McIlvenna Bay Project

McIlvenna Bay Project

Location and Infrastructure

Foran’s 20,382 hectare McIlvenna Bay Property is located in east-central Saskatchewan, approximately 65 km west of Flin Flon, Manitoba (85 km by road). The property is contiguous with Foran's Hanson Lake and Balsam Properties.

The McIlvenna Bay deposit and Foran's exploration camp are road-accessible, located 85 km west of Flin Flon via Provincial Highway 106 and 17 km south on the Hanson Lake all-weather gravel road. Power lines run the length of the Hanson Lake gravel road to the McIlvenna Bay deposit.

The mining town of Flin Flon (pop. 5,600), is the largest commercial/residential centre in the area and a railhead on the Hudson Bay railway. The Flin Flon airport has regular commercial air service to Winnipeg.

Ownership

Foran owns a 100% interest in the McIlvenna Bay Property, subject to a 1% NSR held by Cameco Corporation and BHP Billiton. The NSR has a buy-out provision in favour of Foran for $1,000,000 at any time. Some of the claims that make up the McIlvenna Bay Property are subject to a $0.75/tonne of ore extracted Net Tonnage Royalty, with a right of first refusal in favour of Foran.

  • Technical Report for the 2019 Mineral Resource Estimate on the McIlvenna Bay Project

    The full technical report is available here https://foranmining.com/properties/reports/.

     

    Highlights from the 2019 Mineral Resource Estimate

    • Indicated resources have increased 65%, from 13.9 million tonnes (“Mt”) to 22.95Mt (compared to previous 2013 resource) (see Table 1)
      • Grading 1.17% copper, 3.05% zinc, 0.19% lead, 0.44 grams per tonne (“g/t”) gold and 16.68 g/t silver
      • Contains 1.5 billion pounds Zn and 590 million pounds Cu (see Table 2)
    • Inferred resources are now 11.15Mt
      • Grading 1.38% copper, 1.83% zinc, 0.10 % lead, 0.47 g/t gold and 14.81 g/t silver
      • Contains 450 million pounds Zn and 340 million pounds Cu
    • Significant increase of contained metals within the Deposit compared to previous 2013 resource
      • 89% increase in zinc, 52% increase in copper, 48% increase in gold and 61% increase in silver in the indicated category
    • The Deposit resources are defined by:
      • over 115,000 metres (“m”) of drilling in 239 holes
      • includes over 27,000m of infill and expansion drilling completed in 64 drill holes since the last resource update in 2013
    • Main Lens massive sulphide (“Main Lens”) and adjacent Copper Stockwork Zone (“CSZ”) together have an average combined thickness of 17.6m through the Deposit
    • Deposit starts at the paleosurface (~25m below surface) and extends down-plunge approximately 2km, and
    • The Deposit is open, with potential to further increase the size of the resource with additional drilling.
  • Location and Infrastructure

    McIlvenna Bay is a large tonnage copper-zinc VMS deposit located in on the eastern flank of the Flin Flon Greenstone Belt. Foran is currently preparing a feasibility study for McIlvenna Bay and most recently released its updated mineral resource estimate on May 28, 2019.

  • History and Past Work

    The McIlvenna Bay deposit was discovered in early 1988 during a drill program by a Saskatchewan Mining Development Corporation ("SMDC"; subsequently Cameco Corporation) and Esso Minerals joint venture, following up on a Barringer/Questor Mark VI helicopter INPUT survey which delineated a 1.2 kilometre long anomaly south of Hanson Lake. In addition to its proximity to several VMS deposits in the established Flin Flon mining camp, several VMS occurrences were known in the immediate McIlvenna Bay area. These include the past-producing high-grade Hanson Lake Mine and the Balsam deposit, where past operators outlined an historic mineral resource*.

    * The Balsam mineral resource is historic and the Company is not treating it as current; Foran has not done sufficient work to classify it as a current resource estimate. A program of drill hole re-surveying, re-logging and drill core QAQC is required to qualify the historic resource and identify areas for expansion through exploration drilling.

