Fortune Minerals clinches financing deal for NWT project
TORONTO (miningweekly.com) – Canadian project developer Fortune Minerals on Thursday reported a strategic C$11.7-million investment by full-service mining contractor Procon Resources, which would be applied towards progressing the Nico gold/cobalt/bismuth/copper project, in Canada’s Northwest Territories.
Procon bought 29.25-million newly issued shares at $0.40 apiece. Fortune said the private placement would be completed in two tranches of $5.85-million and would result in Procon holding a 19.4% stake in Fortune on a nondiluted basis.
The issue price represented a 14% premium over Fortune's closing price on the TSX on Wednesday.
Vancouver-based Procon is majority owned by China CAMC Engineering, which is an international engineering, procurement and construction (EPC) services provider based in Beijing, China.
Under the terms of the private placement agreement, Procon could appoint one nominee to Fortune’s board at the closing of the first tranche of the placement, which was expected to be July 25. The second tranche was expected to close on October 1.
Fortune and Procon had also agreed to work together to advance the Nico project, including completing project financing arrangements, detailed engineering and a project execution plan, with the objective of starting construction in 2014.
“[Procon’s] expertise in construction, engineering and mining services will be highly beneficial as Fortune advances its mining projects and becomes a multi-asset producer,” Fortune CEO Robin Goad said.
Procon CEO Ed Yurkowski added that the company was quite familiar with Fortune and its projects, having conducted the underground test mining for the Nico mine in 2005 and 2006.
Fortune is also currently developing the Arctos anthracite mine, in British Columbia.
Fortune's financial adviser was Deloitte Corporate Finance and its legal advisor was Norton Rose Fulbright Canada. Procon's financial adviser was PricewaterhouseCoopers and its legal adviser was Dentons Canada.
Fortune’s stock on the TSX climbed 12.86% in late morning trade on Thursday to C$0.395 apiece.
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