Fortune Minerals announces railway development strategy for Mount Klappan
metallurgical coal project

Rail haulage strategy to Prince Rupert economically attractive

Issued Capital: 97,314,407

LONDON, ON, Aug. 23 /CNW/ - Fortune Minerals Limited (TSX-FT) ("Fortune" or the "Company") is pleased to announce that it has developed a new commercially competitive railway transportation option for haulage of anthracite metallurgical coal products from the Company's Mount Klappan project in northwest British Columbia to the port of Prince Rupert. This new development strategy is based on existing infrastructure and provides a much simpler transportation solution that would allow the Company to rapidly capitalize on the world class resource potential of Mount Klappan and participate in the growing global shortage of high quality metallurgical coals. The railway strategy would also provide access to the Ridley Coal Terminal in Prince Rupert that can load full "Capesize" bulk vessels, making this the preferred point of export for most of the Company's potential customers in the overseas steel industry.

The new railway development strategy is based on quotes that were recently received from the Canadian National Railway Company ("CN"), which operates on the former BC Rail Dease Lake Line to Minaret, 150 km south of Mount Klappan. The roadbed for this railway right-of-way north from Minaret to Mount Klappan and has already been largely constructed and provides an existing transportation corridor that can be upgraded for rail or truck haulage of coal from the mine to Minaret.

Fortune will be required to invest significant capital to upgrade the railway right-of-way as well as make improvements to the CN Rail Dease Lake Line to accommodate 127 car unit trains with 95 tonne car loads and efficient rail speeds. However, this railway development option eliminates a similar amount of capital that would otherwise have been required for truck haulage of coal to Stewart. These savings include elimination of the 100 km access road between the mine and Highway 37, elimination or reduction in the size of the off-site truck fleet, and it also avoids the substantial investment that would have been required to upgrade the bulk terminal facilities in Stewart. Use of the existing infrastructure under the railway option will also reduce the environmental footprint for the development, eliminates concerns for truck and port congestion in Stewart, reduces overall project risk, and provides for more rapid project execution and construction.

Fortune has already engaged Deloitte & Touche Corporate Finance Canada Inc. ("Deloitte") as the Company's financial advisor to pursue strategic alternatives for the advancement of Mount Klappan (see Fortune news release, dated June 30, 2010). Deloitte is assisting Fortune by identifying potential strategic partners for the project and evaluating potential transactions.

Mount Klappan has very large resources and reserves of anthracite metallurgical coal contained in 4 deposit areas, located 150 km northeast of the port of Stewart and 330 km northeast of the port of Prince Rupert. These deposits contain Measured Resources of 107.9 million tonnes, Indicated Resources of 123 million tonnes, plus 2.572 billion tonnes in the Inferred and Speculative classes (see Fortune news release, dated June 22, 2004)(1). Mount Klappan has already been assessed in a positive definitive feasibility study in 2008 by Marston & Marston Inc. ("Marston") (see Fortune news release, dated August 7, 2008)(1). This study assessed the economics of an initial open pit mine in the Lost-Fox deposit area, a wash plant, and mine- and off-site infrastructure to produce 3 million tonnes per year of premium, ultra-low volatile, pulverized coal injection ("PCI") product for the overseas steel industry and other premium metallurgical coal products. Both rail and truck haulage options to the ports of Prince Rupert and Stewart, respectively have previously been assessed. The Proven and Probable In-Situ Mineral Reserves identified in the initial pit in the Lost Fox deposit are 102 million tonnes, producing 61 million PCI product tonnes to support a minimum 20-year mine life. Richard Marston, P.E., is the Qualified Person responsible for the Mineral Resource and Mineral Reserve estimates and the definitive feasibility study in accordance with National Instrument 43-101.

Fortune is working with Marston to update the financial model for its 2008 definitive feasibility study for the Mount Klappan project, using the new transportation data received from CN and other consultants. Fortune expects to receive the results of this updated rail analysis in September. The Company is also engaging local communities to make this project a success for the benefit of all stakeholders.

    
    (1) For additional information on the Mount Klappan Mineral Resources
        and Reserves, and feasibility studies, please see the information
        posted for the Company on the SEDAR website at www.sedar.com.
    

About Fortune:

Fortune is a diversified resource company with several mineral deposits and a number of exploration projects, all located in Canada. The Company is focused on the development of its NICO gold-cobalt-bismuth-copper deposit in the Northwest Territories and its metals processing plant in Saskatchewan. Fortune Minerals owns the buildings and equipment from the Golden Giant Mine at Hemlo, Ontario, which have been dismantled for relocation to NICO. Fortune also owns the Mount Klappan anthracite coal deposits in British Columbia, and the, the Sue-Dianne copper-silver deposit and other exploration projects in the Northwest Territories. Fortune 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 proposed development of and anticipated production from the Mount Klappan project, the establishment of a railway link to Prince Rupert and the pursuit of strategic alternatives for the Mount Klappan projects. 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 risk that the Company may not be able to arrange the necessary financing to construct and operate the Mount Klappan mine and/or the railway link to Prince Rupert, the risk that the Company may not be able to conclude a strategic transaction for Mount Klappan or an agreement with CN for the transportation of coal from Mount Klappan to Prince Rupert, the possibility of delays in the commencement of production from the Mount Klappan project, 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 prices and other factors. 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 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, Barbara Komorowski: [email protected], or Christine Stewart: [email protected], Montreal Tel: [phone], Toronto Tel. [phone], Montreal Fax: [phone], Toronto Fax. [phone], www.renmarkfinancial.com