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Emerging Strategic Metal & Coal
ProducerFortune Minerals LimitedInvestor Presentation
June 2012TSX-FT
2
FORWARD-LOOKING INFORMATIONThis document contains certain forward-looking information. This forward-looking information includes, ormay 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 ofmineral properties, timing and cost for placing the Company’s mineral projects into production, costs ofproduction, 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-lookinginformation is based on the opinions and estimates of management at the date the information is given, andis subject to a variety of risks and uncertainties and other factors that could cause actual events or results todiffer materially from those projected in the forward-looking information. These factors include the inherentrisks involved in the exploration and development of mineral properties, uncertainties with respect to thereceipt or timing of required permits and regulatory approvals, the uncertainties involved in interpretingdrilling results and other geological data, fluctuating metal and coal prices, the possibility of project costoverruns or unanticipated costs and expenses, uncertainties relating to the availability and costs of financingneeded in the future, uncertainties related to metal recoveries and other factors. Mineral resources that arenot mineral reserves do not have demonstrated economic viability. Inferred mineral resources areconsidered too speculative geologically to have economic considerations applied to them that would enablethem to be categorized as mineral reserves. There is no certainty that mineral resources will be convertedinto mineral reserves. Readers are cautioned to not place undue reliance on forward-looking informationbecause it is possible that predictions, forecasts, projections and other forms of forward-looking informationwill not be achieved by the Company. The forward-looking information contained herein is made as of thedate hereof and the Company assumes no responsibility to update them or revise it to reflect new events orcircumstances, except as required by law.
3
CorporateInformation
Share Performance
Listing: TSX-FT, OTCQX-FTMDFShare Price: $ 0.67Issued Shares: 117.1 millionFully Diluted: 123.5 millionMarket Cap: $78.5 millionWorking Capital: $ 24.9 million (Q1- 2012)Total Assets: $ 155.7 million (Q1-2012)
China Mining Resources Group Ltd. ~13%Manulife Global Management US ~ 9%*Officer & Director Holdings ~21% (includes China Mining)
As of May 24, 2012All values in C$ unless otherwise noted*Precision IR data at April 12, 2012
Analyst Reports
Ownership
Killian Charles, Industrial Alliance Securities ($3.30 Target 01/31/12)
David Davidson, Paradigm Capital ($2.85 Target 07/15/11)
Michael Fowler, Loewen Ondaatje McCutcheon ($2.65 Target 05/10/12)
4Canada Focus - Operating in mining friendly jurisdictions
PROPERTY INTERESTS
1. Mount Klappan Anthracite Coal Deposit:British Columbia
2. NICO Gold-Cobalt-Bismuth-Copper Deposit: Northwest Territories
3. Saskatchewan Metals Processing PlantSaskatchewan
4. Sue-Dianne Copper-Silver-Gold DepositNorthwest Territories
5. Salkeld Lake Copper-Zinc-Lead-Gold-Silver ProjectNorthwest Territories
6. Camsell River Silver ProjectNorthwest Territories
5
EMERGING PRODUCER OF GOLD, MET. COAL & SPECIALTY METALSKEY ASSETS
Mount Klappan Anthracite Coal Project, British Columbia (BC)One of the world’s premier metallurgical coal development projectsJV partnership with South Korean steel producer POSCOCollaboration with CN Rail to extend railway infrastructureAccelerated development strategy with funding to construction in place
NICO Gold-Cobalt-Bismuth-Copper Project, Northwest Territories (NWT) & Saskatchewan4 million equivalent gold ozs (1) - Significant gold & cobalt - Largest deposit of bismuth in worldMine & Concentrator planned in NWTVertically integrated metals processing plant planned near Saskatoon, Saskatchewan Potential future mill feed from Sue-Dianne Copper-Silver-Gold satellite deposit
Two development projects - Both: Positive definitive feasibility studies >$ 1.3 billion combined base case NPVSuccessfully test mined & pilot plant processedIn permittingDeloitte & Touche engaged to secure strategic partnersNew reserves & economics pending
EXPERIENCED BOARD & MANAGEMENT TEAMProven 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
6
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
MOUNT KLAPPAN ANTHRACITE COAL PROJECT
7
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 $175 per tonne for PCI based on current reserves
JOINT VENTURE WITH POSCO
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World’s 3rd largest steel producer by crude steel productionCrude steel production of 35.4 million tonnes in 2010 - Sales for 12 months ended September 30, 2011, totalled US$ 67.0 billionGwangyang Works - Largest steel mill in world, 22 million tonnes capacityGlobal expansion plans towards goal of 50 million tonnes total crude steel productionLeading innovator in steel production – FinexHeadquartered in Seoul, South Korea Listed on Korea (KRX), New York, London & Tokyo Stock Exchanges
ABOUT POSCO
9
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
STRATEGIC LOCATION & INFRASTRUCTURE
10
Mount Klappan Resources (million tonnes)
Lost Fox Metallurgical Coal Reserves (million tonnes)
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.
