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Company hopes to build mine in 2006

Stephan Burnett
Northern News Services

Yellowknife (June 02/04) - Fortune Minerals announced a 40-per-cent increase in its resource estimates for the company's 80 per cent owned NICO gold-cobalt-bismuth deposit, located 160 km northwest of Yellowknife, on May 27.

The study was performed by MICON International Limited.

"The overall resource is 98.5 million tonnes, up from 70 million tonnes," said Fortune Minerals president Robin Goad.

Goad explained the amount of ore which can be mined at any time is a function of the metal price scenario.

"What we did is present scenarios with $10 cobalt and $15 cobalt, even though it's currently trading at $27 a pound," said Goad.

Cobalt is very volatile and mining companies have to show they can make money when things are bad, said Goad.

The $10 per pound scenario for cobalt would provide Fortune Minerals with a 15-year mine life, whereas $15 cobalt would give the mine a 30-year shelf life, said the Fortune Minerals president.

In addition to an increase in estimated ore, Fortune has also been graced with a higher grade of ore than previously expected.

The higher grade in the NICO project is offset, however, by a stronger Canadian dollar, said Goad.

Fortune Minerals currently has a mini-bulk sample being analyzed through Lakefield Research, which will produce a feasibility study due to be released later this year.

Goad admitted that diesel, steel and concrete prices are higher "but they're not anticipated to be a problem" for the feasibility of the project.

Fortune Minerals is looking to garner another $90 million from the market and through debt financing prior to getting underway with construction of the mine, scheduled for late 2006.

"There's a very good chance we may go underground next year for a bulk sample while within the permitting process," said Goad.

The Fortune Minerals president also made reference to the slow pace of the regulatory process within the Northwest Territories.

"We deal with process all the time, but the Northwest Territories is one of the slowest regulatory regimes in the country and that is the main problem," he said.