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Fortune Minerals June 2012 Investor Presentation
- 1. Emerging Strategic Metal & Coal Fortune Minerals Limited Producer Investor Presentation June 2012 TSX-FT
- 2. FORWARD-LOOKING INFORMATION This documentcontains 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. 2
- 3. Listing: TSX-FT, OTCQX-FTMDF Share Price: $ 0.67 Issued Shares: 117.1 million Corporate Fully Diluted: 123.5 million Information Market Cap: $78.5 million Working Capital: $ 24.9 million (Q1- 2012) Total Assets: $ 155.7 million (Q1-2012) China Mining Resources Group Ltd. ~13% Ownership Manulife Global Management US ~ 9%* Officer & Director Holdings ~21% (includes China Mining) Killian Charles, Industrial Alliance Securities ($3.30 Target 01/31/12) Analyst Reports David Davidson, Paradigm Capital ($2.85 Target 07/15/11) Michael Fowler, Loewen Ondaatje McCutcheon ($2.65 Target 05/10/12) Share Performance As of May 24, 2012 All values in C$ unless otherwise noted 3 *Precision IR data at April 12, 2012
- 4. PROPERTY INTERESTS 1. Mount Klappan Anthracite Coal Deposit: British Columbia 2. NICO Gold-Cobalt-Bismuth-Copper Deposit: Northwest Territories 3. Saskatchewan Metals Processing Plant Saskatchewan 4. Sue-Dianne Copper-Silver-Gold Deposit Northwest Territories 5. Salkeld Lake Copper-Zinc-Lead-Gold-Silver Project Northwest Territories 6. Camsell River Silver Project Northwest Territories Canada Focus - Operating in mining friendly jurisdictions 4
- 5. EMERGING PRODUCER OFGOLD, MET. COAL & SPECIALTY METALS KEY ASSETS Mount Klappan Anthracite Coal Project, British Columbia (BC) One of the world’s premier metallurgical coal development projects JV partnership with South Korean steel producer POSCO Collaboration with CN Rail to extend railway infrastructure Accelerated development strategy with funding to construction in place NICO Gold-Cobalt-Bismuth-Copper Project, Northwest Territories (NWT) & Saskatchewan 4 million equivalent gold ozs (1) - Significant gold & cobalt - Largest deposit of bismuth in world Mine & Concentrator planned in NWT Vertically integrated metals processing plant planned near Saskatoon, Saskatchewan Potential future mill feed from Sue-Dianne Copper-Silver-Gold satellite deposit Two development projects - Both: Positive definitive feasibility studies >$ 1.3 billion combined base case NPV Successfully test mined & pilot plant processed In permitting Deloitte & Touche engaged to secure strategic partners New reserves & economics pending EXPERIENCED BOARD & MANAGEMENT TEAM Proven records in permitting construction & mine operations (1) Using Metal Price Assumptions: US$ 900/oz Au, US$ 20/lb Co, US$ 10/lb Bi, US$ 2.75/ lb Cu 5
- 6. MOUNT KLAPPAN ANTHRACITECOAL PROJECT One of world’s largest undeveloped metallurgical coal deposits Advanced project with $ 90 million of work completed Definitive Feasibility Study with robust economics Railway development strategy to port of Prince Rupert - Allows for scalable expansion World-class JV partner secured with POSCO - One of the world’s largest steel producers Supply shortages of metallurgical coals with growing world consumption Railway sub-grade links mine site with CN mainline & Ridley Terminals 6