MOUNT KLAPPAN RESOURCES & RESERVESSignificant 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
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
Run – Of –Mine Coal Reserves 10% Ash Product ReservesMeasured Indicated Total In Situ Proven Probable Total Product
89.5 16.8 106.3 51.6 9.2 60.8
11
ANTHRACITE PRODUCTS
Highest quality coal with very high carbon & energy content Anthracite only 1% of world coal reservesMetallurgical coal with diverse applications
Other products: Blend coal with coking coal for making metallurgical cokeDirect coke replacementUrea fertilizersHeating & cooking briquettesPelletizingPremium thermal coal
Source: Company Information.
Filter Media US$ ~ 1000 / tonne Metallurgical Reductants / charge carbon US$ ~ 300 / tonne Ultra-Low Vol. PCI US$ ~ 175-200 / tonneSinter US$ ~ 150-175 / tonne
12
GROWING PCI DEMAND FROM 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
13
Source: EIA, Marubeni
Export / Production 55.8% 1.2% 58.4% 32.2%
Production & Export of Anthracite in 2009In million mt
DECREASING QUANTITIES OF ANTHRACITE AVAILABLE FOR EXPORTWorld 2009 anthracite production: ~ 565 million tonnes
China: 483 million tonnes - Net importer since 2004Vietnam: 43 million tonnes – Reduced exports to utilize production domesticallyFew new high-quality deposits in mining friendly jurisdictions
Import of Anthracite for Japanese MarketMillion mt
Source: Marubeni (1990 – 2009 data), China Coal Resource Website (2010 data), Deloitte
14
Source: China Coal Resource Website, Bloomberg
Coal & Anthracite Net Imports by China In million mt
EMERGENCE OF CHINA AS NET COAL IMPORTERChina became a net coal importer of anthracite in 2004, coking coal in 2007, all coals in 2009
15
Global Met Coal DemandMillion mt
Source: Peabody Global Energy Analytics
SIGNIFICANT FUTURE MET COAL DEMAND GROWTH
>500 million mt demand increase over the next decade with limited new production potential
920
1,185
1,440
-
200
400
600
800
1,000
1,200
1,400
1,600
2010 2015 2020
Increasing demand for good quality metallurgical coals
China’s growth ~8% per yr
Japan & South Korea are increasing anthracite imports –New steel technologies - Lower emissions
Emerging economies are driving forces for future metallurgical coal demand
India’s growth ~8% per yr & -Crude steel production expected to increase from 72.8 million tonnes to 124 million tonnes by 2012 & 293 million tonnes by 2020
Brazilian crude steel production expected to increase from 26.5 million tonnes to 103 million tonnes by 2030
Insufficient supply of metallurgical coals to meet forecast global demand
16
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
RAILWAY UPGRADE & EXPANSION
Existing railway right-of-way & road bed
17
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
PORT OF PRINCE RUPERT
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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)
2010 DEFINITIVE FEASIBILITY STUDY
BASE CASEUltra-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)
Pre-Tax NPV (8%)In billions
19
Rail transportation 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
SIGNIFICANT UPSIDE POTENTIAL
One of world’s largest undeveloped deposits – Railway transportation solution provides scalable expansion potential
20
JV partner 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
ACCELERATED DEVELOPMENT STRATEGY
21
NICO GOLD-COBALT-BISMUTH-COPPER PROJECT100% Ownership – No 3rd party royaltiesOpen 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 IRRPre-tax $ 361 million 8% NPVSignificant 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
22
MINE LOCATION & INFRASTRUCTURE5,140 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
23
Hydrometallurgical plant to process bulk concentrate from NICO mine & mill to produce gold doré, cobalt sulphate or cathode, bismuth ingot & copper metalHigh 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 siteLocated on CN Rail line - Close to Trans Cda HwyInexpensive power (5.7 cents / kWh)Close to natural gas & reagent sourcesSkilled worker / engineer pool – 85 employees5 year tax holiday
SMPP capital cost $200+ million
SASKATCHEWAN METALS PROCESSING PLANT (SMPP)
24
DIVERSIFIED EXPOSURE TO GOLD & SPECIALTY METALS
Gold the most valuable component by value
Front end gold recovery - largest source of revenue in first year of operation
Largest bismuth deposit world-wide – 15% global reserves
High purity cobalt metal (99.8%) or sulphatecommands premium price.
