With the Revenue silver mine in its back pocket, Fortune now finds itself in a position to generate around $10 million in annual cash flow from the mine. For the most part, the revenue from the mine will not finance the development of the company's two other specialty metals projects; instead, as Goad explained, it will fund head office expenses, reducing the company's need to go to market for corporate reasons.Following the news, Fortune Minerals saw its share price climb 9.68 percent to close the day at $0.34. Shares hit an intraday high of $0.37. Securities Disclosure: I, Vivien Diniz, hold no direct investment interest in any company mentioned in this article. Fortune Minerals Amends Terms for Revenue Silver Mine, Announces Financing for $36 Million from Silver Investing News
It was a good news day for diversified exploration and production company Fortune Minerals (TSX:FT), which announced $36 million in financing in conjunction with an amended agreement for the 100-percent acquisition of the Revenue silver mine in Southwest Colorado. Clearly the highlight of the press release lies in the revised agreement for the Revenue silver mine, which Fortune can acquire with lower payment terms under an accelerated schedule. CEO Robin Goad was encouraged by the news, telling Silver Investing News that the purchase of the mine was made under "very attractive terms" and is a "transformational" acquisition for the company as it approaches the producer level. In fact, as Goad explained, Fortune "now has a producing operation with a significant 8-year mine life and two organic growth operations with NICO and Arctos." Goad didn't seem too fazed by the fact that the revised terms of the purchase agreement for Revenue come with an accelerated schedule, which shaves about $23 million off the purchase price. He highlighted instead the second part of the company's news release: the financing. "The good news for us is that we have a financing plan that has been announced ... which provides for US$35 million. We've also raised another million in a private placement," Goad said, adding that it is a pre-payment against production. So with roughly $36 million raised, the company is not in a bad place. "The financing structure also preserves the ability of Fortune's shareholders to maximize their participation in future upside opportunities from any increase in commodity prices and potential delineation of new resources from the mine's significant exploration potential," Goad commented in today's press release.