FORTUNE MINERALS PARTNERS WITH POSCO CANADA TO ADVANCE THE MOUNT KLAPPAN COAL PROJECT TO PRODUCTION

LONDON, ON, July 13, 2011 /CNW/ --
Issued Capital: 107,549,427

LONDON, ON, July 13, 2011 /CNW/ - Fortune Minerals Limited (TSX: FT) ('Fortune' or the 'Company') is pleased to announce that its wholly-owned subsidiary, Fortune Coal
Limited. ('Fortune Coal') has entered into a definitive agreement to
form a joint venture (the 'JV') with POSCO Canada Ltd. ('POSCAN') and
its wholly-owned subsidiary, POSCO Klappan Coal Ltd., to advance the
Mount Klappan Anthracite Metallurgical Coal Project in northwest
British Columbia ('Mount Klappan' or the 'Project') to production. 
POSCAN's parent company, POSCO is based in South Korea and is one of
the world's largest steel producers. Pursuant to the agreement, POSCAN
will acquire a 20% interest in Mount Klappan, and based on current
capital cost estimates, is anticipated to make total payments and cash
contributions of $181 million, including $30 million in upfront funding
upon closing.

JV Highlights:

    --  Formation of a JV to be owned 80% by Fortune and 20% by POSCAN
        to accelerate development of Mount Klappan by combining
        Fortune's local development and operations expertise and
        POSCAN's market knowledge and financial backing;
    --  At closing POSCAN will provide $30 million in upfront funding
        to Fortune Coal, $20 million of which Fortune Coal will
        contribute directly to the JV;
    --  POSCAN will provide funding for 20% of the total development
        and capital cost of the Project, which under current estimates
        will equal a total contribution of $154 million to the JV;
    --  POSCAN will provide $17.2 million in additional payments to
        Fortune Coal based on future milestones;
    --  POSCAN will fund 20% of operating costs and receive 20% of the
        product produced from the Project;-and-
    --  Fortune will serve as Manager of the JV and will be
        compensated, on a recovery basis, for providing operational,
        technical and administrative support over the life of the mine.

Mount Klappan Highlights:

    --  One of world's largest undeveloped deposits(1) of metallurgical
        coal with Measured Resources of 107.9 million tonnes, Indicated
        Resources of 123.0 million tonnes, Inferred Resources of 359.5
        million tonnes and Speculative Resources(2) of 2.2 billion
        tonnes;
    --  Robust economics from a Definitive Feasibility Study(3) ('DFS')
        on the Lost Fox deposit with Run-of-Mine Coal Reserves of 106.3
        million, representing only 3.6% of the total resources (See
        Fortune News Release, dated November 4, 2010);
    --  $1.03 billion pre-tax NPV (8%) and 25.4% IRR from Lost Fox DFS
        at a base case price of US$175 / tonne of 10% ash Ultra-Low
        Volatile Pulverized Coal Injection ('PCI') product;
    --  3 million tonnes per annum planned initial production rate;
    --  Expansion potential via the mining of additional resources in
        the Lost Fox deposit and the adjacent Hobbit Broach, Nass and
        Summit deposits;
    --  Canadian National Railway ('CN') collaboration to extend
        railway infrastructure to the mine site, providing a scalable
        transportation solution to the port of Prince Rupert;
    --  Reduced shipping times to Asia by exporting the coal products
        through the port of Prince Rupert, positioning Mount Klappan as
        a key supplier to the overseas steel industry;
    --  Ability to use Ridley Terminals to load efficient Capesize
        vessels for ocean transport, and potentially share cargos and
        blend with other western Canadian coal producers;
        -and -
    --  Advanced stage project with $86 million of work already
        competed.

Mr. Robin Goad, President and CEO of Fortune, commented, 'We are
extremely proud that Mount Klappan has attracted a world-class
organization like POSCO as a major investor and strategic partner. 
This transaction will allow for accelerated development of the Project
and is anticipated to provide 100% of required funding to complete more
detailed engineering and design studies as well as permitting and
stakeholder consultations.  It is anticipated that Fortune will not be
required to contribute any further funding until permitting is complete
and prior to the commencement of construction.  Additionally, our
post-transaction levered after-tax NPV (8%) of Fortune's 80% share of
Mount Klappan is estimated at $601 million at a $175 per tonne PCI
price, and represents only a fraction of the total resource.'

