Slide 1: Fortune Minerals Limited Investor Presentation March 2011
Emerging Strategic Metal & Coal Fortune Minerals Limited Producer Investor Presentation March 2011 TSX-FT
Slide 2: Forward-Looking Information
FORWARD-LOOKING INFORMATION This document contains certain 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 min
Slide 3: Fortune Minerals Investment Highlights
FORTUNE MINERALS INVESTMENT HIGHLIGHTS 2 development stage projects in permitting stage: NICO Gold-Cobalt-Bismuth-Copper Project, NWT & Saskatchewan 4 million equivalent gold ozs, significant cobalt & largest deposit of bismuth in world Mount Klappan Anthracite Coal Project, British Columbia
Slide 4: Property Interests
PROPERTYINTERESTS PROPERTY INTERESTS CanadaFocus Canada Focus- Operating - Operatingininmining miningfriendly friendlyjurisdictions jurisdictions 4
Slide 5: Corporate Information and Ownership
Listing: TSX-FT Share Price: $ 1.80 Issued Shares: 107.2 million Corporate Fully Diluted: 126.9 million Information Market Cap: $ 193 million Working Capital: $ 8.7 million (Q3- 2010) Total Assets: $ 127.6 million (Q3-2010) China Mining Resources Group Ltd. ~16% Ownership Manulife
Slide 6: Mount Klappan Anthracite Coal Project Highlights
MOUNT KLAPPAN ANTHRACITE COAL PROJECT HIGHLIGHTS 100% owned by Fortune Minerals 2.8 billion tonne resource – One of world’s largest undeveloped deposits of metallurgical coal Definitive Feasibility Study demonstrates robust economics Very well understood geology, with test mining & processin
Slide 7: Strategic Location & Infrastructure
STRATEGIC LOCATION & INFRASTRUCTURE Large license area in northwest B.C. (15,866 Ha) Close proximity to deep water shipping ports Stewart Port (150km) Ridley Terminals in Prince Rupert (330km) Close proximity to Asian markets Port of Prince Rupert 36 hours closer to Asian ports than othe
Slide 8: Mount Klappan Resources & Reserves
MOUNT KLAPPAN RESOURCES & RESERVES Mount Klappan Resources (million tonnes)(1) (3) (4) Area Measured Indicated Demonstrated Inferred Speculative Lost Fox 107.9 109.5 217.4 91.5 749.6 Hobbit-Broatch - 13.5 13.5 258.4 753.0 Summit - - - 9.6 508.9 Nass - - - - 201.5 Total 107.9 123.0 230.9 359.5 2,21
Slide 9: Anthracite Products & Use
ANTHRACITE PRODUCTS & USE Highest quality coal with very high carbon & energy content Anthracite only 1% of world coal reserves Metallurgical coal with diverse applications Filter Media US$ 350 / tonne Metallurgical Reductants / charge carbon US$ 350 / tonne Ultra-Low Vol. PCI US$ 200 / tonne
Slide 10: Very Attractive Market Dynamics for Anthracite / PCI
VERY ATTRACTIVE MARKET DYNAMICS FOR ANTHRACITE / PCI World anthracite production: ~ 565 million tonnes China: 483 million tonnes – a net importer of anthracite Vietnam: 43 million tonnes – reduced exports with plans to utilize all production domestically Few new high-quality deposits in mini
Slide 11: 2010 Definitive Feasibility Study (DFS) – Overview
2010 DEFINITIVE FEASIBILITY STUDY (DFS) – OVERVIEW November 2010 DFS update to 2005 & 2008 DFS Based on railway transport of coal from mine to Ridley Coal Terminal in Prince Rupert Initial production from Lost Fox deposit open pit mine, wash plant & site infrastructure 60.8 Mt of product coa
Slide 12: Existing & Proposed Rail Transportation
EXISTING & PROPOSED RAIL TRANSPORTATION CN Main Line (green) extends between Prince George & Prince Rupert CN operates on the red shaded part of Dease Lake Line - $ 175 million upgrade for unit trains Orange shaded part of Dease Lake Line – track removed 2 years ago Blue shaded part of Dease
Slide 13: Ridley Coal Terminal in Prince Rupert
RIDLEY COAL TERMINAL IN PRINCE RUPERT Ice-free, deepwater port capable of handling full Capesize vessels ~US$ 10/tonne reduction in ocean freight World Class coal & bulk materials handling facility with 16 Mtpa capacity Serviced by Provincial highway & CN Rail Main Line Significant capacity:
Slide 14: Significant Upside Potential Beyond 2010 DFS
SIGNIFIANT UPSIDE POTENTIAL BEYOND 2010 DFS DFS reserves only represents 3.6% of total resource Simultaneous development of the Hobbit Broatch deposit or more rapid mining of the Lost Fox deposit would produce improved economics Rail transportation allows for higher annual production than 3 Mt
Slide 15: Recap of Mount Klappan Investment Case
RECAP OF MOUNT KLAPPAN INVESTMENT CASE One of world’s largest undeveloped deposits with 2.8 billion tonne resource Robust economics – DFS shows pre-tax NPV of $1 billion & IRR of 25.4% mining just 3.6% of total resource Updated DFS with railway development option recently completed – Simpler &
Slide 16: NICO Gold-Cobalt-Bismuth-Copper Project Highlights
NICO GOLD-COBALT-BISMUTH-COPPER PROJECT HIGHLIGHTS 100% Ownership – No 3rd party royalties Mine & mill in NWT Open pit & underground mine & concentrator Saskatchewan Metals Processing Plant (SMPP) Vertically integrated hydrometallurgical facility to produce gold doré, cobalt & copper catho
