The acquisition of this producing asset is being made with the financial support of the Company’s strategic partner, Procon Resources Inc. ("Procon") as negotiations progress towards completing the proposed project financing facility for the NICO gold-cobalt-bismuth-copper project in Canada’s Northwest Territories and Saskatchewan.
Procon is exercising its pre-emptive right to purchase up to 7,717,871 shares of Fortune at a price of 40 cents per share for net proceeds of up to CAD$ 3,087,148.40 to help finance part of this acquisition.
The staged purchase of the Revenue Silver Mine is an accretive acquisition accomplishing Fortune’s goal of becoming a producing mining company, while also positioning the Company for further growth in the Sneffels Silver Mining District of Colorado with a fully permitted project to leverage processing of ores from other mines in the area.
Revenue Silver Mine Acquisition Highlights:
Staged transaction to acquire a 100% interest in the mine to minimize equity dilution;
Fully permitted and constructed mine, concentrator and surface facilities currently ramping up to 400 tons per day with the first concentrate produced in May, 2014;
Projected 13-year life of mine average annual production of 1.78 million ounces of silver, plus gold, lead, and zinc by-product credits representing about 30% of revenues;
Low cost producer with projected C1 cash cost silver price of US$ 8.02 per ounce and breakeven free cash flow silver price of US$ 12.42 per ounce – both net of by-products;
Resources of 215,300 short tons classified as Measured, 586,300 short tons as Indicated and 684,200 short 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;
Resource upside from the horizontal and vertical projection of the 2 main veins beyond the current resources, delineation of new resources in the 5 other mineralized veins intersected by the Revenue Tunnel that are largely unexplored, processing of about 700,000 tons of additional broken mineralized material in surface and underground stockpiles, and opportunities to expand production to other mines in the area;
Fortune is the Operator of the mine and has staff at the site presently;
Contracts with Teck Resources for concentrate processing at its Trail, B.C. Smelter;
Acquisition costs of 32 million common shares of Fortune, US$ 16 million of cash payments, up to US$ 36.8 million in deferred payments over 6.5 years, and assumption of obligations to pay US$ 4.5 million in deferred payments and a capped 2% net smelter return royalty to the previous owners of the project;
CAD$ 4.25 million raised to fund first stage commitments of the transaction at a premium 40 cent price, which can be increased to CAD$ 5.1 million with shareholder approval.
