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Foran Mining Corp (2)
Symbol C : FOM
Shares Issued 130,099,451
Close 2019-05-27 C$ 0.29
Recent Sedar Documents

Foran releases increased McIlvenna resource estimate

2019-05-28 10:49 ET - News Release

Mr. Patrick Soares reports

FORAN ANNOUNCES SIGNIFICANT INCREASE IN RESOURCES FOR MCILVENNA BAY DEPOSIT

Foran Mining Corp. has released an increased mineral resource estimate for the company's 100-per-cent-owned McIlvenna Bay deposit, located in east-central Saskatchewan. McIlvenna Bay is one of the largest, undeveloped volcanogenic massive sulphide deposits in Canada.

Highlights include:

  • Indicated resources have increased 65 per cent from 13.9 million tonnes to 22.95 million tonnes (compared with previous 2013 resource):
    • Grading 1.17 per cent copper, 3.05 per cent zinc, 0.19 per cent lead, 0.44 gram per tonne gold and 16.68 grams per tonne silver;
    • Contains 1.5 billion pounds zinc and 590 million pounds copper;
  • Inferred resources are now 11.15 million tonnes:
    • Grading 1.38 per cent copper, 1.83 per cent zinc, 0.1 per cent lead, 0.47 gram per tonne gold and 14.81 grams per tonne silver;
    • Contains 450 million pounds zinc and 340 million pounds copper;
  • Significant increase of contained metals within the deposit compared with previous 2013 resource:
    • 89-per-cent increase in zinc, 52-per-cent increase in copper, 48-per-cent increase in gold and 61-per-cent increase in silver in the indicated category;
  • The deposit resources are defined by:
    • Over 115,000 metres of drilling in 239 holes;
    • Includes over 27,000 metres of infill and expansion drilling completed in 64 drill holes since the last resource update in 2013;
  • Main Lens massive sulphide and adjacent Copper Stockwork zone (CSZ) together have an average combined thickness of 17.6 metres through the deposit;
  • Deposit starts at the paleosurface (approximately 25 metres below surface) and extends down plunge approximately two kilometres;
  • The deposit is open, with potential to further increase the size of the resource with additional drilling.

Patrick Soares, president and chief executive officer of Foran, commented: "In the past 18 months, Foran shareholders entrusted our management team with over $14-million of new funds to unlock the value of the McIlvenna Bay deposit. Today, we reached our first critical milestone by issuing an updated mineral resource estimate. Infill drilling has increased indicated resources by 65 per cent and improved our confidence in the grade and tonnage of the deposit.

"McIlvenna Bay is a large, cohesive VMS deposit containing considerable amounts of copper and zinc, along with gold, silver and lead. The contained metal within the deposit has significantly increased since our last resource update. We are now pulling this information into the delivery of another key milestone, a feasibility study, scheduled for release before the end of the year," Mr. Soares further noted.

The 2019 resource estimate will be used to support the coming feasibility study, expected in Q4 2019. The mineral resource estimate was audited and verified by William Lewis, PGeo, of Micon International Ltd., independent of Foran and a qualified person as defined within National Instrument 43-101. The 2019 resource estimate is summarized in an attached table. See the rest of this press released for additional information with respect to qualified persons, estimation methodology and parameters.

 
                           MCILVENNA BAY 2019 MINERAL RESOURCE ESTIMATE (1 to 6)
                                (at an NSR cut-off of $60 (U.S.) per tonne) 
 
Zone                                Tonnage       Cu      Zn     Pb      Au      Ag     CuEq     ZnEq  
                                        (Mt)      (%)     (%)    (%)   (g/t    (g/t)      (%)      (%)
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                      

