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Emerging Strategic
Metal & Coal
ProducerFortune Minerals Limited
SASKATCHEWAN METAL PROCESSING
PLANT
February 2011
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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 mineral resources, progress in development of
mineral properties, timing and cost for placing the Company’s mineral projects into production, costs of
production, amount and quality of metal products recoverable from the Company’s mineral resources,
demand and market outlook for metals and coal and future metal and coal 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, uncertainties with respect to the
receipt or timing of required permits and regulatory approvals, the uncertainties involved in interpreting
drilling results and other geological data, fluctuating metal and coal 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, uncertainties related to metal recoveries 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. Readers are cautioned to not place undue reliance on forward-looking information
because it is possible that predictions, forecasts, projections and other forms of forward-looking information
will not be achieved by the Company. The forward-looking information contained herein is made as of the
date hereof and the Company assumes no responsibility to update them or revise it to reflect new events or
circumstances, except as required by law.
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Corporate
Information
Share
Performance
London, Ontario based mineral development company in transition to mid-tier producer
Listing: TSX-FT
Share Price: $ 1.66 (February 04 ,2011)
Issued Shares: 107 million
Fully Diluted: 127 million
Market Cap: $ 187 million
Total Assets: $ 127.6 million (Q3-2010)
China Mining Resources Group Ltd. ~16%
Manulife Global Management US ~ 11%
Officer & Director Holdings ~26% (includes China Mining)
As of January 12, 2011
All values in C$ unless otherwise noted
Analyst Reports
Ownership
David Davidson, Paradigm Capital
Michael Fowler, Loewen Ondaatje McCutcheon
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Small junior mining company
Experienced directors & management team
14 full time employees
Two large advanced stage projects Mount Klappan in BC
(anthracite coal)
NICO Project which includes the mine in the NWT and the Saskatchewan Metals Processing Plant (SMPP)
Who Is Fortune Minerals?
2/16/2011
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MASÌ CHO – THANK YOUThe NICO Project consists of:- Mine & mill in Tłįchǫ Territory
- Metal refinery near Saskatoon,
Saskatchewan
Emerging Strategic
Metal & Coal
Producer
NICO MINE
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LOCATION & INFRASTRUCTURE
City of Yellowknife (160 km SE)
5,140 Ha mining lease
Current access by winter road
New road planned to Behchokǫ & Hwy 3 135 km all-season road required for
concentrate transport & mine supply Fortune contributing to road
Railway terminus at Hay River -500 km south
Sue-Dianne Project 10 million tonne resource 24 km
north of NICO
Future NICO mill feed
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NICO GOLD-COBALT-BISMUTH-COPPER PROJECT SUMMARY
100% Ownership Mine & Concentrator in NWT $78 million work completed to date,
includes: $20 million test mining $6.5 million process pilot plants
2007 positive feasibility study & 2008 update
Golden Giant (Hemlo) buildings & equipment purchased & dismantled to reduce CAPEX
Environmental Assessment in progress in NWT
BNP Paribas engaged to arrange up to US$250 Million in project financing
Targeting production in late 2012
Test mining 2006/2007
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18 yr mine life at 4,650 tpd
Reserves: 31 million tonnes (Mt) Additional 6.5 Mt low grade to be
stockpiled for future processing
Primarily open pit mining Underground mining also in yrs 1&2 Early access to high grade improves
economics
Co-mingled waste rock & mill tailings Plant site Mill & flotation concentrator Power plant Camp & ancillary buildings
150 employees (250 during underground operations)
NICO MINE & CONCENTRATOR - NWT
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Refinery in Saskatchewan will process NICO concentrates
65,000 tonnes of concentrate per year (5 trucks/day) will be trucked from NICO to Hay River in bags
Concentrate bags will be shipped from Hay River to Saskatchewan on CN Railway
CONCENTRATE SHIPPING
Emerging Strategic
Metal & Coal
ProducerSASKATCHEWAN
METAL PROCESSING
PLANT (SMPP)
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Hydrometallurgical process plant will process NICO concentrates
Agreement to purchase lands 3 km from Langham
Located on CN Rail line Close to Trans-Canada Hwy Inexpensive power compared to NWT Close to natural gas, water and reagent
sources Pool of skilled chemical plant workers &
engineers
SASKATCHEWAN METALS PROCESSING PLANT (SMPP)
NICO
Saskatoon
CN Rail Canadian Route Map
