Fairfax Financial Holdings Limited’s C$100 Million Investment In Foran Mining Corp.

Torys represented Fairfax on the deal.

On August 6, 2021, Foran Mining Corp. completed the strategic C$100 million private placement by certain entities controlled by Fairfax Financing Holdings Limited (collectively, “Fairfax”) in an effort to create a global carbon neutral mining company and advance McIlvenna Bay as Canada’s first carbon neutral copper mine.

Pursuant to the definitive subscription agreements executed on July 8, 2021, the financing consisted of C$50 million gross proceeds through the issuance of 27,777,778 units at a price of C$1.80 per unit consisting of one common share and 0.288 of a common share purchase warrant, with a total of 27,777,778 common shares and 8,000,000 warrants issuable in connection with the units; and C$50 million gross proceeds through the issuance of 27,777,778 non-voting units at a price of C$1.80 per unit consisting of one non-voting common share and 0.288 of a warrant, with a total of 27,777,778 common shares and 8,000,000 warrants issuable in connection with the non-voting units.

Under both agreements, each whole warrant is exercisable into one (1) common share at a price of C$2.09 for a period of five (5) years from the date of issuance.

Upon closing, Fairfax beneficially owns 13.3% of the issued and outstanding common shares on a non-diluted basis, 23.5% of the issued and outstanding common shares on a partially diluted basis (assuming conversion of the non-voting shares by Fairfax only) and 28.4% of the issued and outstanding common shares on a partially diluted basis (assuming conversion of the warrants and in the event of conversion of the non-voting common shares by Fairfax).

The net proceeds of the financing will be used to rapidly advance the development of the McIlvenna Bay project, located in eastern Saskatchewan on the largest undeveloped VHMS (volcanic-hosted massive sulfide) deposit along the Flin Flon Greenstone Belt, as well to advance exploration across the Hanson Lake district, enable further investment in key technological and operational research and equipment, and for general corporate purposes.

Foran Mining is a copper-zinc-gold-silver exploration and development company with the goal to build the first mine in Canada designed to be carbon neutral from day one of production. It is in the feasibility stage of development for its flagship McIlvenna Bay project in eastern Saskatchewan.

Fairfax is a holding company which, through its subsidiaries, is engaged in property and casualty insurance and reinsurance and the associated investment management.

The Torys’ team included David Chaikof (Picture), Janan Paskaran and Jon McDonald (corporate/securities).

Involved fees earner: David Chaikof – Torys LLP; Jon McDonald – Torys LLP; Janan Paskaran – Torys LLP;

Law Firms: Torys LLP;

Clients: Fairfax Financial;

Author: Martina Bellini