- 7. JOINT VENTURE WITHPOSCO POSCO Canada (POSCAN) has acquired 20% interest in Mount Klappan. Highlights: Anticipated total payments & cash contributions of $ 181 million based on current capital cost estimates $ 30 million paid to Fortune, $20 million contributed directly to the JV 20% of total development & capital costs - $154 million under current estimates $ 17.2 million in additional payments at production 20% of operating costs for 20% of production in-kind for their own use Fortune is Project Manager & is compensated for providing operational, technical & administrative support over life of mine Secures world-class investor & strategic partner Validates Mount Klappan as one of world’s premier metallurgical coal development projects - Key future supplier to global steel industry Accelerates project development - Upfront payment anticipated to provide 100% of funding to complete detailed engineering, permitting & stakeholder consultations for construction Maintains significant upside for Fortune shareholders $601 million post-transaction levered after-tax NPV (8%) for Fortune’s 80% interest at $175 per tonne for PCI based on current reserves 7
- 8. ABOUT POSCO World’s 3rdlargest steel producer by crude steel production Crude steel production of 35.4 million tonnes in 2010 - Sales for 12 months ended September 30, 2011, totalled US$ 67.0 billion Gwangyang Works - Largest steel mill in world, 22 million tonnes capacity Global expansion plans towards goal of 50 million tonnes total crude steel production Leading innovator in steel production – Finex Headquartered in Seoul, South Korea Listed on Korea (KRX), New York, London & Tokyo Stock Exchanges 8
- 9. STRATEGIC LOCATION &INFRASTRUCTURE Large license area in northwest BC (16,411 Ha) Close proximity to deep water shipping ports Stewart Port (150km) Ridley Terminals in Prince Rupert (330km) Mine site straddles railway right-of-way Track (CN) installed to 150km south of mine Railway road bed largely complete to mine Road access from railway subgrade Support of CN Rail for railway expansion BC Government extending electrical grid to area Project in Tahltan and Gitxsan Territories BC Government sharing revenues with First Nations 9
- 10. MOUNT KLAPPAN RESOURCES& RESERVES Significant potential to upgrade & increase resources & new reserves (expected Q2 2012) Lost Fox deposit remains open for possible expansion Additional coal seams identified below 300 meters & on adjacent lands Mount Klappan Resources (million tonnes) Area Measured (M) Indicated (I) M+I Inferred Lost Fox 107.9 109.5 217.4 91.5 Hobbit‐Broatch 13.5 13.5 258.4 Summit 9.6 Nass Total 107.9 123.0 230.9 359.5 Lost Fox Metallurgical Coal Reserves (million tonnes) Run – Of –Mine Coal Reserves 10% Ash Product Reserves Measured Indicated Total In Situ Proven Probable Total Product 89.5 16.8 106.3 51.6 9.2 60.8 The Mount Klappan Mineral Resource and Mineral reserve estimates were prepared in 2002, 2005, and 2007, respectively, by Marston & Marston Inc. in compliance with NI 43‐101. Richard Marston, P.E. is the Qualified Person responsible for the estimates. In addition to the Measured, Indicated and Inferred resources in the table, historical resources include 2.2 billion tonnes in the Speculative class. However, Speculative resources are not current and should not be relied upon. 10
- 11. ANTHRACITE PRODUCTS Highest quality coal with very high carbon & energy content Anthracite only 1% of world coal reserves Metallurgical coal with diverse applications Filter Media US$ ~ 1000 / tonne Metallurgical Reductants / charge carbon US$ ~ 300 / tonne Ultra-Low Vol. PCI US$ ~ 175-200 / tonne Sinter US$ ~ 150-175 / tonne Other products: Blend coal with coking coal for making metallurgical coke Direct coke replacement Urea fertilizers Heating & cooking briquettes Pelletizing Premium thermal coal Source: Company Information. 11
- 12. GROWING PCI DEMANDFROM STEEL PRODUCERS Use of Pulverized Coal Injection (PCI) reduces the amount of coke required in steel production Steelmakers around the world are expanding PCI use to reduce costs Low-vol PCI typically priced at 70% to 80% of high quality hard coking coal Mount Klappan PCI will achieve a higher price given its ultra-low volatile content Source: Macarthur Coal 12