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SMPP SITE LAYOUT – SOUTH SIDE
Flotation
Autoclave
Precipitation
IX
Reagents
Solid/Liquid Separation
Service Complex
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SMPP SITE LAYOUT – NORTH SIDE
Warming Shed
Cyanidation
Process Water, RO
Oxygen Plant
Bismuth Building
Cu SX/EW
Cooling Pond
Co EW
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SMPP PROCESSING1. Bulk concentrate processed by
secondary flotation to produce separate gold-bearing cobalt & bismuth concentrates
2. Bismuth concentrate processed by ferric chloride leach - then electro-winning to 99.5% cathode
3. Cyanidation of Bismuth residue for gold recovery
4. Pressure acid leach of cobalt concentrate in autoclave -cyanidation of residue for gold recovery
5. Copper recovered by solvent extraction & electro-winning to 99.99% cathode
6. Cobalt solution purified by ionic exchange & electro-winning to 99.8% cathode
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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 – Super conductors, CD’S & auto anti-corrosion
Environmentally safe (non-toxic) replacement for lead in: solder (plumbing &
electronics), hot-dip galvanizing, plumbing brasses, ceramic glazes, ammunition,
radiation shielding, paint pigments & free cutting steel
MCP Group – LOI with World’s largest processor to purchase all production
Copper: By-product of cobalt processing
World Consumption: ~ 18 million T
Principal Markets: electronics / wire, pipe, brasses & other alloys, & coinage
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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 strength alloys, cutting tools, cemented carbides & magnets
Chemical markets: lithium ion & nickel metal hydride batteries, catalysts, agriculture & pigments
Key growth areas: batteries for electronic devices & hybrid / electric vehicles, catalysts for petroleum refining, turbines
LME: Initiated trading in 2010 – Futures market
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Process Water
Overall process water requirement is 50 cubic metres(m3)/hour (183 GPM)
Would require 80 m3/hour (293 GPM) at start-upsWater will be drawn from the Dalmeny aquifer from two wells with a third in
reserve
Alternative Water Source Investigation
Study was completed to determine feasibility of using Town of Langham and/or Dalmeny treated sewage effluent as process water
Limitation was the high amount of chlorides in the treated sewage effluent
Chlorides would damage processing equipment
Consequently, only a small portion of the treated sewage effluent could be used and would have to be blended with water from the aquifer
Capital costs associated with pumping treated sewage effluent to the SMPP site combined with limitation on volume of water that could be used made option cost prohibitive
Fortune has left a portion of the land at the SMPP site available should other options become available
Process Water Requirements
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Fortune will be able to re-cycle process water within the facility
Chlorides will build up in the process water to a point where they will need to be discharged or the chlorides in the water will harm the equipment
TDS of solution will be 47,600 mg/L
Fortune will use a deep well injection system into the deep Manville saline aquifer (TDS 30,000-70,000 mg/l) for the chloride solution
Volume would 30 m3/hour
No other water discharge from the process plant to the environment will occur
Deep Well Injection of Chlorides
Emerging Strategic
Metal & Coal
ProducerENGINEERING STUDIES
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Test Pit Excavation
Excavated test pits to describe the soils encounteredGeotechnical field and laboratory tests.
Geotechnical Investigation for Foundations Analysis
Objective was to determine engineering design criteria for the design and construction of site building foundations;
Program included:
drilling and logging boreholes, Installing a standpipe piezometer to measure the shallow
groundwater elevation; Conducting soil resistivity testing; and, Conducting laboratory testing of soil samples
Geotechnical Investigation for Storage Facilities
Drilling and logging of boreholes; and,Geotechnical field and laboratory tests.
Geotechnical Investigations
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Hydrogeological (Groundwater) Field Studies
The groundwater studies provided information on the following:
Shallow hydrogeology (groundwater); Baseline conditions for the major aquifers
beneath the proposed site; and, Other hydrogeological baseline information in
support of the design of the SMPP and PRSF.
The groundwater information will:
Help develop the predictions in the EIS; Be used to simulate Fortune’s use of the
aquifer in relation to other third-party users; and,
Provide instrumentation that can be used for long-term monitoring of the PRSF and groundwater production in the vicinity of the site.
