Foran Announces Positive Pre-Feasibility Study Results for McIlvenna Bay

Foran Announces Positive Pre-Feasibility Study Results for McIlvenna Bay

Pre-tax $219 million NPV7.5% and 23.4% IRRAfter-tax $$147 million NPV7.5% and 19.2% IRRBased on 3 year trailing average metal pricesCapital expenditures:  $261 million pre-production (including $30 million contingency)Probable Mineral Reserve: 11.34 million tonnes @ US$100/t NSR (see Table 4)Contained within Indicated Resources of 22.95 million tonnes @US$60/t NSR (see Table 6)Zinc and Copper ProductionAverage Annual:  89.2 million lbs zinc, 27.9 million lbs copperCash Cost (net of by product credits) – US$0.41/lb zinc OR US$0.44/lb copperNext StepsAdvance to feasibilityDiscussions with potential partners for development“When we first invested in Foran, we envisioned McIlvenna Bay as being the centre of operations for a new mining camp.  A number of mining executives and friends shared our vision and invested with us in financings as we advanced the project. Today, we take a massive step towards realizing our dream with the release of this Pre-Feasibility Study.”  Patrick Soares, President & CEOVANCOUVER, British Columbia, March 12, 2020 (GLOBE NEWSWIRE) — Foran Mining Corporation (TSX.V: FOM) (“Foran” or the “Company”) is pleased to announce the results of a positive Pre-Feasibility Study (“PFS” or the “Study”) for Foran’s 100% owned McIlvenna Bay zinc-copper volcanogenic massive sulphide (“VMS”) deposit (“McIlvenna Bay” or the “Project”) in east-central Saskatchewan.Patrick Soares, President & CEO commented, “We assembled a project team that has deep experience with projects similar to McIlvenna Bay to prepare this pre-feasibility study. We are proposing a modern underground mine supported by surface infrastructure designed to take into account feedback we have received from local communities. We are committed to taking the project through feasibility and into production in a safe, responsible manner that will provide economic benefits to the region for years to come. We are now in a position to advance discussions with potential investors with experience developing similar mines as we explore the best way to credibly and safely build and operate McIlvenna Bay.  Our goal, as always, is to maximize value per share.”McIlvenna Bay is currently the largest undeveloped deposit in the Flin Flon Greenstone Belt and the second largest deposit discovered in the region.  The Project is located in a top mining jurisdiction within a producing district, with known geology and a limited physical footprint. All results in this release are reported in Canadian dollars, unless otherwise indicated.McIlvenna Bay PFS Highlights:Economics$219 million (“M”) pre-tax net present value (“NPV”) using a 7.5% discount rate ($147M after-tax) and an internal rate of return (“IRR”) of 23.4% (19.2% after-tax) using 3 year trailing average metal prices of US$1.26 per pound (“lb”) zinc (“Zn”), US$2.82/lb copper (“Cu”), US$1,312/ounce (“oz”) gold (“Au”) and US$16.30/oz silver (“Ag”), foreign exchange rate CAD:USD $1.30 / USD:CAD $0.77 (see Table 1).Cash cost of US$0.41/lb Zn or US$0.44/lb Cu (net of by-product credits).Cash cost includes mine cash operating costs (including sustaining capital), smelting and refining charges, royalties and transportation costs.Pre-production capital cost of $261.3M and Life of Mine (“LOM”) sustaining capital cost of $338.6M.After-tax free cash flow of over $626M ($365M net of pre-production capital).Overall average operating cost of $69.48 per tonne:In addition, LOM sustaining capital of $29.86 per tonne (calculated from total LOM sustaining capital of $338.6M)Reserves & ResourcesA Probable Mineral Reserve of 11.34 million tonnes (“Mt”) at 4.01% Zn, 1.14% Cu, 0.54 grams per tonne (“g/t”) Au and 20.97 g/t Ag, derived using a USD$100/t net smelter return (“NSR”) cut-off (see Table 4).Probable Reserves are contained within Indicated Resources outlined in the 2019 Mineral Resource Estimate (using a US$60/t NSR cut-off) (see Table 6):Indicated resources of 22.95MtGrading 1.17% Cu, 3.05% Zn, 0.44 g/t Au and 16.68 g/t AgInferred resources of 11.15MtGrading 1.38% Cu, 1.83% Zn, 0.10 % lead, 0.47 g/t Au and 14.81 g/t AgResources and reserves are open for expansion.Mining & ProcessingLife of mine concentrate production containing over 800 M lbs Zn, over 250 M lbs Cu, over 155,000 oz. Au and approximately 4.4 M oz. Ag.Average annual production of 89.2 M lbs Zn, 27.9 M lbs Cu, 17,312 oz Au and 492,667 oz AgUnderground mine with 9-year life, employing a combination of longitudinal longhole retreat (“Avoca”) and sub-level transverse stoping methods to mine at a nominal rate of 3,600 tonnes per day (“tpd”).Metallurgical testwork yielded robust metallurgical performance, with recoveries of 80% Zn, 88.2% Cu, 79.1% Au and 58.0% Ag into separate high-grade zinc and copper flotation concentrates.Low carbon footprint mining project:Powered by existing hydroelectric powerHaulage of ore to surface using Battery Electric Vehicles (“BEVs”)Efficient ore haulage from deeper levels using vertical ore conveying technologySurface InfrastructureModern on-site processing facilities, including conventional crushing, grinding, flotation and dewatering units.Cemented paste backfill plantOn-site 5.6Mt capacity filter tailing (“dry stack”) storage impoundment.Project Description
McIlvenna Bay is a large polymetallic VMS deposit containing zinc, copper, lead, gold and silver which has been defined by 239 diamond drill holes and over 115,000 metres (“m”) of diamond drilling. The bulk of the resource is contained in two contiguous lenses consisting of a large zinc +/- copper-rich massive sulphide lens and the underlying Copper Stockwork Zone (“CSZ”) which represents a copper-rich feeder zone to the massive sulphide. These two lenses form a coherent mineralized body that averages 17.6m in thickness and plunges over 2,000 m from surface, where it remains open for further expansion. Production will initially focus on mining the high value massive sulphide material with incremental production coming from the CSZ as metal prices allow.
Project economics are summarized in Table 1 below.Table 1:  Summary of McIlvenna Bay PFS Economic Metrics(1-4)
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