Slide 1: Investor Presentation August 2014
Investor Presentation August 2014 1
Slide 2: Forward-looking statements disclaimer
This management presentation(the “presentation”) was prepared as a summary overview of current information about Fortune Minerals Limited (the “Company”) only and is not a prospectus or other offering documentintended to provide investors with the information required to make investmentdecisions.
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
Slide 4: Revenue Silver Mine and two late-stage projects
Headquartered in London, Ontario, Canada Operating in mining friendly jurisdictions Strong management team with proven records Revenue Silver Mine Historical 15 million ozs silver producer in southwest Colorado, U.S.A. Producer in advanced stages of commissioning & ramping up to 400 tons p
Slide 5: Corporate Information and Share Performance
Corporate Information Share Performance $0.50 Daily Volume 5,000 Listings: TSX (Canada): FT Closing Price $0.45 4,500 OTC QX (USA): FTMDF $0.40 4,000 Trading Volume (M) Share Price C$0.31 $0.35 3,500 Share Price (C$) Shares Out – Basic 190.2 $0.30 3,000 $0.25 2,500 Shares Out – Fully Diluted 198.8 $
Slide 6: Building the next mid-tier diversified producer focused on North America
Building the next mid-tier diversified producer focused on North America • Fully permitted & constructed underground high grade silver mine with Revenue Mine byproduct gold, lead & zinc ramping up to 400 tons per day 38 M ozs Ag Eq. • Historical production of ~15 M ozs silver 1876 - 1912 contained •
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Slide 8: Introduction: Revenue Mine acquisition
Introduction Fully permitted & constructed mine, concentrator & surface facilities ramping up to 400 tons per day First concentrates delivered to Teck Resources’ Trail BC Smelter Staged transaction to acquire 100% interest to maximize returns & minimize risks to Fortune shareholders 32 million
Slide 9: Production of silver, gold, lead and zinc
Production of silver, gold, lead & zinc Lead & Zinc concentrates containing silver & gold sold to Teck Resources smelter in Trail, BC Gravity gold sold to Johnson Matthey in Salt Lake City, Utah Potential to produce copper concentrate for sale to Asia & increase revenue payments Potential
Slide 10: Total Silver Equivalent Ounces by Silver Mine
Total Silver Equivalent Ounces by Silver Mine Great Panther Silver Ltd - Topia United Silver Corp. -Crescent Cresent Mine Great Panther Silver Ltd - Guanajuato District Silvercrest Mines Inc. - El Octo Scorpio Mining Corp. - Nuestra Senora Excellon Resources Inc. - Miguel Auza Fortune Minerals - Rev
Slide 11: 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
Slide 12: Cash cost per EqAg/oz
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 $- Fortuna -
Slide 13: Silver peer valuation comparables
Market Cap EV EBITDA (C$) P / CF EV / EBITDA NAV* Public Companies P / NAV (C$M) (C$M) 2014E 2015E 2014E 2015E 2014E 2015E (C$M) Primero Mining Corp. 1127 1156 120.5 186.9 10.3x 7.2x 9.6x 6.2x 799.9 1.4x Fortuna Silver Mines Inc. 541 491 72.0 93.5 9.4x 7.0x 6.8x 5.3x 540.4 1.0x Endeavour Silver Corp
Slide 14: SRK Preliminary Economic Assessment Highlights
Underground mine using shrinkage methods SRK Preliminary Economic Assessment Highlights 400 ton/day underground mill & concentrator 8 years based on Mine Plan Resource Mine Life including ramp up & ramp down Lead-Silver & Zinc-Silver concentrates sold to Teck Resources Trail Smelter Sustaining
Slide 15: Mine located in Sneffels Silver District, Colorado
Mine located in historic Sneffels Silver District in southwest Colorado, USA 11 km south of Ouray (pop. 1,000), 58 km from Montrose (pop. 19,000) & 490 km southwest of Denver Extensive history of underground mining in area dating back to 19th century Strong community support & pool of skille
Slide 16: Revenue Mine surface infrastructure
Compact site layout Excellent infrastructure near highway with county maintained road to mine Connection to Colorado electrical grid with excess capacity to allow for growth Underground mine with electric & air powered equipment to reduce compressor & ventilation requirements Underground m
Slide 17: Constructed surface facilities and Revenue Tunnel
Office, dry, warehouse & surface shop facilities constructed with primarily new equipment Rehabilitated portal & tracked Revenue Tunnel to access mine & haul mineralized material to mill Shop Underground shop Dry Portal Electrics Tails Filter 17
Slide 18: Geology well understood from a century of mining
Geology well understood from more than a century of mining & exploration work Current resources identified in Yellow Rose & Virginius Veins – Upside opportunities in 6 other veins Resources occur in narrow, steeply dipping, high-grade epithermal quartz-carbonate veins containing tetrahedrite &
Slide 19: Vulcan Plan and Cross Section of Yellow Rose Vein
Vulcan Plan & Cross Section of Yellow Rose Vein Extensive geological database in Vulcan software includes historical & modern data 1880-2014 Virginius Vein - 266 drill holes, totalling 81,502 feet with 985 samples of vein, plus 1,296 channel samples of vein, totalling 1,819 feet Yellow Rose Ve
Slide 20: 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
Slide 21: 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
Slide 22: 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 Description Tons (kt) Ag (oz/t) Au (oz/t) Pb (%) Zn (%) Measured Indicated 369.8 19.68 0.03 2.91 0.83 Virginius Measured + 369.8 19.68 0.03
