Fortune River Resource Corp.
TSX VENTURE : FRX
FRANKFURT : RG7A

Fortune River Resource Corp.

April 13, 2010 09:00 ET

Favorable Preliminary Economic Assessment for Fortune River's Wind Mtn

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 13, 2010) - Fortune River Resource Corp. (TSX VENTURE:FRX)(FRANKFURT:RG7A) has received an independent Preliminary Economic Assessment (PEA) for its wholly owned Wind Mountain Project, located in northwestern Nevada. The study, conducted by Mine Development Associates (MDA) of Reno, assumes open-pit mining using conventional trucks, shovels, run-of-mine leaching and utilizing a base case gold price of US$850 per ounce with a credit for silver at a price of $14.50 per ounce. The base case economic model (1) in US dollars indicates:

Resource inside pits = 26.9 million short tons @ 0.012 oz Au/t, with 0.007 oz Au/t cutoff (~90% Measured + Indicated, ~10% Inferred)

Gold Ounces mined = 320,000

Gold Ounces produced = 198,000

Waste: Ore Strip ratio = 0.7:1

Capital = Initial capital of $41.8 million with $4.4 million sustaining capital

Mine Life = 4 years active mining with 2 additional years of residual leaching and rinsing of leach pads

Life-of-mine cash cost per Au ounce = $497 after a silver credit of $86 per ounce of gold is applied

Total Pre-Tax cost per Au ounce = $719 after a silver credit of $86 per ounce of gold is applied

IRR = 15%

Pre-tax NVP @ 5% = $13.2 million

(1)Note that Canadian NI 43-101 guidelines define a PEA as follows: "A preliminary economic assessment is preliminary in nature and it includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied that would enable them to be classified as mineral reserves, and there is no certainty that the preliminary assessment will be realized."

Sensitivity studies by MDA indicate that gold and silver prices 20% higher in the same modeled pit ($1,020/oz Au and $17.40/oz Ag) will increase the IRR to 38% and the NPV@5% to $43.7 million. Gold and silver prices that are 10% lower ($765/oz Au and $13.05/oz Ag) result in the model becoming uneconomic at an NPV@5%. Sensitivities of the model to capital and operating costs are also provided by MDA. MDA notes that additional studies, such as determining if there is economic value in historic 'waste' dumps, could further enhance project economics.

Work by Fortune River indicates that significant portions of the dump could warrant remining; however, the grade distribution of that material has not yet been demonstrated sufficiently to be incorporated into the economic model. The current pit design requires removal of a portion of the historic 'waste' dumps, for which the current PEA assigned no value. MDA also notes, "The PEA uses a relatively high rate of production to maintain lower operating costs and reduce fixed costs. While this increases capital, it also increases the NPV (5%) of the project. The cash flow only includes salvage for buildings and some infrastructure. With the relatively short mine life, there may be a reasonable salvage value that can help enhance the project economics. Additionally, the project may lend itself to the use of used equipment, which would reduce initial capital requirements. This may make the project a valuable asset for companies that have available mining and/or processing equipment."

President Joe Kizis commented, "We are pleased that the economic evaluation completed by an independent and well-respected engineering firm such as MDA has confirmed our assertion that the existing Wind Mountain resource represents an important asset for the company at today's metal prices, particularly when compared to the company's undervalued market cap. There is additional exploration potential both to add to these near-surface resources and to discover potentially bonanza-grade feeder veins that could underlie this resource, as occurs at several similar low-sulfidation gold deposits. We plan to continue to develop the existing resource and to explore for feeder veins after receipt of third-party geologic and geophysical studies that are now underway."

Mine Development Associates, Ore Reserves Engineering ("O.R.E.") and Debra Struhsacker, Environmental Permitting and Government Relations Consultant, compiled the technical report. Thomas Dyer, P.E. is a Senior Engineer for MDA and is responsible for sections of the technical report involving mine designs and the economic evaluation; Alan C. Noble, P.E. is the Principal Engineer of O.R.E. and is responsible for sections of the technical report involving resource modeling and information taken from the 2007 Technical Report completed entitled "Technical Report on the Wind Mountain Gold Project"; and Debra Struhsacker is responsible for the section of the technical report involving environmental issues. These are the Qualified Persons of the technical report for the purpose of Canadian NI 43-101, Standards of Disclosure for Economic Analyses of Mineral Projects. The report will be available on SEDAR and the company's website, www.fortuneriver.ca within 45 days.

Other project updates

An initial line of IP and AMT geophysical surveys at Highland suggest mineralization may be related to a previously unknown and undrilled graben that is covered by younger alluvium. Three additional lines of IP are planned over the next few weeks in order to further define this favorable geologic feature. After data has been obtained and interpreted, drill sites will be chosen and a permit will be submitted. Geologic work has been completed for Buz, and a permit has been submitted for drilling at six sites. Both projects are located in the Walker Lane Gold Trend in Nevada and are being managed by the company, and both programs are being funded by Christopher James Gold Corp. Drilling is anticipated to begin during the third quarter of 2010. Initial field sampling and mapping are planned for May at Zebra, which is located in the Northern Nevada Rift and is being managed by the company and being funded equally by the company and Christopher James Gold Corp.

A program of IP geophysics is being considered for the company's wholly owned Baxter project, which is located in the Walker Lane Gold Trend approximately 8km to the southwest of Highland, in a similar geologic setting. Previous drilling at Baxter by the company intersected several 1.5 meter intercepts of 3.1 to 9.1 g/t gold, with anomalous silver to 44 g/t. Much of the project area is concealed beneath thin gravel cover and IP geophysics may indicate important controls on mineralization that are not observable at surface. The company is seeking partners to further advance its wholly owned Mud Springs (molybdenum, Nevada) and Drayton projects (gold, Ontario), while continuing to evaluate acquisitions of potential high-grade gold/silver submittals in Nevada.

About Fortune River

Fortune River Resource Corp. is exploring for high-grade gold deposits within two prolific gold producing geologic provinces, Nevada and Ontario. The Wind Mountain, East Manhattan, Highland, Baxter, Mud Springs, and Buz projects are located in Nevada and the Drayton project is located in Ontario. The Company's Wind Mountain project, a past-producing open-pit/heap-leach operation.

On behalf of the Board,

Joseph Anthony Kizis, Jr., President, Fortune River Resource Corp.

We seek safe harbor.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Fortune River Resource Corp.
    Jeff Stuart
    1.888.456.1112 or 604.641.2771
    jstuart@mnxltd.com
    or
    Fortune River Resource Corp.
    Liana Shahinian
    1.888.456.1112 or 604.641.2771
    www.fortuneriver.ca