Fortune Minerals Announces Extension of Revenue Silver Mine Purchase Agreement
Issued Capital: 190,244,847
LONDON, ON, July 31, 2014 /PRNewswire/ - Fortune Minerals Limited (TSX: FT) (OTCQX: FTMDF) ("Fortune" or the "Company") (www.fortuneminerals.com) announces that it has entered into an amending agreement with the owners of the Revenue Silver Mine in southwest Colorado, U.S.A. to extend the scheduled closing date of the purchase and sale of the mine from July 31 to September 2, 2014. The Company, through its wholly-owned subsidiary, Fortune Revenue Silver Mines Inc. ("Fortune Revenue") has already completed the purchase of a 12% participating interest in the mine and can acquire a 100% interest by paying the other owners an additional US$ 14 million and issuing a promissory note to pay US$ 34.5 to US$ 36.8 million in deferred quarterly installments. Two deferred payments totaling US$ 4.5 million and a 2% net smelter return royalty capped at US$ 9 million would also be payable to former owners of the mine following completion of the acquisition. Fortune Revenue will continue to act as Operator of the mine pending completion or termination of the transaction and as part of the amending agreement, Fortune Revenue has increased its commitment to fund the working capital for the mine from US$ 4 million to US$ 5.5 million.
Completion of the acquisition by the Company of the remaining interest in the Revenue Silver Mine is subject to various conditions, including the Company arranging the necessary financing. The company is actively engaged in discussions with a number of potential financing sources.
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 Northwest Territories ("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 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 Revenue Silver Mine ("RSM") . 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 fund the next staged payment for the RSM acquisition from external sources and additional staged payments from the mine's cash flow and/or external sources). 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 arrange the necessary financing to complete the acquisition of 100% of the RSM in accordance with its contractual obligations; unexpected technical delays and associated timing delays in the ramp-up of the RSM and associated production of silver; the risk that operating and/or capital costs may be materially higher than anticipated; the risk of substantial decrease in the price of silver or other precious metals; 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; 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