Foran Mining Corporation (FOM-V, $0.40)

Research Report – April 17, 2015

Member of the Canadian Investor Protection Fund

Please see Important Disclosures, Rating Structure, and notes on pages 30 to 33.

Foran Mining Corporation (FOM-V, $0.40) Rating Buy Stefan Ioannou, PhD416-507-2309 [email protected]

Target Price $0.50 (+$0.15) Jenny Lemberg416-507-2703 [email protected]

Return 25% Analyst Certification, Important Information and Legal Disclaimers: See page 30

Bigstone Delivers Additional High Grade Infill Drill Results…

Market Taking Notice, Prompting Equity Financing Price Assumption Review

Overall Risk Rating Very High Event Foran has released high grade assay results from a second infill hole drilled into the historic resource envelope defining the Company’s 100% owned Bigstone deposit, which is located 25 kilometres southwest of Foran’s flagship 25.2 Mt McIlvenna Bay deposit in east-central Saskatchewan.

Valuation Our formal valuation is based on a 1.0x multiple to a fully financed after-tax corporate NAV10% of $0.50 per fully diluted share at Haywood’s long-term forecast copper and zinc prices of US$3.25/lb and US$1.15/lb respectively.

Risks Foran will have to seek additional financing to advance McIlvenna Bay towards construction (and subsequent production) ready status. Near- to medium-term initiatives would likely include ~$12M to complete a BFS for McIlvenna Bay (including ~$6M in drilling to convert sufficient inferred resources to the indicated category in support of a ~10-year mine plan/reserve). Consequently, there could be an unspecified amount of shareholder dilution and possible hedging requirements.

Impact – Positive Hole BS-15-239 has returned the best copper zone intersection to date at Bigstone—namely 104.94 m grading 2.20% copper, including 20.35 m grading 4.38% copper and 19.00 m grading 3.36% copper.

Bigstone is currently underpinned by a historic (1990; non NI 43-101 compliant) resource estimate that includes a 3.75 Mt copper zone grading 2.03% copper and 0.33 g/t gold (at a 1.0% copper cut-off grade) and an adjacent 0.53 Mt zinc zone grading 9.62% zinc and 15.9 g/t silver (at a 5.0% Zn cut-off grade). We anticipate additional drilling at Bigstone will delineate a ramp-accessible target, which could provide supplemental (synergistic) high-grade satellite feed to an operation at McIlvenna Bay. Moreover, drilling this year has continued to delineate multiple volcanogenic massive sulphide (VMS) discoveries in close proximity to McIlvenna Bay. Hence, the Hanson Lake Camp is clearly demonstrating the potential to host a mining camp similar to the neighboring (world class) Flin Flon and Snow Lake camps in Manitoba.

During the two trading sessions prior to Foran’s press release this morning, the Company’s share price traded up 71% (+$0.20 per share to $0.48 per share). Buying, underpinned by high volume, appears to be driven in part by recent positive exploration news as well as improving copper/zinc sentiment. Our formal valuation is underpinned inn part by a number of equity financing assumptions—namely a US$15M ‘interim’ financing in Q3/15 and a US$103M McIlvenna Bay capex financing in Q1/16. Our previous model priced these equity financings at $0.20 and $0.25 per share respectively. However, in light of recent share price appreciation, we have increased these modelled figures to $0.35 and $0.40 per share respectively, which in turn has decreased share dilution in our model, boosting Foran’s fully financed after-tax corporate NAV10% to $0.50 per share (from $0.33). Our target price remains based on a 1.0x multiple to fully financed after-tax corporate NAV10%. Hence our revised target price (previously $0.35).

Forecast Risk (High) 7 Financial Risk (High) 7 Valuation Risk (Moderate) 5 Political Risk (Low) 3 Risk Profile Definitions: See page 32

52-Week High/Low $0.48/ $0.15 YTD Performance 74% Dividend Yield N/A Shares O/S 90.8M (basic)/ 103.8M (F/D) Market Capitalization $36.3M Cash $4.1M Working Capital $4.0M Long-term Debt Nil Enterprise Value $32.3M Daily Volume 80,748 Currency C$ unless noted

Company Profile

Website – www.foranmining.com

CEO – Patrick Soares About the Company – Foran is an advanced-stage copper-zinc developer domiciled on the Toronto Stock Exchange (TSX).

Estimates

Price Performance

Source: Capital IQ and Haywood Securities

2015 2016 2017 2018 2019

Average Shares O/S, millions 102 396 433 433 433

Forecast Copper Price, US$/lb $2.50 $2.75 $3.00 $3.25 $3.25

Forecast Zinc Price, US$/lb $1.10 $1.20 $1.20 $1.15 $1.15

Attributable Payable Copper Production, Mlb - - - - -

Attributable Payable Zinc Production, Mlb - - - - -

Total Copper Cash Cost, US$/lb - - - - -

Consolidated Earnings, US$M ($2) ($2) ($2) ($2) ($2)

EPS, US$ ($0.02) ($0.01) ($0.00) ($0.00) ($0.00)

Price / EPS - - - - -

Cash Flow Before W/C Changes, US$M ($2) ($2) ($2) ($2) ($2)

CFPS, US$ ($0.02) ($0.01) ($0.00) ($0.00) ($0.00)

Price / CFPS - - - - -

Share Price: $0.40

C$/US$ FX Rate: 1.17

http://www.foranmining.com/

Foran Mining Corporation (FOM-V) 4/17/15

Stefan Ioannou, PhD416-507-2309 [email protected]

Source: Foran Mining, Capital IQ, and Haywood Securities

Target Price, C$ $0.50 Shares O/S, million

Current Price, C$ $0.40 Shares F/D, million

Rating: BUY Return, % 25% Market Capitalization, US$M

Target Price: C$0.50 52-Week High / Low, C$ $0.48 / $0.15 Company CEO

Target Price Metric: 1.0x After-Tax Corporate NAV10% Daily Volume (100-day avg) 80,748 Company Web Site

Balance Sheet and Capitalization Share Capital Dilution

US$M C$M Number Price

$31.0 $36.3 5.0M C$0.37

$3.5 $4.1 8.0M C$0.64

$6.0 $7.0 13.1M C$0.54

$3.4 $4.0 C$/US$ FX Rate: 1.17

$0.0 $0.0

$24.2 $28.3 Recent Financings

$27.6 $32.3

EV = Market Capitalization - Working Capital + Long-term Debt


Financial Forecast

2017 2018 2019 2020 2021 2022

$3.00 $3.25 $3.25 $3.25 $3.25 $3.25 Major Shareholders

$1.20 $1.15 $1.15 $1.15 $1.15 $1.15 O/S (%) F/D (%)

$1,250 $1,250 $1,250 $1,250 $1,250 $1,250 Pierre Lassonde 11% 10%

$18.00 $18.00 $18.00 $18.00 $18.00 $18.00 New City 4% 3%

1.12 1.08 1.08 1.08 1.08 1.08 CIBC 2% 2%

433 433 433 433 433 433 US Global 1% 1%

$0 $0 $0 $99 $176 $234 MMA Investment 1% 0%

$0 $0 $0 $77 $140 $191 Management and Directors 16% 15%

$0 $0 $0 ($59) ($74) ($102) Total 35% 31%

($2) ($2) ($2) ($2) ($2) ($2)

($2) ($2) ($2) $15 $63 $85 Corporate NAV Summary and Sensitivity Spot

- - - 1.8x 0.4x 0.3x $2.00 $3.00 $4.00 $5.00 $2.76

$0 $0 $0 ($13) ($20) ($26) $0.50 $1.00 $1.50 $2.00 $1.01

$0 $0 $0 $0 $0 $0 $1,000 $1,250 $1,500 $1,750 $1,205

($2) ($2) ($2) ($13) $20 $35 $10.00 $20.00 $30.00 $40.00 $16.31

($0.00) ($0.00) ($0.00) ($0.03) $0.05 $0.08 1.30 1.20 1.10 1.00 1.22

- - - - 8.0x 4.6x ($63) ($63) ($63) ($63) ($63) ($63)

- - - - 9.9x 5.7x $240 ($57) $214 $435 $649 $183

($2) ($2) ($2) $9 $48 $63 $17 $17 $17 $17 $17 $17

($0.00) ($0.00) ($0.00) $0.02 $0.11 $0.14 $193 ($104) $168 $389 $603 $136

- - - 17.9x 3.3x 2.6x ($0.16) ($0.18) ($0.17) ($0.15) ($0.14) ($0.17)

- - - 22.4x 4.1x 3.2x $0.62 ($0.16) $0.57 $1.05 $1.43 $0.49

$0 ($128) ($128) $0 ($10) ($10) $0.04 $0.05 $0.04 $0.04 $0.04 $0.04

$0 $0 $0 $0 $0 $0 $0.50 ($0.30) $0.44 $0.94 $1.33 $0.37

$0 $0 $0 $0 $0 $0 0.8x - 0.9x 0.4x 0.3x 1.1x

$0 $0 $0 ($31) ($31) ($31) Target Price / Corporate NAV 1.0x - 1.1x 0.5x 0.4x 1.4x

($3) ($130) ($130) ($22) $8 $22 $0.02 ($0.06) $0.01 $0.08 $0.14 $0.01

($0.01) ($0.30) ($0.30) ($0.05) $0.02 $0.05 $0.11 ($0.04) $0.10 $0.18 $0.27 $0.08

Model shares F/D (fully financed): 454M

McIlvenna Bay Production Profile (100% basis)

RLOM 2018 2019 2020 2021 2022 McIlvenna Bay Metal Inventory - Model Mineable, Reserve, and Resource

23.7 - - 0.9 1.4 1.8 Tonnes Cu Grade Zn Grade Copper Zinc EV/lb CuEq

5,000 - - 2,500 3,750 5,000 (000's) (%) (%) (Mlb) (Mlb) (US$/lb)

1.2% - - 1.0% 1.0% 1.2% 23,737 1.2% 2.4% 611 1,237 $0.022

2.4% - - 2.7% 3.3% 2.2% - - - 527 824 $0.030

0.4 - - 0.3 0.4 0.5 - - - - - -

15 - - 14 18 15 13,900 1.27% 2.68% 391 821 -

91% - - 91% 91% 91% 11,311 1.32% 2.97% 329 740 -

81% - - 81% 81% 81% 25,211 1.29% 2.81% 720 1,561 $0.018

78% - - 78% 78% 78% Measured and indicated resource is additional to proven and probable reserve.

69% - - 69% 69% 69%

527 - - 17 26 42 Foran Mining Corp. Consensus Estimate Summary (Reuters data sourced via Capital IQ)

824 - - 36 66 60 Analysts Mean EPS High / Low Haywood vs. Cons. Mean CFPS High / Low Haywood vs. Cons.

224 - - 7 13 22 2015 Consensus Estimate 1 (US$0.02) (US$0.01) / (US$0.02) (77%) (US$0.02) (US$0.01) / (US$0.02) (77%)

5.6 - - 0.2 0.4 0.4 2016 Consensus Estimate 1 US$0.00 (US$0.00) / (US$0.01) - (US$0.00) (US$0.00) / (US$0.01) (6%)

$60 - - $60 $60 $60 Analysts SO Rating SP Rating SU Rating Mean Target High / Low Haywood vs. Cons.

