Investment will provide foundation for a
sustainable company within the new era for mining and a global move
towards green electrification
VANCOUVER, BC, May 25, 2021 /CNW/ - Foran Mining
Corp. (TSXV: FOM) (OTCQX: FMCXF) ("Foran" or the
"Company") is pleased to announce that it has entered into a
letter agreement pursuant to which Fairfax Financial Holdings
Limited, through certain of its subsidiaries (collectively,
"Fairfax"), will make a strategic CAD$100 million investment in the Company in
exchange for the issuance by the Company of common shares,
non-voting common shares, and warrants.
Fairfax has agreed to subscribe, on a private placement basis,
for CAD$100 million in equity
securities of Foran in two tranches (collectively, the
"Financing"):
- Tranche 1 – CAD$50 million gross
proceeds, comprised of 27,777,778 voting common shares (the
"Common Shares") at a price of CAD$1.80 per Common Share, along with warrants to
purchase an aggregate of 8,000,000 million Common Shares (the
"Warrants"). The Warrants have an exercise price of
CAD$2.09 per Common Share and an
exercise period of five years.
- Tranche 2 – CAD$50 million gross
proceeds, comprised of 27,777,778 non-voting common shares (the
"Non-Voting Shares") at CAD$1.80 per Non-Voting Share, along with
8,000,000 Warrants.
The net proceeds of the Financing will be used to rapidly
advance the development of the McIlvenna Bay project and
centralized mill for the Hanson Lake district as well as further
exploration in the Hanson Lake district, enable further investment
in key technological and operational research and equipment, and
general corporate purposes.
Foran believes the investment by Fairfax represents a
significant endorsement of Foran's business model, the quality of
its 100% owned McIlvenna Bay deposit and its wider Hanson Lake
District, and its vision to build the world's first carbon neutral
copper mine. This transaction greatly de-risks the business
financially and is expected to bring a multitude of substantive
synergies and benefits to Foran shareholders. Foran's
resulting cash position of approximately CAD$120M and strategic partnership with Fairfax
will enable significantly accelerated development of the McIlvenna
Bay project and its phase 1 centralized mill at the profound and
prospective Hanson Lake district. Foran believes that
Fairfax, like Foran, values integrity, honesty, doing meaningful
work in an energetic way, and is proud to partner with Fairfax in
addressing the need for carbon neutral materials extraction, and to
grow Fairfax's investment in a meaningful, responsible, and
disciplined manner.
Foran will continue to focus efforts on arranging the remaining
debt component of its project financing, which efforts will be
strengthened and supported by new access to Fairfax's global
network of business partners. Foran will also continue
working with its established banking partners with a focus on
exploring potential ESG financial products that could enhance
overall economics and investment returns for all stakeholders.
Prem Watsa, Chairman and Chief
Executive Officer of Fairfax, said: "Fairfax is
delighted to partner with Foran and to support its management team,
led by Dan Myerson, in the creation
of the world's first carbon neutral copper company. We are excited
to invest alongside Pierre Lassonde
and Darren Morcombe in a company
with an excellent base of assets and a solid strategic plan for
development, which we think represents an excellent opportunity for
long-term growth and value-creation."
Pierre Lassonde, a key
investor in Foran, also commented: "I cannot think of a
better partner for any business than Prem and his Fairfax group.
This is a wonderful development for Foran which is rewriting the
textbook on how to create value in mining. We look forward to
building this new age copper company together."
Dan Myerson, Executive
Chairman of Foran said, "This investment and
partnership is a pivotal moment in our company's short history and
one that will shape our future for many years and decades to come,
elevating us onto the world-stage. We are honored for this profound
vote of confidence, in our vision and strategy, the Foran team, our
stakeholders and the province of Saskatchewan and country of Canada.
About the Investment
Closing of the Financing is
subject to the receipt of TSX Venture Exchange approval, the
settlement of mutually agreeable definitive documentation
(including the terms and conditions of the Non-Voting Shares), the
receipt of all necessary Foran shareholder approvals, and other
customary closing conditions. Further announcements will be
made regarding details of the development of the mine at the
McIlvenna Bay deposit and the expected closing date of each tranche
of the Financing. Fairfax will not receive the right to appoint any
members of the board of directors of Foran.
Neither TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in policies of the TSX Venture
Exchange) accept responsibility for the adequacy or accuracy of
this release.
About Fairfax Financial Holdings Limited
Fairfax is a
holding company which, through its subsidiaries, is engaged in
property and casualty insurance and reinsurance and the associated
investment management.
About Foran Mining Corp.
Foran Mining is
a copper-zinc-gold-silver exploration and development
company, and we are planning to build the first mine in
Canada designed to be carbon
neutral from day one. We are in the feasibility stage of
development for our flagship McIlvenna Bay project in eastern
Saskatchewan. McIlvenna Bay is a copper-zinc-gold-silver rich
VMS deposit intended to be the center of a new mining camp in a
prolific district that has already been producing for 100 years.
McIlvenna Bay sits just 65km from Flin
Flon, Manitoba and is part of the world class Flin Flon
Greenstone Belt that extends from Snow
Lake, Manitoba, through Flin
Flon to Foran's ground in eastern Saskatchewan, a distance of over 225km.
McIlvenna Bay is the largest undeveloped VMS deposit in the
region. The Company filed a NI 43-101 Technical Report for the PFS
on the McIlvenna Bay Deposit on SEDAR on April 28, 2020.
