1. Emerging Strategic
Metal & Coal
Fortune Minerals Limited Producer
Investor Presentation
June 2012
TSX-FT
2. FORWARD-LOOKING INFORMATION
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
3. Listing: TSX-FT, OTCQX-FTMDF
Share Price: $ 0.67
Issued Shares: 117.1 million
Corporate Fully Diluted: 123.5 million
Information Market Cap: $78.5 million
Working Capital: $ 24.9 million (Q1- 2012)
Total Assets: $ 155.7 million (Q1-2012)
China Mining Resources Group Ltd. ~13%
Ownership Manulife Global Management US ~ 9%*
Officer & Director Holdings ~21% (includes China Mining)
Killian Charles, Industrial Alliance Securities ($3.30 Target 01/31/12)
Analyst Reports David Davidson, Paradigm Capital ($2.85 Target 07/15/11)
Michael Fowler, Loewen Ondaatje McCutcheon ($2.65 Target 05/10/12)
Share
Performance
As of May 24, 2012
All values in C$ unless otherwise noted 3
*Precision IR data at April 12, 2012
4. PROPERTY INTERESTS
1. Mount Klappan Anthracite Coal Deposit:
British Columbia
2. NICO Gold-Cobalt-Bismuth-Copper Deposit:
Northwest Territories
3. Saskatchewan Metals Processing Plant
Saskatchewan
4. Sue-Dianne Copper-Silver-Gold Deposit
Northwest Territories
5. Salkeld Lake Copper-Zinc-Lead-Gold-Silver Project
Northwest Territories
6. Camsell River Silver Project
Northwest Territories
Canada Focus - Operating in mining friendly jurisdictions
4
5. EMERGING PRODUCER OF GOLD, MET. COAL & SPECIALTY METALS
KEY ASSETS
Mount Klappan Anthracite Coal Project, British Columbia (BC)
One of the world’s premier metallurgical coal development projects
JV partnership with South Korean steel producer POSCO
Collaboration with CN Rail to extend railway infrastructure
Accelerated development strategy with funding to construction in place
NICO Gold-Cobalt-Bismuth-Copper Project, Northwest Territories (NWT) & Saskatchewan
4 million equivalent gold ozs (1) - Significant gold & cobalt - Largest deposit of bismuth in world
Mine & Concentrator planned in NWT
Vertically integrated metals processing plant planned near Saskatoon, Saskatchewan
Potential future mill feed from Sue-Dianne Copper-Silver-Gold satellite deposit
Two development projects - Both:
Positive definitive feasibility studies >$ 1.3 billion combined base case NPV
Successfully test mined & pilot plant processed
In permitting
Deloitte & Touche engaged to secure strategic partners
New reserves & economics pending
EXPERIENCED BOARD & MANAGEMENT TEAM
Proven records in permitting construction & mine operations
(1) Using Metal Price Assumptions: US$ 900/oz Au, US$ 20/lb Co, US$ 10/lb Bi, US$ 2.75/ lb Cu 5
6. MOUNT KLAPPAN ANTHRACITE COAL PROJECT
One of world’s largest undeveloped metallurgical coal deposits
Advanced project with $ 90 million of work completed
Definitive Feasibility Study with robust economics
Railway development strategy to port of Prince Rupert - Allows for scalable expansion
World-class JV partner secured with POSCO - One of the world’s largest steel producers
Supply shortages of metallurgical coals with growing world consumption
Railway sub-grade links mine site with CN mainline & Ridley Terminals
6
7. JOINT VENTURE WITH POSCO
POSCO Canada (POSCAN) has acquired 20% interest in Mount Klappan. Highlights:
Anticipated total payments & cash contributions of $ 181 million based on current capital
cost estimates
$ 30 million paid to Fortune, $20 million contributed directly to the JV
20% of total development & capital costs - $154 million under current estimates
$ 17.2 million in additional payments at production
20% of operating costs for 20% of production in-kind for their own use
Fortune is Project Manager & is compensated for providing operational, technical &
administrative support over life of mine
Secures world-class investor & strategic partner
