Fortune Minerals Announces Repayment of Maturing Debts

Principal repaid from proceeds of a convertible security; accrued interest settled through the issuance of common shares

NOT FOR DISTRIBUTION TO U.S. NEWSWIRE SERVICES OR DISSEMINATION IN THE UNITED STATES

LONDON, Ontario--(BUSINESS WIRE)--Fortune Minerals Limited (TSX: FT) (OTCQB: FTMDF) (“Fortune” or the “Company”) (www.fortuneminerals.com) is pleased to announce that it has entered into agreements to raise gross proceeds of C$10,000,000 and retire debts totalling approximately C$11.84 million that were maturing on April 30, 2026 (the “Maturing Debts”). Fortune has entered into a new convertible security funding agreement (the “Funding Agreement”) with Lind Global Fund III, LP, an entity managed by The Lind Partners (together, “Lind”), pursuant to which the Company has agreed to draw down C$10,000,000 in exchange for the issuance of a convertible security to Lind (the “Convertible Security”) to pay the principal for the Maturing Debts and provide additional working capital.

The proceeds from the Convertible Security will be used primarily to repay the principal amount of the Maturing Debts (being C$8,258,650.58), with the accrued interest (being C$3,584,016.93) to be settled through the issuance of 35,840,170 common shares of Fortune (“Common Shares”) to the holders of the Maturing Debts. The remaining proceeds of the Convertible Security will be used to fund the Company’s share of work programs on its vertically integrated NICO cobalt-gold-bismuth-copper critical minerals project (the “NICO Project”), being primarily funded by U.S. and Canadian government programs to develop a domestic critical minerals supply chain (see news releases dated May 16, 2024 and December 6, 2023).

The Convertible Security has a 24-month term and a face value (“Face Value”) of C$11,800,000 (representing the C$10,000,000 funded amount plus an implied 9% per annum interest charge for the term) and is secured by a lien against the Company’s mining assets. Lind will be entitled to incrementally convert the Face Value of the Convertible Security over the 24-month term, subject to certain limits, at a conversion price equal to 85% of the five-day trailing volume weighted average price (“VWAP”) of the Common Shares prior to the date of conversion. Following closing (which occurred yesterday), Fortune will have the right to repurchase the Convertible Security, subject to Lind’s option to convert up to one-third of the Face Value into Common Shares prior to such repurchase at a conversion price equal to 85% of the 5-day VWAP. Lind will also receive a closing fee of C$300,000 (which was offset against the funded amount at closing) and 28,801,843 Common Share purchase warrants (the “Warrants”) exercisable at an exercise price of C$0.22568 per Common Share (representing 130% of the 5-day VWAP immediately prior to execution of the Funding Agreement) for 60 months from the date of closing.

Robin Goad, President and CEO of Fortune, commented: “The debts being retired pursuant to these agreements were held by a long-term supportive shareholder who regrettably passed away earlier this year. Lind has emerged as another key financing partner, supporting share liquidity and enabling an orderly conversion of debt into equity as the Company advances the NICO Project toward a construction decision.”

The Toronto Stock Exchange (the “TSX”) has provided conditional approval in respect of the issuance of the Convertible Security and the underlying Common Shares and Warrants, and the Company is awaiting final TSX approval in respect of the foregoing.

The NICO Project is an advanced critical minerals development asset comprised of a planned open pit and underground mine and concentrator in Canada’s Northwest Territories and a dedicated hydrometallurgical refinery in Alberta, where concentrates from the mine and other feed sources will be processed into value-added products. Development of the NICO Project would provide a vertically integrated North American supply of battery-grade cobalt sulphate, bismuth ingots and copper cement, providing a reliable domestic supply chain for three critical minerals, with more than one million ounces of in-situ gold as a highly liquid and countercyclical co-product.

This press release shall not constitute an offer to sell or solicitation of an offer to buy nor shall there be any sale of any of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful. The securities will not be and have not been registered under the United States Securities Act of 1933 and may not be offered or sold in the United States absent registration or applicable exemption from the registration requirements.

About The Lind Partners:
The Lind Partners manages institutional funds that invest in small-cap and mid-cap companies publicly traded in the US, Canada, Australia and the UK. Lind’s multi-strategy funds make direct investments up to US$50 million, invest in syndicated equity placements and selectively buy on market. Having completed more than 200 direct investments totaling over US$2 billion in transaction value, Lind has been a flexible and supportive capital partner to investee companies since 2011.

About Fortune Minerals:
Fortune is a Canadian mining and processing company focused on developing the vertically integrated NICO cobalt-gold-bismuth-copper critical minerals project in Canada. The NICO Project is a development-stage asset consisting of a planned mine and concentrator in the Northwest Territories and a dedicated hydrometallurgical refinery in Alberta’s Industrial Heartland Association north of Edmonton. Fortune also owns the Sue-Dianne copper-silver-gold satellite deposit located 25 km north of the NICO deposit, which is a potential future source of incremental mill feed to extend the life of the NICO mill and concentrator.

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This press release contains forward-looking information and forward-looking statements within the meaning of applicable Canadian securities legislation. This forward-looking information includes statements with respect to, among other things, the issuance of the Common Shares under the Convertible Security and the Common Shares underlying the Warrants, receipt of final TSX approval and the Company’s plans to develop the NICO Project. Forward-looking information is based on the opinions and estimates of management, as well as certain assumptions, as at the date the information is given (including, in respect of the forward-looking information contained in this press release, assumptions regarding: final approval by the TSX in respect of the Funding Agreement and related matters; the Company’s ability to complete construction of the NICO Project refinery; the Company’s ability to arrange the necessary financing to continue operations and develop the NICO Project; the receipt of all necessary regulatory approvals for the construction and operation of the NICO Project, including the planned NICO cobalt-gold-bismuth-copper mine and concentrator, and the timing thereof; growth in the demand for cobalt; the time required to construct the NICO Project; and the economic environment in which the Company will operate in the future, including the price of gold, cobalt and other by-product metals, anticipated costs and the volumes of metals to be produced at the NICO Project). However, such forward-looking information is subject to a variety of risks, 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 risks that the TSX may not provide final approval in respect of the Funding Agreement and related matters, that global geopolitical situations may interfere with the Company’s ability to continue development of the NICO Project, that the Company may not be able to finance and develop the NICO Project on favourable terms or at all, uncertainties with respect to the receipt or timing of required permits, approvals and agreements for the development of the NICO Project (including the related hydrometallurgical refinery), that the construction of the NICO Project may take longer than anticipated, that the Company may not be able to secure offtake agreements for the metals to be produced at the NICO Project, that the Sue-Dianne Property may not be developed to the point where it can provide mill feed to the NICO Project, the inherent risks involved in the exploration and development of mineral properties and in the mining industry generally, that the market for products that use cobalt or bismuth may not grow to the extent anticipated, that the future supply of cobalt and bismuth may not be as limited as anticipated, the risk of decreases in the market prices of cobalt, bismuth and other metals to be produced by the NICO Project, discrepancies between actual and estimated Mineral Resources or between actual and estimated metallurgical recoveries, uncertainties associated with estimating Mineral Resources and Reserves and the risk that, even if such Mineral Resources prove accurate, such Mineral Resources may not be converted into Mineral Reserves once economic conditions are applied, the Company’s production of cobalt, bismuth and other metals may be less than anticipated, and other operational, development, market and regulatory risks. Readers are cautioned not to 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 made as of the date hereof, and the Company assumes no obligation to update or revise it to reflect new events or circumstances, except as required by law.