On July 3, 2015 Fortune Minerals notified shareholders that it had to give up its Colorado mine after failing to deliver the silver it promised in repayment to its New York lenders, Lascaux Capital. Fortune had put up all of its assets, including the NICO mine and proposed Langham metals processing plant, along with virtually all of the silver mine’s output, as security against its loans.
The junior mining company wildly miscalculated its ability to actually run a mine for the first time. On October 10, 2014 Fortune Minerals announced it had completed its purchase of the Revenue Silver Mine. Then, CEO Robin Goad said “Our ability to arrange financing and close this purchase of the Revenue Silver Mine in a challenging capital market is a testament to our team. …” It soon became clear that the company was not able to deal with the technical problems involved in starting up and running the troubled mine, and was not able to manage the risk involved with price volatility in the minerals market.
Nine months later, the company also abandoned its Arctos coal mining project due to unrelenting opposition from First Nations who refuse to allow Fortune Minerals to destroy their traditional territory, which is also the headwaters of three of BC’s most pristine salmon rivers. BC Rail bought out its licenses for $9 million, money Fortune then sunk into its silver mine.
Fortune Minerals is now attempting to negotiate terms of its default agreement with Lascaux and other creditors. Lascaux is trying to partially redeem its bad loans by requiring Fortune Minerals to give it a substantial stake in a new subsidiary that would own both the NICO project and the Langham processing plant project. However, Langham and Dalmeny area residents are not going to allow Fortune Minerals or any other company to build the proposed processing plant that would contaminate the drinking water aquifer, pollute the air and soil, and devalue local residential and farmland property values.
Fortune Minerals’ share price has dropped to a low of 2 cents, indicating that investors have little confidence in the company’s ability to manage its business well enough to ever make a profit.