Validates Mount Klappan as one of world’s premier metallurgical coal development projects -
Key future supplier to global steel industry
Accelerates project development - Upfront payment anticipated to provide 100% of funding to
complete detailed engineering, permitting & stakeholder consultations for construction
Maintains significant upside for Fortune shareholders
$601 million post-transaction levered after-tax NPV (8%) for Fortune’s 80% interest at
$175 per tonne for PCI based on current reserves
7
8. ABOUT POSCO
World’s 3rd largest steel producer by crude steel production
Crude steel production of 35.4 million tonnes in 2010 - Sales for 12 months ended
September 30, 2011, totalled US$ 67.0 billion
Gwangyang Works - Largest steel mill in world, 22 million tonnes capacity
Global expansion plans towards goal of 50 million tonnes total crude steel production
Leading innovator in steel production – Finex
Headquartered in Seoul, South Korea
Listed on Korea (KRX), New York, London & Tokyo Stock Exchanges
8
9. STRATEGIC LOCATION & INFRASTRUCTURE
Large license area in northwest BC (16,411 Ha)
Close proximity to deep water shipping ports
Stewart Port (150km)
Ridley Terminals in Prince Rupert (330km)
Mine site straddles railway right-of-way
Track (CN) installed to 150km south of mine
Railway road bed largely complete to mine
Road access from railway subgrade
Support of CN Rail for railway expansion
BC Government extending electrical grid to area
Project in Tahltan and Gitxsan Territories
BC Government sharing revenues with First
Nations
9
10. MOUNT KLAPPAN RESOURCES & RESERVES
Significant potential to upgrade & increase resources & new reserves (expected Q2 2012)
Lost Fox deposit remains open for possible expansion
Additional coal seams identified below 300 meters & on adjacent lands
Mount Klappan Resources (million tonnes)
Area Measured (M) Indicated (I) M+I Inferred
Lost Fox 107.9 109.5 217.4 91.5
Hobbit‐Broatch 13.5 13.5 258.4
Summit 9.6
Nass
Total 107.9 123.0 230.9 359.5
Lost Fox Metallurgical Coal Reserves (million tonnes)
Run – Of –Mine Coal Reserves 10% Ash Product Reserves
Measured Indicated Total In Situ Proven Probable Total Product
89.5 16.8 106.3 51.6 9.2 60.8
The Mount Klappan Mineral Resource and Mineral reserve estimates were prepared in 2002, 2005, and 2007, respectively, by Marston & Marston Inc. in compliance with NI
43‐101. Richard Marston, P.E. is the Qualified Person responsible for the estimates. In addition to the Measured, Indicated and Inferred resources in the table, historical
resources include 2.2 billion tonnes in the Speculative class. However, Speculative resources are not current and should not be relied upon.
10
11. ANTHRACITE PRODUCTS
Highest quality coal with very high carbon & energy content
Anthracite only 1% of world coal reserves
Metallurgical coal with diverse applications
Filter Media US$ ~ 1000 / tonne
Metallurgical Reductants / charge carbon US$ ~ 300 / tonne
Ultra-Low Vol. PCI US$ ~ 175-200 / tonne
Sinter US$ ~ 150-175 / tonne
Other products:
Blend coal with coking coal for making metallurgical coke
Direct coke replacement
Urea fertilizers
Heating & cooking briquettes
Pelletizing
Premium thermal coal
Source: Company Information. 11
12. GROWING PCI DEMAND FROM STEEL PRODUCERS
Use of Pulverized Coal Injection
(PCI) reduces the amount of coke
required in steel production
Steelmakers around the world are
expanding PCI use to reduce
costs
Low-vol PCI typically priced at
70% to 80% of high quality hard
coking coal
Mount Klappan PCI will achieve a
higher price given its ultra-low
volatile content
Source: Macarthur Coal
12
13. DECREASING QUANTITIES OF ANTHRACITE AVAILABLE FOR EXPORT
World 2009 anthracite production: ~ 565 million tonnes