$1.15 - - $1.50 $0.80 $1.10 Consensus Valuation 3 3 - - US$0.43 US$0.50 / US$0.35 18%

($0.20) - - $0.35 $0.20 ($0.30)

NoC = net of credits; ER = excluding royalties; IR = including royalties. Peer-Group Comparables (Haywood Securities estimates)

Share Price Corp NAV Price / NAV 2015E CFPS Price / CFPS 2016E CFPS Price / CFPS

Hedge Position Foran Mining Corp. (FOM-V) C$0.40 US$0.43 0.8x (US$0.02) - (US$0.01) -

RLOM 2018 2019 2017 2021 2022 Capstone Mining Corp. (CS-T) C$1.33 US$4.44 0.3x US$0.60 1.9x US$0.50 2.3x

- - - - - - Copper Mountain Mining Corp. (CUM-T) C$1.11 US$0.55 1.7x US$0.40 2.3x US$0.62 1.5x

- - - - - - Coro Mining Corp. (COP-T) C$0.03 US$0.43 0.1x (US$0.02) - (US$0.02) -

- - - - - - First Quantum Minerals Ltd. (FM-T) C$15.59 US$22.45 0.6x US$2.45 5.4x US$3.40 3.9x

- - - - - - Highland Copper Co. (HI-V) C$0.17 US$0.64 0.2x (US$0.02) - (US$0.02) -

HudBay Minerals Inc. (HBM-T) C$10.43 US$10.44 0.9x US$0.15 60.4x US$0.75 11.8x

Modelled Equity Financings Lundin Mining Corp. (LUN-T) C$5.00 US$6.50 0.7x US$0.72 6.0x US$1.20 3.6x

Year Quarter Amount Price Nevsun Resources Ltd. (NSU-T) C$4.44 US$4.67 0.8x US$0.60 6.4x US$0.65 5.8x

(US$M) (C$/share) NovaCopper Inc. (NCQ-T) C$0.77 US$1.73 0.4x (US$0.16) - (US$0.33) -

Royal Nickel Corp. (RNX-T) C$0.30 US$0.64 0.4x (US$0.04) - (US$0.02) -

Sunridge Gold Corp. (SGC-V) C$0.19 US$0.30 0.5x (US$0.02) - (US$0.01) -

2015 Q3 $15 C$0.35 Talon Metals Corp. (TLO-T) C$0.15 US$0.42 0.3x (US$0.05) - (US$0.03) -

2016 Q1 $103 C$0.40 Zazu Metals Corp. (ZAZ-T) C$0.26 US$0.58 0.4x (US$0.04) - (US$0.02) -

0.8x 14.7x 5.5x

0.3x - -

Stefan Ioannou, Ph.D. - Mining Analyst Jenny Lemberg. - Research Associate 0.6x 14.7x 5.5x

[email protected] 416-507-2309 [email protected] 416-507-2703 2015E C$/US$ FX Rate: 1.17

2016E C$/US$ FX Rate: 1.17

Peer-Group Average (producers)

Peer-Group Average (developers)

Peer-Group Average (all)

14.9

90.8

Current Price / Corporate NAV

Forecast C$/US$ FX Rate

Corporate Adjustments, US$M

McIlvenna Bay After-Tax Project NAV10%, US$M

Additional Exploration Credit, US$M

Corporate NAV, US$M

Corporate Adjustments, C$ / F/D share

McIlvenna Bay After-Tax Project NAV10%, C$ / F/D share

Additional Exploration Credit, C$ / F/D share

Corporate NAV, C$ / F/D share

Haywood Model Payable (100%)

2020E CFPS, US$

2021E CFPS, US$

Haywood Model Mineable (100%)

Zinc Grade Milled, %

Gold Grade Milled, g/t Proven and Probable Reserve (100%)

Measured & Indicated Resource (100%)

Inferred Resource (100%)

Total Reserve and Resource (100%)

Ore Tonnes Milled, millions

Ore Tonnes Milled, tonnes per day

Copper Grade Milled, %

Current O/S Share Capital

Current F/D Share Capital

Shares

Copper Recovery, %

Silver Grade Milled, g/t

Gold Recovery, %

Zinc Recovery, %

Forward Zinc Sales Price, US$/lb

Payable Gold Production, ounces 000's

91

104

(millions)

Silver Recovery, %

Payable Zinc Production, Mlb

Payable Copper Production, Mlb

Payable Silver Production, Moz

Forward Zinc Sales, Mlb

$0.36

Book Value

Shares O/S, millions

Gross Sales Revenue, US$M

Net Revenue, US$M

Cost of Sales, US$M

Corporate G&A, US$M

Modelled Fully Financed F/D Share Capital

50

On-Site Operating Cost, $/tonne milled

Total Copper Cash Cost (NoC; IR), US$/lb

Total Zinc Cash Cost (NoC; IR), US$/lb

Forward Copper Sales, Mlb

Forward Copper Sales Price, US$/lb

300

Modelled Interim Equity Financing

Modelled McIlvenna Bay Equity Financing

454

Free Cash Flow, US$M

FCPS, US$

EBITDA, US$M

Forecast Zinc Price, US$/lb

Forecast Gold Price, US$/oz

Forecast Silver Price, US$/oz

C$/US$ FX Rate

Options Sept 2015 - Mar 2019US$4.4M

Warrants + Options US$6.0M

February 11, 2014 - C$1.2M non-brokered private placement (6.0M units @ C$0.20; 1 FT sh + 1/2 wt @ C$0.30 per sh)

1.8 1.8

August 30, 2012 - C$5.0M brokered private placement (2.6M FT sh @ C$0.65 + 5.7M units @ C$0.58; 1 sh + 1/2 wt @ C$0.80 per sh)

March 11, 2011 - C$7.5M non-brokered private placement (6.0M FT sh @ C$1.25 per sh)

December 22, 2014 - C$1.6M non-brokered private placement (6.4M FT sh @ C$0.25 per sh)

March 7, 2011 - C$6.3M brokered private placement (6.0M common shares @ C$1.05 per share)

Forecast Copper Price, US$/lb

$0.04Working Capital

$0.00$0.00

$0.27

$0.04

90.8

103.8

Aug 2015 - Oct 2016

$31.0

Patrick Soares

US$1.6M

www.foranmining.com

ExpiryProceeds

Foran Mining Corp. (FOM-V)

US$ / O/S Share C$ / O/S Share

$0.34 $0.40Market Capitalization

$0.08

Long-term Debt

$0.07

Current Cash $0.04

F/D Cash Adds

$0.04

Warrants

$0.31

$0.30Enterprise Value (EV)

1.0

10.0

3.3

1.0

O/S (millions) F/D (millions)

Forecast Silver Price, US$/oz

0.5

Forecast Copper Price, US$/lb

Forecast Zinc Price, US$/lb

Forecast Gold Price, US$/oz

0.5

10.0

3.3

15.8

103.8

Haywood

Model

CFPS, US$

Current Price / CFPS

Target Price / CFPS

CAPEX, US$M

Proceeds from Equity Financing, US$M

Proceeds from Debt Financing, US$M

Debt Repayment, US$M

EV / EBITDA

DD&A, US$M

Gain on Derivative Instruments, US$M

Earnings, US$M

EPS, US$

Current Price / EPS

Target Price / EPS

Cash Flow Before W/C Changes, US$M



Source: Haywood Securities

Current Price, C$ $0.40 $31.0

Return, % 25% $3.5

52-Week High / Low, C$ $0.48 / $0.15 $3.4

90.8 -

Target Price Metric: 1.0x After-Tax Corporate NAV10% 103.8 $27.6

$0.50 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00

$0.35 ($1.11) ($0.90) ($0.69) ($0.47) ($0.26) ($0.05) $0.16 $0.33 $0.49 $0.65

$0.60 ($0.94) ($0.73) ($0.52) ($0.31) ($0.10) $0.11 $0.30 $0.46 $0.62 $0.78

$0.85 ($0.78) ($0.57) ($0.35) ($0.14) $0.07 $0.26 $0.43 $0.59 $0.74 $0.90

$1.10 ($0.61) ($0.40) ($0.19) $0.02 $0.22 $0.39 $0.55 $0.71 $0.87 $1.02

$1.35 ($0.45) ($0.23) ($0.02) $0.18 $0.36 $0.52 $0.68 $0.83 $0.99 $1.15

$1.60 ($0.28) ($0.07) $0.14 $0.32 $0.49 $0.64 $0.80 $0.96 $1.11 $1.27

$1.85 ($0.11) $0.10 $0.28 $0.45 $0.61 $0.77 $0.92 $1.08 $1.23 $1.39

$2.10 $0.05 $0.24 $0.42 $0.58 $0.73 $0.89 $1.05 $1.20 $1.36 $1.51

$2.35 $0.20 $0.38 $0.54 $0.70 $0.86 $1.01 $1.17 $1.32 $1.48 $1.63

$2.60 $0.34 $0.51 $0.67 $0.82 $0.98 $1.13 $1.29 $1.45 $1.60 $1.76

$0.62 $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00

$0.35 ($0.99) ($0.78) ($0.57) ($0.36) ($0.14) $0.07 $0.28 $0.45 $0.61 $0.77

$0.60 ($0.82) ($0.61) ($0.40) ($0.19) $0.02 $0.23 $0.42 $0.58 $0.74 $0.90

$0.85 ($0.66) ($0.45) ($0.23) ($0.02) $0.19 $0.38 $0.55 $0.71 $0.86 $1.02

$1.10 ($0.49) ($0.28) ($0.07) $0.14 $0.34 $0.51 $0.67 $0.83 $0.99 $1.14

$1.35 ($0.33) ($0.11) $0.10 $0.30 $0.48 $0.64 $0.80 $0.95 $1.11 $1.26

$1.60 ($0.16) $0.05 $0.26 $0.44 $0.61 $0.76 $0.92 $1.08 $1.23 $1.39

$1.85 $0.01 $0.22 $0.40 $0.57 $0.73 $0.89 $1.04 $1.20 $1.35 $1.51

$2.10 $0.17 $0.36 $0.54 $0.70 $0.85 $1.01 $1.17 $1.32 $1.48 $1.63

$2.35 $0.32 $0.50 $0.66 $0.82 $0.98 $1.13 $1.29 $1.44 $1.60 $1.75

$2.60 $0.46 $0.63 $0.79 $0.94 $1.10 $1.25 $1.41 $1.57 $1.72 $1.88

0.02$ $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00

$0.35 ($0.14) ($0.12) ($0.10) ($0.08) ($0.07) ($0.05) ($0.03) ($0.01) $0.01 $0.02

