Foran Mining

Exploring and Developing VMS Copper-Zinc Deposits in Saskatchewan

This profile is part of a paid investor education campaign.*

Overview

Foran Mining Corporation (TSXV:FOM) is a Canadian exploration and development company with copper and zinc projects in the Hanson Lake volcanogenic massive sulphide (VMS) camp in mining-friendly Saskatchewan. According to the Fraser Institute’s Annual Survey of Mining, Saskatchewan was named the top mining jurisdiction in Canada and second globally. An emerging zinc-copper base metal district, the Hanson Lake area displays similar VMS structures to those found in the better-known Flin Flon and Snow Lake regions.

Zinc and copper have experienced increased demand from the rapidly growing automobile and electronics industries. These base metals are both anti-corrosive, which makes them ideal for a variety of materials, such as electrical wiring and galvanizing. The supplies of zinc and copper are becoming limited due to the demand for both materials, which are used in electric vehicles, renewable energy sources and related infrastructure, along with issues in top zinc and copper jurisdictions such as China and Indonesia.

Zinc’s depleted supply is in part due to China’s green initiatives and crackdown on mining practices in 2006. In August 2017, eight Chinese provinces were shut down or suspended and more than 11 percent of China’s mined zinc output was lost. Meanwhile, the copper supply chain is also facing challenges as Freeport-McMoRan Inc. (NYSE:FCX) recently announced that production at its Indonesian Grasberg mine would be more than halved next year as it transitions to underground operations. This will cut approximately 300,000 tonnes from the world’s supply, potentially speeding up an expected deficit.

Foran’s properties are located west of Flin Flon, Manitoba in mining-friendly Saskatchewan. Their flagship McIlvenna Bay deposit boasts a 2013 mineral resource with an indicated resource of 13.9 million tonnes grading 1.96 percent copper equivalent and 13.19 percent zinc equivalent and an inferred resource of 11.3 million tonnes grading 2.01 percent copper equivalent and 13.52 percent zinc equivalent.

Foran completed a preliminary economic assessment (PEA) on McIlvenna Bay in 2014. The PEA concluded that McIlvenna Bay could generate an after-tax NPV (seven percent) of $263 million and an after-tax internal rate of return (IRR) of 19 percent. The company expects the mine to pay back their initial capital cost of $249 million in 4.1 years and projects a mine life of 14 years. The company is working towards completing an updated mineral resource for the deposit in the fall of 2018 and expects to complete a feasibility study in mid-2019, in cooperation with Glencore Canada Corporation.

Foran’s Bigstone property also hosts a historic mineral resource that was completed by Cameco Corp. (TSX:CCO) in 1990. The resource outlines an estimated 3.75 million tonnes that graded 2.03 percent copper and 0.33 g/t silver for copper and an estimated 0.53 million tonnes that graded 9.62 percent zinc and 15.9 g/t silver in zinc-rich massive sulphides. Foran is not treating the historic resource as current.

Foran’s third exploration property, Balsam, has seen numerous work programs by a variety of operators, but the biggest finding on the property to date was the discovery of the Thunder Zone in 2013. Additional drilling in winter 2015 stepped out from the original discovery hole and cut thick intercepts of copper- and zinc-rich VMS mineralization in four of the five holes drilled, confirming a significant new blind discovery close to the McIlvenna Bay deposit. A notable intercept of five percent copper, 2.1 percent zinc, 0.84 g/t gold and 41 g/t silver over 2.6 meters within 12 metres of sulphide rich mineralization was encountered during the 2015 program. The strike remains open and further testing is needed to determine the extent of the mineralization.

Finally, Foran’s fourth property is Hanson Lake. The property has a number of potential exploration targets that require further work. Currently, the company is in the process of reinterpreting the results of their 2017 VTEM survey with the goal of generating new drill targets.