China: 483 million tonnes - Net importer since 2004
Vietnam: 43 million tonnes – Reduced exports to utilize production domestically
Few new high-quality deposits in mining friendly jurisdictions
Import of Anthracite for Japanese Market Production & Export of Anthracite in 2009
Million mt In million mt
Export /
Source: Marubeni (1990 – 2009 data), China Coal Resource Website (2010 data), Deloitte 55.8% 1.2% 58.4%
Production 32.2%
Source: EIA, Marubeni
13
14. EMERGENCE OF CHINA AS NET COAL IMPORTER
China became a net coal importer of anthracite in 2004, coking coal in 2007,
all coals in 2009
Coal & Anthracite Net Imports by China
In million mt
Source: China Coal Resource Website, Bloomberg
14
15. SIGNIFICANT FUTURE MET COAL DEMAND GROWTH
Global Met Coal Demand Increasing demand for good quality
1,600 Million mt metallurgical coals
1,440
1,400 China’s growth ~8% per yr
>500 million mt demand
increase over the next decade 1,185 Japan & South Korea are
1,200 with limited new production
potential
increasing anthracite imports –
New steel technologies - Lower
1,000 920 emissions
800
Emerging economies are driving
forces for future metallurgical coal
demand
600
India’s growth ~8% per yr & -
400 Crude steel production expected
to increase from 72.8 million
tonnes to 124 million tonnes by
200 2012 & 293 million tonnes by
2020
-
2010 2015 2020 Brazilian crude steel production
expected to increase from 26.5
Source: Peabody Global Energy Analytics million tonnes to 103 million
tonnes by 2030
Insufficient supply of metallurgical coals to meet forecast global demand
15
16. RAILWAY UPGRADE & EXPANSION
Railway transportation of coal provides lower operational risk over trucking – Allows for
scalable expansion of production to take advantage of large resource base
CN Rail operates between Prince George & port of Prince Rupert & on Dease Lake Line to
Minaret, 150 km south of Mount Klappan
Railway road bed largely constructed to mine site – Brownfield extension from Minaret
Survey & engineering of railway extension - $ 317.8 million capital cost included in 2010 DFS
CN collaborating on railway upgrade & extension to Mount Klappan
Existing railway right-of-way & road bed
16
17. PORT OF PRINCE RUPERT
Ice-free, deepwater port 36 hours closer to Asia than port of Vancouver
Ridley coal terminal a world-class coal & bulk materials handling facility
Capable of handling full Capesize vessels that reduces ocean freight
Currently handling ~70% of 16 Mtpa design capacity
Expansion to 24 Mtpa in progress – Potential to expand to 50 Mtpa
Opportunities for shared cargos & blending of coals with other metallurgical coal
producers
17
18. 2010 DEFINITIVE FEASIBILITY STUDY
November 2010 update to 2005 & 2008 DFS
Based on railway transport of coal to Ridley Coal Terminal in Prince Rupert
Initial 3 Mtpa production from Lost Fox deposit open pit mine, wash plant & site infrastructure
60.8 Mt of product coal reserves – 20+ yrs production (only 3.6% of global resource)
Premium ultra-low volatile PCI product
Can diversify product mix to produce premium products (charge carbon) & sinter
Life of mine average Free On Board (FOB) vessel cash cost US$104.79/tonne (C$110.30/tonne)
Pre-Tax NPV (8%)
In billions
BASE CASE
Ultra-Low Volatile PCI
US$175 / tonne (C$1 = US$ 0.95)
PRE-TAX AFTER TAX
IRR 25.4% 20.7%
NPV (8%) C$ 1,027.8 Million C$ 667.4 Million
Capital (Years 1-4) C$ 768.4 Million
(includes railway capital)
18
19. SIGNIFICANT UPSIDE POTENTIAL
Rail transportation allows for higher annual production than 3 Mtpa
DFS reserves only represents 3.6% of total resource – New reserves in preparation
Updated reserves in preparation for Lost Fox deposit that can support higher production
rates.
