Foran arranges $67 million mine equipment facility
Foran Mining Corp. [FOM-TSX, FMCXF-OTCQX] said Thursday it has secured a $67 million equipment finance facility for its McIlvenna Bay VMS (volcanogenic massive sulphide) project in east-central Saskatchewan
The company said it has entered into a strategic equipment finance arrangement with Sandvik Financial Services Canada in connection with the facility which is intended to cover the initial battery electric vehicle mining fleet and essential components, such as charging stations and batteries. The equipment will be used for the development and operation of the McIlvenna Bay Complex
The facility allows for draws up to $67 million and will be initiated, at the company’s election, as equipment is delivered to the project site. Repayments on draws will commence immediately over a 60-month period.
Interest accrued on draws against the facility will be indexed to 5-year Canadian overnight index swaps plus a spread of 3.20% The rate of interest will become fixed for each individual draw, at the time of the drawdown.
Foran Chief Financial Officer James Steels said the purchases are likely to qualify for an up to 30% refundable investment tax credit associated with the proposed Clean Technology Investment Tax Credit.
Details of the facility were released after the close of trading on September 6, 2023, when Foran shares rose 4.2% or 17 cents to $4.21. The shares are currently trading in a 52-week range of $4.32 and $2.15.
“This is another positive step in our journey to unlocking McIlvenna Bay’s value and advancing our targeted carbon reduction initiatives, all aligned with our primary objective of maximizing risk-adjusted returns for shareholders,’’ said Steels.
Foran Mining is a copper-zinc-gold-silver exploration and development company, which is planning to build the first mine in Canada designed to be carbon neutral from day one.
McIlvenna Bay is a copper-zinc-gold-silver-rich VMS deposit that is intended to be the centre of a new mining camp in a prolific district that is already been producing for 100 years.
A feasibility study envisions a state-of-the art, and re-designed mine plan to accommodate a larger production base at 4,200 tonnes per day, which will serve as a starter-plant and is designed to accommodate future expansions.
The study outlines an 18.4-year mine life and is based on probable mineral reserves of 25.7 million tonnes of grade 2.51% CuEq (copper equivalent). The initial capital cost is forecast at $368 million.
Foran has said assay results continue to demonstrate the sizeable near-mine opportunity at the Tesla zone, with recent results including some of the highest zinc intersections encountered to date across thick intercepts.
The company also owns the Bigstone Project, a resource development stage deposit located 25 kilometres southwest of the McIlvenna Bay project.
The Bigstone copper-zinc deposit, in the southern part of the property and holds great potential to serve as additional feed for a central mill at McIlvenna Bay, the company has said.