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26 boreholes were drilled at 21 locations; including 5 piezometer stack locations (2 at each location);
5 deep boreholes were drilled to provide stratigraphic information;
21 shallow auger holes were drilled for both geotechnical and hydrogeological purposes;
5 piezometers were installed in the Upper Floral Aquifer and 11 were installed at the oxidized/unoxidized Floral Formation till contact;
The piezometers were used to acquire baseline groundwater;
A 10-inch diameter groundwater production well was installed in the Dalmeny Aquifer at a depth of approximately 45.7 m (150 ft);
Conducted a step-drawdown pumping test and a 24-hour constant-rate pumping test;
Drawdown and recovery at the production well(s) and the specified observation well(s) were monitored; and,
The results of this pump test were used to model the potential impact of Fortune’s water withdrawal on the Dalmeny aquifer.
Groundwater Investigations
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Approximately 158,000 tonnes/year of process residue;
Cells 1-8 will provide 18 years of residue storage capacity;
Each cell will hold between 2 and 2.5 years of residue;
The design allows for an additional 7 years of storage capacity if Fortune should elect to expand the facility;
The level of containment proposed for the PRSF meets or exceeds that in place for any other containment facility in Saskatchewan and will virtually eliminates the potential for leachate migration; and,
The primary mineral constituents of the residue are projected to be: Gypsum (CaSO4 2H2O) – 53% of total;
Scorodite (FeAsO4 2H2O) – 45% of total; and,
Actinolite (K,Na)Ca2(Mg,Fe)5Si8O22(OH)2 – 2% of total.
Process Residue Storage Facility (Storage)
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Process Residue Storage Facility (Design)
A ‘dry tomb’ approach will provide long-term storage of the residue
Each cell will: be constructed above the groundwater table and be capped with a ‘store
and release’ engineered cover system when full; consist of a 4.65 m deep excavation and 2 m high containment dyke; have a dual containment liner;
The primary liner is a composite liner consisting of a geomembrane and approximately 0.65 m compacted soil liner;
have a leak detection provided by a geocomposite material installed beneath the primary liner;
have a secondary liner provided by approximately 0.2 m of a compacted soil liner under the geocomposite material;
There is approximately 11 m of low conductivity till between the base of the PRSF and the Dalmeny Aquifer; and,
Surface and sub-surface water quality will be monitored during operation of the PRSF
Emerging Strategic
Metal & Coal
ProducerENVIRONMENTAL
STUDIES AND IMPACT
ASSESSMENTS
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Fortune is currently compiling the Environmental Impact Statement (EIS) for submission to Saskatchewan Ministry of Environment (SE): Draft Project Specific Guidelines (PSG’s) have been issued
for public comment and are available at the following website: www.environment.gov.sk.ca (Programs and Services/ Environmental Assessment/ Notices/ Section 10-2010-064);
Deadline for public comments is February 23rd, 2011; Comments or concerns can also be brought forward to SE,
Fortune staff or their consultant for consideration in the EIS; Project is also subject to a re-zoning process for the RM of
Corman Park; Permits for the project are expected later this year; and, Initiation of construction activities will depend on the timing
of permits and the NICO mine schedule.
Environmental Impact Statement
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Environmental Studies
Baseline environmental studies of the site and surrounding area were completed in the spring, summer, and fall of 2010 and included:
Water quality (surface and groundwater);
Air quality (dust fall collection);
Hydrology;
Noise (baseline noise levels);
Soils characteristics;
Heritage Resource Impact Assessment (HRIA); and,
Biological assessment (e.g. vegetation including rare plants, wildlife, wetlands, birds).
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Water quality samples were taken from both surface water and groundwater sources
Routine water chemistry (total alkalinity, bicarbonate, hydroxide, carbonate, chloride, pH, conductivity, nitrate-N, nitrite-N, ion balance, total dissolved solids (TDS), hardness, calcium, potassium, magnesium, sodium, and sulphate);
Trace metals (Ag, Al, As, B, Ba, Be, Bi, Ca, Cd, Co, Cr, Cu, Fe, Hg, Pb, Mg, Mn, Mo, Na, Ni, Sb,Se, Sr, Ti, Tl, Sn, U, V, Zn);
Hydrocarbon testing for BTEX (Benzene, Toluene, Ethylbenzene, and Xylene).