Production can be expanded from adjacent Hobbit – Broatch deposit
Current resource only identified to 300 meters – Additional coal seams identified at depth
Budget in place for additional drilling
3rd Party contribution to railway capital costs increases NPV
BC Government extending electrical grid & connection lowers power costs & enables use of
lower cost mining equipment
Lease-to-purchase of mobile equipment fleet lowers upfront capital costs & increases IRR
One of world’s largest undeveloped deposits – Railway transportation solution
provides scalable expansion potential
19
20. ACCELERATED DEVELOPMENT STRATEGY
JV partner now secured & accelerated development program underway
Next steps include:
Update reserve estimate
Complete updated feasibility study on the Lost Fox Mine
Complete engineering on railway transportation with CN Rail
Continue Tahltan, Gitxsan & stakeholder engagement
Complete environmental permitting process
Conduct additional expansion drilling
Deloitte engaged to secure 2nd stage strategic partner
Minority equity investor at the project level
Provision of debt & equity tied to off-take
Expertise in coal end market with strong financial position
Objective of announcing fully financed, permitted project at conclusion of currently
planned programs
20
21. NICO GOLD-COBALT-BISMUTH-COPPER PROJECT
100% Ownership – No 3rd party royalties
Open pit & underground mine & mill in Northwest Territories (NT)
Saskatchewan Metals Processing Plant (SMPP)
Vertically integrated hydrometallurgical facility to produce gold
doré, cobalt sulphate or cathode, bismuth ingot & copper metal
$ 100 million work completed to date, includes:
$ 20 million test mining
$ 12 million metallurgy & process pilot plants
2007 positive feasibility study & 2008 update
32.3% Pre-tax IRR
Pre-tax $ 361 million 8% NPV
Significant recent improvements not included
31 Million tonne reserve – 4 Million eq gold ozs*
Golden Giant equipment purchased & dismantled
Environmental Assessments advanced for mine & SMPP permitting
* Using Metal Price Assumptions: US$ 900/oz Au, US$ 20/lb Co, US$ 10/lb Bi, US$ 2.75/ lb Cu
Test mining 2006/2007
21
22. MINE LOCATION & INFRASTRUCTURE
5,140 Ha lease in southern NT
Winter access roads
All-weather road planned by governments to
Hwy (135 km)
$18 million in place for stage 1 –
realignment, bridges & roadbed
Engineering & environmental work
underway
450 km from railway at Hay River for
transport of concentrates to SMPP
160 km from City of Yellowknife
50 km from Town of Whati
22 km from Snare Hydro
Tlicho First Nation
Settled land claim
Co-operative Relationship Agreement
22
23. SASKATCHEWAN METALS PROCESSING PLANT (SMPP)
Hydrometallurgical plant to process bulk concentrate from NICO mine & mill to produce gold
doré, cobalt sulphate or cathode, bismuth ingot & copper metal
High concentration ratio of ore (low mass pull) using simple flotation
4,650 tonnes of ore / day reduced to only 180 tonnes of concentrate (3.8% sulphide fraction)
Allows concentrate to be shipped to Saskatchewan for lower cost processing
Advantages to Saskatoon site
Located on CN Rail line - Close to Trans Cda Hwy
Inexpensive power (5.7 cents / kWh)
Close to natural gas & reagent sources
Skilled worker / engineer pool – 85 employees
5 year tax holiday
SMPP capital cost $200+ million
23
24. DIVERSIFIED EXPOSURE TO GOLD & SPECIALTY METALS
Gold the most valuable component by value Copper
2%
Front end gold recovery - largest source of Bismuth
revenue in first year of operation 30%
Gold
Largest bismuth deposit world-wide – 15% 36%
global reserves
High purity cobalt metal (99.8%) or sulphate
commands premium price.
Cobalt
32%
Gold – 907,000 oz @ $1,595/oz
Cobalt – 82 Mlbs @ $16.00/lb
Bismuth – 109 Mlbs @ $11.00/lb
Copper – 27 Mlbs @ $3.50/lb
Prices as at May 18, 2012
24
25. GOLD – COUNTER CYCLICAL HEDGE
Historical & Forecast Gold Price Gold price increased consistently in past
$2,000
9 years, especially after recent economic
$1,749
downturn
$1,800
$1,600
$1,574 While mine supply remains relatively flat,
future demand continues to grow:
$1,400
$1,211
$1,200 Growing physical demand from
$1,000
Asia & Central banks
$873 $873
$800 $697 Growing investment demand based
$600
$604
on currency protection & safe
$410 $445 haven status
$363
$400 $310
$200 Provides a flexible financing opportunity
$0
Source: Bloomberg; Energy & Metals Consensus Forecasts, April 2012
25
26. COBALT – ROBUST MARKET WITH INCREASING DEMAND
World cobalt production (in tonnes) Wide application of industrial usage
60%
51%
50%
40%
30%
20%
12%
10% 7% 7% 5% 5% 4% 3% 2% 2% 2%
0%
• Vast majority of cobalt sourced from regions that are
politically unstable or prone to export restrictions • 82,000 t market with demand growing by ~8% / year
• Congo (DRC) currently accounts for 51% of global • Wide metallurgical & chemical market applications in:
supply batteries, high strength alloys, cutting tools, catalysts, etc.