Mr. Yong Keun Kim, President of POSCAN, commented, 'We are very pleased
to invest in the Mount Klappan Project, which we see as one of the
world's premier coal development projects and a future key supplier of
premium coal products to the global steel industry.  This transaction
expands our presence in North America, which already includes
investments in the Mount Hope Molybdenum Project and Elk Valley Coal.'

Mount Klappan consists of 15,866 hectares of coal exploration licenses
in northwest British Columbia, located 150 km northeast of the port of
Stewart and 330 km northeast of the port of Prince Rupert.  The
licenses straddle the BC Railway right-of-way and its partially
constructed roadbed, 150 km north of the current terminus of track at
Minaret where CN is operating under a long-term lease.  The 2010 DFS by
Marston & Marston Inc. ('Marston') is based on an open pit mine and
wash plant producing 3 million tonnes of PCI product per annum for the
overseas steel industry with the ability to diversify production into
other metallurgical coal products.  The cost of upgrading and extending
the railway infrastructure is included in the DFS.

Anthracite is a premium coal with the highest carbon and energy content
of all coals, which together with other unique properties, allows for
versatile usage in a number of important metallurgical, chemical,
manufacturing, agriculture and thermal applications.  The very low
volatile (gas) content of anthracite makes it ideal for PCI, allowing
for high injection rates to minimize consumption of coke and improve
efficiency in steel manufacturing, and also for pelletizing and
sintering in the steel industry.  Coarse anthracite is used as a blend
coal to replace coke, and also with hard coking coal to make
metallurgical coke.  Anthracite reductants are used in ferro-chrome,
titanium and aluminum processing, and as charge carbon in electric-arc
steel manufacturing.  Anthracite is also gasified to make urea
fertilizers used for agriculture and other chemicals.  Carbon filters
for water purification and carbon composite materials are commonly made
from anthracite coal.  Thermal uses include fuels for space heating,
cooking and heating briquettes, kiln fuels to make cement and lime, and
in thermal power plants to generate electricity.  The rising cost of
oil is making gasification and coal-to-oil liquefaction economically
attractive to make synthetic fuels.

World annual production of anthracite is approximately 565 million
tonnes.  China produces approximately 85% of the world's supply, but
has been a net importer since 2004.  Vietnam, the world's second
largest producer with 43 million tonnes of annual production, is
curtailing exports in order to preserve its remaining reserves for its
own domestic steel and energy requirements.  Diminishing world supplies
of metallurgical coals, combined with continued growth in the global
steel industry, has contributed to a shortage of high quality
metallurgical coals resulting in strong prices that are expected to
prevail for the foreseeable future.

Development and Financing Strategy:

As part of the agreement, the JV partners have approved a program and
budget focused on rapidly advancing Mount Klappan to production. The
initial budget will focus on engaging with communities and building
stakeholder support for the Project, securing permits, and conducting
more detailed engineering to support permitting and mine planning. 
POSCAN's upfront contribution is expected to fund 100% of activities
through to completion of permitting.

The funding required to construct the Lost Fox Mine and railway
infrastructure is estimated at $768 million, which would result in
POSCAN's total contribution to the JV being $154 million, or 20%, and
Fortune's contribution being $614 million, or 80%.  Based on a
financing scenario of 70% debt and 30% equity, Fortune's equity
requirement is anticipated to be $184 million over the life of the
construction phase, of which $80 million is to be arranged by December
31, 2015.  Fortune plans to concurrently advance Mount Klappan and
continue discussions with potential debt and equity providers, with the
aim of announcing a fully financed, permitted project at the conclusion
of its currently planned programs.

The JV parties plan to consider expansion options - expected either
through increased production at Lost Fox or development of other Mount
Klappan deposits - in due course.  Fortune anticipates its
proportionate share of funds for such expansions would be funded from
Project cash flows.