Major shareholder Pierre Lassonde, chairman of Franco-Nevada, holds 11.8 percent of Foran’s shares. Lassonde has held various roles in senior management for companies such as Newmont Mining Corporation (NYSE:NEM), Euro-Nevada Mining Corporation Ltd. and New Gold Inc. (TSX:NGD). He has also been inducted into the Canadian Mining Hall of Fame in 2013. In addition to Lassonde’s stake in the company, Foran’s management team notably holds 16 percent of the company’s shares.

Company Highlights

 

  • Projects are located in the Fraser Institute’s top mining jurisdiction of Saskatchewan.
  • Foran ground overlies VMS deposits and structures similar to those found in Flin Flon and Snow Lake, Manitoba.
  • McIlvenna Bay deposit hosts an indicated resource of 13.9 million tonnes grading 1.96 percent copper equivalent and 13.19 percent zinc equivalent and an inferred resource of 11.3 million tonnes at 2.01 percent copper equivalent and 13.52 percent zinc equivalent.
  • McIlvenna Bay’s PEA reported after-tax NPV (seven percent) of $263 million; after-tax IRR of 19 percent; initial capital cost of $249 million, including a 20 percent contingency.
  • Updated mineral resource estimate and feasibility study for McIlvenna Bay being prepared in cooperation with Glencore Canada Corporation.
  • Bigstone historic mineral resource is an estimated 3.75 million tonnes grading 2.03 percent copper and 0.33 g/t silver and 0.53 million tonnes grading 9.62 percent zinc and 15.9 g/t silver.
  • Exploration opportunities at Balsam and Hanson Lake properties, particularly the Thunder Zone and Target A prospects.
  • Canadian Mining Hall of Fame inductee Pierre Lassonde holds 11.8 percent of Foran’s shares.
  • Foran’s management team owns 16 percent of the company’s shares.

VMS Deposits

VMS deposits are base metal-rich mineral deposits that may contain small or trace amounts of precious metals. Their ores can be major sources of zinc, copper and lead, with gold and silver byproducts. These deposits can be found worldwide in clusters or camps and consist of massive or semi-massive accumulations of sulphide minerals, which form in lens-like or tabular bodies parallel to the stratigraphy or bedding. The deposits are typically associated with volcanic and/or sedimentary rocks, which form on or below the ocean floor.

There are five types of VMS deposits based on a variety of criteria set out by Barrie and Hannington (1999) and Franklin et al. (2005): bimodal-mafic, mafic associated, mafic-siliciclastic, felsic-siliciclastic, and bimodal-felsic. Foran’s McIlvenna Bay is a bimodal-mafic VMS deposit.

Canada is home to several clusters of VMS deposits, including those located at the Flin Flon and Snow Lake, Bathurst and Noranda camps. These deposits generally contain high-grades and have been known to produce five to 20 million tonnes worth of ore material. The largest VMS deposits in Canada include the Flin Flon mine, which produced 62 million tonnes and the Kidd Creek and Bathurst Number 12 mines, which each produced over 100 million tonnes of ore.

McIlvenna Bay

In November 2010, Foran finalized their definitive agreement to consolidate 100 percent ownership of the McIlvenna Bay deposit by purchasing the 25 percent interest held by Copper Reef Mining Corporation (CSE:CZC) in the McIlvenna Bay Joint Venture Agreement.

The 20,907-hectare property is located approximately 65 kilometers west of Flin Flon, Manitoba. The McIlvenna Bay deposit and Foran’s exploration camp are accessible by road and power lines run the length of the Hanson Lake gravel road, which intersects the deposit. Flin Flon is home to approximately 5,600 people and is the largest commercial and residential center in the region. The town is accessible by the Hudson Bay rail line and has regular commercial flights to Winnipeg.

Exploration

In 1988, Saskatchewan Mining Development Corporation (SMDC) (now Cameco Corporation) and Esso Minerals discovered the McIlvenna Bay deposit while following up on a survey that outlined a 1.2-kilometer long anomaly south of Hanson Lake. The anomaly was in proximity to several VMS deposits in the Flin Flon mining camp and occurrences in the immediate McIlvenna Bay area.