Notes:
(1) Effective date May 7, 2019, CIM (Canadian Institute of Mining, Metallurgy and Petroleum) 
definitions were followed for mineral resources; CuEq refers to copper equivalent; ZnEq refers
to zinc equivalent; and NSR refers to net smelter return.
(2) The base-case mineral resource is estimated based on 239 diamond drill holes and an NSR 
cut-off grade of $60 (U.S.) per tonne. NSR grades were calculated and high-grade caps were 
applied as per the discussion in estimation methodology and parameters herein and include 
provisions for metallurgical recovery and estimates of current shipping terms and smelter 
rates for similar concentrates. Metal prices used are $3.30 (U.S.) per pound for copper, 
$1.25 (U.S.) per pound for zinc, $1 (U.S.) per pound for lead, $1,310 (U.S.) per ounce for 
gold and $16.20 (U.S.) per ounce for silver. Specific gravity was interpolated for each block 
based on measurements taken from core specimens.
(3) William Lewis, PGeo, 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 per cent copper for the Copper Stockwork zone and a factor of $46.69 per 
per cent copper and $15.10 per per cent copper for all other zones.
(6) A sensitivity table is provided herein, 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 NI 43-101 mineral resource estimate for the deposit, which was announced by the company on March 27, 2013. The 2019 resource estimate is estimated using long-term metal price projections of $3.30 (U.S.) per pound for copper, $1.25 (U.S.) per pound for zinc, $1 (U.S.) per pound for lead, $1,310 (U.S.) per ounce for gold and $16.20 (U.S.) per ounce for silver. The base case uses an NSR cut-off of $60 (U.S.) per tonne using provisions for metallurgical recoveries, smelter payables, refining costs, freight and applicable royalties, consistent with the cut-off used for the 2013 resource.

Roger March, vice-president, exploration, of Foran, commented: "The McIlvenna Bay deposit has now been defined by 239 diamond drill holes and over 115,000 metres of drilling. This includes almost 27,000 metres of infill and expansion drilling completed in 2018 during a work program designed to increase our confidence in the deposit. Our on-site technical team, supported by a team of professional drillers and field crews, accomplished this program under strict geological control, allowing us to successfully hit our targets and reach this milestone. The new resource estimate shows that the deposit is already host to a large metal endowment and the 2018 program has demonstrated that the deposit continues to display good continuity at depth and remains open for expansion. We remain confident that the resource can continue to grow with further drilling."

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-per-cent increase in contained zinc, a 52-per-cent increase in contained copper, a 61-per-cent increase in contained silver and a 48-per-cent increase in contained gold 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 the associated table outlining the contained metal in the 2019 resource estimate.

                           CONTAINED METAL (1)
              (at an NSR cut-off of $60 (U.S.) per tonne)
 
Zone            Resource        Zn       Cu          Ag         Au       Pb 
          classification     (M lb)    (M lb)  (000s oz)  (000s oz)   (M lb)

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.

Mineralization

The 2019 resource estimate includes several zones and two distinct styles of mineralization, typical of VMS deposits:

  • Massive to semi-massive sulphide mineralization in the Main Lens and Lens 3;
  • Stockwork-style sulphide mineralization in CSZ that directly underlies the Main Lens;
  • Two other small lenses of stockwork-style mineralization occur in the deposit:
    • The Stringer zone, which is located between the Main Lens and Lens 3;
    • The Copper Stockwork Footwall zone (CSFWZ), which occurs as a separate lens underneath the CSZ for approximately 140 metres of strike length, which could represent a fault offset and repetition of the Main Lens and the CSZ.

The Main Lens at McIlvenna Bay is a large massive to semi-massive sulphide horizon containing a metal zonation consisting of copper-gold-rich material near the upper plunge line of the deposit, which transitions down dip into a more zinc-silver-dominant massive sulphide. In the 2013 resource, the Main Lens was subdivided into the Upper West zone (UWZ) and zone 2 based on these differences in mineralogy, but, for the 2019 resource estimate, the Main Lens massive sulphide is reported 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 really 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 that varies from 0.1 metre to 36.0 metres in thickness and averages 5.5 metres overall, with a strike length of 1,700 metres.

The CSZ is a zone of stockwork-style copper-rich mineralization that directly underlies and is in contact with the massive sulphide and is interpreted to represent the feeder zone to the massive sulphide system. The CSZ varies from 0.3 metre to 37.2 metres in thickness with an average thickness of 12.1 metres. The Main Lens massive sulphide and the underlying CSZ are generally in contact with one another throughout the deposit, giving the bulk of the deposit an average thickness of 17.6 metres over all. The deposit plunges at approximately 45 degrees from surface for a downplunge length of approximately 2,000 metres.

