Foran Mining

Exploring and Developing VMS Copper-Zinc Deposits in Saskatchewan

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Overview

Foran Mining Corporation (TSXV:FOMis 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 2018, Saskatchewan was named the top mining jurisdiction in Canada and third globally. An emerging copper-zinc base metal district, the Hanson Lake area displays similar geological characteristics as those found in the better-known Flin Flon and Snow Lake regions. Mining operations have occurred in and around Flin Flon for over 100 years.

Please see Foran’s company infographic here.

Foran Mining is well positioned to address an increase in copper and zinc demand along with a shortage of their supply. Copper and zinc 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, useful in electric vehicles, renewable energy sources, and related infrastructure necessary to meet our low-carbon future. Along with an increase in their uses, the copper and zinc supplies are currently strained due in part to production issues in top metal-producing jurisdictions in China and Indonesia. The high demand and constrained foreign supply places the Canadian market at an advantage.

Zinc’s depleted supply is in part due to China’s green initiatives and a 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. China’s zinc production dropped 4.6 percent in 2018 as smelters experienced longer maintenance periods. Meanwhile, the copper supply chain is also facing challenges as Freeport-McMoRan Inc. 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 just across the provincial border from Flin Flon, Manitoba in eastern Saskatchewan. Their flagship McIlvenna Bay deposit boasts a 2019 mineral resource with an indicated resource of 22.95 million tonnes grading 1.17% copper, 3.05% zinc, 0.19% lead, 0.44 g/t gold and 16.68 g/t silver. The contained metal in the indicated resource includes over 590 million pounds of copper and over 1.5 billion pounds of zinc. It also has an additional inferred resource of 11.15 million tonnes grading 1.38% copper, 1.83% zinc, 0.10% lead, 0.47 g/t gold and 14.81 g/t silver, containing 340 million pounds of copper and 450 million pounds of zinc.  See the Company’s news release here.

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

Foran’s land holdings also include Target A, a deep EM conductor located two kilometers southeast of McIlvenna Bay and the Balsam claims, which are host to the Thunder Zone, a new VMS discovery from 2013.  In addition, the Hanson Lake property has a number of potential exploration targets that require further work.

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 17 percent of the company’s shares.

Company Highlights

  •  Projects are located in the Fraser Institute’s top mining jurisdiction of Saskatchewan.
  • Foran ground overlies known VMS deposits and rocks with similar geological characteristics as those found in Flin Flon and Snow Lake, Manitoba.
  • McIlvenna Bay has an indicated resource of 22.95 million tonnes grading 1.17% copper, 3.05% zinc, 0.19% lead, 0.44 g/t gold and 16.68 g/t silver.
    • The contained metal in the indicated resource includes over 590 million pounds of copper and over 1.5 billion pounds of zinc.
  • McIlvenna Bay also has an additional inferred resource of 11.15 million tonnes grading 1.38% copper, 1.83% zinc, 0.10% lead, 0.47 g/t gold and 14.81 g/t silver.
    • The contained metal in the inferred resource includes 340 million pounds of copper and 450 million pounds of zinc.
  • Updated mineral resource estimate for McIlvenna Bay being prepared in cooperation with Glencore Canada Corporation and Micon International Limited.
  • Bigstone historic mineral resource is an estimated 3.75 million tonnes grading 2.03 % copper and 0.33 g/t gold and an additional 0.53 million tonnes grading 9.62 % 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 11.5 percent of Foran’s shares.
  • Foran’s management team owns 17 percent of the company’s shares.

McIlvenna Bay

2019 Project Update

The revised 2019 Resource Estimate for the McIlvenna Bay will be incorporated into the ongoing Feasibility Study for the project and used as a basis for an estimate of mineable reserves for the deposit and detailed mine planning and design work. A number of work programs are currently underway in support of the Feasibility study, including metallurgical test work, hydrogeological modeling, infrastructure and mining studies.  It is currently expected that the Feasibility Study for the McIlvenna Bay deposit should be completed in H2 2019.

Overview

In November 2010, Foran’s then newly established management team increased the Company’s ownership interest in the McIlvenna Bay deposit to 100% by purchasing the remaining 25% interest from Copper Reef Mining Corporation (CSE:CZC).