In 1991, Cameco suspended exploration at McIlvenna Bay and the property remained dormant until optioned by Foran in 1998. Since then, Foran completed several drill programs between 1998 and 2000 and then again between 2011 and 2014.  Further exploration drill testing has taken place in conjunction with the feasibility drill programs underway in 2018.

Target A

In 2013, Foran completed a TDEM survey over the property and uncovered a large geophysical anomaly located approximately two kilometeres southeast of the main deposit. The next year, Foran completed a two-hole initial drill test on the anomaly. One hole had to be abandoned due to excessive flattening but the second hole reached a depth of 1,683 meters. Foran conducted additional electromagnetic surveying on the site and results indicate that there is a conductor below the trace of the second hole at a depth of 1,200 meters.

Target A is only accessible during the winter season. Foran started drilling at Target A in 2017 but the hole was suspended due to the early onset of spring breakup.  This hole was deepened during the winter 2018 drill program and intersected the upper edge of the modelled conductor plate.

This area remains a high priority drilling target for Foran. Target A will be subjected to a borehole EM survey and directional drilling in upcoming work programs.

2013 Mineral Resource Estimate

In January 2013, Foran completed a mineral resource estimate for the McIlvenna Bay deposit. The report outlined an indicated resource of 13.9 million tonnes grading 1.96 percent copper equivalent and 13.19 percent zinc equivalent and an inferred resource of 11.3million tonnes grading at 2.01 percent copper equivalent and 13.52 percent zinc equivalent.

 

Preliminary Economic Assessment

 

In November 2014, Foran completed a PEA for McIlvenna Bay. Highlights of the PEA include:

  • After-tax NPV (seven percent) of $263 million.
  • After-tax IRR of 19 percent.
  • Pay back of 4.1 years and a mine life of 14 years.
  • Initial capital cost of $249 million, including a 20 percent contingency.

The PEA outlined a throughput rate of 5,000 tonnes per day as an underground operation. There is also the potential to be expanded with additional exploration. It was also recommended in the report that a stand-alone concentrator should be constructed adjacent to the mine.

Moving forward

Foran is currently working on updating the 2013 resource estimate for the McIlvenna Bay deposit. The company is also working towards completing a feasibility study for the property mid-2019 in cooperation with Glencore Canada Corporation.

 

Bigstone

The 16,117-hectare Bigstone property is located approximately 85 kilometers west of Flin Flon, Manitoba. The property is accessible by provincial highway and transmission lines cross the northern end of the property. The Bigstone deposit, which is located on the southern end of the property, is accessible by helicopter, boat or winter road. The deposit also lies approximately 25 kilometers west of the McIlvenna Bay deposit and is accessible in the winter from the Hanson Lake property via gravel roads, Highway 106 and winter roads.

Exploration

In 1963, a Selco airborne geophysical survey identified the electromagnetic conductor associated with the Bigstone deposit, which was ultimately discovered by the Granges and SMDC joint venture in 1982. The joint venture continued to explore the Bigstone VMS deposit and regional targets on the property until 1994.

In 1995, Aur Resources Ltd. purchased Granges’ interest in the property and was able to complete several exploration programs until the project was shelved in 2002.

In 2003, Foran purchased Aur’s interest in the project. Subsequently, Foran commissioned a high-resolution VTEM survey over portions of the property in 2007 and then again in 2011. The two datasets were merged and reinterpreted to identify exploration targets for upcoming work programs.

After purchasing Cameco’s remaining interest and becoming 100% owner of the property in early in 2012, Foran drilled 1,176 meters to test three north-south oriented VTEM conductor trends in the Freeport zone which is located in the northern part of the property. Foran encountered mineralization in three of the four holes, as well as grades of 0.40 percent zinc, 0.09 percent copper, 2.9 g/t silver and 130 ppb gold in one of the samples taken.

