Foran proposes $350 million financing to fund project completion
Foran Mining Corp. [FOM-TSX, FMCXF-OTCQX] has announced a proposed non-brokered private placement of common shares for gross proceeds of $350 million. The company has also provided capital cost update for development of Phase 1 at its 100%-owned McIlvenna Bay VMS (volcanogenic massive sulphide) project in east-central Saskatchewan.
The McIlvenna Bay property sits just 65 kilometres west of Flin Flon, Man., and is part of the world-class Flin Flon greenstone belt that extends from Snow Lake, Man., through Flin Flon to Foran’s ground in eastern Saskatchewan, a distance of over 225 kilometres.
The McIlvenna Bay deposit is the largest undeveloped VHMS deposit in the region.
In connection with the private placement, the company said it is in advanced discussions with a limited number of investors and has received indications covering the full amount of the offering. Foran’s Executive Chairman and CEO Dan Myerson is expected to participate in the private placement, the company said, adding it expects to disclose final terms once they are settled.
Meanwhile, the company said its Phase 1 capital budget to completion has been re-estimated to $1.08 billion ($888 million previously), inclusive of contingency and net of costs incurred up to and including May 31, 2024. Roughly 46% of the increase in capital required reflects the incorporation of non-recoverable sales taxes and reduced pre-commercial production revenue credits associated with a streamlined commissioning phase t support earlier production readiness.
From June 1, 2024, to March 31, 2025, the company has incurred $381 million of costs toward its Phase 1.0 capital budget, resulting in remaining cost to completion of $7.01 million.
In reference to Federal Government Contributions, Foran said it continues to advance the Project while managing the timing of anticipated proceeds from the previously announced up to $41 million Strategic Innovation Fund (SIF) contribution and the up to $20 million Critical Minerals Innovation Fund (CMIF) contribution. While the company expects to eventually receive full contributions under both programs, the reimbursement structure-model of the programs for certain qualifying costs gives rise to a timing uncertainty and an associated working capital impact during the construction period.
As such, the company has estimated reduced contribution amounts it expects to receive over the construction period, with the balance expected to be received in subsequent periods after the company reaches commercial production.
Foran and its integrated project management team led by G-Mining Services Inc. jointly undertook an extreme capital review to refine project-level cost estimates. “This update highlights the most important takeaway: McIlvenna Bay remains on scheduled for commercial production, backed by strong execution certainty driven by the progress achieved to date,’’ said G Mining Services President Mathieu Gignac. “With engineering and procurement substantially complete, construction fully mobilized, and 32% finished despite the challenges of the toughest construction season, we now have a clear line of sight on costs and major project scopes,’’ he said.