FORTUNE MINERALS LIMITED Test mining 1985-86 148 Fullarton Street, Suite 1508 London, Ontario, Canada N6A 5P3 Tel (519) 858-8188 Fax (519) 858-8155 info@fortuneminerals.com www.fortuneminerals.com MOUNT KLAPPAN ANTHRACITE COAL PROJECT World Class resources (2.8 billion tonnes) of anthracite rank coal near existing infrastructure & tide water in northwest B.C. Railway sub-grade MINERALS NORTH CONFERENCE, STEWART, B.C. April 29, 2005
FORTUNE MINERALS LIMITED LISTING: The Toronto Stock Exchange, Symbol FT SHARE PRICE: $4.50 (52 week high/low : $6.10/$2.11) ISSUED SHARES: 32.7 million INSIDER HOLDINGS: Directors - 8.8 million (27%) WORKING CAPITAL: ~ $26.5 million TOTAL ASSETS: ~ $40 million A diversified natural resources company creating sustainable shareholder value through the acquisition, exploration & development of mineral resource properties. Stockpiles of Mount Klappan Anthracite
FORTUNE MINERALS PROJECTS NICO Gold-Cobalt- Bismuth SUE-DIANNE Copper-Silver FORMOSA High Ca Limestone MOUNT KLAPPAN Anthracite Coal 7 mineral deposits & prospective exploration projects, all in Canada
MOUNT KLAPPAN LOCATION & INFRASTRUCTURE 150km 2 lease within Tahltan traditional territory Proximity to tide water 150km from Stewart & 330km from Prince Rupert Leases straddle railway right-of-way Railway sub-grade provides road access to highway Track 70km south CNR recently purchased BC Rail & will provide proposal for rail access Transport of product by truck to Stewart or rail to Prince Rupert & NAFTA markets
MOUNT KLAPPAN PORTS Port of Stewart Prince Rupert 30 hours closer to Asian markets Port of Prince Rupert Closest major coal deposit to tide water in western North America
MOUNT KLAPPAN PROPERTY HISTORY 1981-2001 Gulf Canada Resources Limited 2001-2002 Conoco Canada Resources Limited takeover of Gulf & parent merges with Phillips Petroleum to become ConocoPhillips 2002 - Fortune Coal Limited, a wholly-owned subsidiary of Fortune Minerals Limited, completes acquisition of 100% interest in Mount Klappan
MOUNT KLAPPAN EXPENDITURE HISTORY $70 million expended on the project to date $65 million by Gulf & $5+ million by Fortune
MOUNT KLAPPAN EXPLORATION & DEVELOPMENT WORK Resource delineation, test burns, marketing, transportation, environmental & feasibility studies 200,000 tonne bulk sample in 1985-86 & quality verified in 100,000 tonnes of finished coal products produced in pilot plant at site
MOUNT KLAPPAN GEOLOGY Upper Jurassic to Lower Cretaceous rocks of Bowser Basin Klappan Sequence: shallow coastal plain of clastic sediments & peat bogs, converted to coal during digenesis & then anthracite during regional metamorphism & plutonism 33 coal horizons up to 11.13 metres in thickness identified on property
MOUNT KLAPPAN RESOURCES Mineral Resource Category (millions of tonnes) AREA MEASURED INDICATED DEMONSTRATED INFERRED SPECULATIVE LOST-FOX 107.9 109.5 217.4 91.5 749.6 HOBBIT-BROATCH - 13.5 13.5 258.4 753.0 SUMMIT - - - 9.6 508.9 NASS - - - - 201.5 TOTAL 107.9 123.0 230.9 359.5 2,213.0 TOTAL RESOURCES IN ALL CLASSES 2.8 BILLION TONNES Resources by Marston Canada Ltd. in compliance with NI 43-101 Test mining 1985-86 Lost-Fox Deposit In-Pit Resource (MMT) (12% Ash Product @ 62% Recovery) (2005 feasibility study) Measured Indicated Total 134.8 10.4 145.2 Finished product ratio 10.3:1 BCM/T
ABOUT ANTHRACITE Premium product with highest rank by carbon & energy content
