The Globe and Mail

Go to the Globe and Mail homepage

Jump to main navigationJump to main content

Press release from CNW Group

Fortune Minerals announces strategic investment by Procon Resources Inc.

Thursday, June 27, 2013

Fortune Minerals announces strategic investment by Procon Resources Inc.

11:09 EDT Thursday, June 27, 2013

/NOT FOR DISSEMINATION IN THE UNITED STATES OR TO UNITED STATES NEWSWIRE SERVICES/

Fortune and Procon will work together to advance the development of the NICO Gold-Cobalt-Bismuth-Copper Project in the Northwest Territories 

Issued Capital:  121,276,976
Excluding shares issued pursuant to agreement

LONDON, ON, June 27, 2013 /CNW/ - Fortune Minerals Limited (TSX: FT) (OTCQX: FTMDF) ("Fortune" or the "Company") (www.fortuneminerals.com) is pleased to announce that Procon Resources Inc. ("Procon") has agreed to make a strategic investment of C$11.7 million in the capital stock of Fortune at a price of $0.40 per common share for a total of 29,250,000 newly issued common shares. The private placement will be completed in two tranches of $5,850,000 and will result in Procon holding a 19.4% ownership stake in the Company on a non-diluted basis.  The issue price represents a 14% premium over Fortune's closing price on The Toronto Stock Exchange ("TSX") on June 26, 2013.

Procon is a full-service mining contracting company headquartered in Vancouver, Canada. It is majority owned by China CAMC Engineering Co., Ltd. ("CAMCE"), a leading provider of international engineering, procurement and construction ("EPC") services based in Beijing, China.

Pursuant to the private placement agreement, Procon will have the right to appoint one nominee to the board of directors of Fortune upon closing of the first tranche of the placement. Closing of the private placement is subject to customary closing conditions including the approval of the TSX. The first tranche is anticipated to close on July 25, 2013 and the second tranche is expected to close on October 1, 2013.

Fortune and Procon have also agreed to work together to advance the NICO Gold-Cobalt-Bismuth-Copper Project ("NICO" or the "Project") in the Northwest Territories ("NT"), Canada towards the objective of commencing construction activities in 2014, including completing project financing arrangements, detailed engineering, and a project execution plan.  Fortune will use the proceeds of the private placement financing to advance the Project and for working capital.

Mr. Robin Goad, CEO of Fortune commented, "We are very proud to welcome Procon as a strategic investor. Their expertise in construction, engineering and mining services will be highly beneficial as Fortune advances its mining projects and becomes a multi-asset producer."

Mr. Ed Yurkowski, CEO of Procon, "We are very familiar with Fortune and its projects, having conducted the underground test mining for the NICO mine in 2005 and 2006.  We look forward to leveraging our experience and working with Fortune's management team to make the NICO Project a success."

Fortune's financial advisor is Deloitte Corporate Finance Inc. and its legal advisors are Norton Rose Fulbright Canada LLP. Procon's financial advisor is PricewaterhouseCoopers and its legal advisors are Dentons Canada LLP.

This news release does not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of such jurisdiction.  The securities have not been and will not be registered under the United States Securities Act of 1933, as amended, or any state securities laws and may not be offered or sold within the united Sates unless an exemption from such registration is available.

About NICO
The NICO deposit in Canada's NT contains open pit and underground Proven and Probable Mineral Reserves totalling 33 million tonnes containing 1,085,000 ounces of gold, 82 million pounds of cobalt, 102 million pounds of bismuth, and 27 million pounds of copper (see News Release, dated July 2, 2012). At the planned mill throughput rate of 4,650 tonnes of ore per day, the mineral reserves will sustain operations for 19.8 years. More than $110 million of work has already been conducted for the NICO project to delineate and engineer the deposit and reduce risks from the development, including completion of Front-End Engineering and Design studies by Jacobs Minerals Canada Inc. and other engineering companies, underground test mining, and several pilot plant tests. Site preparations are expected to be conducted this summer to prepare for construction activities anticipated to begin in 2014, subject to completion of the Project Financing and receipt of applicable permits.

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

About Procon
Procon is a full service mining contractor providing a comprehensive range of expertise to meet the growing needs of the mining and civil industries.  Procon provides services in underground and open pit mining, mill construction and rehabilitation, heavy equipment rental and maintenance, and industrial services for infrastructure for the mining, forestry, and construction industries.  Procon has one of the largest owned fleets of mining equipment and has ranked as one of the leading mining contractors in North America and one of the top thirty general contractors in Canada.  Well respected in the mining industry, Procon also has an impressive performance record in both safety and operations.

Procon is majority owned by CAMCE, a Fortune China 500 company with revenues of RMB 10.2 billion (USD 1.6 billion) in 2012. CAMCE's core business is international EPC services, contracting, trading, and domestic and overseas project investment.  With extensive experience in international project management, CAMCE has completed large turnkey projects in Asia, Africa, Europe, Latin America and the Caribbean in the fields of transportation, municipal engineering, irrigation and water works, power development, construction materials, food processing, textiles, petrochemicals, agricultural and construction equipment and telecommunications.

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. 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.

This news release contains forward-looking information. This forward-looking information includes statements with respect to, among other things, the financing from Procon referred to herein (the "Financing), proposed production of gold and specialty metals, and the proposed development of the NICO project. 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 inherent volatility of metal prices, the risk that the Company may not be able to complete the Financing or arrange the necessary additional financing to construct and operate the NICO mine, uncertainties with respect to the receipt or timing of required permits for the development of the NICO project, the possibility of delays in the commencement of production from the NICO project 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 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

For further information:

Fortune Minerals Limited
Robin Goad, President, or
Troy Nazarewicz Investor Relations Manager
info@fortuneminerals.com
Tel.: (519) 858-8188
Fax: (519) 858-8155
www.fortuneminerals.com

Renmark Financial Communications
Barbara Komorowski: bkomorowski@renmarkfinancial.com, or
Nadia Marks: nmarks@renmarkfinancial.com
Montreal Tel: (514) 939-3989, Toronto Tel. (416) 644-2020
Montreal Fax: (514) 939-3717, Toronto Fax. (416) 644-2021
www.renmarkfinancial.com

Products
  • Globe Unlimited

    Digital all access pass across devices. subscribe

  • The Globe and Mail Newspaper

    Newspaper delivered to your doorstep. subscribe

  • Globe2Go

    The digital replica of our newspaper. subscribe

  • Globe eBooks

    A collection of articles by the Globe. subscribe

See all Globe Products

Advertise with us

GlobeLink.ca

Your number one partner for reaching Canada's Influential Achievers. learn more

The Globe at your Workplace
Our Company
Customer Service
Globe Recognition
Mobile Apps
NEWS APP
INVESTING APP
Other Sections