11:12 AM EST, 11/26/2024 (MT Newswires) -- (Adds analyst comment and updates shares.)

Foran Mining ( FMCXF ) said Tuesday it secured an option to acquire the Hanson Lake property in Saskatchewan from Voyageur Mineral Explorers ( CPEFF ) .

Hanson Lake is located three kilometers north of Foran's McIlvenna Bay deposit. Foran said consolidating the two properties would strengthen its position in the region.

"The Hanson Lake property encompasses the natural extension of the highly prospective Tesla Trend, further enhancing Foran's ability to unlock exploration potential," said Erin Carswell, Foran's vice president of exploration. "This option agreement highlights our commitment to advancing near-mine projects of interest, and we look forward to working with stakeholders in preparing for exploration activities."

Under the terms of the agreement, Foran will make an initial payment of $1 million in shares and will have five years to explore Hanson Lake with no minimum exploration-spending requirement. Foran holds the option to acquire 100% of the property for a one-time payment of $10 million, either in cash or shares, during this period.

If Foran exercises the option, Voyageur will retain a 2% net smelter royalty (NSR) on the property, which can be halved for $1 million. The NSR can be further reduced by 25% after 54 months of production for an additional $1.0 million, after which Voyageur will retain a 0.5% NSR.

"Foran's exploration team has done a tremendous job at the McIlvenna Bay project in recent years, including the discovery of the Tesla Zone," Voyageur chief executive Fraser Laschinger said. "With the obvious locational synergies, we view them as the perfect partner to explore the Hanson Lake property."

National Bank of Canada maintained its outperform rating and $5.75 price target on Foran shares following the company's release.

Foran shares were last seen down $0.07 to $4.25 on the Toronto Stock Exchange.

Price: 4.25, Change: -0.07, Percent Change: -1.62