Fortune Minerals announces agreement to purchase lands near Saskatoon,
Saskatchewan for NICO refinery

    
    Due-diligence in progress to close transaction

    Issued Capital: 68,240,857
    

LONDON , ON, Nov. 3 /CNW/ - Fortune Minerals Limited (TSX-FT) ("Fortune Minerals" or the "Company") is pleased to announce that it has entered into an agreement to purchase lands near Saskatoon, Saskatchewan on which the Company proposes to construct its Southern Hydrometallurgical Facility ("SHMF" or "refinery") for the NICO gold-cobalt-bismuth-copper project. NICO is a planned vertically integrated project to mine and concentrate ores from the Company's deposit in the Northwest Territories. Bulk concentrates will be transported by truck and rail to the Saskatoon area for processing to high-value metal products, including gold doré, cobalt, copper and bismuth cathodes, and a nickel precipitate by-product. Earlier this year, Fortune Minerals announced that it was evaluating a number of sites in southern Canada to construct this facility (see Fortune Minerals News release, dated July 28 , 2009). The relocation of the metal refining part of the project from the mine site to the Saskatoon area is being done to reduce capital and operating costs for the project, mitigate exposure to increasing energy costs, accelerate the construction schedule, reduce environmental impacts at the mine site, and speed the permitting process already in progress. Fortune Minerals believes that the selection of this site is an important step forward in its planned development of the NICO project and reduces project risk.

The purchase of lands in the Saskatoon area is subject to certain conditions, including completion of satisfactory due-diligence of the site and appropriate rezoning. Enterprise Saskatchewan and the Saskatoon Regional Economic Development Authority have been working with Fortune Minerals personnel over the last several months to identify a Saskatchewan location for this state of the art metallurgical processing plant in the province. Enterprise Saskatchewan Minister Ken Cheveldayoff said, "We are very pleased that Fortune Minerals has chosen Saskatchewan over other potential locations for this new and exciting project that means jobs and investment in the Saskatoon area."

The proposed Saskatoon refinery site includes access to the main line of the Canadian National Railway, which can accommodate a spur for delivery of concentrates from the mine, reagents and other supplies, and ship metal products to industrial centres in North America or points of export. The property is in close proximity to the Trans-Canada Highway and other services including power, natural gas, and water supply. Saskatoon is the fastest growing city in Canada and the commercial centre for the province of Saskatchewan. "With a diversified economy, a highly skilled work force and respected post-secondary institutions, Saskatoon can accommodate everything that is required to construct and operate this refinery" said Fortune Minerals President, Robin Goad .

Based on the Company's current mine plan, the Saskatoon refinery will process approximately 80,000 tonnes of NICO sulphide concentrates each year, producing average annual production of approximately 4 million pounds of 99.8% cobalt cathode, 4.2 million pounds of 99.5% bismuth cathode, as well as 81,000 ounces of gold in each of the first two years of the mine life, followed by 27,000 ounces of annual gold production in subsequent years. Approximately 760,000 pounds of 99.9% copper cathode and a nickel precipitate will also be produced as by-products of the cobalt refining process. Notably, the process flow sheet, production of high value metal products and metal recoveries have all been proved by pilot plant testing.

When it enters production, NICO is expected to be a significant global producer of cobalt to service increasing demand in high performance rechargeable batteries used in portable electronic devices and electric- and hybrid-electric cars. Cobalt is also used in superalloys, magnets, high strength steels, catalysts, pigments and food additives (Vitamin B12). NICO is also expected to be the largest independent producer of bismuth in the world to service growth in the demand for traditional products (medicines, flame retardants, fusible alloys, castings, cosmetics, lubricants, dimensionally stable compounds / alloys, and chemicals). Due to concerns about lead-toxicity, the market is also growing for a variety of new products that have been developed because bismuth is an environmentally safe replacement for lead. The gold contained in the NICO deposit is an attractive counter cyclical hedge, which is primarily recovered during early years of the mine life.

Fortune Minerals has determined that relocating its refinery to Saskatoon produces positive net impacts for the entire NICO development for the benefit of all stakeholders. It may also provide the Company with an opportunity to source materials from other projects for custom processing and also to participate in the metals recycling business. Undertaking such business activities would provide for a sustainable project extending beyond the anticipated life of the NICO mine. The Saskatoon refinery is expected to employ 85 people over a 15 to 20 year period based on the anticipated life of the NICO deposit alone. Investment in the refinery is estimated at $150 million and construction is anticipated to commence upon receipt of the NICO mine permits and project financing. NICO is in the second phase of environmental assessment for mine permitting and is under review for senior project financing by BNP Paribas, a world class bank and highly ranked market leader in global mine finance.

About Fortune Minerals

Fortune Minerals is a diversified natural resource company with several 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 gold-cobalt-bismuth-copper deposit, the Sue-Dianne copper-silver deposit and other base and precious metals exploration projects in the Northwest Territories. Fortune Minerals owns the buildings and equipment from the Golden Giant Mine at Hemlo, Ontario, which have been dismantled for relocation to NICO. Fortune Minerals is focused 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 completion of the purchase of the SHMF and production from the NICO project and the SHMF. 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 the receipt of necessary permits and approvals, the uncertainties involved in interpreting drilling results and other geologic data, fluctuating metal prices, the possibility of project cost overruns or unanticipated costs and expenses, uncertainties related to metal recoveries and other factors. 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: Fortune Minerals Limited: Robin Goad, President or Lindsay Simmons, IR Coordinator, [email protected], Tel.: [phone], Fax: [phone], www.fortuneminerals.com; Renmark Financial Communications: Dan Symons: [email protected] or Barbara Komorowski: [email protected]; Media Contact: Valerie Lacasse: [email protected], Tel: [phone], Fax: [phone], www.renmarkfinancial.com