PAH (Polycyclic Aromatic Hydrocarbons);
PCB’s; and,
Coliforms (total and fecal).
Water Quality Sampling
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Objective was to collect baseline background chemistry from existing users within a 3.2 km radius around the site;
Fortune staff visited and interviewed 31 3rd party well owners in April and June 2010;
Water samples from each well were submitted to an Accredited Saskatchewan Laboratory for testing as well as trip, field and duplicate samples
Water quality parameters tested were the same as the surface and groundwater sampling program
Results were sent to the individual well owners
Some parameters exceeded drinking water guidelines (e.g. uranium, selenium and TDS).
Third Party Water Well Baseline Study
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SMPP Water Withdrawal From Aquifer
Pump test showed a long-term production rate of 121 GPM
To meet SMPP water demand of 183 GPM, a well array will be used (2 actives wells and 1 back-up)
A conservative 3D groundwater flow model was used to determine the short and long-term impact of SMPP aquifer water use
The model simulated water production from all major users including the town of Langham at its maximum licensed pumping rate
A maximum drawdown rate of 15.7 m is predicted at the end of the project within the site boundary
Langham water supply will not be affected
Nearby wells may see up to a 3.5 m drop in well water levels under worst case conditions
Fortune Minerals would mitigate wells that become unproductive
By 2049, all third party wells will recover to 2 m or less of the simulated 2011 condition
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Air Quality Modeling Results
The estimated concentrations of PM2.5 and all metals including Cobalt beyond the property boundary are lower than the regulatory ambient air objectives;
Dominant Green House Gases (GHG) from the proposed facility include CO2, water vapour, and NOX;
The GHG emission rates and the corresponding concentrations from the facility are not expected to have a significant impact on regional and global scales;
The proposed mitigative measures include bag houses, demisters, and scrubbers with single and double stages; and,
Cumulative effects are negligible since no major industrial developments that emit significant air emissions are situated within a 10 km radius from the proposed facility.
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Noise Modeling Results
The results of the noise modeling indicate that the Permissible Sound Level is slightly exceeded at two of the receptor locations (R2 and R4);
However, further noise monitoring will not be completed at this time, since actual noise levels are expected to be lower than those predicted here due to the conservative nature of the model; and,
Further monitoring may be conducted if any mitigation measures are required.
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Process Residue Storage Facility (Closure)
Cells will be capped with an engineered cover once filled;
The cover over the cells will greatly reduce dust generation;
A vegetated store and release cover with a capillary barrier should greatly reduce the amount of water and oxygen entering the storage cell.
Run-off from the PRSF will be collected by perimeter ditches and diverted to a pond where it can be monitored.
The low profile of the PRSF (2 m containment dykes) will facilitate return of the site to agricultural or recreational use.
Continued monitoring of the storage cells will be required to ensure no contaminants are escaping the facility.
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Employment
Approximately 85 people will be employed in the following areas:
Processing Plant Metallurgists Foreman Operators
Analytical Group Chemists Technicians
Power and Maintenance Services Superintendent Engineers Various trades (e.g. welder, millwright, pipefitter, carpenter, etc.) Technicians
Administration Managers Accountants Purchasing and Stores
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Expanded production from NICO (Sue-Dianne deposit)
Custom processing of ores & concentrates from other projects Central location with rail access for receiving concentrates &
delivery of products Sophisticated hydrometallurgical process plant for processing
unique & refractory ores
Expansion into recycling business Process technology allows for re-processing of cobalt &
bismuth residues & other processed materials Strategic location in central Canada allows for receiving
materials from North American industrial heartland CN Rail access allows for receiving of recyclable materials &
delivery of products
FUTURE OPPORTUNITIES FOR SMPP
Emerging Strategic Metal & Coal Producer
For further information, please contact:
Pat Moloney, Manager Human Resources
140 Fullarton Street, Suite 1902
London, Ontario, Canada
N6A 5P2
Tel. (519) 858-8188
Fax. (519) 858-8155
E-mail. info@fortuneminerals.com
Website. www.fortuneminerals.com
TSX-FT
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