Could you give us a brief introduction to Foran Mining and outline how the company has developed over the years?

Foran Mining was started in 1998 as a public company and took over the McIlvenna Bay project at about the same time. McIlvenna Bay was a large VMS deposit, which at that time was thought to be zinc only. Flin Flon was looking for additional sources of ore and, although Cameco and BHP had this deposit, Cameco was going into uranium and it was too small for BHP, so Foran Mining took over the project. This current management group only became involved in 2011; our focus has been to develop the project with a mining partner to realize the value of the underlying asset.

We focussed on infill drilling McIlvenna Bay. This added a large copper component to the resource and was enough to complete a preliminary economic assessment, which was published in late 2014. This showed that McIlvenna Bay was an economic deposit, and if we were to build a mill there and a processing plant on site, we could build it for an all-in cost of C$250 million, plus an additional C$150 million over the life of the mine. This generated an estimated pre-tax NPV7% of C$382 million ($263 million after tax) and 22% IRR (19% after tax). In short, it was a robust project. Unfortunately, soon after that, the prices of zinc and copper dropped, so projects like ours became hard to finance. We therefore focused on exploration.

What are some of the developments at the McIlvenna Bay project since 2015?

The most significant recent development is an agreement that Foran signed with Glencore Canada Corporation, a subsidiary of the mining giant Glencore. Glencore has agreed to complete a feasibility study on McIlvenna Bay in return for obtaining the zinc offtake from the project. We think that this speaks loudly of our project, because, of all the undeveloped zinc-copper projects, Glencore has agreed to complete a feasibility study on ours.

McIlvenna Bay, though our biggest project, is not the only deposit or discovery on our properties. We made a discovery called the Thunder Zone, which is about 8km away from McIlvenna Bay, and we also found a large EM anomaly, Target  A,  about 1km away from McIlvenna Bay. Our first drill hole passed over the top of the Target A anomaly. This year we have two holes planned for Target A. Our hope is that a new discovery will be made here. In 2015, we drilled six holes into the Bigstone deposit, which is another property about 20km west of McIlvenna Bay. There we drilled 100 m of 2% copper and 80 m of slightly more than 2% copper. Unfortunately, we found it hard to gain traction in a market that no longer cared about base metals and the share price actually dropped from 40 cents to 8 cents. At that point Foran’s Board decided to avoid unnecessary shareholder dilution, and the Company protected its cash by keeping everything under low care and maintenance. Management and the Board of Foran, as significant shareholders in the Company (17%), are aligned with shareholders in keeping shareholder dilution at a minimum and spending our funds prudently.

As the price of zinc rose we became more active. In 2016 and 2017, we searched for a partner for the McIlvenna Bay project, because we already had completed a PEA on that. However, while we came close to partnerships a couple of times, they each fell through. Our efforts culminated in a Technical Services Agreement with Glencore to advance McIlvenna Bay signed in December of 2017.

What are the plans for the project going forward?

Our work will be split between working with Glencore to complete a feasibility study on McIlvenna Bay, exploring new areas and expanding known deposits. With respect to Target A, last year we got to within 60 metres of the anomaly, but then the weather warmed up and the site became a swamp, so we had to pull the drill off. We plan to revisit the site in January, completing this hole and then following up with a second hole. We also plan to review Thunder Zone and Big Stone.

As we advance development work on McIlvenna Bay, exploration activity will be driving the interest in the company. At US$3.20 copper US$1.45 to US$1.50 zinc and a Canadian dollar exchange rate at $0.78 McIlvenna Bay looks better than the PEA projections. With Glencore’s long term view on zinc and copper prices, it is no wonder that they want to get the zinc offtake from McIlvenna Bay.

Has Foran Mining received government support, or does it expect to in the future?

Right now, we are working alone and we have not asked for government assistance. When the feasibility study is finished, we may need to ask for assistance in terms of power - if we decide to build a mill onsite, we will have to run better power lines to the project. Running a processing plant requires a lot of power; running new power lines to the project may be expensive.  Perhaps the Saskatchewan government will be able to assist us with this. 

We also want to work with the local Peter Ballantyne Cree Nation (PBCN). This First Nation is progressive in its approach to industry development. They are looking to companies such as ours to build on training, employment and business opportunities within their communities.

Going forward, what is the longer-term vision for the company?

The longer-term goal is to complete the feasibility study in late 2018 or early 2019, and to work towards funding the McIlvenna Bay project through to construction. We want to catch this metal cycle, and it is a good cycle now. They generally last between four and six years. With developments in battery technology and the push for electric automobiles, zinc and copper will be in high demand. It may be a longer cycle – perhaps not a big super cycle like 2001 to 2010 was – but we will see copper prices increase dramatically, and zinc prices remaining strong.