$0.60 ($0.12) ($0.10) ($0.08) ($0.07) ($0.05) ($0.03) ($0.01) $0.01 $0.02 $0.04

$0.85 ($0.10) ($0.08) ($0.06) ($0.05) ($0.03) ($0.01) $0.01 $0.02 $0.04 $0.06

$1.10 ($0.08) ($0.06) ($0.05) ($0.03) ($0.01) $0.01 $0.03 $0.04 $0.06 $0.08

$1.35 ($0.06) ($0.04) ($0.03) ($0.01) $0.01 $0.03 $0.04 $0.06 $0.08 $0.10

$1.60 ($0.04) ($0.03) ($0.01) $0.01 $0.03 $0.05 $0.06 $0.08 $0.10 $0.11

$1.85 ($0.03) ($0.01) $0.01 $0.03 $0.05 $0.06 $0.08 $0.10 $0.11 $0.12

$2.10 ($0.01) $0.01 $0.03 $0.05 $0.07 $0.08 $0.10 $0.11 $0.13 $0.14

$2.35 $0.01 $0.03 $0.05 $0.07 $0.08 $0.10 $0.11 $0.13 $0.14 $0.15

$2.60 $0.03 $0.05 $0.07 $0.08 $0.10 $0.11 $0.13 $0.14 $0.15 $0.17

0.11$ $0.50 $1.00 $1.50 $2.00 $2.50 $3.00 $3.50 $4.00 $4.50 $5.00

$0.35 ($0.16) ($0.14) ($0.11) ($0.08) ($0.05) ($0.02) $0.01 $0.04 $0.07 $0.10

$0.60 ($0.13) ($0.10) ($0.07) ($0.04) ($0.01) $0.02 $0.05 $0.08 $0.10 $0.12

$0.85 ($0.09) ($0.06) ($0.03) ($0.00) $0.02 $0.05 $0.08 $0.11 $0.13 $0.14

$1.10 ($0.06) ($0.03) $0.00 $0.03 $0.06 $0.09 $0.12 $0.13 $0.15 $0.16

$1.35 ($0.02) $0.01 $0.04 $0.07 $0.10 $0.12 $0.14 $0.15 $0.17 $0.19

$1.60 $0.02 $0.05 $0.08 $0.10 $0.13 $0.14 $0.16 $0.17 $0.19 $0.21

$1.85 $0.05 $0.08 $0.11 $0.13 $0.15 $0.16 $0.18 $0.20 $0.22 $0.24

$2.10 $0.09 $0.12 $0.14 $0.15 $0.17 $0.18 $0.20 $0.22 $0.25 $0.27

$2.35 $0.12 $0.14 $0.16 $0.17 $0.19 $0.21 $0.23 $0.25 $0.27 $0.29

$2.60 $0.15 $0.16 $0.18 $0.20 $0.21 $0.23 $0.26 $0.28 $0.30 $0.32

Haywood model is based on a forecast copper price of US$2.50/lb in 2015, US$2.75/lb in 2016, US$3.00/lb in 2017, and US$3.25/lb thereafter.

Haywood model is based on a forecast zinc price of US$1.10/lb in 2015, US$1.20/lb in 2016-2017, and US$1.15/lb thereafter.

NAV sensitivity is based on 454M fully financed F/D shares. 2020E and 2021E CFPS sensitivities are based on 433M fully financed O/S shares.

Current Cash, US$M

Working Capital, US$M

Long-term Debt, US$M

Foran Mining Corp. (FOM-V)Market Capitalization, US$M

Enterprise Value (EV), US$MShares F/D, million

Rating: BUY

Target Price: C$0.50 Shares O/S, million

2020E CFPS Sensitivity (US$)

Copper Price (US$/lb)

Zin

c P

rice

(U

S$/

lb)

Fully Financed After-Tax Corporate NAV Sensitivity (C$ per fully financed F/D share)

After-Tax McIlvenna Bay Project NAV Sensitivity (C$ per fully financed F/D share)


Zin

c P

rice

(U

S$/

lb)

Base Case: $0.5

Base Case: $0.62

Zin

c P

rice

(U

S$/

lb)

2021E CFPS Sensitivity (US$)



Zin

c P

rice

(U

S$/

lb)

Base Case: $0.02

Base Case: $0.11



Investment Thesis

Foran’s flagship asset is a 100% interest in the McIlvenna Bay copper-zinc-gold-silver project located in Saskatchewan. Established infrastructure associated with the world-class Flin Flon mining district positions McIlvenna Bay for expedited development. A recently completed preliminary economic assessment (PEA) details a $249 million 5,000-tonne-per-day underground mining operation utilizing standard froth flotation processing technology to produce ~38 million pounds of copper and ~59 million pounds of zinc (in separate concentrates) per annum over a 14-year mine life. Our model includes a life-of-mine average total copper cash cost of US$1.15 per pound net of credits.

Approximately 31% of McIlvenna Bay’s life-of-mine revenue is derived from zinc in our model (versus ~57% from copper). We believe this by-product profile significantly enhances the project’s intrinsic value given the scarcity of large advanced-stage zinc development projects in a market that is facing a medium-term supply shortfall. McIlvenna Bay’s zinc profile is further enhanced by established zinc-specific infrastructure (e.g., Hudbay’s refinery) in the Flin Flon region—clearly a (the) staple of Hudbay’s project portfolio, in part evidenced by its commitment to build the ~$794 million Lalor mine and mill complex near Snow Lake. We believe Hudbay will eventually need to look beyond Lalor to support its major infrastructure in the region. The Company is actively working to replace/grow its Flin Flon resource inventory, in part, through a number of joint-venture agreements with junior exploration companies. Unlike most other notable advanced-stage volcanogenic massive sulphide (VMS) development projects in the region, McIlvenna Bay is not subject to a pre-emptive back-in right by Hudbay, giving Foran’s investors full exposure to successful project execution. Furthermore, McIlvenna Bay arguably offers the most significant single source of additional resource potential / concentrate feed. Currently underpinned by a total resource (open) of 25.2 million tonnes, the deposit is the third largest discovered in the region to date—just behind Hudbay’s Lalor deposit and ahead of the Company’s Trout Lake and 777 mines (each +20 million tonnes). We note the region’s giant Flin Flon deposit (62.5 million tonnes) is now depleted. Most other known deposits (~28; current and historical) contain(ed) less than 5 million tonnes each. Hence, corporate activity is a notable wild-card catalyst that could drive Foran’s market valuation higher. Precedent copper developer mergers and acquisitions have valued the underlying assets at +US$0.03 per pound of total in situ copper equivalent resource. We would argue that Foran could garner a valuation towards the upper end of this range given McIlvenna Bay’s preferred location, size, and implied economics. That said, we note the Company is currently trading at (1) US$0.018 per pound of total in situ National Instrument 43-101 compliant copper equivalent resource, and (2) US$0.022 per pound of total mineable in situ copper equivalent resource in our model. We continue to recommend Foran Mining Corporation (FOM-V) with a Buy rating and a revised target price of $0.50 per share (25% implied return).



Risks

Significant Investment Risks

The investment to which this report relates carries various risks, which are reflected in our Overall Risk Rating. We consider the following to be the most significant of these investment risks:

Development risks associated with projects that have completed advanced engineering studies are significantly reduced, as many of the technical parameters used to define a project, including mine plans, metallurgical processes, and cost estimates, are backed by detailed engineering work. Development plans at McIlvenna Bay are underpinned by a recently completed Preliminary Economic Assessment (PEA). McIlvenna Bay is a zoned volcanogenic massive sulphide (VMS) deposit composed of a copper-gold rich Copper Stockwork Zone and zinc-copper-rich Upper West Main Lens, Zone 2 Main Lens, and Lens 3 Zones, which will likely require batch-processing consideration given their varying metallurgical characteristics (noting the PEA process flow sheet includes a talc pre-flotation step to remove the gangue mineralogy).

Foran will have to seek additional equity and/or debt to finance McIlvenna Bay’s initial capital cost ($249 million November 2014 PEA estimate; $300 million in our formal valuation). Consequently, there will be an unspecified amount of shareholder dilution and possible hedging requirements. Although our valuation accounts for potential dilution, it is pro forma in nature. We note that Foran’s December 31, 2014, balance sheet includes $4.1 million in cash (prior to spending ~$1.6 million on a 2015 winter drill program). Hence, although the Company is funded to meet near-term working-capital requirements, it will likely have to seek additional financing to advance McIlvenna Bay towards construction-ready status.

Foran needs to begin the formal Environmental Assessment (EA) process at McIlvenna Bay. The Company began environmental baseline studies in Q2/12 and submission of the formal EA documentation will initiate the ~2-year process, which includes an 18-month assessment, followed by a 30-day screening and subsequent 180-day review period (potential EA approval in 2016). We note that a harmonization agreement will likely facilitate federal and provincial permit approval through a single review process (assuming the project even triggers a federal review). Given the fact that mining activities are prolific in the Flin Flon region, we expect the EA process should be relatively straightforward. Furthermore, the past-producing Hanson Lake mine exists adjacent to the McIlvenna Bay property boundaries. That said, the EA permitting process presents a (the) significant regulatory hurdle. Furthermore, we remain cognizant that the McIlvenna Bay property’s relatively flat (and swampy) topography may pose a challenge to traditional tailings management practices, possibly prompting consideration of underground paste backfill, as detailed in the project’s November 2014 PEA.

Our Risk Profile Parameters ratings and Overall Risk Rating are set out on the cover page and are explained in our Rating Structure section under ‘Overall Risk Rating’ and ‘Risk Profile Parameters’. These ratings are an integral part of our Report.



Bigstone Delivers Additional High Grade Infill Drill Results

Foran recently released the result of a second infill hole drilled into the historic resource envelope defining the Company’s 100% owned Bigstone deposit, which is located 25 kilometres southwest of Foran’s flagship 25.2 million tonne McIlvenna Bay deposit in east-central Saskatchewan. Hole BS-15-239 returned the best copper zone intersection to date at Bigstone—namely 104.94 metres grading 2.20% copper and 0.10 g/t gold (starting at a downhole depth of 327.56 metres), including 20.35 metres grading 4.38% copper and 0.25 g/t gold, and 19.00 metres grading 3.36% copper and 0.08 g/t gold.

Drill hole BS-15-139 follows previously released hole BS-15-240, which returned 11.78 metres of massive sulphide mineralization grading 18.42% zinc, 0.26% copper, 0.38 g/t gold, and 32.4 g/t silver (starting at a vertical depth of ~295 metres below surface; including 7.62 metres grading 27.03% zinc, 0.31% copper, 0.37 g/t gold, and 45.3 g/t silver) within Bigstone’s historic zinc zone, followed by a 10.59 metre and 8.47 metre intersections grading 1.42% and 1.28% copper respectively (+ associated by-product zinc, gold, and silver credits) within Bigstone’s historic copper zone (refer to Radar Screen, April 2, 2015) . True thicknesses are estimated at 60% to 65% of the downhole intersections.

Recent Bigstone Drill Result Highlights

Source: Foran Mining

Although ‘infill’ holes, the high grades intersected in BS-14-239 and BS-15-240 are very impressive. The Bigstone volcanogenic massive sulphide (VMS) deposit is currently underpinned by a historic (1990; non National Instrument 43-101 compliant) resource estimate that includes a 3.75 million tonne copper zone grading 2.03% copper and 0.33 g/t gold (at a 1.0% copper cut-off grade) and an adjacent 0.53 million tonne zinc zone grading 9.62% zinc and 15.9 g/t silver (at a 5.0% zinc cut-off grade). The deposit’s historic resource outlines a vertically oriented, flattened, cylindrical body, which has been drill tested in part between 100 and 700 m below surface. A subsequent ‘historic’ resource estimate tabled by Aur in 2002 is underpinned by 1.45 million tonnes grading 2.80% copper in the copper-rich zone and 0.3 million tonnes grading 11.20% zinc in the zinc-rich zone. Hence, based on historic work, cut-off grade appears to be an important consideration at Bigstone. Sulphide mineralization in the zinc zone includes pyrrhotite, pyrite, arsenopyrite, sphalerite, chalcopyrite, and galena. Mineralization in the copper zone consists of disseminated chalcopyrite and quartz-chalcopyrite hosted by altered footwall chlorite schist. Foran has utilized large diameter (HQ) core to test Bigstone, which will provide material for preliminary metallurgical testwork.