    In 1991 Cameco suspended exploration of the McIlvenna Bay deposit, which remained dormant until optioned by Foran in 1998. Foran completed several additional drill programs between 1998 and 2000. Following a period of inactivity and the appointment of a new management team in late 2010 - early 2011, Foran completed several drill campaigns between early 2011 and 2014.

    The following table summarizes diamond drilling at McIlvenna Bay from discovery of the deposit in 1988 to completion of the Winter 2013 Drill Program:

    YearCompanyNumber of HolesMeters Drilled
    1988Cameco/Esso/TriGold267,702
    1989Cameco/TriMin3014,565
    1990Cameco/Billiton137,869
    1998Foran3978
    1999Foran6228,993
    2000Foran32,938
    2007/08Foran76,525
    2011Foran2813,214
    2012Foran153,825
    2013Foran42,243
    Total: 19188,681

    An increased mineral resource estimate for the McIlvenna Bay deposit was announced on March 27, 2013.

    A positive preliminary economic assessment (PEA) for the McIlvenna Bay deposit was released on November 12, 2014.

  • Regional Geology

    The McIlvenna Bay deposit is located on the western edge of the Paleoproterozoic Flin Flon Greenstone Belt (FFGB) which extends from north central Manitoba into northeastern Saskatchewan. The FFGB forms part of the Reindeer Zone, a subdivision of the Trans-Hudson Orogen, a continental-scale tectonic event which occurred approximately between 1.84 Ga and 1.80 Ga as a result of the collision between the Superior and Hearne Archean Cratons.

    The Hanson Lake Block, the host terrain of the McIlvenna Bay deposit, is bound to the east by the Sturgeon-Weir Shear Zone and to the west by the Tabbernor Fault Zone. This supracrustal block extends to the south beneath flat lying cover of Ordovician sandstones of the Winnipeg Formation and dolomites of the Red River Formation. To the north, the block is bound by the Kisseynew Domain, a gneissic metasedimentary belt and the Attitti Complex.

    In the Hanson Lake area, north of the Paleozoic unconformity, exposed Proterozoic rocks of the Hanson Lake Block are dominated by juvenile island arc, felsic to intermediate metavolcanic rocks, with subordinate amounts of mafic volcanics and sedimentary rocks. Oxide facies iron formations have been identified by diamond drilling and are readily identified in airborne magnetic data. The sequence has been intruded by various felsic intrusions, some of which are believed to be subvolcanic. Abundant diorite and gabbro plugs and dykes cut the sequence, as well as minor ultramafic intrusions. Supracrustal rocks in the Hanson Lake area are northerly trending, upright and east-facing.

  • Property Geology

    Lacking outcrop in the area of the McIlvenna Bay deposit, the property geology has been interpreted from the drill core record with help from geophysical surveys.

    The stratigraphy of the deposit area, divided into six formations, has been defined over a 2 km strike length by a total of 191 drill holes. The lowest formation intersected by drilling both structurally and stratigraphically is the McIlvenna Bay Formation, which consists of variably altered felsic volcanic and volcaniclastic units. The formation is at least 200m thick (the limit of current drilling) and is the host to both the massive and semi-massive sulphide horizons and underlying stockwork zones that make up the McIlvenna Bay deposit. The McIlvenna Bay Formation is overlain to the north by the Cap Tuffite Formation, a sequence of intercalated felsic volcanics and cherty metasediments which ranges from 35-55m in true thickness and forms a cap to the sulphide deposits. Overlying the Cap Tuffite Formation is the Koziol Iron Formation, an oxide-facies iron formation up to 25m in true thickness which forms a long and distinctive marker horizon traceable for several kilometres along strike by drilling and geophysics. Topping the Koziol Iron Formation is the Rusk Formation, a thick package of carbonate altered mafic volcanics rocks, up to 100m in true thickness. The Rusk Formation is in turn overlain by the thin HW-A Formation, an exhalative oxide-sulphide facies iron formation that locally transitions laterally into pyrite-pyrrhotite-sphalerite bearing massive sulphide. This unit ranges from 1cm to about 5m in true thickness. Capping the HW-A Formation is a thick unsorted bimodal package of mafic and felsic volcanics, mafic intrusions, minor sediments and iron formations tentatively called the Upper Sequence. The stratigraphic package has been cut by several different intrusions, the most significant of which is the Davies Gabbro, a series of sill-like bodies which intrude the Cap Tuffite Formation. The basement geology is unconformably overlain by the flat lying to shallowly south-dipping Ordovician dolomites and sandstones of the Red River and Winnipeg Formations which have a combined total thickness between 20 and 30m.