- 13. DECREASING QUANTITIES OFANTHRACITE AVAILABLE FOR EXPORT World 2009 anthracite production: ~ 565 million tonnes China: 483 million tonnes - Net importer since 2004 Vietnam: 43 million tonnes – Reduced exports to utilize production domestically Few new high-quality deposits in mining friendly jurisdictions Import of Anthracite for Japanese Market Production & Export of Anthracite in 2009 Million mt In million mt Export / Source: Marubeni (1990 – 2009 data), China Coal Resource Website (2010 data), Deloitte 55.8% 1.2% 58.4% Production 32.2% Source: EIA, Marubeni 13
- 14. EMERGENCE OF CHINAAS NET COAL IMPORTER China became a net coal importer of anthracite in 2004, coking coal in 2007, all coals in 2009 Coal & Anthracite Net Imports by China In million mt Source: China Coal Resource Website, Bloomberg 14
- 15. SIGNIFICANT FUTURE METCOAL DEMAND GROWTH Global Met Coal Demand Increasing demand for good quality 1,600 Million mt metallurgical coals 1,440 1,400 China’s growth ~8% per yr >500 million mt demand increase over the next decade 1,185 Japan & South Korea are 1,200 with limited new production potential increasing anthracite imports – New steel technologies - Lower 1,000 920 emissions 800 Emerging economies are driving forces for future metallurgical coal demand 600 India’s growth ~8% per yr & - 400 Crude steel production expected to increase from 72.8 million tonnes to 124 million tonnes by 200 2012 & 293 million tonnes by 2020 - 2010 2015 2020 Brazilian crude steel production expected to increase from 26.5 Source: Peabody Global Energy Analytics million tonnes to 103 million tonnes by 2030 Insufficient supply of metallurgical coals to meet forecast global demand 15
- 16. RAILWAY UPGRADE &EXPANSION Railway transportation of coal provides lower operational risk over trucking – Allows for scalable expansion of production to take advantage of large resource base CN Rail operates between Prince George & port of Prince Rupert & on Dease Lake Line to Minaret, 150 km south of Mount Klappan Railway road bed largely constructed to mine site – Brownfield extension from Minaret Survey & engineering of railway extension - $ 317.8 million capital cost included in 2010 DFS CN collaborating on railway upgrade & extension to Mount Klappan Existing railway right-of-way & road bed 16
- 17. PORT OF PRINCERUPERT Ice-free, deepwater port 36 hours closer to Asia than port of Vancouver Ridley coal terminal a world-class coal & bulk materials handling facility Capable of handling full Capesize vessels that reduces ocean freight Currently handling ~70% of 16 Mtpa design capacity Expansion to 24 Mtpa in progress – Potential to expand to 50 Mtpa Opportunities for shared cargos & blending of coals with other metallurgical coal producers 17
- 18. 2010 DEFINITIVE FEASIBILITYSTUDY November 2010 update to 2005 & 2008 DFS Based on railway transport of coal to Ridley Coal Terminal in Prince Rupert Initial 3 Mtpa production from Lost Fox deposit open pit mine, wash plant & site infrastructure 60.8 Mt of product coal reserves – 20+ yrs production (only 3.6% of global resource) Premium ultra-low volatile PCI product Can diversify product mix to produce premium products (charge carbon) & sinter Life of mine average Free On Board (FOB) vessel cash cost US$104.79/tonne (C$110.30/tonne) Pre-Tax NPV (8%) In billions BASE CASE Ultra-Low Volatile PCI US$175 / tonne (C$1 = US$ 0.95) PRE-TAX AFTER TAX IRR 25.4% 20.7% NPV (8%) C$ 1,027.8 Million C$ 667.4 Million Capital (Years 1-4) C$ 768.4 Million (includes railway capital) 18