• China has the largest refining capacity (43% in 2010) • Largest growth is in lithium ion & nickel metal hydride
but limited mine supply batteries for electronic devices & hybrid/electric vehicles
• LME initiated futures market trading for cobalt in • High purity cobalt (99.8%) used in aerospace applications
2010, resulting in a more liquid market • Cobalt sulphate (21%) used for batteries
• NICO will be a reliable North American producer
Source: USGS Industry Survey Source: Cobalt Development Institute
26
27. BISMUTH – ENVIRONMENTAL FRIENDLY WITH GROWTH POTENTIAL
Growing number of applications World reserves (in tonnes) Bismuth prices continue to increase
Alloys, solders and 300,000
others, 8%
250,000
240,000
Metallurgical 200,000
additives, 27%
150,000
100,000
48,661
50,000
39,000
11,000 10,000 10,000 5,000 5,000
Chemicals and
pharmaceuticals, -
65%
• Traditionally used in fusible alloys,
cosmetics, chemicals etc. • World market between 15,000 and • Bismuth prices have risen, supported
20,000 tonnes per year by steady demand & constrained
• New markets focus on super
supply
conductors, CDs & auto anti-corrosion • China is the principal source of bismuth
materials & has total reserves of 240Kt,
• Environmentally safe replacement for accounting for 80% of world reserves
lead in plumbing & electronic solders, • China has closed 20% of its production
brass, ceramic glazes, free cutting steel, due to environmental concerns
hot dip galvanizing & paint pigments
• NICO contains over 48Kt of bismuth,
• Global framework to eliminate lead could equivalent to 15% of world reserves &
increase bismuth consumption by 25% the world’s largest deposit
• European legislation to eliminate lead in
electronics
Source: USGS Industry Survey Source: USGS Industry Survey 2010 Source: Asian Metal, Metal Bulletin 27
28. NICO MINERAL RESERVES (TO BE UPDATED SHORTLY)
Underground Mineral Reserves Tonnes Au (g/t) Co (%) Bi (%) Cu (%)
Proven 1,403,000 2.23 0.16 0.22 0.04
Probable 767,000 2.92 0.17 0.19 0.03
Total 2,170,000 2.47 0.16 0.21 0.03
Open Pit Mineral Reserves Tonnes Au (g/t) Co (%) Bi (%) Cu (%)
Proven 15,019,000 0.85 0.12 0.16 0.04
Probable 13,797,000 0.71 0.12 0.15 0.03
Total 28,816,000 0.79 0.12 0.15 0.04
Combined Mineral Reserves Tonnes Au (g/t) Co (%) Bi (%) Cu (%)
Proven 16,422,000 0.97 0.12 0.16 0.04
Probable 14,564,000 0.83 0.12 0.15 0.03
Total 30,986,000 0.91 0.12 0.16 0.04
Contained Metal 907,000 82 million 109 million 27 million
ounces pounds pounds pounds
Reserve estimate by P&E Mining Consultants Inc., Eugene Puritch, P.Eng. & Fred Brown, CPG PrSciNat, Qualified Persons as defined by NI-43-101 28
29. 2010 DRILL PROGRAM
38 holes drilled in 2010
Drilling successfully expanded deposit &
intersected high-grade gold intervals
51.3m averaging 2.2 g/t Au & 0.11% Co,
including 3m averaging 15.59 g/t Au,
0.46% Co, 0.05% Bi & 0.20% Cu
8.00m averaging 4.74 g/t Au & 0.16% Bi,
including 1m grading 35 g/t Au
3.38m averaging 11.59 g/t Au, 0.37%
Co, 0.16% Bi & 0.14% Cu, including
1.67m averaging 20.04 g/t Au, 0.36%
Co, 0.24% Bi & 0.13% Cu
5.00m averaging 4.84 g/t Au, including
2.5m averaging 9.21 g/t Au
20.1m averaging 0.38% Co & 0.37% Bi
New Mineral Reserve estimates pending
29
30. UNDERGROUND TEST MINING & PILOT PLANTS
Mining conditions, geometry & grades for
deposit confirmed
Environmental impacts assessed
Portal, decline ramp & 2 mine levels
established with ventilation raise to surface
~$ 20 million pre-production development
completed
Large sample collected for $ 8 million pilot
