Foran Mining plans to turn its McIlvenna Bay project into the world’s first carbon-neutral copper mine - and they just got $100 million in financing to do it.
The company announced May 25 that it had entered into a letter agreement with Fairfax Financial Holdings, a Toronto-based holding company, that would lead to Fairfax investing $100 million into the company in exchange for shares and warrants.
Fairfax will receive two tranches from Foran as part of the deal. In total, $50 million of the gross proceeds from Fairfax - half the funding - will get the company just under 28 million voting common shares at $1.80 apiece, along with warrants to buy an aggregate of eight million common shares with an exercise price of $2.09 per common share. The warrants, according to Foran, have an exercise period of five years.
The second tranche will involve another $50 million in gross proceeds, which will give Fairfax another just under 28 million non-voting common shares at $1.80 apiece, along with another eight million warrants.
The money received by Foran will be used directly for the McIlvenna Bay project, to “rapidly advance” its development, to invest in equipment and fund further exploration in the area. Foran also plans to build its own mill near the McIlvenna Bay site.
“Foran believes the investment by Fairfax represents a significant endorsement of Foran’s business model, the quality of its McIlvenna Bay deposit and the wider Hanson Lake district and its vision to build the world’s first carbon neutral copper mine,” reads a May 25 news release issued by Foran.
Fairfax Financial is familiar with financing northern projects - Fairfax was one of the companies that purchased the Hudson Bay Railway from American company Omnitrax in 2018 before selling their ownership interest in March.
Foran had already announced it had purchased carbon offsets to cover emissions relating to the McIlvenna Bay project over the past 10 years, including emissions from fuel and exploration. Foran announced after purchasing the offsets that doing so had allowed McIlvenna Bay to become the “world’s first carbon neutral copper development project”.
The company funded carbon offset projects in Newfoundland and Labrador and Zimbabwe, choosing each because “they are verified to a high standard and incorporate Canadian and international projects,” according to a news release issued May 18.