    Stratigraphy in the deposit area strikes between 275° and 295° and dips to the north at 65° to 70°, although in selected areas it dips vertically. The deposit has the same orientation as the stratigraphy and plunges at approximately 45° to the northwest. Rocks in the host stratigraphy are massive to strongly foliated, the intensity of which depends on the competency of each individual unit and the degree of alteration. Rocks are variably altered to sericite and chlorite throughout the deposit area and have been subjected to greenschist facies regional metamorphism.

    Two phases of folding of the host stratigraphy have been observed in the drill core and are believed to correspond to the regional D2 and D3 deformational events. An early tight to isoclinal fold event (regional D2/F2) was responsible for the development of the dominant observed structural fabric, a foliation oriented at approximately 280°/65°, and resulted in the transposition of bedding into the plane of the foliation (making the foliation sub-parallel to stratigraphy). Isolated isoclinal fold hinges in iron formation units have been observed in several drill holes that have a plunge that is estimated to be approximately 45° to the west or west-north-west. This plunge is roughly parallel to the plunge of the deposit and indicates that the D2 deformational event was likely responsible for the current geometry of the deposit. A strong crenulation (regional D3/F3 event) of the foliation is developed in portions of the footwall alteration zone. The plunge of the crenulation is much flatter, usually less than 25° and trends either northwest or northeast.

  • Mineralization and Mineral Resources

    McIlvenna Bay is a volcanogenic massive sulphide (VMS) deposit, of a type commonly found in Canada in Precambrian through Mesozoic volcano-sedimentary greenstone belts occupying extensional arc environments such as a rifts or calderas. They are typified by synvolcanic accumulations of sulphide minerals in geological environments characterized by submarine volcanic rocks.

    VMS deposits are exhalative deposits, formed through the focused discharge of hot, metal-rich hydrothermal fluids. These deposits commonly occur in clusters which, when developed constitute localized mining districts or VMS camps. A single deposit or mine may consist of several individual massive sulphide lenses and their underlying stockwork zones. It is thought that the stockwork zone represents the near-surface channel ways of a submarine hydrothermal system and the massive sulphide lens represents the accumulation of sulphides precipitated from the hydrothermal solutions, on or near the sea floor, in close proximity to the discharge vent.

    McIlvenna Bay comprises four different zones of mineralization that are mineralogically and/or texturally distinct: massive to semi-massive sulphide mineralization in the Main Lens and Lens 3 (Main Lens) and three stockwork-style sulphide mineralization zones; the Copper Stockwork Zone (CSZ), Stringer Zone and Copper Stockwork Footwall Zone.

    The Main Lens at McIlvenna Bay is a large massive to semi-massive sulphide horizon containing a metal zonation consisting of Cu-Au-rich material near the upper plunge line of the deposit which transitions down dip into a more Zn-Ag-dominant massive sulphide. In the 2013 Resource, the Main Lens was sub-divided into the Upper West (UWZ) and Zone 2 based on these differences in mineralogy, but for the 2019 Resource reports the Main Lens massive sulphide as a single zone. This is a result of statistical analysis of the assay grades within the lens, which suggests that there is a gradational transition between the two zones and that a hard boundary is not appropriate; coupled with the fact that they will likely be mined together without any distinction between the zones in the Feasibility Study. The Main Lens massive sulphide is a continuous mineralized horizon which varies from 0.1 to 36.0m in true thickness and averages 5.5m overall, with a strike length of 1,700m.