Drill Hole Zone From (m) To (m) Interval (m) CuEq (%) ZnEq (%) Cu (%) Zn (%) Au (g/t) Ag (g/t) Type

301.40 303.50 2.10 - 5.39 0.21 4.59 0.03 5.0 MS

327.56 432.50 104.94 2.20 - 2.03 0.12 0.10 6.4 DSS, SMS, MS

incl. 333.70 354.05 20.35 4.38 - 4.11 0.14 0.25 7.3 DSS, SMS, MS

and 363.00 382.00 19.00 3.36 - 3.16 0.19 0.08 9.6 DSS, SMS, MS

339.00 350.78 11.78 - 20.86 0.26 18.42 0.38 32.4 MS

incl. 339.85 347.47 7.62 - 30.01 0.31 27.03 0.37 45.3 MS

378.45 392.77 14.32 - 2.38 0.10 1.88 0.07 2.27 DSS

incl. 380.56 387.85 7.29 - 3.15 0.15 2.57 0.04 1.8 DSS

418.74 429.33 10.59 1.53 - 1.42 0.08 0.06 5.2 DSS

incl. 425.89 428.56 2.67 3.02 - 2.83 0.14 0.08 9.8 DSS

445.00 453.47 8.47 1.50 - 1.28 0.09 0.17 8.9 DSS

incl. 447.07 452.56 5.49 1.98 - 1.69 0.12 0.22 11.5 DSS

Note drill hole BS-15-240 previously released (refer to Radar Screen, April 2, 2015).

BS-15-239

Zinc Zone

Copper Zone

BS-15-240

Copper Zone



Bigstone Drill Hole Location Map


A recently completed 2015 winter drill program (11 holes; 4,459 metres) included six infill holes (2,545 metres) on the Bigstone property, which were designed to facilitate the conversion of the deposit’s historic resource to National Instrument 43-101 compliant status. Results from the four outstanding 2015 winter Bigstone drill holes, which have also been drilled to test (infill) Bigstone’s historic resource envelope at vertical depths of 200 to 400 metres, are pending and anticipated within the coming weeks. Borehole electromagnetic surveys at Bigstone and the Thunder Zone areas are currently underway. In addition, Foran is conducting a 50 line-km large loop deep-penetrating time-domain electromagnetic (DEEP EM) survey over prospective stratigraphy located 4 to 8 kilometres north of McIlvenna Bay. We note that the recently expanded Thunder Zone was targeted through similar geophysical survey (refer to Radar Screen, March 25, 2015).

Foran’s 2015 winter drill program was funded by a $1.6 million non-brokered flow-through private placement that was closed last December (priced at $0.25 per share; 6.4 million shares; 7.6% dilution; 12% premium to market at the time; refer to Radar Screen, December 15, 2014). The Company is now evaluating steps to follow-up mineralization intersected to date at the Thunder Zone, which remains open in multiple directions (refer to Radar Screen, March 25, 2015).



Deep-Electromagnetic Geophysical Anomalies at/near McIlvenna Bay




We note significant exploration potential at McIlvenna Bay also extends to the north of the Thunder zone. Target A, which is underpinned by a 2013 DEEP EM geophysical anomaly that is similar, yet larger than the one associated with the neighboring 25.2 million tonne McIlvenna Bay VMS deposit located 1.5 kilometres to the northwest, remains essentially undrilled. A single (~$0.5 million) drill hole completed earlier last year attempted to test the target, but was drilled over the top of the conductor, which appears to sit ~1,200 metres below the surface (based on downhole borehole EM data; refer to Radar Screen, May 2, 2014). The conductor exhibits exceptional late-time decay characteristics—a profile that suggests a non-graphitic source (which gives early to mid-time EM responses). We remind investors that the McIlvenna Bay deposit is blind, located beneath ~35 metres of Paleozoic cover rocks, and has been traced down plunge to a vertical depth of ~1,200 metres, where it remains open. We also note that Foran’s 2013 DEEP EM geophysical survey, which is responsible for the identification of Target A and Target B, was conducted by Koop Geotechnical Services Inc., which was involved in the identification of the geophysical target associated with Hudbay’s Lalor VMS deposit near Snow Lake.

We anticipate additional drilling at Bigstone will delineate a ramp-accessible target, which could provide supplemental high-grade (synergistic) satellite feed to an operation at McIlvenna Bay. Moreover, drilling this year has continued to delineate multiple volcanogenic massive sulphide (VMS) discoveries in close proximity to McIlvenna Bay. Hence, the Hanson Lake Camp is clearly demonstrating the potential to host a mining camp similar to the neighboring (world class) Flin Flon and Snow Lake camps in Manitoba.

Property Location Map




Market Taking Notice

During the two trading sessions prior to Foran’s news release this morning, the Company’s share price traded up 71% (+$0.20 per share to $0.48 per share). Buying, underpinned by high volume (~727,000 share daily average over the 2-day period, versus a ~95,000 share per day average during the preceding 3 months) appears to be driven in part by recent positive exploration news (refer to March 25, 2015 and April 2, 2015 Radar Screen) as well as improving copper/zinc sentiment.

Our formal valuation (i.e., fully financed NAV10% based target price) is in part underpinned by a number of equity financing assumptions—namely a US$15 million ‘interim’ financing in Q3/15 and a US$103 million McIlvenna Bay initial capital cost financing in Q1/16 (see below). Our previous model priced these equity financings at $0.20 and $0.25 per share respectively. However, in light of recent share price appreciation, we have increased these modelled figures to $0.35 and $0.40 per share respectively, which in turn has decreased share dilution in our model, boosting Foran’s fully financed after-tax corporate NAV10% to $0.50 per share (from $0.33). Our target price remains based on a 1.0x multiple to fully financed after-tax corporate NAV10%. Hence our revised $0.50 per share target price (previously $0.35).

Robust Standalone PEA Poised to Benefit from Regional Synergies

Last November Foran released summary results of a Preliminary Economic Assessment (PEA) for the Company’s 100% owned McIlvenna Bay polymetallic (copper-zinc) project in Saskatchewan. The study, headed by JDS Engineering, is centred on a 5,000-tonne-per-day underground mine (with ramp + ~1,200-metre shaft) utilizing conventional froth flotation to produce ~38 million pounds of coper and ~59 million pounds of zinc per annum over a 14-year mine life. Associated initial capital costs are pegged at $249 million (including a 20% contingency). A life-of-mine average on-site operating cost of $51 per tonne milled translates into an average total copper cash cost of US$0.84 per pound net of credits (or conversely a total zinc cash cost of negative US$0.37 per pound net of credits). Key base-case economics include a $262 million after-tax NAV7% (19% internal rate of return [IRR]; 4.1 year payback) at US$3.08 per pound of copper and US$1.06 per pound of zinc.

We note comparable (albeit slightly smaller) advanced-stage VMS projects are underpinned by $100 million to $200 million initial capital-cost estimates. For example, Glencore Xstrata’s 100% owned Bracemac-McLeod project in Quebec includes a US$116 million initial capital-cost estimate (September 2010 feasibility study; ramp-accessed underground mine; 2,500-tonne-per-day mill; located within an established mining camp). Similarly, Capstone’s (CS-T) 100% Kutcho project in northern British Columbia includes a $187 million initial capital-cost estimate (February 2011 preliminary feasibility study; ramp-accessed underground mine; 2,500-tonne-per-day mill; relatively remote location).

The PEA mine plan is notably larger than the conceptual (conservative) plan underpinning our previous valuation; namely, a 3,000-tonne-per-day underground operation (US$200 million initial capex and US$75-per-tonne milled life-of-mine average on-site operating cost) producing ~24 million pounds of copper and ~40 million pounds of zinc per annum over a 14-year mine life (refer to Radar Screen, April 17, 2013). Note that our previous model considered only McIlvenna Bay’s 13.9 million-tonne indicated resource inventory, whereas the PEA considers potentially mineable portions of the deposit’s indicated and inferred inventories. Our conceptual plan generated a $55 million after-tax project NAV12% (15% IRR; 2016 forward basis; 2018 modelled production start-up) at US$3.25 per pound of copper and US$1.15 per pound of zinc (refer to Radar Screen, October 23, 2014).



McIlvenna Bay PEA Conceptual Mine Design


McIlvenna Bay PEA Payable Metal production




McIlvenna Bay Project Parameters

Source: Foran Mining and Haywood Securities

Previous Haywood Updated Haywood

Model Model

McIlvenna Bay 'Mineable' Resource

'Mineable' Resource (100% basis), Mt 13.9 23.7 23.7 -

'Mineable' Resource Copper Grade, % 1.3% 1.16% 1.2% 0%

'Mineable' Resource Zinc Grade, % 2.7% 2.36% 2.4% (0%)

'Mineable' Resource Lead Grade, % - 0.15% 0.1% (2%)

'Mineable' Resource Gold Grade, g/t 0.5 0.42 0.4 (1%)

'Mineable' Resource Silver Grade, g/t 17 14.8 15 (0%)

Timing

Commercial Production Start-up (milling), year 2018 - 2020 -

Mine Life, years 14 14 14 -

Mine / Mill Type

owner operated

underground mining

/

owner operated

underground mining

/

-

Production

Nameplate Ore Throughput (mill; 100% basis), Mtpa 1.1 1.8 1.8 -

Nameplate Ore Throughput (mill; 100% basis), tpd 3,000 5,000 5,000 -

LOM Average Copper Head Grade, % 1.2% 1.2% 1.2% 0%

LOM Average Zinc Head Grade, % 2.6% 2.4% 2.4% (0%)

LOM Average Gold Head Grade, g/t 0.5 0.4 0.4 (1%)

LOM Average Silver Head Grade, g/t 17 15 15 (0%)

LOM Average Copper Concentrate Copper Grade, % 27% 28% 28% -

LOM Average Zinc Concentrate Zinc Grade, % 55% 55% 55% -

LOM Average Lead Concentrate Lead Grade, % - 14% - (100%)

LOM Average Copper Recovery to Copper Concentrate, % 90% 91% 91% -

LOM Average Zinc Recovery to Zinc Concentrate, % 80% 81% 81% -

LOM Average Lead Recovery to Lead Concentrate, % - 59% - (100%)

LOM Average Gold Recovery to Copper Concentrate, % 60% 78% 78% -

LOM Average Silver Recovery to Copper Concentrate, % 60% 69% 69% -

LOM Annual Average Copper Production (payable; 100% basis), Mlb 24 37.6 38 -

LOM Annual Average Zinc Production (payable; 100% basis), Mlb 40 58.9 59 -

LOM Annual Average Lead Production (payable; 100% basis), Mlb - 1.2 - (100%)

LOM Annual Average Gold Production (payable; 100% basis), koz 9 16 16 -

LOM Annual Average Silver Production (payable; 100% basis), koz 300 398 398 -

LOM Total Copper Production (payable; 100% basis), Mlb 334 514 600 17%

LOM Total Zinc Production (payable; 100% basis), Mlb 558 805 900 12%

LOM Total Lead Production (payable; 100% basis), Mlb - 16 - (100%)

LOM Total Gold Production (payable; 100% basis), koz 123 218 230 6%

LOM Total Silver Production (payable; 100% basis), Moz 4,500 5,437 6,000 10%

Operating Costs

LOM Average Operating Cost (on-site), $/tonne milled $85 $51 $60 18%

LOM Average Total Copper Cash Cost (net of credits; including royalties), US$/lb payable $1.25 $0.84 $1.15 37%

LOM Average Total Zinc Cash Cost (net of credits; including royalties), US$/lb payable ($0.10) ($0.37) ($0.20) 46%

Capital Costs

Initial Capital Cost (100% basis), $M $226 $249 $300 21%

LOM Total Capital Cost (incl. sustaining capital and closure costs; 100% basis), $M $305 $399 $460 15%

Project Valuation

Senario Base -10% Base +10% Base -10% Base +10%

Long-term Forecast Copper Price, US$/lb $3.25 $2.77 $3.08 $3.39 $3.25 17% 6% (4%)

Long-term Forecast Zinc Price, US$/lb $1.15 $0.95 $1.06 $1.17 $1.15 21% 8% (2%)

Long-term Forecast Lead Price, US$/lb $1.10 $0.84 $0.93 $1.02 $1.05 25% 13% 3%

Long-term Forecast Gold Price, US$/oz $1,250 $1,114 $1,238 $1,362 $1,250 12% 1% (8%)

Long-term Forecast Silver Price, US$/oz $18.00 $15.30 $17.00 $18.70 $18.00 18% 6% (4%)

Project NAV Discount Rate, % 12% 7% 7% 7% 10% - - -

Pre-Tax Project NAV, $M $73 $201 $382 $563 $207 3% (46%) (63%)

Pre-Tax Project IRR, % 16% 15% 22% 28% 18% 20% (16%) (33%)

After-Tax Project NAV, $M $55 $129 $263 $395 $154 19% (41%) (61%)

After-Tax Project IRR, % 15% 13% 19% 24% 17% 25% (12%) (31%)

Previous Haywood project NAV is based on a 2016 forward basis.