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 passing over 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 EM geophysical south of Hanson Lake.

In 1991, Cameco suspended exploration at McIlvenna Bay and the property remained dormant until optioned by Foran in 1998. Since then, Foran has completed several drill programs between 1998 and 2000 and then again between 2011 and 2013 focused on the McIlvenna Bay deposit. 

In 2018, Foran completed a large infill and expansion drill program consisting of approximately 27,000m of drilling designed to increase the confidence in the deposit and convert as much as possible of the inferred resources into indicated categories in advance of a Feasibility Study. The program was successful in meeting that mandate and the results of the drilling were incorporated into the recently released 2019 resource estimate. The McIlvenna Bay deposit has now been defined by 239 diamond drill holes and over 115,000 meters of drilling, continues to display good continuity at depth and remains open for expansion with further drilling. A Feasibility Study for the project is currently underway and it is anticipated that this work will be complete in the second half of 2019.

2019 Mineral Resource Estimate

The 2019 Resource indicates that the deposit is host to an indicated resource of 22.95MT grading 1.17% Cu, 3.05% Zn, 0.19% lead, 0.44 g/t gold and 16.68 g/t silver; with an additional inferred resource of 11.15MT grading 1.38% Cu, 1.83% Zn, 0.10% lead, 0.47 g/t Au and 14.81 g/t Ag. There has been substantial growth in the Deposit since the last resource update was completed in 2013. This is demonstrated by the large increase in contained metal in the Deposit, including an 89% increase in contained Zn, a 52% increase in contained Cu, a 61% increase in contained Ag and a 48% increase in contained Au in the indicated category which equates to over 1.5 billion pounds of zinc, almost 600 million pounds of copper, over 12 million ounces of silver and over 300,000 ounces of gold.  See Tables 1 and 2 below for detailed information on the 2019 Resource and contained metal in the deposit and Figures 1 and 2 for longitudinal sections that illustrate the outline and classification of the resource estimate.

The McIlvenna Bay deposit consists of several zones and two distinct styles of mineralization, typical of VMS deposits:

  • massive to semi-massive sulphide mineralization in the Main Lens and Lens 3;
  • stockwork-style sulphide mineralization in a Copper Stockwork Zone (“CSZ”) that directly underlies the Main Lens;
  • two other small lenses of stockwork-style mineralization occur in the deposit:
    • the Stringer Zone which is located between the Main Lens and Lens 3
    • the Copper Stockwork Footwall Zone (“CSFWZ”) which occurs as a separate lens underneath the CSZ for approximately 140m of strike length which could represent a fault offset and repetition of the Main Lens and CSZ.  

The Main Lens at McIlvenna Bay is a large massive to semi-massive sulphide horizon containing a metal zonation consisting of Cu-Au-rich material near the upper plunge line of the deposit which transitions down dip into a more Zn-Ag-dominant massive sulphide. In the 2013 Resource, the Main Lens was sub-divided into the Upper West Zone and Zone 2 based on these differences in mineralogy, but for the 2019 resource, the Main Lens massive sulphide is reported as a single zone. This is a result of statistical analysis of the assay grades within the lens that suggests that there is a gradational transition between the two zones and that a hard boundary is not really appropriate, coupled with the fact that they will likely be mined together without any distinction between the zones in the feasibility study. The Main Lens massive sulphide is a continuous mineralized horizon which varies from 0.1 to 36.0 meters in thickness and averages 5.5 meters overall, with a strike length of 1,700 meters (Figure 1).

The CSZ is a zone of stockwork style copper-rich mineralization that directly underlies and is in contact with the massive sulphide and is interpreted to represent the feeder zone to the massive sulphide system. The CSZ varies from 0.3 to 37.2 meters in thickness with an average thickness of 12.1 meters. The Main Lens massive sulphide and the underlying CSZ are generally in contact with one another throughout the deposit, giving the bulk of the deposit an average thickness of 17.6 meters overall. The deposit plunges at approximately 45 degrees from surface for a down plunge length of approximately 2,000 meters (Figure 2).