    The CSZ directly underlies and is in contact with the massive sulphide and varies from 0.3 to 37.2m in true thickness with an average thickness of 12.1m. The Main Lens massive sulphide and the underlying CSZ are generally in contact with one another, giving the bulk of the deposit an average thickness of 17.6m overall. The deposit plunges at approximately 45 degrees from surface for a down plunge length of approximately 2000m.

    Lens 3 sits approximately 15 to 30m in the hangingwall above the Main Lens and demonstrates the presence of stacked sulphide lenses in the Deposit. This lens has been traced intermittently along a strike length of 1,440m and plunges parallel to the underlying Main Lens and CSZ. The true thickness of Lens 3 ranges from 0.1 to 12.5m and averages 2.8m. The Stringer Zone is a narrow intermittent lens of stringer-style sulphide that occurs sporadically between the Main Lens and Lens 3 through the Deposit.

    The CSFWZ is a separate lens that underlies the CSZ and has been intersected in nine drill holes over approximately 140m of strike length in the up-dip, central part of the Deposit. The lens varies in thickness from 0.3 to 17m with an average thickness of 4.4m. The CSFWZ dominantly consists of stockwork style copper-rich mineralization similar to the CSZ, although in several holes, narrow massive sulphide was also intersected at the top of the interval. It is possible that the CSFWZ represents a fault offset and repetition of the Main Lens and CSZ, but further drilling is required to prove the relationship of this lens to the rest of the Deposit.

    McIlvenna Bay 2019 Mineral Resource Estimate (US$60/t NSR cut-off) 1-6

    Zone

    Tonnage

    (Mt)

    Cu

    (%)

    Zn

    (%)

    Pb

    (%)

    Au

    (g/t)

    Ag

    (g/t)

    CuEq

    (%)

    ZnEq

    (%)

    Indicated

     

     

    Main Lens – Massive Sulphide

    9.25

    0.90

    6.43

    0.40

    0.52

    25.97

    -

    10.25

    Lens 3

    1.99

    0.85

    3.29

    0.14

    0.27

    14.71

    -

    6.45

    Stringer Zone

    0.70

    1.38

    0.62

    0.04

    0.35

    13.34

    1.73

    -

    Copper Stockwork Zone

    10.30

    1.43

    0.28

    0.02

    0.40

    9.30

    1.73

    -

    Copper Stockwork Footwall Zone

    0.71

    1.60

    1.04

    0.04

    0.54

    11.47

    2.20

    -

    Total Indicated

    22.95

    1.17

    3.05

    0.19

    0.44

    16.68

     

     

     

     

     

    Inferred

     

     

    Main Lens – Massive Sulphide

    2.97

    1.29

    4.79

    0.29

    0.47

    23.58

    -

    9.70

    Copper Stockwork Zone

    8.18

    1.42

    0.76

    0.03

    0.47

    11.63

    1.77

    -

    Total Inferred

    11.15

    1.38

    1.83

    0.10

    0.47

    14.81

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    1 Effective date May 7, 2019; CIM definitions were followed for Mineral Resources; CuEq = copper equivalent; ZnEq = zinc equivalent; NSR = Net Smelter Return.

    2 The base case mineral resource is estimated based on 239 diamond drill holes and a NSR cut-off grade of US$60/t. NSR grades were calculated and high-grade caps were applied as per the discussion in Estimation Methodology and Parameters below and include provisions for metallurgical recovery and estimates of current shipping terms and smelter rates for similar concentrates. Metal prices used are US$3.30/lb. Cu, US$1.25/lb. Zn, US$1.00/lb. Pb, US$1,310/oz. Au, and US$16.20/oz. Ag. Specific gravity was interpolated for each block based on measurements taken from core specimens.

    3 Mr. William Lewis, P.Geo., of Micon, has reviewed and verified this mineral resource estimate. Mr. Lewis is independent of Foran and is a “Qualified Person” within the meaning of NI 43-101.