Updated Haywood project NAV is based on a 2018 forward basis.

November 2014

JDS PEA

owner operated

underground mining /

froth flotation

November 2014 JDS PEA

Updated Haywood Model vs.



McIlvenna Bay Production Profile (Haywood model)


We updated our model to better reflect McIlvenna Bay’s larger PEA mine plan, which is underpinned by a 23.7 million-tonne mineable resource inventory grading 1.2% copper and 2.4% zinc (refer to Radar Screen, November 17, 2014). We have modestly inflated (~20%) initial capital (to $300 million) and operating costs (life-of-mine average on-site operating cost of $60 per tonne milled) in our model to reflect cost creep that continues to impact the global mining industry. We have also excluded the production of lead in our valuation, in part given the metal’s relatively small production profile (~1.2 million pounds per annum in the PEA) and associated added complexity to produce a bulk lead-copper concentrate (in addition to separate [clean] copper [~28%] and zinc [~55%] concentrates).

With a positive PEA in hand, Foran plans to fast-track McIlvenna Bay to the completion of a bankable feasibility study, which would be followed by subsequent permitting initiatives. The formal approval process is anticipated to take ~18+ months following formal document submission, the baseline collection is already complete, and the PEA mine plan includes consideration for cemented paste (tailings) backfill. Subsequent construction is expected to span 18 to 24 months, setting the stage for initial production start-up by as early as ~2019. Given timing delays commonly encountered by the global mining industry, our formal valuation is based on production start-up in 2020. We previously applied a 12% discount rate to our conceptual project net asset value (NAV) estimate to partially mitigate risk in our formal valuation. However, with (summary results of) a PEA now in hand, we have decreased our modelled discount rate to 10%—Haywood’s standard practice for base metals projects with a completed National Instrument 43-101 compliant technical study (mine plan).

Our updated model, now based on a 5,000-tonne-per-day operation underpinned by a 23.7 million-tonne mineable resource, generates a $154 million after-tax NAV10% (17% IRR; 2018 forward basis; 2020 modelled production start-up) at US$3.25 per pound of copper and US$1.15 per pound of zinc (refer to Radar Screen, January 27, 2015). On a fully financed basis, which reallocates project debt to corporate adjustments, McIlvenna Bay’s after-tax project NAV10% increases to US$240 million (or $0.62 per fully diluted share; 2015 forward basis). Our target price of $0.50 per share remains based on a 1.0x multiple to fully financed after-tax corporate NAV (US$193 million or $0.50 per share).

$0.50

$0.75

$1.00

$1.25

$1.50

$1.75

$2.00

0

20

40

60

80

100

120

Tota

l Cop

per

Cas

h C

ost

(net

of c

redi

ts, U

S$/

lb)

Pay

able

Pro

duct

ion

(M

lb)

Year

Copper Production Zinc Production

Copper Equivalent Production Copper Cash Cost

Copper Equivalent Production calculated using Haywood's formal metal price assumptions (refer to Radar Screen, January 27, 2015).



McIlvenna Bay Cross Section / NI 43-101 Compliant Resource Estimate


We note McIlvenna Bay is a zoned volcanogenic massive sulphide (VMS) deposit composed of a copper-gold-rich Copper Stockwork Zone and zinc-copper-rich Upper West Main Lens, Zone 2 Main Lens, and Lens 3 Zones, which will likely require consideration of batch processing given their varying metallurgical characteristics (noting the PEA process flow sheet includes a talc pre-flotation step to remove the gangue mineralogy).

PEA Details Robust Standalone Operation Poised to Benefit from Regional Synergies

McIlvenna Bay’s PEA demonstrates robust economics for a standalone operation, which will likely benefit from further mine-plan optimization, mineable resource expansion, and/or regional synergy considerations. In particular, we note:

The 25.2 million-tonne McIlvenna Bay deposit remains open at depth, and the PEA does not consider potential satellite feed from the project’s neighbouring deposits/targets (e.g., Bigstone, Balsam, etc.; see above and refer to Radar Screen, March 25, 2015).

Target A, identified by Foran in 2013, but not previously drill tested, is characterized by a large Deep-electromagnetic (EM) geophysical anomaly that is similar in shape, size, and orientation to the signature of the McIlvenna Bay deposit located ~1.5 kilometres to the northwest along the same stratigraphic horizon. Unfortunately, a two-hole winter program completed early last year did not intersect massive sulphides and/or return any significant assay results. However, we remain optimistic about Target A’s potential, as preliminary modelling of borehole EM data indicates a strong off-hole conductor at a downhole depth of ~1,200 metres, which is interpreted to be the source of the principal Target A anomaly. The conductor exhibits exceptional late-time decay characteristics—a profile that suggests a non-graphitic source (which gives early to mid-time EM responses).



We remind investors that the McIlvenna Bay deposit is blind, located beneath ~35 metres of Paleozoic cover rocks, and has been traced down plunge to a vertical depth of ~1,200 metres, where it remains open. We also look to exploration upside associated with other recently identified nearby (on-strike) geophysical anomalies; namely, the Thunder Zone, where initial drilling in 2013 returned a 3.7-metre intersection grading 3.7% copper (including 1.1 metres grading 10.6% copper) at a vertical depth of ~300 metres, and was subsequently followed up with a very successful 2015 winter drill program that included a 3.46 metre intersection grading 2.0% copper, 3.5% zinc, 0.37 g/t gold, and 12 g/t silver followed downhole by 3.70 metres grading 0.7% copper, 7.2% zinc, 0.29 g/t gold, and 43 g/t silver within a ~15 metre thick sulphide-rich interval (drill hole BA-15-83; refer to Radar Screen, March 25, 2015).

The PEA mine plan stands to benefit from synergistic considerations given McIlvenna Bay’s proximity to the world-class Flin Flon mining camp in Manitoba (~100 kilometres to the east), which includes Hudbay’s (HBM-T) 777, Lalor, and Reed mines, as well as a smelter. Note, McIlvenna Bay’s PEA does not include any consideration for this proximal/established infrastructure; the study assumes transport of the project’s zinc concentrate to Trail, British Columbia, and copper concentrate to overseas (Asian) smelters.

We believe Hudbay will eventually need to look beyond its Lalor project to support the Company’s major infrastructure in Manitoba (including a zinc refinery; refer to Radar Screen, October 31, 2014). Hudbay is actively working to replace/grow its Flin Flon resource inventory, in part, through a number of joint-venture agreements with junior exploration companies. Unlike most other notable advanced-stage VMS development projects in the region, McIlvenna Bay is not subject to a pre-emptive back-in right by Hudbay, giving Foran’s investors full exposure to successful execution at the project. Furthermore, McIlvenna Bay arguably offers the most significant single source of additional resource potential / concentrate feed. Currently underpinned by a total resource (open) of 25.2 million tonnes, the deposit is the third largest discovered in the region to date—just behind Hudbay’s Lalor deposit and ahead of the Company’s Trout Lake and 777 mines (each +20 million tonnes). We note the region’s giant Flin Flon deposit (62.5 million tonnes) is now depleted. Most other known deposits (~28; current and historical) contain(ed) less than 5 million tonnes each (acknowledging some are higher grade than McIlvenna Bay; refer to Appendix below). Hence, corporate activity is a notable wild-card catalyst that could drive Foran’s market valuation higher. We also note that a production profile including ~59 million pounds of zinc per annum stands to attract established base metals producers looking for exposure to the metal in anticipation of improving fundamentals (zinc price) in +H2/15 (refer to Radar Screen, January 27, 2015).

McIlvenna Bay PEA After-Tax NAV7% Sensitivity




Valuation and Target Price

Our valuation is based on Haywood’s formal commodity price forecast, which includes long-term (+2018) copper and zinc prices of US$3.25 per pound and US$1.15 per pound respectively (refer to Radar Screen, January 27, 2015). Our target price of $0.50 per share is based on a 1.0x multiple to Foran’s fully financed after-tax corporate NAV10% of $0.50 per share, which includes the following:

$0.62 per share attributable to the McIlvenna Bay project (10% discount rate; 100% project interest)

$0.04 per share attributable to resource and exploration upside potential

($0.16) per share attributable to corporate adjustments.

NAV Valuation Breakdown and Sensitivity


Long-term Copper Price Forecast, US$/lb $2.00 $3.00 $4.00 $5.00 $6.00

Long-term Zinc Price Forecast, US$/lb $0.50 $1.00 $1.50 $2.00 $2.50

Long-term Gold Price Forecast, US$/oz $1,000 $1,250 $1,500 $1,750 $2,500

Long-term Silver Price Forecast, US$/oz $10.00 $20.00 $30.00 $40.00 $50.00

Long-term C$/US$ FX Rate 1.30 1.20 1.10 1.00 0.90

Fully Financed F/D Shares, millions 454 454 454 454 454 454 454

Corporate Adjustments (fully financed)

Corporate Adjustments, US$M ($63) ($63) ($63) ($63) ($63) ($63) ($63)

Corporate Adjustments, C$ per F/D share ($0.16) ($0.18) ($0.17) ($0.15) ($0.14) ($0.12) ($0.17)

McIlvenna Bay Project

After-Tax Project NAV(10%), US$M $240 ($57) $214 $435 $649 $884 $183

After-Tax Project NAV(10%), C$ per F/D share $0.62 ($0.16) $0.57 $1.05 $1.43 $1.75 $0.49

Subtotal 'Base Case' Valuation (corporate adjustments + projects)

Subtotal 'Base Case' After-Tax Corporate NAV(10%), US$M $177 ($120) $151 $372 $586 $821 $120

Subtotal 'Base Case' After-Tax Corporate NAV(10%), C$ per F/D share $0.46 ($0.35) $0.40 $0.90 $1.29 $1.63 $0.32

Resource + Exploration Upside Credit

Resource Credit, US$M $7 $7 $7 $7 $7 $7 $7

Resource Credit, C$ per F/D share $0.02 $0.02 $0.02 $0.02 $0.01 $0.01 $0.02

Regional Exploration Upside Credit, US$M $10 $10 $10 $10 $10 $10 $10

Regional Exploration Upside Credit, C$ per F/D share $0.03 $0.03 $0.03 $0.02 $0.02 $0.02 $0.03

Total Resource + Exploration Upside Credit, US$M $17 $17 $17 $17 $17 $17 $17

Total Resource + Exploration Upside Credit, C$ per F/D share $0.04 $0.05 $0.04 $0.04 $0.04 $0.03 $0.04

Total Valuation (base case + resource/exploration)

Total After-Tax Corporate NAV(10%), US$M $193 ($104) $168 $389 $603 $837 $136

Total After-Tax Corporate NAV(10%), C$ per F/D share $0.50 ($0.30) $0.44 $0.94 $1.33 $1.66 $0.37

Implied Target Price @ 1.0x After-Tax Corporate NAV(10%), C$ $0.50 - $0.45 $0.95 $1.35 $1.70 $0.40

2020E CFPS, US$ $0.02 ($0.06) $0.01 $0.08 $0.14 $0.19 $0.01

2021E CFPS, US$ $0.11 ($0.04) $0.10 $0.18 $0.27 $0.38 $0.08

Haywood model is based on a long-term forecast copper price of US$3.25/lb.

