Foran Mining (TSX: FOM; US-OTC: FMCXF) says it has secured up to $70 million (US$51 million) in Saskatchewan provincial tax credits to support the development of its McIlvenna Bay project in the province’s east on the Flin Flon greenstone belt.
The polymetallic McIlvenna Bay project is now officially part of Saskatchewan’s Critical Minerals Processing Investment Incentive (CMPII) program, Foran said in a release on Thursday. Launched a year ago, the CMPII represents one of two new government initiatives aimed at boosting the production of 11 designated critical minerals, including copper and zinc, within the province. McIlvenna Bay is about 600 km north of Regina.
“The CMPII program is a tangible example of Foran pursuing innovative initiatives to optimize our financial position, support future deleveraging and deliver value to stakeholders,” Foran’s chief financial officer James Steels said in the release.
“Our government is proud to support companies like Foran who are helping us make progress towards our goals in Saskatchewan’s Critical Minerals Strategy,” Minister of Energy and Resources Colleen Young added. “Programs like the CMPII have been successful in showing industry partners that Saskatchewan is the best place in the world for mining investment.”
Among top deposits
The McIlvenna Bay project hosts one of the region’s largest massive sulphide deposits, with 29.7 million tonnes in probable reserves grading 1.21% copper, 2.17% zinc, 0.44 gram gold per tonne and 14.4 grams silver, according to a resource from last November. Indicated resources total 39 million tonnes grading 1.2% copper and 2.16% zinc, for 1 billion lb. of contained copper and 1.9 billion lb. of zinc.
The project reached the feasibility stage in 2022, with a report outlining an 18-year mine capable of producing an average 34.5 million lb. of copper and 58.6 million lb. of zinc annually. Capital costs total $368 million for the initial stage, translating to 24¢ per lb. copper equivalent. However, that cost estimate has since risen significantly, with Foran now projecting over $1 billion for the first stage build.
Shares of Foran Mining jumped as much as 5.5% to C$3.39 on the announcement, giving the Vancouver-based mine developer a market capitalization of C$1.7 billion. The stock has traded in a 12-month range of $2.47 to $4.69.
Mid-2026 production
Construction of the project began in July 2024, and Foran recently said it has surpassed the halfway mark, placing it on track and budget for a mid-2026 production start.
To meet the construction timeline, management is banking on $645 million in cash net of payables, credit facilities of $153 million, a $25 million federal Strategic Innovation Fund contribution, and a Critical Minerals Infrastructure Fund grant of up to $15 million, plus investment tax credits of $10 million.
From June 2024 to the end of first quarter 2025, the company has incurred about $381 million of costs toward its stage one capital budget, resulting in remaining cost to completion of $701 million.
Credits in 2027
Projects under the CMPII program are eligible to earn royalty tax credits equivalent to 15% of specifically recognized project costs incurred up to a defined date. In McIlvenna Bay’s case, this would be $70 million, which can either be applied to offset future payments due under Saskatchewan’s Mineral Crown Royalty Tax or potentially monetized through the sale to third parties.
Once a project reaches completion, the CMPII royalty credits are calculated based on incurred eligible costs and earned over a three-year period: 20% in Year 1, 30% in Year 2, and 50% in Year 3. If McIlvenna Bay starts production next year as planned, Foran is expected to earn these credits in 2027.
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