Coal

[sumisu]

Fortune Minerals announces closing of the Hemlo Mill purchase

Thursday August 31, 2:31 pm ET

LONDON, ON, Aug. 31 /CNW/ - Fortune Minerals Limited (TSX-FT) is pleased to report that it has completed the previously announced (see Fortune news release of December 8, 2005) purchase of the mill, ancillary buildings, surface facilities, spare parts and inventory from the Golden Giant mine at Hemlo, Ontario, which had been owned by Newmont Canada Limited (Newmont). Total consideration for this purchase was C$3.3 million, which was paid to Mindecom Industrial Constructors Limited (Mindecom) who had a reciprocal purchase agreement with Newmont. The Hemlo facilities were purchased for use at Fortune's 89%-owned NICO gold-cobalt-bismuth deposit in the Northwest Territories, which is currently being assessed in a full feasibility study led by Micon International Limited (Micon). The Golden Giant mill and surface facilities have been well maintained by Newmont and are well suited for use at NICO. The purchase of these facilities has also been incorporated into the NICO feasibility study to mitigate the effects on project capital from increasing steel and equipment costs.

Robin Goad, Fortune's President and CEO, noted, "We're very pleased to have secured the purchase of the Hemlo facilities at an attractive price as it will both materially reduce our projected capital costs at NICO and significantly reduce project risk."

Fortune will have 36 months to remove the facilities from the current mine site. The assets include a 4,000 tonne/day conventional crushing and grinding plant, flotation equipment, buildings, structural steel, minor equipment, spare parts and inventory, and engineered designs, which collectively can be used at NICO. Fortune has also received offers from a number of companies interested in purchasing surplus equipment from Hemlo that the Company does not intend to use. Mindecom is Fortune's exclusive agent for conducting such sales. The sale of surplus equipment will significantly reduce the net cost of purchasing the facilities.

The NICO gold-cobalt-bismuth deposit is located 160 km northwest of the City of Yellowknife and 22 km west of the Snare hydro complex. The Micon feasibility study for NICO is assessing a combination of underground and open pit mining methods with mineralized material processed in a 4,000 tonne/day mill/flotation concentrator and a hydrometallurgical plant to produce gold doré, cobalt cathode and bismuth concentrate. Micon's project manager responsible for the NICO feasibility study is Ian Ward, P.Eng., and is the Qualified Person for the purposes of NI 43-101.

Fortune Minerals Limited is a diversified natural resource company with seven mineral deposits and a number of exploration projects, all located in Canada. They include the Mount Klappan anthracite coal deposits in British Columbia, the NICO gold-cobalt-bismuth deposit, the Sue-Dianne copper-silver deposit and other base and precious metals exploration projects in the Northwest Territories. Fortune is the managing partner of Formosa Environmental Aggregates Ltd., an industrial mineral company developing the Greenock high calcium limestone quarry in Ontario. The Company is focussed on the assembly and development of high quality mineral resource projects that can generate strong returns for its shareholders.

For further information

Fortune Minerals Limited, Robin Goad, President, Tel.: [phone], Fax: [phone], [e-mail], www.fortuneminerals.com
G/T Investor Relations, Greg Taylor, Investor & Public Relations, Tel: [phone], Fax: [phone], [e-mail]