Lens 3 sits approximately 10 metres to 30 metres 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 1,440 metres and plunges parallel to the underlying Main Lens and CSZ. The lens ranges in thickness from 0.1 metre to 12.5 metres and averages 2.8 metres. 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 140 metres of strike length in the updip, central part of the deposit. The lens varies in thickness from 0.3 metre to 17 metres with an average thickness of 4.4 metres. 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.

Sensitivity analysis

A sensitivity analysis is provided in an attached table for the indicated and inferred resources for the 2019 resource estimate, which demonstrates the variation in grade and tonnage in the deposit as a result of employing different NSR cut-offs.

                 MINERAL RESOURCE ESTIMATE SENSITIVITY ANALYSIS 
  
Zone                                Tonnage      Cu      Zn      Pb      Au      Ag
                                        (Mt)     (%)     (%)     (%)   (g/t)   (g/t)

NSR cut-off of $75 (U.S.)
per tonne

Indicated
Main Lens -- massive sulphide          9.13    0.91    6.46    0.40    0.52   26.05
Lens 3                                 1.62    0.87    3.60    0.15    0.28   15.26
Stringer zone                          0.42    1.50    0.71    0.04    0.38   13.59
Copper Stockwork zone                  7.33    1.59    0.30    0.02    0.47   10.29
Copper Stockwork Footwall zone         0.52    1.76    1.30    0.05    0.62   13.25
Total indicated                       19.02    1.21    3.58    0.22    0.48   18.44
Inferred
Main Lens -- massive sulphide          2.92    1.30    4.81    0.29    0.47   23.60
Copper Stockwork zone                  6.22    1.55    0.77    0.03    0.54   12.43
Total inferred                         9.14    1.47    2.06    0.11    0.52   16.01

NSR cut-off of $60 (U.S.)
per tonne (base case)

Indicated
Main Lens -- massive sulphide          9.25    0.90    6.43    0.40    0.52   25.97
Lens 3                                 1.99    0.85    3.29    0.14    0.27   14.71
Stringer zone                          0.70    1.38    0.62    0.04    0.35   13.34
Copper Stockwork zone                 10.30    1.43    0.28    0.02    0.40    9.30
Copper Stockwork Footwall zone         0.71    1.60    1.04    0.04    0.54   11.47
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
Copper Stockwork zone                  8.18    1.42    0.76    0.03    0.47   11.63
Total inferred                        11.15    1.38    1.83    0.10    0.47   14.81

NSR cut-off of $45 (U.S.)
per tonne

Indicated
Main Lens -- massive sulphide          9.31    0.90    6.41    0.40    0.51   25.93
Lens 3                                 2.23    0.84    3.07    0.13    0.27   14.31
Stringer zone                          0.97    1.25    0.61    0.04    0.31   12.84
Copper Stockwork zone                 12.12    1.34    0.27    0.02    0.36    8.74
Copper Stockwork Footwall zone         0.86    1.50    0.90    0.04    0.48   10.39
Total indicated                       25.49    1.14    2.79    0.17    0.41   15.72
Inferred
Main Lens -- massive sulphide          3.05    1.26    4.74    0.30    0.46   23.48
Copper Stockwork zone                  9.61    1.33    0.74    0.03    0.43   11.03
Total inferred                        12.66    1.31    1.70    0.09    0.44   14.03

The base case presented in this release is estimated using an NSR cut-off of $60 (U.S.) per tonne, which was selected as being representative of the comparable North American operations.

Qualified persons

The 2019 resource estimate meets the guidelines as set out in NI 43-101 and was audited and verified by Micon, a global geological and mining consultancy. The 2019 resource estimate was verified by William Lewis, PGeo. Mr. Lewis is a qualified person as defined in NI 43-101 and has consented to applicable disclosure contained herein regarding the 2019 resource estimate.

Roger March, PGeo, vice-president, exploration, for Foran, is the qualified person for all technical information in this news release, excluding the 2019 resource estimate. Mr. March has reviewed and approved the technical information in this release.