In 2014, Foran conducted another ground EM geophysical survey over the Bigstone deposit area to further delineate the conductor associated with the historic deposit and other nearby conductors.

During the 2015 winter work program, Foran completed 2,545 meters of drilling at the Bigstone deposit to test its depth and to confirm the historical resource completed by Cameco in 1990. The Bigstone historic resource is known to be vertically oriented and flattened with cylindrical shaped body. The resource has been drill-tested between 100 and 700 meters below surface. Highlights from the winter 2015 drill program include two percent copper over 105 meters in Hole BS-15-239 and 27 percent zinc over 7.6 meters in Hole BS-15-240.

Mineral Resource

In 1990, Cameco completed a historic mineral resource at the Bigstone deposit that delineated two zones of mineralization (Main Zone and Zn-rich Massive Sulphides). Using a one percent copper cut-off at the Main Zone, there is an estimated 3.75 million tonnes grading 2.03 percent copper and 0.33 g/t silver. Using a five percent zinc cutoff for the Zn-rich Massive Sulphides, there is an estimated 0.53 million tonnes grading 9.62 percent zinc and 15.9 g/t silver in zinc-rich massive sulphides.  Foran is not treating this historic estimate as current.

Balsam

The 4,066-hectare Balsam property is wholly owned by Foran and is located approximately 65 kilometers west of Flin Flon, Manitoba. The property’s Thunder Zone discovery is approximately seven kilometers southeast of the McIlvenna Bay deposit and is accessible by winter road from the McIlvenna Bay deposit.

Exploration

Since the mid-1980s, the property has been subjected to various exploration campaigns by numerous operators. These programs have included geophysical testing, drilling and drill core lithogeochemistry. The programs have identified several horizons of VMS-style alteration and copper and zinc mineralization over a three-kilometer strike length.

Between 1981 and 1987, joint venture partners Granges and Troymin completed airborne INPUT surveys, ground HLEM and magnetometer surveys and 26 diamond drill holes which resulted in the discovery of the Balsam Zone in 1986. The zones returned grades of up to 3.19 percent copper, 3.3 percent zinc, 3.6 g/t gold and 52.48 g/t silver.

In 1989, Cameco optioned the property and completed more magnetic and EM surveys as well as 10 drill holes between 1990 and 1991. The ground EM conductors northwest of the Balsam Zone were tested at this time and would later point towards the discovery of the Thunder Zone.

In 1995, Aur Resources purchased Granges’ interest in the property and completed several exploration programs that identified several additional mineralized horizons between 1996 and 2002. In the late 1990s, Aur completed a mineral resource for the Balsam Zone.

In 2013, Foran completed a ground EM survey that covered the seven kilometer trend from McIlvenna Bay to Balsam and completed drilling that targeted new EM conductors and known zones of mineralization. This program resulted in the expansion of the Balsam and B2 zones and uncovered a significant intersection of copper rich massive sulphides at the Thunder Zone.

In 2015, follow up drilling and downhole TDEM surveys confirmed and expanded the Thunder Zone. The zone remains open to the northwest and expansion is possible with additional drilling.

Thunder zone

In 2013, Foran discovered the Thunder Zone through a work program that consisted of drilling and ground-based deep penetrating electromagnetic geophysics. Foran intersected 3.7 meters of massive sulphide that graded 4.1 percent copper and 0.43 g/t gold.

In 2015, winter drilling recovered thick intercepts of copper- and zinc-rich VMS mineralization and confirmed Thunder Zone as a significant new discovery close to the McIlvenna Bay deposit. Drill highlights from 2015 include five percent copper, 2.1 percent zinc, 0.84 g/t gold and 41 g/t silver over 2.6 meters within a 12 m thick sulphide-rich interval in Hole BZ-15-80.  Copper and zinc rich mineralization was encountered in four of the five drill holes during this drill program.

Drilling at the Thunder Zone indicates that the massive sulphides strike northwest. The zone is currently open along strike and more drilling is needed to test the extent of the deposit.

