FORTUNE MINERALS UPDATES THE GOLDEN GIANT MINE DISMANTLING & RELOCATION TO NICO

Fortune Minerals Ltd. is providing an update of its activities for relocation of the Golden Giant mine buildings, equipment and spare parts inventory at Hemlo, Ont., previously owned by Newmont Canada Ltd. See the news release in Stockwatch dated Aug. 31, 2006. Fortune acquired these assets in 2006, for $3.3-million, for installation at the company's wholly owned Nico cobalt-gold-bismuth development project, in the Northwest Territories, materially reducing projected capital costs for this project. Importantly, Fortune is not responsible for environmental liabilities at the Hemlo site other than to remove the assets to the foundations by August, 2009.

Fortune has submitted its notice of project to the Ontario Ministry of Labour, which allows the company to commence the salvage, dismantling, and demolition of equipment and buildings, from the Golden Giant mine site. Fortune has hired an eight-man team to begin this work, which is being supplemented by casual labourers and contractors. The current priority is the salvage of high-value process, electrical and technical equipment for relocation to a staging site, for reconditioning and transport to Nico after receipt of applicable permits. Fortune is also assembling the surplus equipment that is not required at Nico and has begun selling it on the used equipment market through Mindecom Industrial Constructors Ltd. Fortune has also identified significant amounts of recoverable gold, silver and other valuable metals, that are contained in ores and residues, within certain equipment at the mine. It is working with Mindecom and a company that specializes in recovering these metals from decommissioned process plants for sale. Fortune is further reducing its net cost of dismantling the Golden Giant mine facilities through the planned collection of other high-value materials, including stainless and structural steels, aluminum, copper, and other metals, which the company expects to sell for scrap.

Fortune has retained a consultant to help prepare a request for proposal to seek tender bids for the major dismantling, demolition and sorting work to be carried out in 2008. A number of companies have expressed significant interest in conducting this work and the contract is expected to be awarded in January, 2008, with work commencing shortly thereafter.

Fortune has also retained Aker Kvaerner E&C, a division of Aker Kvaerner Canada Inc., to prepare an execution plan including a logistics study for the engineering procurement construction management (EPCM) phase of the Nico development. This will include evaluating potential transportation corridors and facilities that could receive used equipment and materials from Hemlo, in addition to new equipment from Canadian and international suppliers, rehabilitation of the used equipment, completion of modular fabrication and installation to offset on-site construction costs at Nico. As part of this process, Aker Kvaerner is examining ways to help take advantage of the high Canadian dollar by looking at U.S. suppliers and sites, where significant components of this work might be conducted to reduce the transportation and construction components of the project's capital costs. Various methods of transporting equipment and modular components to the Northwest Territories, including the use of railway infrastructure between Ontario, the north-central U.S., Western Canadian provinces, and the terminus of rail at Hay River, NWT, are being evaluated as part of this process. Transportation of equipment and materials by rail presents a significant opportunity to control costs for Nico.

"The dismantling and relocation of the Golden Giant mill and equipment for Nico is a major logistical challenge that will mark an important milestone for Fortune, as we remain on target to bring the project into production in less than three years," said Robin Goad, the company's president and chief executive officer. "And in this time of constantly rising costs, we are particularly pleased to see the savings and other benefits from our original decision to acquire the Golden Giant assets clearly demonstrated at each step of the process."

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