Haywood model is based on a long-term forecast zinc price of US$1.15/lb.

Haywood model is based on a long-term forecast gold price of US$1,250/oz.

Haywood model is based on a long-term forecast silver price of US$18.00/oz.

Haywood model is based on a current C$/US$ FX rate of 1.17 and a long-term C$/US$ FX rate of 1.08.

Spot pricing is based on metals prices of US$2.76/lb copper, US$1.01/lb zinc, US$1,205/oz gold, US$16.31/oz silver, and a C$/US$ FX rate of 1.22.

Inferred resource credit is based on in situ metal prices of US$0.030/lb copper, US$0.010/lb zinc, US$25/oz gold, and US$0.50/oz silver.

Haywood

Model

Spot

Price



McIlvenna Bay – A Polymetallic Deposit with a Significant Zinc By-product Credit

Approximately 57% of McIlvenna Bay’s life-of-mine revenue is derived from copper in our model. However, the deposit, like most other volcanogenic massive sulphide (VMS) deposits, is truly polymetallic. Our conceptual mine plan includes ~59 million pounds of annual zinc production (in zinc concentrate), accounting for ~31% of the project’s life-of mine revenue. We believe this by-product profile significantly enhances McIlvenna Bay’s intrinsic value given the scarcity of large advanced-stage zinc development projects in a market that is facing a medium-term supply shortfall (refer to Radar Screen, January 27, 2015). McIlvenna Bay’s zinc profile is further enhanced by established zinc-specific infrastructure (namely, Hudbay’s refinery) in the Flin Flon region (see above).

McIlvenna Bay Revenue Profile (Haywood model; annual [left], life-of-mine [right])


McIlvenna Bay Fully Financed After-Tax Project NAV10% CAPEX-OPEX Sensitivity (US$M)


$0

$50

$100

$150

$200

$250

$300

Gro

ss R

even

ue C

ontr

ibut

ion

By

Met

al

(U

S$M

)

Year

Copper Zinc Gold Silver

57%31%

9%

3%

Copper Zinc Gold Silver

Formal Haywood Valuation:

US$240 C$200 C$250 C$300 C$350 C$400 C$450 C$500 C$550 C$600

US$1.00 US$207 US$213 US$220 US$225 US$231 US$236 US$240 US$244 US$247

McIlvenna US$1.05 US$214 US$220 US$226 US$232 US$237 US$242 US$246 US$249 US$252

Bay US$1.10 US$221 US$227 US$233 US$239 US$243 US$248 US$251 US$254 US$256

Total Copper US$1.15 US$228 US$234 US$240 US$245 US$249 US$253 US$256 US$258 US$260

Cash Cost US$1.20 US$235 US$241 US$246 US$251 US$255 US$258 US$260 US$262 US$260

Net of Credits US$1.25 US$242 US$247 US$252 US$256 US$260 US$262 US$264 US$263 US$260

(US$/lb) US$1.30 US$248 US$254 US$258 US$262 US$264 US$266 US$265 US$263 US$260



Fully financed formal Haywood valuation and sensitivity assumes a 60:40 debt:equity financing (priced at $0.40 per share). Fully financed formal Haywood valuation and sensitivity assumes a 60:40 debt:equity financing (priced at $0.40 per share).

Sensitivity is based on a 10% discount rate applied to McIlvenna Bay's project NAV. Sensitivity is based on a 10% discount rate applied to McIlvenna Bay's project NAV.

Formal Haywood valuation is based on a life-of-mine average total copper cash cost of US$1.15/lb net of credits (payable; including royalties) at McIlvenna Bay. Formal Haywood valuation is based on a life-of-mine average total copper cash cost of US$1.15/lb net of credits (payable; including royalties) at McIlvenna Bay.

Haywood model is based on a long-term forecast copper price of US$3.25/lb. Haywood model is based on a long-term forecast copper price of US$3.25/lb.

Haywood model is based on a long-term forecast zinc price of US$1.15/lb. Haywood model is based on a long-term forecast zinc price of US$1.15/lb.


McIlvenna Bay Capital Cost (C$M)



McIlvenna Bay Fully Financed After-Tax Project NAV10% CAPEX-OPEX Sensitivity (C$ per F/D share)


Foran Fully Financed After-Tax Corporate NAV10% CAPEX-OPEX Sensitivity (US$M)


Foran Fully Financed After-Tax Corporate NAV10% CAPEX-OPEX Sensitivity (C$ per F/D share)



US$0.62 C$200 C$250 C$300 C$350 C$400 C$450 C$500 C$550 C$600

US$1.00 US$0.68 US$0.62 US$0.57 US$0.52 US$0.49 US$0.46 US$0.43 US$0.41 US$0.38

McIlvenna US$1.05 US$0.71 US$0.64 US$0.58 US$0.54 US$0.50 US$0.47 US$0.44 US$0.41 US$0.39

Bay US$1.10 US$0.73 US$0.66 US$0.60 US$0.55 US$0.51 US$0.48 US$0.45 US$0.42 US$0.40

Total Copper US$1.15 US$0.75 US$0.68 US$0.62 US$0.57 US$0.53 US$0.49 US$0.46 US$0.43 US$0.40

Cash Cost US$1.20 US$0.78 US$0.70 US$0.64 US$0.58 US$0.54 US$0.50 US$0.47 US$0.44 US$0.40

Net of Credits US$1.25 US$0.80 US$0.72 US$0.65 US$0.60 US$0.55 US$0.51 US$0.47 US$0.44 US$0.40

(US$/lb) US$1.30 US$0.82 US$0.73 US$0.67 US$0.61 US$0.56 US$0.52 US$0.47 US$0.44 US$0.40



Fully financed formal Haywood valuation and sensitivity assumes a 60:40 debt:equity financing (priced at $0.40 per share). Fully financed formal Haywood valuation and sensitivity assumes a 60:40 debt:equity financing (priced at $0.40 per share).

Sensitivity is based on a 10% discount rate applied to McIlvenna Bay's project NAV. Sensitivity is based on a 10% discount rate applied to McIlvenna Bay's project NAV.

Formal Haywood valuation is based on a life-of-mine average total copper cash cost of US$1.15/lb net of credits (payable; including royalties) at McIlvenna Bay. Formal Haywood valuation is based on a life-of-mine average total copper cash cost of US$1.15/lb net of credits (payable; including royalties) at McIlvenna Bay.

Haywood model is based on a long-term forecast copper price of US$3.25/lb. Haywood model is based on a long-term forecast copper price of US$3.25/lb.

Haywood model is based on a long-term forecast zinc price of US$1.15/lb. Haywood model is based on a long-term forecast zinc price of US$1.15/lb.




US$193 C$200 C$250 C$300 C$350 C$400 C$450 C$500 C$550 C$600


McIlvenna US$1.05 US$191 US$186 US$180 US$174 US$167 US$160 US$152 US$143 US$134

Bay US$1.10 US$198 US$193 US$187 US$180 US$173 US$166 US$157 US$148 US$139

Total Copper US$1.15 US$205 US$199 US$193 US$187 US$179 US$171 US$162 US$153 US$143

Cash Cost US$1.20 US$212 US$206 US$200 US$193 US$185 US$176 US$166 US$157 US$143

Net of Credits US$1.25 US$219 US$213 US$206 US$198 US$190 US$180 US$170 US$157 US$143

(US$/lb) US$1.30 US$225 US$219 US$212 US$203 US$194 US$184 US$171 US$157 US$143



Fully financed formal Haywood valuation and sensitivity assumes a 60:40 debt:equity financing (priced at $0.40 per share).

Sensitivity is based on a 10% discount rate applied to McIlvenna Bay's project NAV.

Formal Haywood valuation is based on a life-of-mine average total copper cash cost of US$1.15/lb net of credits (payable; including royalties) at McIlvenna Bay.






US$0.50 C$200 C$250 C$300 C$350 C$400 C$450 C$500 C$550 C$600


McIlvenna US$1.05 US$0.63 US$0.54 US$0.46 US$0.40 US$0.35 US$0.31 US$0.27 US$0.24 US$0.21

Bay US$1.10 US$0.66 US$0.56 US$0.48 US$0.42 US$0.37 US$0.32 US$0.28 US$0.25 US$0.22

Total Copper US$1.15 US$0.68 US$0.58 US$0.50 US$0.43 US$0.38 US$0.33 US$0.29 US$0.25 US$0.22

Cash Cost US$1.20 US$0.70 US$0.60 US$0.52 US$0.45 US$0.39 US$0.34 US$0.30 US$0.26 US$0.22

Net of Credits US$1.25 US$0.72 US$0.62 US$0.53 US$0.46 US$0.40 US$0.35 US$0.30 US$0.26 US$0.22

(US$/lb) US$1.30 US$0.75 US$0.63 US$0.55 US$0.47 US$0.41 US$0.36 US$0.31 US$0.26 US$0.22



Fully financed formal Haywood valuation and sensitivity assumes a 60:40 debt:equity financing (priced at $0.40 per share).

Sensitivity is based on a 10% discount rate applied to McIlvenna Bay's project NAV.

Formal Haywood valuation is based on a life-of-mine average total copper cash cost of US$1.15/lb net of credits (payable; including royalties) at McIlvenna Bay.







Project Financing Considerations

Foran will have to seek additional equity and/or debt to finance McIlvenna Bay’s initial capital cost ($249 million November 2013 PEA estimate; $300 million in our formal valuation). Consequently, there will be an unspecified amount of shareholder dilution and possible hedging requirements. Although our valuation accounts for potential dilution, it is pro forma in nature. Our model assumes McIlvenna Bay will be financed through a 60:40 debt:equity structure in 2016, and as a result, includes additional dilution of Foran’s share capital (300 million additional shares priced at $0.40; 213% pro forma dilution) to bring McIlvenna Bay into production. We note that a change of $0.15 per share in assumed equity financing price impacts Foran’s fully financed after-tax corporate NAV10% (and related implied target price) in our model by about $0.10 (~20%). Our model also includes a US$15 million interim financing in Q3/15 (50 million shares priced at $0.35 per share; 55% dilution) to advance McIlvenna Bay towards construction-ready status (i.e., feasibility and formal environmental permitting initiatives). We note that Foran’s December 31, 2014, balance sheet included $4.1 million in cash (prior to spending ~$1.6 million on a 2015 winter drill program; see above). Hence, the Company is funded to meet near-term working-capital requirements.