    4 Mineral resources which are not mineral reserves do not have demonstrated economic viability. The estimate of mineral resources may be materially affected by environmental, permitting, legal, marketing or other issues.

    5 CuEq and ZnEq values were calculated from the NSR values for the zones using a factor of $55.71 per % Cu for the CSZ and a factor of $46.69 per % Cu and $15.10 per % Zn for all other zones.

    6A sensitivity table is provided in Table 3 below which demonstrates the variation in tonnage and grade for the deposit at different NSR cut-offs.

    The 2019 Resource Estimate builds on and supersedes the previous comprehensive National Instrument 43-101 (“NI 43-101”) mineral resource estimate for the Deposit which was announced by the Company on March 27, 2013 (the “2013 Resource”). The 2019 Resource Estimate is estimated using long-term metal price projections of US$3.30/lb. for copper, US$1.25/lb. for zinc, US$1.00/lb. for lead, US$1,310/oz. for gold and US$16.20/oz. for silver. The base case uses a US$60/t NSR cut-off using provisions for metallurgical recoveries, smelter payables, refining costs, freight, and applicable royalties, consistent with the cut-off used for the 2013 Resource.

    Contained Metal

    There has been substantial growth in the Deposit since the 2013 Resource was issued. This is demonstrated by the large increase in contained metal in the Deposit, including an 89% increase in contained Zn, a 52% increase in contained Cu, a 61% increase in contained Ag and a 48% increase in contained Au in the indicated category which equates to over 1.5 billion pounds of zinc, almost 600 million pounds of copper, over 12 million ounces of silver and over 300,000 ounces of gold See Table 2 below for a table outlining the contained metal in the 2019 Resource Estimate

    Contained Metal(US$60/t NSR cut-off) 1, 2

    Zone

    Resource

    Zn

    Cu

    Ag

    Au

    Pb

     

    Classification

    Mlb

    Mlb

    Koz

    Koz

    Mlb

    CSZ

    Indicated

    63.6

    325.2

    3,077.1

    132.5

    5.1

    Inferred

    136.3

    255.7

    3,059.3

    124.2

    5.6

    FW

    Indicated

    16.3

    25.1

    262.4

    12.4

    0.7

    Lens 3

    Indicated

    144.5

    37.6

    943.0

    17.4

    6.0

    MS

    Indicated

    1,310.7

    183.8

    7,724.9

    153.5

    81.6

    Inferred

    314.0

    84.3

    2,253.0

    44.9

    19.3

    Stringer

    Indicated

    9.5

    21.2

    299.7

    7.8

    0.6

    Total

    Indicated

    1,544.7

    592.9

    12,307.1

    323.7

    93.8

    Inferred

    450.3

    339.9

    5,312.3

    169.1

    24.9

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    1 Totals may not add due to rounding.

    2 See footnotes 1-5 for  McIlvenna Bay 2019 Mineral Resource Estimate.

     

     

  • Metallurgy

    Scoping level metallurgical test work was conducted on composite samples from Zone 2 (L2MS), the Upper West Zone (UW-MS) and the Copper Stockwork Zone (CSZ) in 2011. Samples were found to be amenable to conventional grinding and floatation. This work demonstrated the potential to produce saleable high grade copper and zinc concentrates at McIlvenna Bay.

    Due to the differences in the mineralogy of the zones, a variety of concentrates were produced by the testwork as detailed in the table below. The copper-rich CSZ produces a high grade copper concentrate (Cu Con#1), the UWZ has a mixed mineralogy and produces both a copper concentrate (Cu Con#2) as well as a zinc concentrate (Zn Con#2) and Zone 2 produces a good zinc concentrate (Zn Con#1) along with a ‘bulk concentrate’ which contains the other minor elements (Cu-Pb) included in the lens.