plant tests
Proved process flow sheet
Verified production of high value metal
products
Increase in metal recoveries over
feasibility study
Tangible demonstration of successful project
to governments & communities
Reduced project risk
30
31. GOLDEN GIANT MINE (HEMLO) MILL, ONTARIO
Buildings & equipment acquired from Newmont Canada for relocation to NICO
No environmental liability for Hemlo site
Dismantling & removal completed for net cash cost of ~$ 20 million
Demonstration of project execution on budget & schedule
31
32. 2008 DEFINITIVE FEASIBILITY STUDY
Micon, Met-Chem, Golder, SGS Lakefield & metallurgical & engineering experts
Results:
Pre-tax IRR 32.3%
Pre-tax C$361 million 8% NPV
Pre-production capital cost C$230 million
Cash Cost US$1.41/lb Co (1)(2)
Cash Cost US $259/oz Au equivalent (2)
April 2008 metal price sensitivity increases IRR to 97.2% & NPV (8%) to $1.5 billion(3)
Study now outdated
New reserves & operational improvements not included
Capital costs will be significantly higher
(1) Net of credits for gold and bismuth sales
(2) Base Case metal prices of US$750/oz Au, US$20/lb Co, US$10/lb Bi and US$/C$ 0.97
(3) April 2008 metal prices of US$900/oz Au, US$50/lb Co, US$16/lb Bi and US$/C$ 0.97
32
33. POST-DEFINITIVE FEASIBILITY STUDY IMPROVEMENTS
43% increase in reserves to 31 Mt – 18 Yr mine life - Excludes results of 2010 drilling
16% production rate increase to 4,650 tpd
More efficient mine plan - Eliminated underground backfilling
Identification of low strip starter pit – Eliminates pre-stripping
Co-disposal of waste rock & tails – Reduces dam structures & reclamation costs
Commodity price assumptions higher for gold & bismuth
Improved recoveries from pilot plant:
Gold 56-85%, Averages 76%
Cobalt 84%
Bismuth 73%
Copper 58% - Not previously included
Higher value end products:
Cobalt 21% cobalt sulphate option – Lower capital & operating costs - Premium
Bismuth 99.9% ingot – Feasibility study assumed concentrate
Copper Copper metal – Not included in feasibility study
Hydrometallurgical process plant relocated to Saskatoon
Lower OPEX (~$7 million per yr) – Mitigates capital cost increase (~$30 million)
33
34. RESULTS OF NICO PROJECT IMPROVEMENTS
Higher forecast annual metal production
Gold yrs 1 & 2 of mine life ~70,000 ozs, yrs 3-18 ~35,000 ozs
Cobalt ~ 3.4 million lbs (1,550 tonnes)
Bismuth ~ 3.65 million lbs (1,650 tonnes)
Copper ~ 770,000 lbs (350 tonnes)
Cost ~$ 56 / tonne, ~$ 90 million / yr
Revenue ~$ 100 / tonne, ~$ 180 million / yr
Capital costs expected to be $400+ million
Updated economics pending receipt of Front End Engineering & Design (FEED) Study by
Jacobs Engineering & other engineering Co.’s
34
35. NICO FINAL PRODUCTS
Cobalt Carbonate
Co 50.6 %
Ni 0.005 %
Ca 0.018 %
Mg <0.005 %
Cobalt Cathode Metal
Cu 0.005 %
Co >99.95%
Cobalt Sulphate (heptahydrate)
Co 20.9 %
Ni <0.003 %
Fe <0.001 %
Cu <0.001 %
Bismuth Ingot
Zn <0.001 %
Bi >99.99%
35
36. ADVANTAGES OF NICO PROJECT
Potential reliable North American supply of critical specialty metals
Diversified product mix reduces exposure to metal price volatility
Cobalt supply coupled with world’s largest bismuth deposit
Strong leverage to gold – Counter-cyclical hedge – Financing options
Low operating cost net of co-products
Vertical Integration – Fortune controls process from mine to product reducing risk of third party
metal supplier or custom processors
Sulphide cobalt source
Lower capital & operating costs compared to laterites
High concentration ratio allows transport to low cost processing environment