Estimation methodology and parameters

The 2019 resource estimate update included a reinterpretation of the mineralized envelopes in the deposit following the incorporation of over 27,000 metres of diamond drilling completed since the 2013 resource estimate. The 2019 resource estimate was carried out using a block model constrained by 3-D wire frames of the mineralized zones. Values for copper, zinc, gold, silver and lead were interpolated into the blocks using ordinary kriging, with validation estimates using ID2 (inverse distance squared) and nearest neighbour performed to confirm results. Block size was 10 metres wide (east-west) by two metres across (north-south) by 10 metres high. The models were constructed using Leapfrog Edge software. The 2019 resource estimate has an effective date of May 7, 2019.

The 2019 resource estimate is based entirely on diamond drilling data. The database contained records for 246 diamond drill holes (including seven short Geotech holes), of which 239 target the deposit, with a total of 8,765 assay intervals. Top cuts were applied to composites as required. A 1.0-metre composite length was used for all domains at McIlvenna Bay (respecting the original mean sample length); within the domains, under-0.5-metre end-length samples were distributed equally.

Implicit modelling was used to dynamically generate wire frames using the mineralized intercepts as defined by the interpretation for each domain on 25-metre cross-sections. In constructing these models, a cut-off of 0.5 per cent copper was used for compositing the intercepts in the interpretation of the CSZ, while the logged geological intervals were used to constrain the intercept lengths for the massive and semi-massive sulphide zones. The NSR cut-off of $60 (U.S.) per tonne was derived by Micon based on comparable projects in North America, taking into account provisions for milling, general and administrative, and direct mining costs (no development). Density was interpolated into each block using ID0 (moving average) based on specific gravity measurements collected from core samples.

The mineral resources were classified using the following criteria:

  • Resources were classified as indicated in the core of the deposit, where the nominal drill hole spacing is 65 metres or less, and/or where the average distance to the nearest three drill holes is 70 metres or less. The classification reflects not only the drill spacing, but the confidence level in the continuity of the grade and the geometry of the deposit.
  • Resources classified as inferred were defined by blocks which were estimated with less stringent requirements within search ellipses defined for each domain to a maximum distance of 175 metres in both the massive and semi-massive sulphide and stockwork bodies.

In Micon's opinion, the audited mineral resources are classified in a manner that is consistent with NI 43-101 regulations and guidelines. Mineral resources do not have demonstrated economic viability. In Micon's opinion, there are currently no relevant factors or issues that affect the 2019 resource estimate; however, there is no guarantee that the deposit will be placed into production.

Quality assurance and quality control

For drilling conducted by Foran and its consultants since 2011, an independent quality assurance/quality control protocol consisting of blanks, standards and duplicates is introduced into the sample stream for each batch of samples processed by the laboratory and the results of the assaying of the quality assurance/quality control material included in each batch are tracked to ensure the integrity of the assay data. Sample analysis was performed by TSL Laboratories Ltd. in Saskatoon, Sask. TSL is a laboratory accredited under CAN-P-1579 and CAN-P-4E (ISO/IEC 17025:2005) and is independent of Foran.

Micon reviewed the quality assurance/quality control reports from these programs and noted that there were no issues that arose which would affect confidence with the assay data. Micon considers the sampling method appropriate for the deposit type, adequate security measures were maintained and samples should be representative of the mineralization.

Prior to Micon initiating its audit of resource estimation, Foran completed a program of validation and verification of the historic drill hole database, which was included in this resource estimate. This work included: resurveying the locations of historic drill hole collars on the ground, downhole directional surveys of as many historic drill holes as possible utilizing a gyro tool to verify downhole survey data, rebuilding of the historic assay database from original assay certificates, additional sampling of gaps in mineralized zones (shouldering) where required to better represent the mineralizing system, and a reinterpretation of the geology and ore zones in the deposit.

About Foran Mining Corp.

Foran is a copper-zinc exploration and development company with projects located along the Flin Flon greenstone belt. The McIlvenna Bay project, Foran's flagship asset located within the Hanson Lake district, sits just 65 kilometres from 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.

William Lewis, PGeo, of Micon and a qualified person within the meaning of NI 43-101, has reviewed and approved the 2019 resource estimate information in this release. Roger March, PGeo, vice-president, exploration, for Foran, is the qualified person for all technical information in this news release, excluding the 2019 resource estimate. Mr. March has reviewed and approved the technical information in this release.

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