Hanson

In January 2005, Foran entered into a definitive agreement with Cameco Corporation and Billiton Metals Canada Inc. to acquire a 100 percent interest in the 2,565 hectare Hanson Lake project in northeastern Saskatchewan. The project is approximately 55 kilometers west of Flin Flon and immediately west of the McIlvenna Bay project.

From past exploration, there have been a number of potential targets outlined on the property. In 2007, Foran completed a VTEM survey over the property. The results from this property are currently being reinterpreted to help generate drill targets for future work programs.

In October 2014, Foran completed an agreement with Teck, which extinguished the back in rights held by Teck on Foran’s Bigstone, Balsam and Hanson properties.

Management

Darren Morcombe — Executive Chairman

Darren Morcombe joined Foran in mid-2010 and was appointed Chairman shortly thereafter. Morcombe has more than 20 years of international experience in a variety of roles in in the natural resource sector. This includes over 10 years in senior roles with Normandy Mining and Newmont Mining Corporation in the areas of financing, treasury, mergers and acquisitions.

Morcombe is the founder of Springtide Capital Pty. Ltd., a private investment company specializing in micro-cap listed companies, venture capital and resource-oriented companies. He was Chairman and a major shareholder of European Gold Refineries SA, Europe’s largest gold refinery, and Director of AGR Matthey, one of the world’s largest gold refineries. He retired from this position in 2008 and these businesses are now owned by Newmont Mining Corporation. Morcombe is a major shareholder of several public companies.

Patrick Soares, B.Sc (Hons), P.Geo. — President, CEO & Director

Patrick Soares was appointed President and CEO of Foran Mining Corporation and a member of the Board of Directors in November 2010. Previously, he served as the President and CEO of Brett Resources Inc., which was acquired by Osisko Mining Corp. in May 2010.

Soares holds a B.Sc. (Hons.) from the University of British Columbia and is a Professional Geoscientist with APEGBC. He began his professional career in 1983 as an exploration and mine geologist in northern Canada. Subsequently, he worked in the field of investor relations and corporate development, and held positions with Sutton Resources Ltd. (acquired by Barrick Gold in 1999), EuroZinc Mining Corp. (now part of Lundin Mining Corporation) and Aurizon Mines Ltd. (which put the Casa Berardi mine into production). Mr. Soares was the Chairman of SnipGold Corp. (acquired by Seabridge Gold in June 2016).

Tim Thiessen, B.Comm., CA — CFO & Corporate Secretary

Tim Thiessen has over 18 years of international experience in public accounting and the mining industry. Previously, he was CFO of Aurcana Corporation, a TSXV-listed mining company with silver-copper-zinc operations in Mexico and a silver development project in Texas. In this role he oversaw the accounting and finance departments and played a key role in growing Aurcana’s market capitalization. Previously, he was domiciled in the Cayman Islands as VP of Finance for TSX-listed Endeavour Financial Ltd., an advisory firm in the mining industry. He has also held positions as controller for Endeavour Mining Capital Corp., corporate accountant for several offshore subsidiaries of Silver Wheaton Corp. and as an auditor for Deloitte LLP with a focus in the mining and financial services industries.

Thiessen is a graduate of the University of Manitoba and is a member of the Canadian Institute of Chartered Accountants.

Roger March, B.Sc. (Hons.), P.Geo. — VP Exploration

Rodger March has almost 25 years of progressive exploration and project management experience, focused mainly on the design, implementation and supervision of advanced exploration programs. In his prior role as Senior Project Geologist at Cumberland Resources, he spent 11 years as part of the team responsible for the completion of pre-feasibility and feasibility level studies for the Meadowbank Gold Project, including resource increases from 0.8 million to over 4 million ounces of gold. He has multi-commodity exploration experience and has held positions with Inco, Redfern Resources, Lac Minerals and the Newfoundland and Labrador Department of Mines and Energy.