Copper2%
Gold36%
Cobalt32%
Bismuth30%
Gold – 907,000 oz @ $1,595/ozCobalt – 82 Mlbs @ $16.00/lb
Bismuth – 109 Mlbs @ $11.00/lbCopper – 27 Mlbs @ $3.50/lb
Prices as at May 18, 2012
25
GOLD – COUNTER CYCLICAL HEDGE
Gold price increased consistently in past 9 years, especially after recent economic downturn
While mine supply remains relatively flat, future demand continues to grow:
Growing physical demand from Asia & Central banks
Growing investment demand based on currency protection & safe haven status
Provides a flexible financing opportunity
Historical & Forecast Gold Price
Source: Bloomberg; Energy & Metals Consensus Forecasts, April 2012
$310$363 $410 $445
$604$697
$873 $873
$1,211
$1,574
$1,749
$0
$200
$400
$600
$800
$1,000
$1,200
$1,400
$1,600
$1,800
$2,000
26
COBALT – ROBUST MARKET WITH INCREASING DEMAND
World cobalt production (in tonnes) Wide application of industrial usage
• Vast majority of cobalt sourced from regions that are politically unstable or prone to export restrictions
• Congo (DRC) currently accounts for 51% of global supply
• China has the largest refining capacity (43% in 2010) but limited mine supply
• LME initiated futures market trading for cobalt in 2010, resulting in a more liquid market
• NICO will be a reliable North American producer
• 82,000 t market with demand growing by ~8% / year• Wide metallurgical & chemical market applications in:
batteries, high strength alloys, cutting tools, catalysts, etc.• Largest growth is in lithium ion & nickel metal hydride
batteries for electronic devices & hybrid/electric vehicles• High purity cobalt (99.8%) used in aerospace applications• Cobalt sulphate (21%) used for batteries
Source: USGS Industry Survey
51%
12%7% 7% 5% 5% 4% 3% 2% 2% 2%
0%
10%
20%
30%
40%
50%
60%
Source: Cobalt Development Institute
27
240,000
11,000 10,000 10,000 5,000 5,000
39,000 48,661
-
50,000
100,000
150,000
200,000
250,000
300,000
BISMUTH – ENVIRONMENTAL FRIENDLY WITH GROWTH POTENTIALBismuth prices continue to increaseWorld reserves (in tonnes)Growing number of applications
• Bismuth prices have risen, supported by steady demand & constrained supply
• World market between 15,000 and 20,000 tonnes per year
• China is the principal source of bismuth & has total reserves of 240Kt, accounting for 80% of world reserves
• China has closed 20% of its production due to environmental concerns
• NICO contains over 48Kt of bismuth, equivalent to 15% of world reserves & the world’s largest deposit
• Traditionally used in fusible alloys, cosmetics, chemicals etc.