Equity Financing Assumptions (Haywood model)


Impact of Interim Equity Financing Dilution on Valuation (before project financing at $0.40)


Impact of McIlvenna Bay Equity Financing Dilution on Valuation (after interim financing at $0.35)


Amount Price Shares

(US$M) ($/share) (millions)

Current O/S Share Capital 91

Current F/D Share Capital 104

Modelled Interim Equity Financing 2015 Q3 $15 C$0.35 50

Modelled McIlvenna Bay Equity Financing 2016 Q1 $103 C$0.40 300

Modelled Fully Financed F/D Share Capital 454

QuarterYear

Issue Shares Fully Financed Fully Financed After-Tax Implied Target

Price Issued F/D Shares Corporate NAV10% per F/D Share Price per Share

(C$) (million) (million) (C$) (C$)

$0.50 35 439 $0.52 $0.50

$0.35 50 454 $0.50 $0.50

$0.20 88 492 $0.46 $0.45

Haywood model assumes a 60:40 debt:equity structure to fund McIlvenna Bay's $300M capital cost (100% basis; equity component finaced at C$0.4 per share).

Implied target price per share is based on a 1.0x multiple to fully financed after-tax corporate NAV10%.


Issue Shares Fully Financed Fully Financed After-Tax Implied Target

Price Issued F/D Shares Corporate NAV10% per F/D Share Price per Share

(C$) (million) (million) (C$) (C$)

$0.70 171 325 $0.70 $0.70

$0.55 218 372 $0.61 $0.60

$0.40 300 454 $0.50 $0.50

$0.25 480 634 $0.36 $0.35

Haywood model assumes a US$15M interim financing priced at C$0.35 per share in 2015 to advance McIlvenna Bay to construction ready status.

Implied target price per share is based on a 1.0x multiple to fully financed after-tax corporate NAV10%.




Strategic partnership transactions have become a recurring theme/strategy across the small- to mid-tier base metals sector, in particular for smaller companies looking to develop large (i.e., capital-cost-intensive) assets. The strategic partner(s) are typically driven by an interest to secure production offtake, and in some cases, have also made direct equity investments in a company through a private placement. Furthermore, the strategic partners (typically Asian) have direct access to inexpensive debt, which reduces project financing risk. To cite specific examples, Copper Mountain (CUM-T) formally entered into a strategic partnership (including a 25% project interest) with Mitsubishi in 2009. Similarly, Capstone (CS-T) formally entered into a strategic partnership (including 30% project interest) with KORES in 2011. KGHM’s Sierra Gorda copper-molybdenum project in Chile is also underpinned by a strategic partnership with Sumitomo, and Antofagasta signed a Memorandum of Understanding with Marubeni in late 2011 for the sale of a 30% interest in the Antucoya copper oxide project in Chile. Given the early development stage of the McIlvenna Bay project, we have not included any provision for potential strategic partnership(s) in our formal Foran valuation. However, we note that Hudbay (HBM-T) has a strong history of mining in the Flin Flon region (see above) and continues to remain heavily invested in the area. Furthermore, Hudbay holds investments in ~14 other junior exploration companies located within the Flin Flon / Snow Lake belt, but does not own an equity position in Foran, nor does it have a joint venture in Foran’s McIlvenna Bay project. We believe strategic partnership potential (with Hudbay) is high.

For illustrative purposes, our fully financed after-tax corporate NAV10% (and implied target price) increases to ~$0.60 per share (+20%) if we were to assume Foran sells a 30% interest in the McIlvenna Bay project to a strategic partner(s) for approximately $46 million (30% of McIlvenna Bay’s $154 million pre-financed after-tax project NAV10% in our model; 2018 forward basis) and uses the proceeds to partially fund its share of project equity financing.

Additional Resource Credits Add $0.04 per Share to Our After-Tax Corporate NAV10%

Our fully financed after-tax corporate NAV10% of US$193 million, or $0.50 per fully diluted share, includes an in situ credit of ~US$0.03 per pound for Foran’s National Instrument 43-101 compliant copper equivalent resource inventories not included in our McIlvenna Bay modelled mine plan, in line with in situ market valuations received by the Company’s peer group of advanced-stage base metals developers and established mid-tier producers. We note Foran currently trades at ~US$0.018 per pound of in situ copper equivalent resource, and that mineralization at McIlvenna Bay remains open at depth. Our formal valuation also includes a (very) modest US$10 million credit for upside potential associated with the Company’s significant land holdings in the Flin Flon region (~43,000 hectares), including the Bigstone project, located ~25 kilometres west of McIlvenna Bay, which hosts a historical resource containing 1.45 million tonnes grading 2.80% copper in the copper-rich zone and 0.3 million tonnes grading 11.20% zinc in the zinc-rich zone (completed by Aur Resources in 2002).

Drilling in late 2011 intersected VMS-style mineralization in McIlvenna Bay’s hanging wall stratigraphy, ~10 metres above the deposit’s Lens 2 horizon. Lens 3, included in the deposit’s current National instrument 43-101 compliant resource estimate clearly demonstrates potential for stacked VMS horizons at the project. We note that the recognition of stacked horizons at Matagami, Quebec (home to Glencore-Xstrata’s Bracemac McLeod mine) has rejuvenated exploration potential in the historical mining camp (refer to Radar Screen, November 29, 2011). Furthermore, Foran is now testing deeper exploration targets at McIlvenna Bay and its adjacent Hanson and Balsam properties (i.e., potential for down plunge extensions and/or other stacked horizons; see Appendix below). The southern extent of the Flin Flon greenstone belt is poorly understood, masked by a thin veneer (~35 metres thick at McIlvenna Bay) of barren Paleozoic cover rock (see below). Hence, we believe the exploration potential associated with the blind southern extent of the Flin Flon greenstone belt is high given the prolific tenure of exposed greenstones to the north, which has been the focus of historical exploration efforts.



Financial Forecast – Strong Cash-Flow Potential

We anticipate the bulk of McIlvenna Bay’s development costs will be incurred during 2018 and 2019 as construction proceeds over an estimated 18- to 24-month period. We do not expect Foran to be in a position to report positive cash flow from the project until ~2020, following the start-up of commercial copper and zinc production in our model. Consequently, we have based our formal valuation on the Company’s fully financed after-tax corporate NAV10%. Nevertheless, at Haywood’s metal price forecast, which includes long-term (+2018) copper and zinc prices of US$3.25 per pound and US$1.15 per pound respectively, we anticipate that McIlvenna Bay will generate approximately US$0.15 in annualized average cash flow per share (CFPS) once the mine reaches steady-state full-scale production (5,000 tonnes per day of mill throughput). We note that comparable established base metals producers in Haywood’s coverage universe currently trade at ~5.0x 2015E CFPS, a multiple that suggests Foran will command a premium valuation to its NAV as production start-up approaches. The Company’s financial profile is leveraged to both the copper and zinc prices: a change of US$0.25 per pound (8%) in the forecast copper price impacts our 2022E CFPS by about US$0.02 (14%), and a change of US$0.10 per pound (9%) in the forecast zinc price impacts our 2022E CFPS by about US$0.02 (14%).

Foran Financial Forecast


2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Forecast Copper Price, US$/lb $2.50 $2.75 $3.00 $3.25 $3.25 $3.25 $3.25 $3.25 $3.25 $3.25 $3.25

Forecast Zinc Price, US$/lb $1.10 $1.20 $1.20 $1.15 $1.15 $1.15 $1.15 $1.15 $1.15 $1.15 $1.15

Forecast Gold Price, US$/oz $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250

Forecast Silver Price, US$/oz $18.00 $18.00 $18.00 $18.00 $18.00 $18.00 $18.00 $18.00 $18.00 $18.00 $18.00

C$/US$ FX Rate 1.17 1.17 1.12 1.08 1.08 1.08 1.08 1.08 1.08 1.08 1.08

Average Shares O/S, millions 102 396 433 433 433 433 433 433 433 433 433

Copper Sales, Mlb - - - - - 15 25 40 45 43 41

Zinc Sales, Mlb - - - - - 32 63 60 57 57 46

Gold Sales, koz - - - - - 6.3 12.0 20.8 21.7 18.0 14.3

Silver Sales, Moz - - - - - 0.2 0.4 0.4 0.4 0.5 0.4

Total Copper Cash Cost (NoC; IR), US$/lb - - - - - $1.50 $0.80 $1.10 $1.10 $1.25 $1.60

Total Zinc Cash Cost (NoC; IR), US$/lb - - - - - $0.35 $0.20 ($0.30) ($0.55) ($0.40) ($0.40)

Gross Sales Revenue, US$M - - - - - $99 $176 $234 $245 $235 $212

Net Revenue, US$M - - - - - $77 $140 $191 $201 $192 $174

Cost of Sales, US$M - - - - - ($59) ($74) ($102) ($104) ($103) ($104)

Corporate G&A, US$M ($2) ($2) ($2) ($2) ($2) ($2) ($2) ($2) ($2) ($2) ($2)

EBITDA, US$M ($2) ($2) ($2) ($2) ($2) $15 $63 $85 $93 $86 $67

EV / EBITDA - - - - - 1.9x 0.5x 0.3x 0.3x 0.3x 0.4x

DD&A, US$M - - - - - ($13) ($20) ($26) ($26) ($26) ($26)

Gain on Derivative Instruments, US$M - - - - - - - - - - -

Earnings, US$M ($2) ($2) ($2) ($2) ($2) ($13) $20 $35 $44 $41 $29

EPS, US$ ($0.02) ($0.01) ($0.00) ($0.00) ($0.00) ($0.03) $0.05 $0.08 $0.10 $0.10 $0.07

Current Price / EPS - - - - - - - 4.8x 3.8x 4.0x 5.8x

Target Price / EPS - - - - - - - 5.7x 4.6x 4.8x 6.9x

Cash Flow Before W/C Changes, US$M ($2) ($2) ($2) ($2) ($2) $9 $48 $63 $73 $68 $56

CFPS, US$ ($0.02) ($0.01) ($0.00) ($0.00) ($0.00) $0.02 $0.11 $0.14 $0.17 $0.16 $0.13

Current Price / CFPS - - - - - - 3.4x 2.6x 2.3x 2.4x 3.0x

Target Price / CFPS - - - - - - 4.1x 3.2x 2.7x 2.9x 3.6x

Capex, US$M ($5) ($10) - ($128) ($128) - ($10) ($10) ($10) ($10) ($10)

Proceeds from Equity Financing, US$M $15 $103 - - - - - - - - -

Proceeds from Debt Financing, US$M - $154 - - - - - - - - -

Debt Repayment, US$M - - - - - ($31) ($31) ($31) ($31) ($31) ($0)

Free Cash Flow, US$M $8 $244 ($3) ($130) ($130) ($22) $8 $22 $32 $28 $46

FCPS, US$ $0.08 $0.62 ($0.01) ($0.30) ($0.30) ($0.05) $0.02 $0.05 $0.07 $0.06 $0.11

NoC = net of credits; IR = including royalties.NoC = net of credits; IR = including royalties.NoC = net of credits; IR = including royalties.NoC = net of credits; IR = including royalties.