Slide 17: Mine Location & Infrastructure
MINE LOCATION & INFRASTRUCTURE 5,140 Ha lease in southern NWT Winter access roads New all-weather road planned by governments to Hwy (135 km) $18 million in place for stage 1 – realignment, bridges & roadbed Engineering & environmental work underway 450 km from railway at Hay River for t
Slide 18: NICO Mineral Reserves
NICO MINERAL RESERVES Underground Mineral Reserves Tonnes Au (g/t) Co (%) Bi (%) Cu (%) Proven 1,403,000 2.23 0.16 0.22 0.04 Probable 767,000 2.92 0.17 0.19 0.03 Total 2,170,000 2.47 0.16 0.21 0.03 Open Pit Mineral Reserves Tonnes Au (g/t) Co (%) Bi (%) Cu (%) Proven 15,019,000 0.85 0.12 0.16 0.04 P
Slide 19: Diversified Exposure to Gold & Specialty Metals
DIVERSIFIED EXPOSURE TO GOLD & SPECIALTY METALS Gold: Largest source of revenue in first yr of operation – Counter cyclical hedge Cobalt: Significant demand growth - Principal sources in politically unstable countries World consumption: ~70,000T ~ 6% annual growth Metallurgical markets: high
Slide 20: Diversified Exposure to Gold & Specialty Metals – Bismuth
DIVERSIFIED EXPOSURE TO GOLD & SPECIALTY METALS Bismuth: Largest deposit in world – China principal source – supply concerns World consumption: ~15,000T Traditional markets – fusible alloys, cosmetics, chemicals, ointments, medicines, lubricants, electronics & flame retardants New markets –
Slide 21: Underground Test Mining & Pilot Plant Processing
UNDERGROUND TEST MINING & PILOT PLANT PROCESSING Mining conditions, geometry & grades for deposit confirmed Environmental impacts assessed Portal, decline ramp & 2 mine levels established with ventilation raise to surface ~$20 million pre-production development completed Large sample colle
Slide 22: Golden Giant Mine (Hemlo) Mill, Ontario
GOLDEN GIANT MINE (HEMLO) MILL, ONTARIO Buildings, equipment & spare parts acquired from Newmont Canada Relocation to NICO for significant reduction in CAPEX & project risk No environmental liability for Hemlo site Dismantling & removal completed for net cash cost of ~$18 million Includes
Slide 23: 2008 Definitive Feasibility Study
2008 DEFINITIVE FEASIBILITY STUDY Micon, Met-Chem, Golder, SGS Lakefield & metallurgical & engineering experts Open pit mine with underground mining contribution in yrs 1 & 2 Maximize gold recovery & high grades during initial production Simple flotation to produce high value concentrate H
Slide 24: Post-Definitive Feasibility Study Improvements
POST-DEFINITIVE FEASIBILITY STUDY IMPROVEMENTS 43% increase in reserves to 31 Mt – 18 Yr mine life - Excludes results of 2010 drilling 16% production rate increase to 4,650 tpd New more efficient mine plan - Eliminated underground backfilling – More underground mill feed Identification of lo
Slide 25: Saskatchewan Metal Processing Plant (SMPP)
SASKATCHEWAN METAL PROCESSING PLANT (SMPP) Hydrometallurgical plant to process NICO concentrates to high value metal products Agreement to purchase lands near Saskatoon Located on CN Rail line Close to Trans-Canada Hwy Inexpensive power (5.7 cents/kWh) Close to natural gas & water NICO
Slide 26: 2010 NICO Drill Program
2010 NICO DRILL PROGRAM 37 new drill holes completed in 2010 to extend deposit & better delineate limits Particular emphasis on extending gold-rich central core to depth Drilling very successful in expanding deposit & intersecting high-grade gold intervals:. 51.3m averaging 2.2 g/t Au & 0.11
Slide 27: Current Status of NICO Project
CURRENT STATUS OF NICO PROJECT Average Annual Metal Production: Gold: yrs 1&2 of mine life: ~66,400 ozs, yrs 3-18 of mine life: ~31,500 ozs Cobalt: ~3.4 million lbs (1,550 tonnes) Bismuth: ~ 3.65 million lbs (1,650 tonnes) Copper: ~ 770,000 lbs (350 tonnes) Average revenue: ~$100/T, $170
Slide 28: Strategy for Shareholder Value Recognition
STRATEGY FOR SHAREHOLDER VALUE RECOGNITION Market Capitalization: $ 170 Million: undervalues 2 major projects with feasibility NPV’s collectively > $ 1.3 Billion, $ 8.7 million working capital & ~$ 40 million(1) in Hemlo equipment Joint venture Mount Klappan with strategic partner: Deloitte
Slide 29: Directors and Management
Directors George Doumet, MSc, MBA Chairman, Director Chemical Engineer – President & CEO, Federal White Cement Robin Goad, MSc, Pgeo President & CEO, Director Geologist - 29 yrs mining & exploration experience David Knight, BA, LLB Secretary, Director Partner, Macleod Dixon specializing in securitie
Slide 30: Contact Information
Emerging Strategic For further information, please contact: Metal & Coal Robin Goad, President & Chief Executive Officer Lindsay Simmons, Investor Relations Coordinator Producer 140 Fullarton Street, Suite 1902 London, Ontario, Canada N6A 5P2 Tel. (519) 858-8188 Fax. (519) 858-8155 E-mail. info@fort