Fortune Minerals closes NICO refinery lands purchase

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Fortune Minerals Limited is pleased to announce it closed the purchase of lands near Saskatoon, Saskatchewan on which the Company proposes to build its Saskatchewan Metals Processing Plant (“SMPP”) for the NICO gold-cobalt-bismuth-copper project. Rezoning of the 482 acre property is underway as the Company nears completion of the permitting process in two jurisdictions. NICO is a planned vertically integrated project consisting of an open pit and underground mine and mill in the Northwest Territories (“NT”) and refinery in Saskatchewan where concentrates from the mill will be processed to high value metal products.

The SMPP location in the Rural Municipality of Corman Park, 27 kilometres northwest of Saskatoon, straddles the CN main rail line and is near the Trans-Canada Highway. The site has access to nearby natural gas and reagent sources for processing as well as a skilled labour pool of engineers and refinery workers. The plant is expected to employ at least 85 employees over a 20 year period based on the anticipated life of the NICO deposit. The opportunity to source materials from other projects for custom processing and the potential to participate in the metals recycling business could extend the useful life of the facility well beyond the mine life. The 2012 NICO Front End Engineering and Design study has determined the capital cost for the refinery at $230 million (see the report entitled “Technical Report And Updated Mineral Reserve Estimate And Front-End Engineering & Design (FEED) Study on the NICO Gold-Cobalt-Bismuth-Copper Deposit Mazenod Lake Area, Northwest Territories, Canada” prepared by P&E Mining Consultants Inc. and effective as of July 2, 2012 filed under the Company’s SEDAR profile at www.sedar.com).

The high concentration ratio of the NICO ore allows for generation of a high value concentrate at the mine site containing the valuable metals, which can then be transported to a lower cost region for processing. The decision to locate the downstream processing in Saskatchewan was driven primarily by the availability of lower cost electricity and the support of the Government of Saskatchewan, which passed attractive tax legislation to encourage processing of raw materials that have been sourced from outside the province. An average of 4650 tonnes per day of NICO ore will be converted to 180 tonnes of bulk concentrate and shipped by truck and rail to the SMPP for processing. The life of mine average annual metal production from the facility is expected to be 40,500 ounces of gold doré, 1576 tonnes cobalt in the form of 99.8% cobalt cathode and/or cobalt sulphate heptahydrate, 1670 tonnes of bismuth ingot, and 254 tonnes of copper metal precipitate.

Fortune is advancing through the Environmental Assessment process in Saskatchewan to permit the SMPP.  The next step is for the Saskatchewan Environmental Assessment Branch (“SEAB”) to post the Environmental Impact Statement and associated documentation for public review. This will be followed by the SEAB’s recommendation to the Saskatchewan Minister of Environment. Permitting in the NT is also well advanced with the Mackenzie Valley Review Board (“MVRB”) finalizing its Report of Environmental Assessment that will contain the recommendation to the Minister of Aboriginal Affairs and Northern Development Canada for the mine and concentrator. This report is expected to be completed by January 22, 2013 and shortly thereafter placed on the public registry.

Fortune is concurrently working with Deloitte & Touche Corporate Finance Canada (“Deloitte”) to attract a strategic partner(s) to provide project financing.  As a potential reliable Canadian-based producer of cobalt and bismuth, NICO presents an attractive opportunity for potential partners that need a secure source of supply of these specialty metals. The countercyclical hedge provided by the approximately 1.1 million ounces of gold contained in the deposit, together with the low cash cost for metals net of by-product credits, will contribute to the sustainability of operations during periods of low metal prices.  Cobalt has growing consumption in superalloys and cobalt sulphate needed to manufacture high performance lithium-ion and nickel-metal hydride rechargeable batteries used in portable electronic devices and hybrid-electric cars.  NICO also contains 15% of global bismuth reserves, which has growing use as a non-toxic and environmentally safe replacement for lead in a number of important metal alloys, industrial materials as well as other specialized products that leverage its unique physical and chemical properties.

The disclosure of scientific and technical information contained in this press release has been approved by Robin Goad, M.Sc., P. Geo., President and Chief Executive Officer of the Company, who is a “qualified person” under National Instrument 43-101.

About Fortune Minerals:
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 the Arctos Anthracite Project in British Columbia (“BC”) and the NICO gold-cobalt-bismuth-copper deposit in the NT. As part of the development of the NICO deposit, Fortune is developing the Saskatchewan Metals Processing Plant (“SMPP”) in Saskatchewan to process NICO concentrates to high value metal products. In addition, the Company 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.

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