Fortune Minerals Limited announced that its wholly owned subsidiary, Fortune Coal Limited has entered into a definitive agreement to form a JV with POSCO Canada Limited and its wholly owned subsidiary, POSCO Klappan Coal Limited, to advance the Mount Klappan Anthracite Metallurgical Coal Project in northwest British Columbia to production.

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 USD 181 million, including USD 30 million in upfront funding upon closing.

Mr Robin Goad president & CEO of Fortune said that "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 USD 601 million at a USD 175 per tonne PCI price, and represents only a fraction of the total resource."

Mr Yong Keun Kim president of POSCAN said that "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."