Investor Presentation February 2014
This document contains certain 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 size and quality of the Company’s mineral resources, progress in development of mineral properties, timing and cost for placing the Company’s mineral projects into production, costs of production, amount and quality of metal products recoverable from the Company’s mineral resources, demand and market outlook for metals and coal and future metal and coal prices. 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, 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 and coal prices, the possibility of project cost overruns or unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future, uncertainties related to metal recoveries and other factors. Mineral resources that are not mineral reserves do not have demonstrated economic viability. Inferred mineral resources are considered too speculative geologically to have economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that mineral resources will be converted into mineral reserves. 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 them or revise it to reflect new events or circumstances, except as required by law . 2
Corporate Information Share Performance Daily Volume Listings: TSX (Canada): FT $0.60 5,000 Closing Price OTC QX (USA): FTMDF $0.50 4,000 Share Price $0.38 Shares Out – Basic 150.5 Share Price (C$) Volume ('000s) $0.40 3,000 Shares Out – Fully Diluted 160.4 Market Cap – Basic $57.2 $0.30 2,000 Working Capital (Q3 2013) $14.7 $0.20 1,000 Total Assets (Q3 2013) $159.3 All amounts in M or CAD$M except per share amounts. $0.10 - Feb-13 Apr-13 Jun-13 Aug-13 Oct-13 Dec-13 Feb-14 Analyst Coverage Ownership Dealer Date Rating Target Procon Resources Inc. 19% Killian Charles China Mining Resources Group Ltd. 10% June 28, 2013 Spec Buy $3.30 Industrial Alliance Securities Insiders 37% David Davidson July 24, 2013 Spec Buy $1.00 Paradigm Capital Michael Fowler July 22, 2013 Spec Buy $2.65 Loewen Ondaatje McCutcheon As of February 25, 2014 3
Fortune Minerals Limited � Canadian mineral development company � Headquartered in London, Ontario, Canada � Canada Focus ‐ operating in mining friendly jurisdictions Two late ‐ stage projects � ArctosAnthracite Project, BC � Positive Feasibility Study � In BC Environmental Assessment process � NICO Gold ‐ Cobalt ‐ Bismuth ‐ Copper Project, Northwest Territories & Saskatchewan: � Positive Feasibility & FEED Studies � Completing Permitting Process 4
� Significant deposit of gold, cobalt & bismuth co ‐ products & by ‐ product copper � Positioned to be one of the largest & lowest cost suppliers of cobalt sulphate to the rapidly expanding battery sector � Very advanced project with $110 million already invested – Including pilot plants & test mining – Environmental Assessments Completed – Planned production in 2017 ** � Positive Front End Engineering & Design Study (FEED) in 2012 based on a vertically integrated mine & mill in Northwest Territories & refinery in Saskatchewan � FEED ~20% of detailed engineering complete for procurement � Attractive economics – NPV of $309 million* – Highly leveraged to increased cobalt & gold prices with low downside risk � Negative cash cost – Cobalt cash cost (net of credits) of negative US$0.81/lb at Base Case prices & negative US$1.07/lb at recent prices � Updated Feasibility Study Q1 2014 Test mining 2006/2007 *Base case: pre ‐ tax, 7% discount rate ** Subject to financing 5
June 27, 2013 ‐ Strategic (19.4%) investment of C$11.7million by Procon Resources Inc. � CAMCE via controlled subsidiary, “Procon” acquired interest in Fortune as first stage investment for proposed equity & debt project financing transaction for NICO � Long ‐ term strategic & financial partner to help advance NICO project � Provided financing in challenging capital market – Validates Fortune as company with high growth potential � Financing overview: � CAMCE anticipated to contribute required capital in equity & debt guarantee with Chinese bank � Right to conduct mining contracting & construction services to project on commercially competitive terms � Procon/CAMCE’s has one seat on Fortune’s board of directors 6
� Proven flow sheet to produce high value products: � Gold: Doré Bars � Cobalt: Sulphate Heptahydrate (~20.9% Co) – Potential to diversify production with cathode, Carbonate, Oxide, Chloride & Nitrate � Bismuth: ingot (>99.995% Bi), needles (>99.995% Bi) & Oxide (44.8% Bi) � Copper: Cement (~90% Cu) – Potential to produce Cathode Gold Doré Cobalt Sulphate Copper Cement Bismuth Ingot Bismuth Needles Bismuth Oxide 7
10 ‐ Yr Historical Gold Price $1,800 $1,669 $1,574 $1,600 � Gold price increased in the past decade $1,398 $1,400 � While mine supply remains relatively flat, $1,211 future demand continues to grow: $1,200 � Growing physical demand from Asia & $1,000 central banks $873 $873 � $800 Investment demand based on currency $697 protection & safe haven status $604 $600 � Flexible financing opportunities $363 $410 $445 $400 � Significant counter ‐ cyclical metal hedge NICO contains 1.1 million ounces of gold $200 $ ‐ 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Source: Bloomberg, Consensus Economics Inc. 8
� Wide chemical and metallurgical market applications in batteries, high strength alloys, Cobalt Consumption by End Use cutting tools, magnets, catalysts & pigments 2013 � High purity cobalt is used in aerospace Battery Chemicals applications 7% 4% 3% 7% (42%) � Cobalt sulphate & oxide used in lithium ion & Superalloys (19%) 42% nickel metal hydride batteries for electronic 9% devices & hybrid/electric vehicles Hard Materials (9%) 9% � Chemical applications accounted for ~60% of Catalysts (9%) worldwide cobalt demand in 2013 & expected 19% to dominate future cobalt consumption Ceramics / Pigments (7%) � Over past decade, demand growth was primarily from use in chemical applications, particularly rechargeable batteries & catalysts � Cobalt demand expected to grow at ~7% per year in the next five years 9
� Cobalt critical for manufacturing batteries used in electric vehicles*, computers, cell phones & other electronic devices – Battery usage 42% of cobalt demand with growth of ~20% per year � Nickel metal hydride car batteries contain ~4 kg of cobalt � Lithium ‐ ion car batteries contain 2 to 6 kg of cobalt � Tesla planning world’s largest battery factory reportedly doubling lithium ‐ ion production � By 2020, Cobalt use in battery applications alone could be greater than entire 2013 world market for refined cobalt Global Electric Vehicle Battery Sales 6 5 Millions of Units Approx. 20% compound annual growth forecast from 2011 to 2020 4 3 2 1 0 2008 2010f 2012f 2014f 2016f 2018f 2020f * Electric vehicles include hybrid electric vehicles (HEV), plug ‐ in hybrid electric vehicles (PHEV) & pure electric vehicles (EV) Source: Roskill 10
� World market for refined cobalt ~85,000 tonnes in 2013, excluding some secondary processing & scrap � Vast majority of cobalt sourced from regions that are politically unstable or prone to export restrictions � Congo (DRC) currently accounts for 61% of global supply � China has the largest refining capacity (43%) but limited mine supply � Chemical production in deficit whereas metals in surplus � LME initiated futures market trading for cobalt in 2010, resulting in greater liquidity � NICO will be a reliable North American vertically integrated producer Source: USGS Industry Survey 11
� Traditionally used in low temperature fusible alloys, cosmetics, chemicals, fire retardants & sprinkler systems � New markets focus on its non ‐ toxicity as environmentally safe replacement for lead in plumbing & electronic solders, brass, steel & aluminum, ceramic glazes, hot dip galvanizing & pigments: � Global framework to eliminate lead expected to drive increased bismuth consumption � European legislation to eliminate lead in electronics Growing Number of Applications Source: USGS Industry Survey 12
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