Foran trades on the TSX.V under the symbol "FOM", and on the
OTCQX under the symbol "FMCXF".
CAUTIONARY NOTE REGARDING FORWARD LOOKING STATEMENTS
This news release contains "forward-looking information" (also
referred to as "forward looking statements"), which relate to
future events or future performance and reflect management's
current expectations and assumptions. Often, but not always,
forward-looking statements can be identified by the use of words
such as "plans", "hopes", "expects", "is expected", "budget",
"scheduled", "estimates", "forecasts", "intends", "anticipates", or
"believes" or variations (including negative variations) of such
words and phrases, or state that certain actions, events or results
"may", "could", "would", "might" or "will" be taken, occur or be
achieved. Such forward-looking statements reflect management's
current beliefs and are based on assumptions made by and
information currently available to the Company. All statements,
other than statements of historical fact, are forward-looking
statements or information. Forward-looking statements or
information in this news release relate to, among other things:
about the closing of the Financing (if at all), the use of proceeds
of the Financing, the approval of the TSX Venture Exchange relating
to the Financing, receipt of any necessary shareholder approval and
satisfaction of closing conditions; completion of the feasibility
study in a timely manner, and the anticipated capital and operating
costs, sustaining costs, net present value, internal rate of
return, payback period, process capacity, average annual metal
production, average process recoveries, anticipated mining and
processing methods, proposed PFS production schedule and metal
production profile, anticipated construction period, anticipated
mine life, expected recoveries and grades, anticipated production
rates, infrastructure, social and environmental impact studies,
future financial or operating performance of the Company,
subsidiaries and its projects; estimation of mineral resources,
exploration results, opportunities for exploration, development and
expansion of the McIlvenna Bay Project, its potential
mineralization; the future price of metals; the realization of
mineral reserve estimates, costs and timing of future exploration,
the timing of the development of new deposits; requirements for
additional capital; foreign exchange risk; government regulation of
mining and exploration operations, environmental risks, reclamation
expenses; title disputes or claims; insurance coverage; and
regulatory matters. In addition, these statements involve
assumptions made with regard to the Company's ability to develop
the McIlvenna Bay Project and to achieve the results outlined in
the PFS, and the ability to raise capital to fund construction and
development of the McIlvenna Bay Project.
These forward-looking statements and information reflect the
Company's current views with respect to future events and are
necessarily based upon a number of assumptions that, while
considered reasonable by the Company, are inherently subject to
significant operational, business, economic and regulatory
uncertainties and contingencies. These assumptions include: risks
relating to the Financing, volatility in the trading price of
common shares of the Company, risks relating to the ability of the
Company to obtain required approvals, complete definitive
documentation and complete the Financing on the terms announced;
our mineral reserve and resource estimates and the assumptions upon
which they are based, including geotechnical and metallurgical
characteristics of rock confirming to sampled results and
metallurgical performance; tonnage of ore to be mined and
processed; ore grades and recoveries; assumptions and discount
rates being appropriately applied to the PFS; success of the
Company's projects, including the McIlvenna Bay Project; prices for
zinc, copper, gold and silver remaining as estimated; currency
exchange rates remaining as estimated; availability of funds for
the Company's projects; capital decommissioning and reclamation
estimates; mineral reserve and resource estimates and the
assumptions upon which they are based; prices for energy inputs,
labour, materials, supplies and services (including
transportation); no labour-related disruptions; no unplanned delays
or interruptions in scheduled construction and production; all
necessary permits, licenses and regulatory approvals are received
in a timely manner; and the ability to comply with environmental,
health and safety laws. The foregoing list of assumptions is not
exhaustive.
The Company cautions the reader that forward-looking statements
and information include known and unknown risks, uncertainties and
other factors that may cause actual results and developments to
differ materially from those expressed or implied by such
forward-looking statements or information contained in this news
release and the Company has made assumptions and estimates based on
or related to many of these factors. Such factors include, without
limitation: the projected and actual effects of the COVID-19
coronavirus on the factors relevant to the business of the
Corporation, including the effect on supply chains, labour market,
currency and commodity prices and global and Canadian capital
markets, fluctuations in zinc, copper, gold and silver prices;
fluctuations in prices for energy inputs, labour, materials,
supplies and services (including transportation); fluctuations in
currency markets (such as the Canadian dollar versus the U.S.
dollar); operational risks and hazards inherent with the business
of mining (including environmental accidents and hazards,
industrial accidents, equipment breakdown, unusual or unexpected
geological or structure formations, cave-ins, flooding and severe
weather); inadequate insurance, or the inability to obtain
insurance, to cover these risks and hazards; our ability to obtain
all necessary permits, licenses and regulatory approvals in a
timely manner; changes in laws, regulations and government
practices in Canada, including
environmental, export and import laws and regulations; legal
restrictions relating to mining; risks relating to expropriation;
increased competition in the mining industry for equipment and
qualified personnel; the availability of additional capital; title
matters and the additional risks identified in our filings with
Canadian securities regulators on SEDAR in Canada (available at www.sedar.com). Although
the Company has attempted to identify important factors that could
cause actual results to differ materially, there may be other
factors that cause results not to be as anticipated, estimated,
described or intended. Investors are cautioned against undue
reliance on forward-looking statements or information.
These forward-looking statements are made as of the date hereof
and, except as required by applicable securities regulations, the
Company does not intend, and does not assume any obligation, to
update the forward-looking information.
SOURCE Foran Mining Corporation