    McIlvenna Bay Metallurgical Results

    ZoneCopper ConcentratesZinc Concentrates
    Copper Stockwork Zone
    Composite Head Grade:
    1.45% Cu, 0.34 g/t Au, 8 g/t Ag
    Cu Conc. #1
    Grade: 29% Cu, 6.4g/t Au, 126g/t Ag
    Recoveries:
    94% Cu, 85% Au, 77% Ag
    N/A
    Main Lens:
    Upper West Zone
    Composite Head Grade:
    3.97% Zn, 1.61% Cu, 0.55 g/t Au, 25 g/t Ag
    Cu Conc. #2
    Grade:
    24% Cu, 6.5g/t Au, 216g/t Ag
    Recoveries:
    84% Cu, 60% Au, 50% Ag
    Zn Conc. #2
    Grade: 54% Zn
    Recovery: 76% Zn
    Main Lens:
    Zone 2
    Composite Head Grade:
    7.25% Zn, 0.30% Cu, 0.19 g/t Au, 16 g/t Ag
    Bulk Cu-Pb Conc.
    (minor: <1% of revenue)
    Grade:
    12% Cu, 14% Pb, 5.3g/t Au, 332g/t Ag
    Recoveries: 56% Cu, 59% Pb, 42% Au, 33% Ag
    Zn Conc. #1
    Grade: 55% Zn
    Recovery: 85% Zn

    Testwork conducted by G&T Metallurgical (Stewart Group)

  • Historic McIlvenna Bay PEA (superseded by the 2019 Mineral Resouce Estimate on the McIlvenna Bay Project)

    The resource estimate used within this PEA has not incorporated the updated 2019 Resource Estimate.  The results and conclusions of any updated PEA or Feasibility Study incorporating the 2019 Resource Estimate will be materially different than those previously disclosed.  Accordingly, the 2019 Resource Estimate described herein supersedes the PEA and the PEA can no longer be considered current.

    On November 12, 2014 Foran announced the results of a positive Preliminary Economic Assessment (PEA) for McIlvenna Bay. Highlights of the PEA include:

    • Estimated pre-tax NPV7% of $382M ($263M after-tax) & 22% IRR (19% after-tax)
    • The PEA contemplates a 5,000 tonne per day underground mine and concentrator with a 14 year mine life; estimated costs and design are in-line with existing mining operations in the region
    • The deposit is open to depth, with potential to increase mine life
    • Pre-production CapEx of $249M & sustaining capital of $150M (including a 20% contingency)
    • Average annual production of 58.9 Mlbs of payable zinc, 37.6 Mlbs of payable copper, 16,000 ounces of payable gold and 398,000 ounces of payable silver at a cash cost of production (net of by-product credits) of $(0.37) per pound of zinc, or $0.84 per pound of copper
    • Estimated costs and design are in-line with existing mining operations in the region
    • For the purposes of the PEA, zinc and copper concentrates are not assumed to be transported to the nearest smelters, but to a North American smelter for zinc and an Asian smelter for copper

    McIlvenna Bay PEA Summary

     Pre-TaxPost-Tax
    NPV7%$382M$263M
    IRR22%19%
    Payback4.1 years4.1 years
    Mine Life14 years
    Plant Throughput5,000 tpd
    CapEx2C$249M Pre-Production / +C$150M Sustaining
    OpExC$51.03/t milled3
    Cu Cash Cost4US$0.84/lb.
    Zn Cash Cost4(US$0.37/lb.)

    1 The PEA is considered preliminary in nature and includes mineral resources, including inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral resources that are not mineral reserves have not yet demonstrated economic viability. Due to the uncertainty that may be attached to mineral resources, it cannot be assumed that all or any part of a mineral resource will be upgraded to mineral reserves. Therefore, there is no certainty that the results concluded in the PEA will be realized.

    2 Includes 20% contingency.

    3 Comprised of $33.54/t mining, $13.39/t processing & $4.10/t G&A.

    4 Net of by-product, includes all TC/RC, operating costs & royalties.

    All figures are quoted in CDN$ unless otherwise noted; base case metal prices of US$3.08/lb. Cu, US$1.06/lb., Zn, US$0.93/lb. Pb, US$1,238/oz. Au and US$17/oz. Ag and exchange rate of 0.89 based on spot as at Oct. 15, 2014.



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