- 19. SIGNIFICANT UPSIDE POTENTIAL Railtransportation allows for higher annual production than 3 Mtpa DFS reserves only represents 3.6% of total resource – New reserves in preparation Updated reserves in preparation for Lost Fox deposit that can support higher production rates. Production can be expanded from adjacent Hobbit – Broatch deposit Current resource only identified to 300 meters – Additional coal seams identified at depth Budget in place for additional drilling 3rd Party contribution to railway capital costs increases NPV BC Government extending electrical grid & connection lowers power costs & enables use of lower cost mining equipment Lease-to-purchase of mobile equipment fleet lowers upfront capital costs & increases IRR One of world’s largest undeveloped deposits – Railway transportation solution provides scalable expansion potential 19
- 20. ACCELERATED DEVELOPMENT STRATEGY JVpartner now secured & accelerated development program underway Next steps include: Update reserve estimate Complete updated feasibility study on the Lost Fox Mine Complete engineering on railway transportation with CN Rail Continue Tahltan, Gitxsan & stakeholder engagement Complete environmental permitting process Conduct additional expansion drilling Deloitte engaged to secure 2nd stage strategic partner Minority equity investor at the project level Provision of debt & equity tied to off-take Expertise in coal end market with strong financial position Objective of announcing fully financed, permitted project at conclusion of currently planned programs 20
- 21. NICO GOLD-COBALT-BISMUTH-COPPER PROJECT 100% Ownership – No 3rd party royalties Open pit & underground mine & mill in Northwest Territories (NT) Saskatchewan Metals Processing Plant (SMPP) Vertically integrated hydrometallurgical facility to produce gold doré, cobalt sulphate or cathode, bismuth ingot & copper metal $ 100 million work completed to date, includes: $ 20 million test mining $ 12 million metallurgy & process pilot plants 2007 positive feasibility study & 2008 update 32.3% Pre-tax IRR Pre-tax $ 361 million 8% NPV Significant recent improvements not included 31 Million tonne reserve – 4 Million eq gold ozs* Golden Giant equipment purchased & dismantled Environmental Assessments advanced for mine & SMPP permitting * Using Metal Price Assumptions: US$ 900/oz Au, US$ 20/lb Co, US$ 10/lb Bi, US$ 2.75/ lb Cu Test mining 2006/2007 21
- 22. MINE LOCATION &INFRASTRUCTURE 5,140 Ha lease in southern NT Winter access roads 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 transport of concentrates to SMPP 160 km from City of Yellowknife 50 km from Town of Whati 22 km from Snare Hydro Tlicho First Nation Settled land claim Co-operative Relationship Agreement 22
- 23. SASKATCHEWAN METALS PROCESSINGPLANT (SMPP) Hydrometallurgical plant to process bulk concentrate from NICO mine & mill to produce gold doré, cobalt sulphate or cathode, bismuth ingot & copper metal High concentration ratio of ore (low mass pull) using simple flotation 4,650 tonnes of ore / day reduced to only 180 tonnes of concentrate (3.8% sulphide fraction) Allows concentrate to be shipped to Saskatchewan for lower cost processing Advantages to Saskatoon site Located on CN Rail line - Close to Trans Cda Hwy Inexpensive power (5.7 cents / kWh) Close to natural gas & reagent sources Skilled worker / engineer pool – 85 employees 5 year tax holiday SMPP capital cost $200+ million 23
- 24. DIVERSIFIED EXPOSURE TOGOLD & SPECIALTY METALS Gold the most valuable component by value Copper 2% Front end gold recovery - largest source of Bismuth revenue in first year of operation 30% Gold Largest bismuth deposit world-wide – 15% 36% global reserves High purity cobalt metal (99.8%) or sulphate commands premium price. Cobalt 32% Gold – 907,000 oz @ $1,595/oz Cobalt – 82 Mlbs @ $16.00/lb Bismuth – 109 Mlbs @ $11.00/lb Copper – 27 Mlbs @ $3.50/lb Prices as at May 18, 2012 24