Transaction History:

Fortune began its search for a strategic partner in 2010 with an
objective of attracting a world-class partner with metallurgical coal
market knowledge and significant financial strength.  To assist the
company with this objective, Fortune engaged Deloitte & Touche
Corporate Finance Canada Inc. as its financial advisor.

About POSCO:

POSCO, headquartered in Seoul, South Korea, is the world's 3(rd) largest steel producer by market value with a current market
capitalization of US$32.6 billion(4).  POSCO had crude steel production of 33.7 million tonnes in 2010 and
sales for the 12 months ended March 31, 2011, totaled US$62.2
billion.   POSCO's Gwangyang Works is the largest steel mill in the
world, with capacity of 19.5 million tonnes.

POSCO has investments and operations across the globe, including in
Korea, China, Japan, India, Indonesia, United States, Australia,
Canada, Brazil, Vietnam and Thailand.  It continues to expand its
global operations towards a goal of achieving a total crude steel
production capacity of 50 million tonnes.

POSCO was founded in 1968 and is listed on the Korea Exchange (KRX) and
is also inter-listed on the New York, London and Tokyo Stock Exchanges.

About Fortune Minerals:

Fortune Minerals is a diversified resource company with several mineral
deposits and a number of exploration projects, all located in Canada. 
The Company is focused on the development of the Mount Klappan
anthracite metallurgical coal deposits in British Columbia and the NICO
gold-cobalt-bismuth-copper deposit in the Northwest Territories
('NT').  As part of the development of the NICO deposit, Fortune is
developing a metals processing plant in Saskatchewan and has acquired
the buildings and equipment from the Golden Giant Mine at Hemlo,
Ontario, which have been dismantled, moved, and stored for relocation
to NICO.  In addition, the Company owns the Sue-Dianne
copper-silver-gold deposit and other exploration projects in the NT. 
Fortune Minerals is focused on outstanding performance and growth of
shareholder value through assembly and development of high quality
mineral resource projects.

(1)The Mount Klappan mineral resource and mineral reserve estimates were
prepared in 2004, 2005 and 2010, by Marston in compliance with National
Instrument 43-101.  Richard Marston, P.E. is the Qualified Person
responsible for the estimates.

(2)Speculative Resources estimated in 2004 in compliance with National
Instrument 43-101 are no longer used as a compliant resource class.

(3)Further information regarding the Mount Klappan Mineral Resource and
Mineral Reserve estimates and DFS is available from the Company's
disclosures under the Company's profile on the SEDAR website at
www.sedar.com.

(4)Market capitalization based on the closing price of POSCO's stock on
June 24, 2011 on the NYSE stock exchange.

This press release contains forward-looking information.  This
forward-looking information includes, or may be based upon, estimates,
forecasts, and statements as to management's expectations with respect
to, among other things, the proposed development of and anticipated
production from the Mount Klappan project, the establishment of a
railway link to Prince Rupert and. Forward-looking information is based
on the opinions and estimates of management at the date the information
is given, and is subject to a variety of risks and uncertainties and
other factors that could cause actual events or results to differ
materially from those projected in the forward-looking information. 
These factors include the risk that the Company may not be able to
arrange the necessary financing to construct and operate the Mount
Klappan mine and/or the railway link to Prince Rupert, the risk that
the JV may be terminated in accordance with its terms, the risk that
the Company may not be able to conclude  an agreement with CN for the
transportation of coal from Mount Klappan to Prince Rupert, the
possibility of delays in the commencement of production from the Mount
Klappan project, the inherent risks involved in the exploration and
development of mineral properties, the risk that actual capital and
operating costs for the Mount Klappan project may differ from those
anticipated, uncertainties with respect to the receipt or timing of
required permits and regulatory approvals, the uncertainties involved
in interpreting drilling results and other geological data, fluctuating
metal prices and other factors. Readers are cautioned to not place
undue reliance on forward-looking information because it is possible
that predictions, forecasts, projections and other forms of
forward-looking information will not be achieved by the Company. The
forward-looking information contained herein is given as of the date
hereof and the Company assumes no responsibility to update or revise
such information to reflect new events or circumstances, except as
required by law. 

To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/July2011/13/c5036.html