breccia up to 1.3 km in length, 550 m in width, & 70 m in thickness  Underground test mining has verified g

  32. Slide 32: NICO mineral reserves

    Tonnes Au Co Bi Cu Underground Mineral Reserves (Thousands) (g/t) (%) (%) (%) Proven 282 4.93 0.14 0.27 0.03 Probable 295 5.00 0.07 0.07 0.01 Total 577 4.96 0.10 0.17 0.02 Tonnes Au Co Bi Cu Open Pit Mineral Reserves (Thousands) (g/t) (%) (%) (%) Proven 20,453 0.92 0.11 0.15 0.04 Probable 12,047 1.0

  33. Slide 33: 20 year mine life at 4,650 tpd

     20 yr mine life at 4,650 tpd  Additional 5.5 Mt low grade to be stockpiled for future processing  Primarily open pit mining  Underground mining in first 2 years  Early access to high grade improves economics  Co-mingled waste rock & mill tailings  Plant site  Mill & flotation concentrator 

  34. Slide 34: Saskatchewan Metals Processing Plant

     Saskatchewan Metals Processing Plant (SMPP) is a hydrometallurgical refinery that will be built on land owned by Fortune 27 km north of Saskatoon near the Town of Langham  High concentration ratio of NICO ores during flotation reduces mass to <4% in bulk concentrate for efficient transport to by

  35. Slide 35: Positive Feasibility Study with strong economics

    Feasibility Study Highlights – Base Case Positive Feasibility Study with strong economics Mine type Open pit with underground in 2nd year  Vertically integrated project consisting of open pit & underground mine & mill in NT & refinery in SK Open pit: conventional truck & loader Mining method Underg

  36. Slide 36: Permitting and project financing and development

    Permitting substantially complete  EA’s completed for mine & SMPP  Land Use Permit & Class A Water License approvals received Advanced relationships with NT & Tlicho Governments  18 years of active community engagement with Tlicho  Co-operative Relationship Agreement with Tlicho (aboriginal) Gov

  37. Slide 37: Arctos Summary Highlights

    Summary Highlights  One of the world’s premier metallurgical coal development projects  Joint Venture partnership with South Korean steel producer POSCO  C$110 million of work completed including test mining, pilot plant processing & trial cargos  Positive Feasibility Study with robust economics

  38. Slide 38: Arctos anthracite metallurgical coal applications

    Arctos is one of the largest & most advanced Canadian projects of high rank anthracite coal  Highest quality metallurgical coal with very high carbon & energy content  Represents only 1% of world coal reserves Metallurgical coal with diverse applications  Metallurgical Reductants / charge carbon

  39. Slide 39: China coal and anthracite net imports and coking coal price

    China became net coal importer of anthracite in 2004, coking coal in 2007 & all coals in 2009 Coal & Anthracite Net Imports by China 600 $400 Coal Net Imports (Mt) Anthracite Net Imports (Mt) 500 $300 Hard Coking Coal Price (US$/t) $291 $300 400 $215 $209 Hard Coking Coal Price (US$/t) $200 $160 300

  40. Slide 40: Arctos resources and reserves

     Measured & Indicated Resources of 230 Mt - Small fraction of total global resource  Run-of-Mine Coal Reserves of 125 Mt in Lost Fox deposit remains open for possible expansion  Historical Resources include 2 Bn + tonnes in the Speculative class (1) Arctos Global Resources (million tonnes) Area M

  41. Slide 41: Railway road bed and CN extension

     Railway road bed largely constructed to mine site by BC Government  Project economics supports 150 km brownfield extension from Minaret  EA on railway extension underway as part of mine development  MOU advanced with CN to operate railway  Other parties interested in the rail – Dramatic reduct

  42. Slide 42: Arctos Feasibility Study economics

     Marston (Golder) Feasibility Study completed October 2012 based on rail transport to port & diesel power supply  Initial 3 Mtpa production from Lost Fox deposit open pit mine, wash plant & site infrastructure  69.2 Mt of product coal reserves – 25+ years production  Premium ultra-low volatile P

  43. Slide 43: Arctos Milestones to Production

    Initial Mine Closure and Reclamation Engineering & Economic Studies Production Operation Exploration Concept Mineral Resource Construction Mineral Reserve Early Exploration Target Testing MINE PEA PFS FS Arctos 3 – 6 Years 6 – 7 Years 0.5 – 2 Years 5 – 25 Years Arctos Milestones to Production Baseli

  44. Slide 44: Upcoming milestones by project

     Revenue Silver Mine  Complete capital improvements & ramp up to full production  Achieve cash flow from operations  NICO & SMPP Project  Complete detailed engineering & secure remaining permits for construction readiness  Complete re-zoning of SMPP lands  Complete Participation & Socio-econo

  45. Slide 45: Directors and Management

    Directors Mahendra Naik, B Comm, CPA,CA Chairman, Director CFO Fundeco - Founding director & former CFO, IAMGOLD George Doumet, MSc, MBA Honorary Chairman, Director Chemical Engineer – President & CEO, Federal White Cement Robin Goad, MSc, PGeo President & CEO, Director Geologist - 30 yrs mining & e

  46. Slide 46: Fortune Minerals contact information

    ee, FORTUNE \ \ y) ) MINERALS LIMITED Z, Join Fortune’s email list TSX:FT / OTC QX: FTMDF 148 Fulllarton Street, Suite 1600, London, Ontario, Canada N6A 5P3 Troy Nazarewicz, Investor Relations Manager info@fortuneminerals.com | 519-858-8188 | fortuneminerals.com

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