Slide 23: Revenue Tunnel access and mining methods
Veins accessed from ~7400 foot (2.3 km) long tracked Revenue Tunnel crosscut, plus ~5600 feet (1707 m) of drifting on 2 main veins Internal winze ~710 feet deep (216 m) to access 4 additional levels of Virginius Vein Mining primarily by underground shrinkage methods from Alimak raises Slushe
Slide 24: Ball Mill and Flotation
Ball Mill & Flotation Bulk Flotation Crushing Gallery 24
Slide 25: Virginius Vein – Ore Production Zones
Area of high grade gold shoots not quantified in resource model Potential production of copper concentrate Upside to add tonnage from horizontal & vertical projection of known veins Process broken mineralized material in surface & underground stockpiles from historical mining 6 additional
Slide 26: Acquisition and ramp-up priorities
Accretive & transformational acquisition that transitions Fortune to producer with cash flow Securing financing to fund second stage of acquisition Completing execution of transition plan with current owners & integrating management team Advancing mine plan & development to ensure sufficient
Slide 27: NICO vertically integrated gold-cobalt-bismuth project
Vertically integrated project to recover gold, cobalt, bismuth (12% of global reserves) & by- product copper Mine & concentrator in NT Saskatchewan Metals Processing Plant (SMPP) in SK to process concentrates from mine to high value metals & chemicals Bulk flotation concentrate (3.8% of orig
Slide 28: 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
Slide 29: Proven flow sheet to produce high value products
Proven flow sheet to produce high value products Gold: Doré Bars Cobalt: Sulphate Heptahydrate (~20.9% Co) – Potential to diversify production with cathode, Carbonate, Oxide, Chloride & Nitrate Bismuth: ingot (>99.995% Bi), needles (>99.995% Bi) & Oxide (89.7% Bi) Copper: Cement (~90% Cu)
Slide 30: Cobalt Consumption by End Use
Wide chemical & metallurgical market applications in batteries, high strength alloys, Cobalt Consumption by End Use cutting tools, magnets, catalysts & pigments 2013 High purity cobalt used in aerospace industry Battery Chemicals 4% 3% 7% Cobalt sulphate & oxide used in lithium ion & 7% (42%)
Slide 31: Cobalt: Battery Use Drives Demand
Cobalt: Battery Use Drives Demand BATTERY USAGE ACCOUNTS NICKEL-METAL HYDRIDE LITHIUM-ION FOR 42% OF COBALT DEMAND BATTERIES BATTERIES 159 UP TO 15% 6 UP TO 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 st
Slide 32: Tesla lithium-ion battery plant
Tesla plans to build $5 billion lithium-ion battery plant in US Anticipated to produce 500,000 lithium-ion batteries by 2020 – more than were produced globally in 2013 Model S uses Nickel Cobalt Aluminum (NCA) cathode chemistry from Panasonic (contains ~9% cobalt) Tesla prefers North America
Slide 33: World Bismuth Reserves and Mine Production
World market ~15,000 to 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 – Policies to restrict exports NICO is World’s largest deposit - 12% of
Slide 34: Bismuth: Automotive and Health Use
Pie iL ° fo LJ \ A E om U |_ am Ll > Gr Bismuth: Automotive & Health Use per vehicle of bismuth in the winc secures thi 80 million ca ind around the shield frit. This black id to the vehic Automotive Health Pepto-Bismol? & Rust protection similar stomach Lei ei settling medicines Paint pigments & Co
Slide 35: 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
Slide 36: Positive Feasibility Study with strong economics
Positive Feasibility Study with strong economics Feasibility Study Highlights – Base Case Vertically integrated project consisting of open pit Mine type Open pit with underground in 2nd year & underground mine & mill in NT & hydrometallurgical refinery in SK Mining method Open pit: conventional tr
Slide 37: Average Annual Revenues by Metal - Base Case
100 Average Annual Revenues by Metal - Base Case 90 80 $76 70 $63 60 $55 C$M 50 40 30 20 10 $2 0 Cobalt Sulphate Gold Bismuth Copper Annual Production 3,560,400 lbs 41,360 oz 3,824,400 lbs 582,500 lbs Metals Contained % of Revenue 39% 33% 27% 1% 37
Slide 38: Permitting, relationships, 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 Signed Co-operative Relationship Agreement with Tlicho (aboriginal) Government Infrastructure, Socio-Economic & Part
Slide 39: Arctos Summary Highlights
Summary Highlights One of the world’s premier metallurgical coal development projects Joint Venture partnership with South Korean steel producer POSCO Advanced project with C$110 million of work completed including test mining, pilot plant processing & trial cargos Positive Feasibility Study
Slide 40: Arctos Measured and Indicated Resources of 230 Mt
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
Slide 41: Arctos high rank anthracite coal
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
Slide 42: China coal and anthracite net imports
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
Slide 43: Arctos railway 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
Slide 44: Arctos Feasibility Study
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
Slide 45: 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
Slide 46: Upcoming milestones by project
Revenue Silver Mine Complete acquisition of mine & transition with management 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
Slide 47: 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
Slide 48: 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