By James Kwantes
Published first at Patreon
In an age of capital-starved juniors and success-starved mining companies, there are outliers.
On Monday Foran Mining (FOM-T) announced a strategic investment/financing package for up to $315 million and an upsized credit facility with Sprott Resource Lending. The funds would allow Foran to build Phase 1 of its McIlvenna Bay copper-zinc-gold-silver mine in eastern Saskatchewan for US$604 million. Commercial production is expected in the first half of 2026.
"Everybody has a plan until they get punched in the mouth."
Mike Tyson said it ahead of his fight with Evander Holyfield. The quote applies equally to mining companies and their ambitous plans ... and the hard bite of reality.
There's reason to believe Foran could actually execute. Foran's executive chairman, Dan Myerson, came onboard in November 2020 with the stock at a quarter and development dreams far away for a deposit discovered in the 1980s.
Myerson came to Foran from Glencore, where he ran Canadian zinc operations. Glencore is one of the world's largest natural resources companies, with global mining operations and a vast commodity trading business.
Myerson leveraged his base metals expertise and connections to assemble a team that rapidly advanced a deposit many had written off, making high-grade discoveries along the way.
The companies Foran is doing business with are also top-shelf. Today's announcement included plans for a follow-up investment from Fairfax Financial, a strategic equity investment from Agnico Eagle, and construction details with build partner G Mining Services.
Fairfax Financial (FFH-T) is a large holding/insurance company founded and run by Prem Watsa, who has been described as the "Canadian Warren Buffett." Fairfax's investment into Foran was one of its first into a mining company.
Agnico Eagle (AEM-T) is firing on all cylinders and has leapfrogged Barrick (ABX-T) among the world's largest gold mining companies.
G Mining Services is quickly becoming the OG of mine development, with a track record of completing mine construction on time and on budget. Recent construction wins have included Lundin Gold's Fruta del Norte mine and Equinox Gold's Greenstone mine.
I wrote about Myerson in Forward-looking: Execs Who Make a Statement on Aug. 25, 2022 with the stock at $2.10. Shares responded positively in Monday's session, rising 32 cents (8.4%) to close at $4.12.
Leadership matters. Top operators assuming control of struggling companies at low valuations can spell opportunity for stock investors. That theme will continue to be a major focus for my writing here.
Disclosure: I don't own Foran shares. I hold an equity position in Voyageur Mineral Explorers (VOY-CN), which has royalties on much of Foran's ground including their high-grade Tesla discovery.