• New markets focus on super conductors, CDs & auto anti-corrosion materials
• Environmentally safe replacement for lead in plumbing & electronic solders, brass, ceramic glazes, free cutting steel, hot dip galvanizing & paint pigments
• Global framework to eliminate lead could increase bismuth consumption by 25%
• European legislation to eliminate lead in electronics
Source: Asian Metal, Metal BulletinSource: USGS Industry Survey 2010Source: USGS Industry Survey
Chemicals and pharmaceuticals,
65%
Metallurgical additives, 27%
Alloys, solders and others, 8%
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
Reserve estimate by P&E Mining Consultants Inc., Eugene Puritch, P.Eng. & Fred Brown, CPG PrSciNat, Qualified Persons as defined by NI-43-101
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 ounces
82 million pounds
109 million pounds
27 million pounds
29
38 holes drilled in 2010Drilling 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% Cu8.00m averaging 4.74 g/t Au & 0.16% Bi, including 1m grading 35 g/t Au3.38m 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% Cu5.00m averaging 4.84 g/t Au, including 2.5m averaging 9.21 g/t Au20.1m averaging 0.38% Co & 0.37% Bi
New Mineral Reserve estimates pending
2010 DRILL PROGRAM
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
31
GOLDEN GIANT MINE (HEMLO) MILL, ONTARIO
Buildings & equipment acquired from Newmont Canada for relocation to NICONo environmental liability for Hemlo siteDismantling & removal completed for net cash cost of ~$ 20 millionDemonstration of project execution on budget & schedule
32
Micon, Met-Chem, Golder, SGS Lakefield & metallurgical & engineering experts Results:
Pre-tax IRR 32.3%Pre-tax C$361 million 8% NPVPre-production capital cost C$230 millionCash 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 outdatedNew reserves & operational improvements not includedCapital costs will be significantly higher
2008 DEFINITIVE FEASIBILITY STUDY
(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
33
43% increase in reserves to 31 Mt – 18 Yr mine life - Excludes results of 2010 drilling16% production rate increase to 4,650 tpdMore efficient mine plan - Eliminated underground backfillingIdentification of low strip starter pit – Eliminates pre-strippingCo-disposal of waste rock & tails – Reduces dam structures & reclamation costsCommodity price assumptions higher for gold & bismuthImproved 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 - PremiumBismuth 99.9% ingot – Feasibility study assumed concentrateCopper Copper metal – Not included in feasibility study
Hydrometallurgical process plant relocated to SaskatoonLower OPEX (~$7 million per yr) – Mitigates capital cost increase (~$30 million)
POST-DEFINITIVE FEASIBILITY STUDY IMPROVEMENTS
34
Higher forecast annual metal production
Gold yrs 1 & 2 of mine life ~70,000 ozs, yrs 3-18 ~35,000 ozs
Cobalt ~ 3.4 million lbs (1,550 tonnes)
Bismuth ~ 3.65 million lbs (1,650 tonnes)
Copper ~ 770,000 lbs (350 tonnes)
Cost ~$ 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
RESULTS OF NICO PROJECT IMPROVEMENTS
35
Cobalt CarbonateCo 50.6 %Ni 0.005 %Ca 0.018 %Mg <0.005 %Cu 0.005 %
NICO FINAL PRODUCTS
Cobalt Sulphate (heptahydrate)Co 20.9 %Ni <0.003 %Fe <0.001 % Cu <0.001 %Zn <0.001 %
Cobalt Cathode MetalCo >99.95%
Bismuth IngotBi >99.99%
36
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
ADVANTAGES OF NICO PROJECT
37
New reserve estimates 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 2014Deloitte 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
DEVELOPMENT STRATEGY
38
Mount KlappanRevised 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
NICONew 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
CorporateOTCQX Listing (Q2)
2012 TARGETED MILESTONES
39
DirectorsMahendra Naik, B Comm, 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
Shou Wu (Grant) Chen, MSc, MBA
Director
Director
Commercial pilot - former owner of charter airline in NWT
Geologist – Deputy Chairman & CEO, China Mining Resources Group
ManagementJulian 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
Bill Shepard
Project Manager
Logistics Manager
Mining Engineer – 40+ yrs engineering & managerial experience
15 yrs experience in procurement and logisticsDr. Richard Schryer, PhD
Adam Jean, HBA, CA
Director Regulatory & Environmental AffairsController
Aquatic Scientist –20+ yrs experience in mine permitting & environmental assessmentsChartered Accountant previously with Ernst & Young
James Mucklow, MESc, PEng
Keith Lee, BSc
Carl Kottmeier, MBA, Peng
Joon Kim, MASc, PEng
Manager Env.& Community
Senior Process Engineer
Project Manager
Mine Planning Engineer
Geological Engineer – 20+ yrs geological & environmental experience
25 yrs operations, engineering & mineral processing experience
Mining Engineer – 24 yrs engineering & operations experience
Mining Engineer – 10+ years operations and engineering experience
40
APPENDIX A
Source: Company reports and CIBC World Markets Inc.
Recent Coal M&A Metrics
41
Notes
42
Notes
43
Notes
Emerging Strategic Metal & Coal
Producer
For further information, please contact:Troy Nazarewicz, Investor Relations Manager
148 Fullarton Street, Suite 1600London, Ontario, Canada
N6A 5P3Tel. (519) 858-8188Fax. (519) 858-8155
E-mail. tnazarewicz @fortuneminerals.comWebsite. www.fortuneminerals.com
TSX-FTOTCQX-FTMDF
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