Fortune Minerals announces agreement in principle to purchase minority interest in NICO project
Tuesday May 29, 8:00 am ET
biz.yahoo.com
LONDON, ON, May 29 /CNW/ - Fortune Minerals Limited (TSX-FT) ("Fortune") is pleased to announce that it has reached an agreement in principle with Candou Industries Inc. ("Candou") to purchase its 9.2% minority interest in the NICO cobalt-gold-bismuth project in the Northwest Territories not held by Fortune. As part of this same transaction, Fortune would also transfer its 30% minority interest in Formosa Environmental Aggregates Ltd. ("Formosa") to Federal White Cement Ltd. ("Federal"). Formosa is an industrial mineral company developing a high calcium limestone quarry in Ontario.
"In addition to providing Fortune with a 100% interest in NICO, this transaction will simplify Fortune's corporate structure and allow the Company to focus on its two core assets, NICO and the Mount Klappan anthracite coal deposits in northwest British Columbia," said Robin Goad, Fortune's President and C.E.O.
Under the terms of the proposed agreement, Fortune will issue to Candou 1,000,000 common shares of Fortune and 100,000 common share purchase warrants exercisable at $3.00/share for a term of five years from the date of issuance. In addition to the transfer of its minority interest in Formosa to Federal, the Company will also transfer Formosa's indebtedness to Fortune for shareholder advances in the amount of approximately $240,210.
Candou and Federal are both private companies controlled by Fortune's Chairman, George Doumet. The agreement with Candou and Federal has been approved by the disinterested directors of Fortune, subject to receipt of an opinion from Desjardins Securities Inc., who was retained by the disinterested directors, that the transaction is fair, from a financial point of view, to Fortune. The transaction is also subject to completion of definitive documentation and regulatory approval. After completion of the transaction, George Doumet will control, directly and indirectly, 4,356,324 shares of Fortune.
The NICO cobalt-gold-bismuth deposit is located 160km northwest of Yellowknife, 22km west of the Snare hydro complex and 85km north of the community of Behchoko and the highway to Edmonton, Alberta. The project has already been assessed in a positive full feasibility study led by Micon International Limited. Fortune is entering the permitting process to develop a combined underground and open pit mine to produce cobalt cathode, gold dore and bismuth bullion in a process plant to be constructed at the site. Phase 1 of underground test mining was completed at NICO in 2006 and a second $10-million test mining program is underway to deepen the underground workings. Approximately 250 tonnes of ore has been composited and will be used in a large-scale pilot plant test planned for later this year at SGS Lakefield Research Ltd. in Ontario. Notably, Fortune has also purchased the Golden Giant mine buildings, equipment and approximately $2 million in spare parts inventory from Newmont Canada at Hemlo, Ontario, which Fortune plans to relocate to NICO.
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, 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, 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
Robin Goad, President, Tel.: (519) 858-8188, Fax: (519) 858-8155, info@fortuneminerals.com
Greg Taylor, Investor & Public Relations, Tel: (416) 605-5120, Fax: (905) 844-6532, gtaylor@fortuneminerals.com
www.fortuneminerals.com
Source: Fortune Minerals Limited |
