11:46 AM EDT, 05/14/2025 (MT Newswires) -- (Adds comment and updates shares)

Foran Mining ( FMCXF ) late on Tuesday said it will raise $350 million in a non-brokered private placement of shares and said costs are on the rise for Phase 1 production at the McIlvenna Bay project in Saskatchewan.

The company is in advanced discussions with investors and has received indications it can cover the full amount of the offering, Foran said. Foran chief executive Dan Myerson is also expected to participate.

Proceeds from the offering will be used to complete construction at McIlvenna Bay and for advancing exploration at near-mine and regional targets.

Meanwhile, the company's Phase 1 capital budget to completion has been re-estimated to $1.08 billion, up from $886 million. About 46% of the increase required reflects the incorporation of non-recoverable sales taxes and reduced pre-commercial production revenue credits associated with a streamlined commissioning phase.

From June 1, 2024, to March 31, 2025, the company spent about $381 million of costs toward its Phase 1 budget, resulting in remaining cost to completion of $701 million.

Foran also expects proceeds from the up to $41 million from the Strategic Innovation Fund and up to $20 million Critical Minerals Innovation Fund contributions. However, the reimbursement structure model for certain qualifying costs results in timing uncertainty and an associated working capital impact during the construction period.

As a result, the company has estimated reduced contribution amounts over the construction period, with the rest expected to be received after the project reaches commercial production.

Commercial production at McIlvenna Bay is targeted for mid-2026.

National Bank of Canada kept its outperform, speculative risk, rating on the company's shares and its $5.75 price target following the company's update.

Foran tends to trade at a premium on P/NAV versus developer peers due to its near-term development, Tier 1 jurisdiction and supportive backers, National Bank said.

Foran's shares were last seen down $0.57 to $3.10 on the Toronto Stock Exchange.

Price: 3.10, Change: -0.57, Percent Change: -15.53