MOUNT KLAPPAN PRODUCT QUALITY Processing produces 3 main products @ 62% recovery 12% Ash SINTER PRODUCT (50 x 0 mm) (air-dried) 8% Ash PCI PRODUCT THERMAL PRODUCT (35 x 0.5 mm) (0.5 x 0 mm) (air-dried) (air-dried) Ash (wt%) 12.0% 7.5% 20.3% Gross Calorific Value (MJ/kg) 30.3 32.2 26.7 Gross Calorific Value (kcal/kg) 7,235 7,693 6,379 Gross Calorific Value (Btu/lb) 13,023 13,847 11,483 Total Moisture (wt%) 9% 8.5% 10% Residual Moisture (wt%) 0.9% 0.9% 1.1% Volatile Matter (wt%) 6.6% 6.7% 6.4% Fixed Carbon (wt%) 80.5% 85.0% 72.2% Sulphur (wt%) 0.5% 0.5% 0.6% HGI 40-45 40-45 40-45
WORLD ANTHRACITE MARKETS World production 2003 ~ 300 million tonnes/yr World trade 2004 ~ 30 million tonnes/yr Growth in trade market 2004 ~ 25% Growth in low volatile PCI > hard coking coal Filtre Media ~ US $ 250/T Nut, Charge Carbon & Sized Solid Fuel ~ US $ 130+/T Metallurgical Reductants ~ US $ 130+/T Pulverized Coal Injection (PCI) ~ US $ 100+/T Pelletizing & Sintering ~ US $ 100+/T Briquettes ~ US $ 65/T Cement ~ US $ 55/T Power Generation ~ US $ 55/T (source: Fortune marketing study & published information)
MOUNT KLAPPAN CURRENT WORK 2002 - Gulf resource estimates reviewed by Marston in compliance with NI 43-101 & mineability reviewed by Roscoe Postle 2002 & 2003 - Historical data compiled into new digital geology & drill hole database 2003 & 2004 - Marston prepares new block model & estimates Lost-Fox resources in compliance with NI 43-101 2002-2004 - Infrastructure, transportation & marketing studies by Fortune & Marston 2004 & 2005 - Marston prepared new flow sheet to reflect products identified from market studies & is conducting mine planning & bankable feasibility study
MARSTON UPDATED BANKABLE FEASIBILITY STUDY Open pit mine, wash plant & site infrastructure Production of 3 MT/yr with staged start-up, possibly under small mine permit Products include 8-12% ash metallurgical & 15-20% ash thermal Production expandable in future (3-5 MT/yr) Staged truck & rail connections to transport coal from mine to ports (Stewart & Prince Rupert) Camp at site to accommodate ~220 employees working on rotational basis Power requirement 5-7 MW by diesel generators, potential grid connection in future Water supply from recycling & Little Klappan River Test mining 1985-86
MOUNT KLAPPAN MINE PLAN
LOST-FOX BLOCK MODEL & PIT OPTIMIZATION New, simpler interpretation of geology & higher anthracite prices results in expansion of in-pit measured & indicated resources Pit optimization allows expansion to 1 large pit
MOUNT KLAPPAN MINING METHODS Conventional open pit mining methods using trucks & shovels Waste rock drilled & blasted, loaded into trucks using shovels & transported to waste dumps around periphery of pits Coal loaded onto smaller trucks using excavators for transport to process plant
MOUNT KLAPPAN PROCESSING METHODS Coal preparation plant uses breakers to crush run-of-mine (raw) coal to predetermined sizes & remove rock impurities Coal is washed using heavy media separation, cyclones & froth flotation to reduce ash & then dried for shipment Standard coal processing technology to maximize product yield & quality No chemicals used in coal processing
MOUNT KLAPPAN ENVIRONMENTAL WORK Gulf Canada completed extensive environmental baseline studies & Stage 2 of Environmental Assessment Rescan & RTEC retained to collect additional environmental & socio-economic data & assist Company with permitting Project Description submitted & Section 10 Order received for Environmental Assessment Working with governments & First Nations to maximize benefits to local communities
MOUNT KLAPPAN ANTICIPATED DEVELOPMENT SCHEDULE Potential for accelerated production under small mine permit & phased expansion on completion of rail access