The mine has made four shipments of concentrate to the smelter received its first revenue
Issued Capital: 194,578,180
LONDON, ON, Sept. 18, 2014 /CNW/ – Fortune Minerals Limited (TSX: FT) (OTCQX: FTMDF) (“Fortune” or the “Company”) (www.fortuneminerals.com) announces receipt of the previously announced US$4 million bridge loan that is part of the production pre-pay facility from Lascaux Resource Capital Fund 1 LP (“Lascaux”) (see Fortune News Release dated August 20, 2014). Proceeds from this financing are being used to fund the acquisition of the remaining interest in the Revenue Silver Mine (“RSM”) in southwest Colorado, U.S.A., make capital improvements to the mine, and to provide working capital.
The Company is also pleased to report that the RSM has received its first revenue from the sale of concentrates to a smelter. Four concentrate shipments have been made and the mine is continuing with commissioning toward its ramp up to a 400 ton per day production rate.
Robin Goad, Fortune’s President and Chief Executive Officer commented, “We are very pleased to be working with Lascaux as our financial partner to help complete the Revenue Silver Mine acquisition and complete work to improve operating efficiencies at the mine required to achieve full production. The production pre-pay funding arrangement is an elegant solution to minimize equity dilution in a difficult capital market environment.”
Fortune, through its wholly-owned subsidiary Fortune Revenue Silver Mines Inc. (“Fortune Revenue”), acquired an initial 12% participating interest in the RSM in May 2014 and has been the Operator of the mine since that time. Fortune Revenue can complete the acquisition of a 100% interest in the RSM by paying the owners US$15.5 million by October 1, 2014, with an obligation to pay a further US$10 million following completion of the acquisition.
With completion of the acquisition of the RSM, Fortune would achieve its goal of becoming an operating company with two significant organic growth projects: the NICO gold-cobalt-bismuth-copper development in the Northwest Territories (“NT”) and related refinery in Saskatchewan; and the Arctos anthracite metallurgical coal project in British Columbia.
About the Revenue Silver Mine:
The RSM is a fully constructed and permitted, high-grade, underground silver mine with a 400 ton per day mill and concentrator located in an underground excavation. The mine is situated on 147 patented and unpatented mining claims, totaling approximately 1,079.9 acres in southwest Colorado, 11 km southwest of the town of Ouray and 490 km southwest of Denver. The RSM is an historic producer that operated between 1876 and 1912 by Caroline Mining Co. and had production estimated at approximately 15 million ounces of silver before the mill burned and the mine closed. The RSM is located in the prolific Sneffels silver mining district where there are many past producers. Fortune believes there is very good potential to identify additional resources on the mine property and in the district generally.
About Fortune Minerals:
Fortune is a diversified North American mining and development company. Fortune operates the Revenue Silver Mine in Colorado and is developing the vertically integrated NICO gold-cobalt-bismuth-copper project that is comprised of a proposed mine and mill in the NT that will produce a bulk concentrate for shipment to a refinery in Saskatchewan for processing to high value metal and chemical products. Fortune is also developing the Arctos anthracite metallurgical coal project in British Columbia and owns the Sue-Dianne copper-silver-gold deposit and other exploration projects in the NT. 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 and forward-looking statements within the meaning of applicable securities legislation. This forward-looking information includes statements with respect to, among other things, the anticipated completion of the acquisition of 100% of the RSM using the proceeds from the anticipated production pre-pay facility from Lascaux described herein, the proposed increase in the production rate at the RSM, the potential to identify additional resources in the area of the RSM and the proposed development of the NICO and Arctos projects. Forward-looking information is based on the opinions and estimates of management as well as certain assumptions at the date the information is given (including, in respect of the forward-looking information contained in this press release, assumptions regarding the Company’s ability to complete the Lascaux financing, to repay Lascaux from production at the RSM, to increase production at and identify additional resources near the RSM and to complete the development of the NICO and Arctos projects). However, such forward-looking information 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 risk that the Company may not be able to complete the Lascaux production pre-pay facility or the acquisition of the RSM; unexpected technical delays and associated timing delays in the ramp-up of the RSM and associated production of silver and other metals; the risk that the Company may not be able to establish increased resources near the RSM; the risk that the Company may not be able to arrange the necessary financing to complete the NICO and Arctos projects; the risk that operating and/or capital costs may be materially higher than anticipated; the risk of decreases in the prices of relevant commodities; potential loss of key personnel; potential discrepancies between actual and estimated production; potential discrepancies between actual and estimated mineral resources or between actual and estimated metallurgical recoveries; potential labour shortages; the risk of mining accidents; the risk of changes in applicable laws or regulations; uncertainties with respect to the timing and receipt of all necessary permits; and other factors. In addition, the risk factors described or referred to in Fortune’s Annual Information Form for the year ended December 31, 2013, which is available on the SEDAR website, should be reviewed in conjunction with the information contained in this news release. 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 or revise it to reflect new events or circumstances, except as required by law.
SOURCE Fortune Minerals Limited