Lens 3 sits approximately 10 to 30 meters in the hanging wall above the Main Lens and demonstrates the presence of stacked sulphide lenses in the Deposit. This lens has been traced intermittently along a strike length of 1,440m and plunges parallel to the underlying Main Lens and CSZ. The lens ranges in thickness from 0.1 to 12.5m and averages 2.8 meters. The Stringer Zone is a narrow intermittent lens of stringer-style sulphide that occurs sporadically between the Main Lens and Lens 3 through the deposit.

The CSFWZ is a separate lens that underlies the CSZ and has been intersected in nine drill holes over approximately 140m of strike length in the up-dip, central part of the deposit. The lens varies in thickness from 0.3 to 17m with an average thickness of 4.4m. The CSFWZ dominantly consists of stockwork style copper-rich mineralization similar to the CSZ, although in several holes narrow massive sulphide was also intersected at the top of the interval. It is possible that the CSFWZ represents a fault offset and repetition of the Main Lens and CSZ, but further drilling is required to prove the relationship of this lens to the rest of the deposit. The reader is referred to Foran News Release from May 22, 2019, for more detailed information of the 2019 resource.

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 by-products. 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.

Please see Foran’s VMS Deposits infographic here.

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.

For more information about Foran and its projects, please see the company website:  https://www.foranmining.com/

Leadership Team

Management and Directors

Darren Morcombe — Executive Chairman

Mr. Morcombe joined the Board of Directors in mid-2010 and was appointed Chairman shortly thereafter. Mr. 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.

Mr. 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. Mr. Morcombe is a major shareholder of several public companies.

Patrick Soares. — President, CEO & Director

Mr. Soares was appointed President and CEO of Foran Mining Corporation and a member of the Board of Directors in November, 2010. Mr. Soares served as the President and CEO of Brett Resources Inc. from late 2007 until its acquisition by Osisko Mining Corp. in May, 2010. During his tenure as President and CEO of Brett Resources, the market capitalization of the company increased from $60M to approximately $370M.

Mr. Soares holds a B.Sc. (Hons.) from the University of British Columbia in Geology. Mr. Soares 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. Mr. Soares was the Chairman of SnipGold Corp. (acquired by Seabridge Gold in June 2016).  He is currently Chair and Director of the board for Colorado Resources Ltd.

Tim Thiessen — CFO & Corporate Secretary

Mr. Thiessen has over 20 years of international accounting and finance experience, the last 15 years in the mining industry.  His experience includes holding the position of Chief Financial Officer for a number of publicly-listed mineral companies including Aurcana Corporation, SnipGold Corp. (acquired by Seabridge Gold in 2016), Metallic Minerals Corp. and Group Ten Metals Inc.  Prior to this, Mr. Thiessen spent 7 years as Vice President of Finance for TSX-listed Endeavour Financial, an advisory firm in the mining industry specializing in mergers and acquisitions and debt and equity financings.  He was part of a team that spawned industry-leading companies such as Silver Wheaton, UrAsia Energy, Peak Gold and Coastal Energy Corp.

Mr. Thiessen is a member of the Chartered Professional Accountants of Canada.

Roger March— VP Exploration

Mr. March has over 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, Mr. March spent 11 years as part of the team responsible for the completion of prefeasibility 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.

Mr. 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.

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

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

Mr. Tagami joined the Board of Directors in 2011 and has over 30 years’ experience in mining development and operations. Mr. Tagami 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.

Mr. Tagami is the Technical Ambassador 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. (acquired by CVRD in 2005). Mr. Tagami 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

Mr. 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.

Mr. 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. Mr. Petroff, who holds a B. Math from the University of Waterloo and an MBA from the Schulich School of Business, also sits on the Board of Pancontinental Gold Corporation.

Mario Grossi – Director

Mario Grossi is the President, CEO and founder of Technica Group Inc. and Technica Mining. Technica Mining is Ontario’s second largest underground contractor, growing from a staff of 6 in 1999 in Sudbury, Ontario to over 450 personnel and operating Canada-wide. Mario has worked within the Canadian mining and metals industry for over 25 years, focused on continuously improving mining techniques while striving to create a zero-harm workplace. Technica Mining has provided contracting services to Vale and Glencore, and believes in offering state of the art service without compromising health & safety.


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