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PEA For The Revenue Silver Mine In Colorado

LONDON, ON - Fortune Minerals Limited reported results of a Preliminary Economic Assessment (PEA) report for the Revenue Silver Mine in southwest Colorado. The PEA prepared by SRK Consulting ("SRK") demonstrates an attractive 73.2% After Tax Internal Rate of Return ("IRR") and US$ 58.8 million 6% discounted After Tax Net Present Value ("NPV") for the project. Fortune can acquire a 100% interest in the Revenue Silver Mine pursuant to an agreement with staged acquisition terms. The Company has already completed the purchase of a minimum 12% interest and is Operator of the mine. The purchase of the Revenue Silver Mine accomplishes Fortune's goal to become a producer, while also positioning the Company for further growth in the prolific Sneffels Silver Mining District of Colorado.

Highlights of the PEA: Fully permitted and constructed mine, mill and surface facilities in the commissioning for a ramp up to 400 tons per day; Resources of 215,300 tons classified as Measured, 586,300 tons as Indicated and 684,200 tons as Inferred, containing 16.3 million ounces of silver in the Measured and  indicated Resources and 10.1 million ounces of silver in the Inferred Resources; Mine Plan Resource of 888,283 tons (diluted) with an average grade of 14.6 ounces of silver per ton, 0.02 ounces of gold per ton, 2.26 percent lead, and 0.90 percent zinc used as a basis for the economic analysis; Cash cost of US$ 6.62 per ounce of silver net of by-product credits, excluding freight, treatment and refining charges ("TC/RC"), and US$ 10.28 per ounce C1 cash cost including TC/RC charges 8-year mine life based only on the Mine Plan Resource including ramp up and ramp down and upside from potential expansion of the Mine Plan Resource where widespread drilling indicates continuity of the mineralization, extension of the 2 main veins systems beyond the current Mineral Resource Estimate, identification of resources in the 6 other mineralized veins intersected by the main access tunnel, and expansion of production to other mines in an historic silver mining district

The Revenue Silver Mine is a fully constructed and permitted, high-grade, underground silver mine that is in commissioning. The mine is situated on 147 patented and unpatented mining claims, totaling approximately 1,079.9 acres in southwest Colorado, 11 km southwest of the town of Ouray and 490 km southwest of Denver. The Revenue Silver Mine is an historic producer in the late 1800's and early 1900's operated by Caroline Mining Co. and had production estimated at up to 15 million ounces of silver before the mill burned in 1912 and the mine closed. The underground workings have been rehabilitated and new surface facilities and an underground mill have been constructed. The mine is ramping up to a 400 ton per day production rate, and delivered its first shipment of concentrate to Teck Resources' Trail Smelter in British Columbia for treatment further to an off-take agreement to generate the mine's first revenues.

The Revenue Silver Mine is currently in commissioning. The Company advises that when the mine enters commercial production, that decision will not be based on a feasibility study of Mineral Reserves demonstrating economic and technical viability. As a result, there may be increased uncertainty of achieving any particular level of production or the cost of such production. Historically, such projects have a much higher risk of economic and technical failure.

Fortune, through its wholly-owned subsidiary, Fortune Revenue Silver Mines Inc. entered into an agreement to acquire the Revenue Silver Mine and related assets from Silver Star Resources LLC, Star Mine Operations LLC and Revenue-Virginius Mines Corporation. Fortune Revenue has purchased a 12% participating interest in the mine and can purchase a 100% interest by paying the Vendors an additional US$ 14 million and by issuing a promissory note to pay US$ 34.5 to US$ 36.8 million in deferred quarterly installments over 3.5 to 5.75 years commencing in August, 2015. The amount of the quarterly payments and rate under which the promissory note is paid are determined by revenue targets for each respective quarter. Two deferred payments totaling US$ 4.5 million and a 2% net smelter return royalty - capped at US$ 9 million, are also payable to former owners of the mine. The acquisition of the remaining interest in the mine is subject to Fortune arranging financing.