Fortune Minerals Completes Coal Study

Fortune Minerals (TSX:FT) (OTCQX:FTMDF) announce the results of an updated Definitive Feasibility Study (“DFS”) for the Arctos Project (formerly known as the Mount Klappan) in northwestern British Columbia (“BC”), Canada.  Arctos, project, is a collaborative international development project by the Arctos Anthracite Joint Venture (“AAJV”) between Fortune (80%) and POSCAN (20%), the Canadian subsidiary of Korea’s POSCO, one of the world’s largest steel producers.  The updated DFS was prepared by Marston, a Golder Associates Company (“Golder-Marston”) and incorporates the results of additional drilling and survey data for the Lost Fox deposit area, which together with updated operating and capital costs, confirms an increase in reserves and robust economics for the Arctos project. Because of a more rapid planned project start-up, initial capital costs to achieve commercial production has increased only 2.6% over the initial capital in the previous 2010 DFS.  The updated FOBT cash cost of C$ 127.61 / tonne would place Arctos among the lowest cost Canadian metallurgical coal producers. Innovation in the global steel industry continues to drive the increased use of anthracite in the manufacture of steel and in metal processing, while scarcity of high quality deposits and declining exports from the traditional suppliers highlights the importance of having a new reliable Canadian source of supply.


  •  17.5% increase in Run of Mine (“ROM”) Coal Reserves to 124.9 million tonnes (“Mt”) and 13.8% increase in 10% Ash Product Reserves to 69.2 Mt in the Lost Fox deposit area
  • Extension of mine life from 20 to 25 years;
  • Production of premium pulverized coal injection (“PCI”) coal used to manufacture steel;
  • Ability to diversify production to other metallurgical coal products that are short of supply;
  • Initial capital (first 3 years) of C$ 788.6 million for the mine, surface facilities and railway;
  • Cash cost FOBT loading vessel in Prince Rupert of C$ 127.61/tonne (US$ 121.22/tonne);
  • Base Case pre-tax IRR of 17.0% and pre-tax 8% discounted NPV of C$ 615.9 million;
  • Expansion case from 3 to 4 million tonnes per annum (“Mtpa”) in year eight of the mine life, increases Pre-tax IRR to 17.5% and 8% discounted NPV to C$ 657.1 million;
  • Significant additional improvement to economics when using higher coal prices and/or
  • incorporating railway capital contributions from third party users or government;
  • Advancing railway with Canadian National Railway Company (“CN”) and BC Government