March has extensive experience integrating exploration with geotechnical, metallurgical and environmental programs for project development and is using this background to advance the exploration and development of the McIlvenna Bay Project.

March is also a Professional Geoscientist with the PEGNL and holds a B.Sc. (Hons.) from Memorial University.

Marian (Mike) Koziol, B.Sc., P.Geo., P.Eng. — Technical Consultant

Marian Koziol was appointed as a Technical Consultant to Foran Mining Corporation in February, 2013. He is an experienced and highly successful geologist, with over 30 years in the mining and exploration industry and has been responsible for a number of Canadian base and precious metal discoveries, including the McIlvenna Bay deposit.

Koziol is a graduate of McGill University and is a member of the APGO and the APEO.

Koziol has also served as the President and a Director of Alto Ventures Ltd. since 2004. Previously, he held technical positions with the Saskatchewan Mining Development Corporation and subsequently Cameco Gold Inc. from 1978 to 2002.

Sharon Dowdall, B.A. (Hons.), LL.B. — Director

Sharon Dowdall joined the Board of Directors in 2011 and has over 30 years’ experience in the legal field, including experience as a practicing lawyer and as a senior executive in the resource sector.

Dowdall is a consultant to Franco-Nevada, working on Special Projects. Previously, she was the Chief Legal Officer and Corporate Secretary of Franco-Nevada Corporation, and prior to the IPO of Franco-Nevada, she had a 20 year association with the royalty portfolio assets of Franco-Nevada, including serving as an Officer of Newmont Capital from 2002 to 2007.

Dowdall holds a B.A. (Hons.) from the University of Calgary and an LL.B, from Osgoode Hall at York University. She was the recipient of the 2011 Canadian General Counsel Award for Business Achievement and currently sits on the Boards of NovaGold Resources Inc. and Olivut Resources Ltd.

Maurice Tagami, BA.Sc., P.Eng. — Director

Maurice Tagami joined the Board of Directors in 2011 and has over 30 years’ experience in mining development and operations. He holds a degree in Metallurgical Engineering from the University of British Columbia and is a Professional Engineer with APEGBC. During his career, he has played a significant role in the metallurgical and project management of numerous open pit, underground and heap leach projects worldwide.

Tagami is the Vice President, Mining Operations at TSX-listed Wheaton Precious Metals, the largest metals streaming company in the world. Previously, he held the positions of President and CEO, with Keegan Resources Inc. and Senior Project Manager (Onca Puma Project) with Canico Resource Corp., which was acquired by CVRD in 2005. Tagami has served on the Board of Brett Resources Inc. (acquired by Osisko Mining Corp. in 2010) and currently sits on the Board of Maple Gold Mines Ltd.

David M. Petroff, B.Math., MBA — Director

David Petroff joined the Board of Directors in 2012 and has over 30 years’ experience in the mining and investment industry, including holding senior management and financial positions with several prominent, publicly-traded mining companies and working in Investment Banking with a major Canadian investment dealer.

Petroff was previously President, CEO and Director of Jaguar Mining Inc. From early 2009 until its acquisition by Nyrstar NV in mid-2011, he held the role of President, CEO and Director of zinc producer Breakwater Resources Ltd. Petroff holds a B. Math from the University of Waterloo and an MBA from the Schulich School of Business. He also sits on the Board of Pancontinental Gold Corporation.


 

*Disclaimer: The profile provides information which was sourced and approved by Foran Mining in order to help investors learn more about the company. Foran Mining is a client of the Investing News Network (INN). The company’s campaign fees pay for INN to create and update this profile page, to which links are placed on Investingnews.com and channel newsletters.

The company description, investment highlights and catalysts were sourced by INN and approved by the company. INN does not guarantee the accuracy or thoroughness of the information contained on this page.

INN does not provide investment advice and the information on Investingnews.com profile should not be considered a recommendation to buy or sell any security.

INN does not endorse or recommend the business, products, services or securities of any company profiled.

Readers should conduct their own research for all information publicly available concerning the company.