- 25. GOLD – COUNTERCYCLICAL HEDGE Historical & Forecast Gold Price Gold price increased consistently in past $2,000 9 years, especially after recent economic $1,749 downturn $1,800 $1,600 $1,574 While mine supply remains relatively flat, future demand continues to grow: $1,400 $1,211 $1,200 Growing physical demand from $1,000 Asia & Central banks $873 $873 $800 $697 Growing investment demand based $600 $604 on currency protection & safe $410 $445 haven status $363 $400 $310 $200 Provides a flexible financing opportunity $0 Source: Bloomberg; Energy & Metals Consensus Forecasts, April 2012 25
- 26. COBALT – ROBUSTMARKET WITH INCREASING DEMAND World cobalt production (in tonnes) Wide application of industrial usage 60% 51% 50% 40% 30% 20% 12% 10% 7% 7% 5% 5% 4% 3% 2% 2% 2% 0% • Vast majority of cobalt sourced from regions that are politically unstable or prone to export restrictions • 82,000 t market with demand growing by ~8% / year • Congo (DRC) currently accounts for 51% of global • Wide metallurgical & chemical market applications in: supply batteries, high strength alloys, cutting tools, catalysts, etc. • China has the largest refining capacity (43% in 2010) • Largest growth is in lithium ion & nickel metal hydride but limited mine supply batteries for electronic devices & hybrid/electric vehicles • LME initiated futures market trading for cobalt in • High purity cobalt (99.8%) used in aerospace applications 2010, resulting in a more liquid market • Cobalt sulphate (21%) used for batteries • NICO will be a reliable North American producer Source: USGS Industry Survey Source: Cobalt Development Institute 26
- 27. BISMUTH – ENVIRONMENTALFRIENDLY WITH GROWTH POTENTIAL Growing number of applications World reserves (in tonnes) Bismuth prices continue to increase Alloys, solders and 300,000 others, 8% 250,000 240,000 Metallurgical 200,000 additives, 27% 150,000 100,000 48,661 50,000 39,000 11,000 10,000 10,000 5,000 5,000 Chemicals and pharmaceuticals, - 65% • Traditionally used in fusible alloys, cosmetics, chemicals etc. • World market between 15,000 and • Bismuth prices have risen, supported 20,000 tonnes per year by steady demand & constrained • New markets focus on super supply conductors, CDs & auto anti-corrosion • China is the principal source of bismuth materials & has total reserves of 240Kt, • Environmentally safe replacement for accounting for 80% of world reserves lead in plumbing & electronic solders, • China has closed 20% of its production brass, ceramic glazes, free cutting steel, due to environmental concerns hot dip galvanizing & paint pigments • NICO contains over 48Kt of bismuth, • Global framework to eliminate lead could equivalent to 15% of world reserves & increase bismuth consumption by 25% the world’s largest deposit • European legislation to eliminate lead in electronics Source: USGS Industry Survey Source: USGS Industry Survey 2010 Source: Asian Metal, Metal Bulletin 27
- 28. NICO MINERAL RESERVES(TO BE UPDATED SHORTLY) 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 Probable 13,797,000 0.71 0.12 0.15 0.03 Total 28,816,000 0.79 0.12 0.15 0.04 Combined Mineral Reserves Tonnes Au (g/t) Co (%) Bi (%) Cu (%) Proven 16,422,000 0.97 0.12 0.16 0.04 Probable 14,564,000 0.83 0.12 0.15 0.03 Total 30,986,000 0.91 0.12 0.16 0.04 Contained Metal 907,000 82 million 109 million 27 million ounces pounds pounds pounds Reserve estimate by P&E Mining Consultants Inc., Eugene Puritch, P.Eng. & Fred Brown, CPG PrSciNat, Qualified Persons as defined by NI-43-101 28
- 29. 2010 DRILL PROGRAM 38holes drilled in 2010 Drilling successfully expanded deposit & intersected high-grade gold intervals 51.3m averaging 2.2 g/t Au & 0.11% Co, including 3m averaging 15.59 g/t Au, 0.46% Co, 0.05% Bi & 0.20% Cu 8.00m averaging 4.74 g/t Au & 0.16% Bi, including 1m grading 35 g/t Au 3.38m averaging 11.59 g/t Au, 0.37% Co, 0.16% Bi & 0.14% Cu, including 1.67m averaging 20.04 g/t Au, 0.36% Co, 0.24% Bi & 0.13% Cu 5.00m averaging 4.84 g/t Au, including 2.5m averaging 9.21 g/t Au 20.1m averaging 0.38% Co & 0.37% Bi New Mineral Reserve estimates pending 29