Exothermic reaction in autoclave reduces energy consumption & generates its own acid
SMPP flowsheet allows for flexible & diversified product mix
36
37. DEVELOPMENT STRATEGY
New reserve estimates pending – Focus on expansion of gold
FEED studies nearly complete – Currently reviewing draft
Revised capital & operating costs & financial model
Environmental Assessments advanced for mine & SMPP permitting
Public Hearing Stage in NT – Targeting recommendation to Minister in 2012
Targeting receipt of permits in Saskatchewan in 2012 for SMPP
Expanding management team
Production targeted in 2014
Deloitte engaged to secure strategic partner - Ideal partner:
Minority equity investor at the project level
Ability to arrange & guarantee project finance facility
Expertise in cobalt or specialty metal end markets/off-take partner
Committed to an accelerated development plan
37
38. 2012 TARGETED MILESTONES
Mount Klappan
Revised Project Description submission to BC EAO (Q2)
New reserves (Q2)
Revised economics (Q2)
MOU with CN Rail (Q2)
Second stage strategic partner(s) and project financing
NICO
New reserve estimates (Q2)
Revised economics (Q2)
Initiate Tlicho Participation Agreement (PA) Negotiations (Q4)
SMPP permits (Q4)
Initiate discussions with the Wek'èezhìi Land and Water Board to advance EA process (Q4)
Closure of Public Registry in the DAR Review process (Q4)
Strategic partner(s) and project financing
Corporate
OTCQX Listing (Q2)
38
39. Directors
Mahendra Naik, B Comm, CA Chairman, Director CFO Fundeco - Founding director & former CFO, IAMGOLD
George Doumet, MSc, MBA Honorary Chairman, Director Chemical Engineer – President & CEO, Federal White Cement
Robin Goad, MSc, PGeo President & CEO, Director Geologist - 30 yrs mining & exploration experience
David Knight, BA, LLB Secretary, Director Partner, Norton Rose specializing in securities & mining law
James Excell, BASc Director Metallurgical Engineer – 35 yrs mining experience BHP-Billiton
William Breukelman, BASc, MBA, PEng Director Chemical Engineer – Chairman, Gedex
James Currie, BSc (Hons), PEng Director Mining Engineer – COO, Kimber Resources
The Honorable Carl L. Clouter Director Commercial pilot - former owner of charter airline in NWT
Shou Wu (Grant) Chen, MSc, MBA Director Geologist – Deputy Chairman & CEO, China Mining Resources Group
Management
Julian Kemp, BBA, CA VP Finance & CFO Chartered Accountant – 20+ yrs mining financial experience
Thomas Rinaldi, BSc VP Operations Mining Engineer – 30 yrs engineering & operations experience
Michael De Carlo, BSc, BBA Project Manager Mining Engineer – 40+ yrs engineering & managerial experience
Bill Shepard Logistics Manager 15 yrs experience in procurement and logistics
Dr. Richard Schryer, PhD Director Regulatory & Aquatic Scientist –20+ yrs experience in mine permitting & environmental
Environmental Affairs assessments
Adam Jean, HBA, CA
Controller Chartered Accountant previously with Ernst & Young
James Mucklow, MESc, PEng Manager Env.& Community Geological Engineer – 20+ yrs geological & environmental experience
Keith Lee, BSc Senior Process Engineer 25 yrs operations, engineering & mineral processing experience
Carl Kottmeier, MBA, Peng Project Manager Mining Engineer – 24 yrs engineering & operations experience
Joon Kim, MASc, PEng Mine Planning Engineer Mining Engineer – 10+ years operations and engineering experience 39
40. APPENDIX A
Recent Coal M&A Metrics
Source: Company reports and CIBC World Markets Inc.
40