- 30. UNDERGROUND TEST MINING& PILOT PLANTS 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 collected for $ 8 million pilot plant tests Proved process flow sheet Verified production of high value metal products Increase in metal recoveries over feasibility study Tangible demonstration of successful project to governments & communities Reduced project risk 30
- 31. GOLDEN GIANT MINE(HEMLO) MILL, ONTARIO Buildings & equipment acquired from Newmont Canada for relocation to NICO No environmental liability for Hemlo site Dismantling & removal completed for net cash cost of ~$ 20 million Demonstration of project execution on budget & schedule 31
- 32. 2008 DEFINITIVE FEASIBILITYSTUDY Micon, Met-Chem, Golder, SGS Lakefield & metallurgical & engineering experts Results: Pre-tax IRR 32.3% Pre-tax C$361 million 8% NPV Pre-production capital cost C$230 million Cash Cost US$1.41/lb Co (1)(2) Cash Cost US $259/oz Au equivalent (2) April 2008 metal price sensitivity increases IRR to 97.2% & NPV (8%) to $1.5 billion(3) Study now outdated New reserves & operational improvements not included Capital costs will be significantly higher (1) Net of credits for gold and bismuth sales (2) Base Case metal prices of US$750/oz Au, US$20/lb Co, US$10/lb Bi and US$/C$ 0.97 (3) April 2008 metal prices of US$900/oz Au, US$50/lb Co, US$16/lb Bi and US$/C$ 0.97 32
- 33. POST-DEFINITIVE FEASIBILITY STUDYIMPROVEMENTS 43% increase in reserves to 31 Mt – 18 Yr mine life - Excludes results of 2010 drilling 16% production rate increase to 4,650 tpd More efficient mine plan - Eliminated underground backfilling Identification of low strip starter pit – Eliminates pre-stripping Co-disposal of waste rock & tails – Reduces dam structures & reclamation costs Commodity price assumptions higher for gold & bismuth Improved recoveries from pilot plant: Gold 56-85%, Averages 76% Cobalt 84% Bismuth 73% Copper 58% - Not previously included Higher value end products: Cobalt 21% cobalt sulphate option – Lower capital & operating costs - Premium Bismuth 99.9% ingot – Feasibility study assumed concentrate Copper Copper metal – Not included in feasibility study Hydrometallurgical process plant relocated to Saskatoon Lower OPEX (~$7 million per yr) – Mitigates capital cost increase (~$30 million) 33
- 34. RESULTS OF NICOPROJECT IMPROVEMENTS Higher forecast annual metal production Gold yrs 1 & 2 of mine life ~70,000 ozs, yrs 3-18 ~35,000 ozs Cobalt ~ 3.4 million lbs (1,550 tonnes) Bismuth ~ 3.65 million lbs (1,650 tonnes) Copper ~ 770,000 lbs (350 tonnes) Cost ~$ 56 / tonne, ~$ 90 million / yr Revenue ~$ 100 / tonne, ~$ 180 million / yr Capital costs expected to be $400+ million Updated economics pending receipt of Front End Engineering & Design (FEED) Study by Jacobs Engineering & other engineering Co.’s 34
- 35. NICO FINAL PRODUCTS Cobalt Carbonate Co 50.6 % Ni 0.005 % Ca 0.018 % Mg <0.005 % Cobalt Cathode Metal Cu 0.005 % Co >99.95% Cobalt Sulphate (heptahydrate) Co 20.9 % Ni <0.003 % Fe <0.001 % Cu <0.001 % Bismuth Ingot Zn <0.001 % Bi >99.99% 35
- 36. ADVANTAGES OF NICOPROJECT Potential reliable North American supply of critical specialty metals Diversified product mix reduces exposure to metal price volatility Cobalt supply coupled with world’s largest bismuth deposit Strong leverage to gold – Counter-cyclical hedge – Financing options Low operating cost net of co-products Vertical Integration – Fortune controls process from mine to product reducing risk of third party metal supplier or custom processors Sulphide cobalt source Lower capital & operating costs compared to laterites High concentration ratio allows transport to low cost processing environment Exothermic reaction in autoclave reduces energy consumption & generates its own acid SMPP flowsheet allows for flexible & diversified product mix 36
- 37. DEVELOPMENT STRATEGY New reserveestimates pending – Focus on expansion of gold FEED studies nearly complete – Currently reviewing draft Revised capital & operating costs & financial model Environmental Assessments advanced for mine & SMPP permitting Public Hearing Stage in NT – Targeting recommendation to Minister in 2012 Targeting receipt of permits in Saskatchewan in 2012 for SMPP Expanding management team Production targeted in 2014 Deloitte engaged to secure strategic partner - Ideal partner: Minority equity investor at the project level Ability to arrange & guarantee project finance facility Expertise in cobalt or specialty metal end markets/off-take partner Committed to an accelerated development plan 37
- 38. 2012 TARGETED MILESTONES MountKlappan Revised Project Description submission to BC EAO (Q2) New reserves (Q2) Revised economics (Q2) MOU with CN Rail (Q2) Second stage strategic partner(s) and project financing NICO New reserve estimates (Q2) Revised economics (Q2) Initiate Tlicho Participation Agreement (PA) Negotiations (Q4) SMPP permits (Q4) Initiate discussions with the Wek'èezhìi Land and Water Board to advance EA process (Q4) Closure of Public Registry in the DAR Review process (Q4) Strategic partner(s) and project financing Corporate OTCQX Listing (Q2) 38
- 39. Directors Mahendra Naik, BComm, 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 & exploration experience David Knight, BA, LLB Secretary, Director Partner, Norton Rose specializing in securities & mining law James Excell, BASc Director Metallurgical Engineer – 35 yrs mining experience BHP-Billiton William Breukelman, BASc, MBA, PEng Director Chemical Engineer – Chairman, Gedex James Currie, BSc (Hons), PEng Director Mining Engineer – COO, Kimber Resources The Honorable Carl L. Clouter Director Commercial pilot - former owner of charter airline in NWT Shou Wu (Grant) Chen, MSc, MBA Director Geologist – Deputy Chairman & CEO, China Mining Resources Group Management Julian Kemp, BBA, CA VP Finance & CFO Chartered Accountant – 20+ yrs mining financial experience Thomas Rinaldi, BSc VP Operations Mining Engineer – 30 yrs engineering & operations experience Michael De Carlo, BSc, BBA Project Manager Mining Engineer – 40+ yrs engineering & managerial experience Bill Shepard Logistics Manager 15 yrs experience in procurement and logistics Dr. Richard Schryer, PhD Director Regulatory & Aquatic Scientist –20+ yrs experience in mine permitting & environmental Environmental Affairs assessments Adam Jean, HBA, CA Controller Chartered Accountant previously with Ernst & Young James Mucklow, MESc, PEng Manager Env.& Community Geological Engineer – 20+ yrs geological & environmental experience Keith Lee, BSc Senior Process Engineer 25 yrs operations, engineering & mineral processing experience Carl Kottmeier, MBA, Peng Project Manager Mining Engineer – 24 yrs engineering & operations experience Joon Kim, MASc, PEng Mine Planning Engineer Mining Engineer – 10+ years operations and engineering experience 39
- 40. APPENDIX A Recent Coal M&A Metrics Source: Company reports and CIBC World Markets Inc. 40
- 41. Notes 41
- 42. Notes 42
- 43. Notes 43
- 44. For further information,please contact: Emerging Strategic Troy Nazarewicz, Investor Relations Manager 148 Fullarton Street, Suite 1600 Metal & Coal London, Ontario, Canada Producer N6A 5P3 Tel. (519) 858-8188 Fax. (519) 858-8155 E-mail. tnazarewicz @fortuneminerals.com Website. www.fortuneminerals.com TSX-FT OTCQX-FTMDF