Corresponding McIlvenna Bay Production Profile


Foran’s 2021E CFPS and Implied CFPS-Based Target-Price Sensitivity


RLOM 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025

Ore Tonnes Mined, millions 23.7 - - - - 0.9 1.4 1.8 1.8 1.8 1.8

Waste Tonnes Mined, millions 1.0 - - - 1.0 - - - - - -

Ore Tonnes Milled, millions 23.7 - - - - 0.9 1.4 1.8 1.8 1.8 1.8

Ore Tonnes Milled, tonnes per day 5,000 - - - - 2,500 3,750 5,000 5,000 5,000 5,000

Copper Head Grade, % 1.2% - - - - 1.0% 1.0% 1.2% 1.3% 1.2% 1.2%

Zinc Head Grade, % 2.4% - - - - 2.7% 3.3% 2.2% 2.1% 2.1% 1.7%

Gold Head Grade, g/t 0.4 - - - - 0.3 0.4 0.5 0.5 0.4 0.3

Silver Head Grade, g/t 15 - - - - 14 18 15 15 17 12

Copper Recovery (to copper concentrate), % 91% - - - - 91% 91% 91% 91% 91% 91%

Zinc Recovery (to zinc concentrate), % 81% - - - - 81% 81% 81% 81% 81% 81%

Gold Recovery (to copper concentrate), % 78% - - - - 78% 78% 78% 78% 78% 78%

Silver Recovery (to copper concentrate), % 69% - - - - 69% 69% 69% 69% 69% 69%

Copper Production (in copper concentrate), Mlb 556 - - - - 18 28 44 47 45 44

Zinc Production (in zinc concentrate), Mlb 996 - - - - 44 80 72 69 68 54

Gold Production (in concentrate), koz 250 - - - - 8 14 24 24 20 16

Silver Production (in concentrate), Moz 7.8 - - - - 0.3 0.6 0.6 0.6 0.7 0.5

Payable Copper Production, Mlb 527 - - - - 17 26 42 45 42 41

Payable Zinc Production, Mlb 824 - - - - 36 66 60 57 57 45

Payable Gold Production, koz 224 - - - - 7 13 22 22 18 14

Payable Silver Production, Moz 5.6 - - - - 0.2 0.4 0.4 0.4 0.5 0.4

On-site Operating Cost, US$/tonne milled $60 - - - - $60 $60 $60 $60 $60 $60

Adittional Tolling Charges (Glencore), US$/tonne milled - - - - - - - - - - -

Total On-site Operating Cost, US$/tonne milled $60 - - - - $60 $60 $60 $60 $60 $60

Copper Cash Cost (on-site; NoC; ER), US$/lb $0.05 - - - - $0.20 ($0.65) $0.05 $0.10 $0.20 $0.65

Zinc Cash Cost (on-site; NoC; ER), US$/lb ($0.95) - - - - ($0.30) ($0.40) ($1.05) ($1.35) ($1.20) ($1.25)

Total Copper Cash Cost (NoC; IR), US$/lb $1.15 - - - - $1.50 $0.80 $1.10 $1.10 $1.25 $1.60

Total Zinc Cash Cost (NoC; IR), US$/lb ($0.20) - - - - $0.35 $0.20 ($0.30) ($0.55) ($0.40) ($0.40)

NoC = net of credits; ER = excluding royalties; IR = including royalties.

Haywood Model Current Spot

2021E Forecast Copper Price, US$/lb $3.25 $2.00 $3.00 $4.00 $5.00 $2.76

2021E Forecast Zinc Price, US$/lb $1.15 $0.50 $1.00 $1.50 $2.00 $1.01

2021E Forecast Gold Price, US$/oz $1,250 $1,000 $1,250 $1,500 $1,750 $1,205

2021E Forecast Silver Price, US$/oz $18.00 $10.00 $20.00 $30.00 $40.00 $16.31

2021E Forecast C$/US$ FX Rate 1.08 1.30 1.20 1.10 1.00 1.22

2021E CFPS, US$ $0.11 ($0.04) $0.10 $0.18 $0.27 $0.08

Implied Target Price at 3.0x 2021E CFPS, C$ per share $0.40 - $0.40 $0.60 $0.85 $0.30




2018E Average Shares O/S: 433M

Sensitivity



Capital Structure

Foran Capital Structure

Source: Foran Mining, Capital IQ, Bloomberg, and Haywood Securities

Strike Value Expiry

(C$) (US$) Date

Total Shares O/S 90,773,922

Warrants 3,037,500 $0.30 $778,846 August 11, 2015

1,000,000 $0.70 $598,291 December 22, 2015

1,000,000 $0.24 $205,128 October 14, 2016

Total Warrants 5,037,500 $0.37 $1,582,265

Options 200,000 $0.40 $68,376 September 23, 2015

1,600,000 $1.25 $1,709,402 February 2, 2016

400,000 $1.25 $427,350 February 27, 2016

500,000 $0.90 $384,615 April 13, 2016

900,000 $0.80 $615,385 January 24, 2017

200,000 $0.67 $114,530 April 19, 2017

1,150,000 $0.59 $579,915 January 24, 2018

2,000,000 $0.20 $341,880 January 24, 2019

100,000 $0.17 $14,530 May 28, 2019

975,000 $0.20 $166,667 January 20, 2020

Total Options 8,025,000 $0.64 $4,422,650

Total Warrants + Options 13,062,500 $0.54 $6,004,915

Total Shares F/D 103,836,422

Number (O/S) Number (F/D)

(millions) (millions)

Pierre Lassonde 10.0 11.1% 10.0 9.7%

New City 3.3 3.6% 3.3 3.2%

CIBC 1.8 1.9% 1.8 1.7%

US Global 1.0 1.1% 1.0 1.0%

MMA Investment 0.5 0.5% 0.5 0.5%

Management and Directors 14.9 16.4% 15.8 15.3%

Total Major Shareholders 31.5 34.7% 32.4 31.2%

Recent Equity Financings

December 22, 2014 - C$1.6M non-brokered private placement (6.4M FT sh @ C$0.25 per sh)

February 11, 2014 - C$1.2M non-brokered private placement (6.0M units @ C$0.20; 1 FT sh + 1/2 wt @ C$0.30 per sh)

August 30, 2012 - C$5.0M brokered private placement (2.6M FT sh @ C$0.65 + 5.7M units @ C$0.58; 1 sh + 1/2 wt @ C$0.80 per sh)

March 11, 2011 - C$7.5M non-brokered private placement (6.0M FT sh @ C$1.25 per sh)

March 7, 2011 - C$6.3M brokered private placement (6.0M common shares @ C$1.05 per share)

December 2, 2010 - C$1.2M non-brokered private placement (2.0M units @ C$0.58; 1 sh + 1/2 wt @ C$0.70 per sh)

Share Price: $0.40


% (F/D)% (O/S)

Number

Major Shareholders



APPENDIX I – Geology

Regional Framework

McIlvenna Bay is located on the western edge of the Early Proterozoic Flin Flon greenstone belt (FFGB) which extends from north-central Manitoba into northeastern Saskatchewan. The FFGB forms part of the Reindeer Zone, a subdivision of the Trans-Hudson Orogen, a continental-scale tectonic event that occurred approximately 1.8 billion years ago. The FFGB is composed of structurally juxtaposed ~1.9 billion-year-old volcanic and sedimentary assemblages that were emplaced in a variety of tectonic environments.

The FFGB is host to two major volcanogenic massive sulphide (VMS) camps (Flin Flon and Snow Lake), which have supported mining activities for more than 75 years. Total production in the Flin Flon camp is estimated at 7.5 million tonnes of copper and zinc from 16 deposits, including the past-producing Flin Flon mine, and the currently operating 777 and Trout Lake mines run by Hudbay. The world-class Flin Flon deposit contained 62 million tonnes of ore grading 2.2% copper, 4.1% zinc, 2.6 grams per tonne gold, and 42 grams per tonne silver. At Snow Lake, approximately 120 kilometres east of Flin Flon, almost 2 million tonnes of copper and zinc have been produced from 10 deposits, including the Chisel North mine. The camp also hosts the recently discovered Lalor VMS deposit, which Hudbay is currently developing into a ~5,400-tonne-per-day underground mine centred on a 14 million-tonne reserve grading 0.6% copper, 6.7% zinc, 1.9 grams per tonne gold, and 24 grams per tonne silver. In the western part of the FFGB, the past-producing, high-grade Hanson Lake mine is located approximately 6 kilometres northwest of the McIlvenna Bay deposit. The Hanson Lake mine, which was in production from 1967 to 1969, yielded 162,000 tonnes of ore grading 0.51% copper, 9.99% zinc, 5.83% lead, and 4.0 ounces per tonne silver from an initial historical reserve of 230,000 tonnes grading 0.6% copper, 11.4% zinc, 8.1% lead, 1.0 gram per tonne gold, and 160 grams per tonne silver.

Deposit Geology

McIlvenna Bay is a blind (located under ~35 metres of barren Phanerozoic (Paleozoic) cover rock; see below) copper-zinc-gold-silver VMS deposit that was discovered in 1988 through follow-up drilling of a Barringer/Questor Mark VI helicopter INPUT survey, which delineated a 1.2-kilometre-long anomaly striking east-southeast 1 kilometre south of McIlvenna Bay. The deposit consists of structurally modified, strataform, polymetallic VMS mineralization underlain by an associated stockwork zone. McIlvenna Bay is hosted within the Hanson Lake Block of the FFGB, which is bound to the east by the Sturgeon-Weir Shear Zone and to the west by the Tabbernor Fault Zone. The block extends an unknown distance to the south beneath a nearly flat-lying (thin) cover of Paleozoic (Ordovician) sandstones of the Winnipeg Formation, and dolomites of the Red River Formation.

In the Hanson Lake area, north of the Paleozoic margin, the exposed Proterozoic rocks of the Hanson Lake Block are dominated by juvenile island arc, felsic to intermediate metavolcanic rocks, subordinate amounts of mafic volcanics, minor intermediate volcanics, and greywackes. The sequence has been intruded by various felsic intrusions. Abundant diorite and gabbro plugs and dikes cut the sequence. At least two distinct folding events have influenced the stratigraphy in the Hanson Lake area. Peak regional metamorphism reached upper amphibolite facies (retrograde to greenschist facies at the McIlvenna Bay deposit). The supracrustal rocks generally dip moderately to steeply east to northeast. South of Hanson Lake, the Proterozoic sequence is poorly understood given the overlying (unconformable) Paleozoic cover rock noted above. The McIlvenna Bay deposit projects to the subsurface under this thin sedimentary cover. We believe the exploration potential associated with the blind southern extent of the FFGB is high given the prolific tenure of exposed greenstones to the north, which has been the focus of historical exploration efforts.

http://www.foranmining.com/s/VMSDeposits.asp



Property Geophysics — Blind Greenstone Potential Beneath Thin Phanerozoic (Paleozoic) Cover


Mineralization

McIlvenna Bay’s sulphide mineralogy is dominated by pyrite (iron sulphide), chalcopyrite (copper sulphide), and sphalerite (zinc sulphide). The deposit comprises five different zones and includes three distinct styles of mineralization—massive sulphides, semi-massive sulphides, and copper stockwork. Each style is mineralogically and texturally distinct, which will likely require batch metallurgical processing consideration (see above).

Lens 2 is the largest and most significant massive sulphide zone discovered to date. The 1.6- to +20-metre-thick (true; 6.5-metre average) zinc-rich lens has a plunge length of ~1,880 metres (plunging approximately 45o to the north; average dip of 68o; i.e., steep—likely amenable to cost-effective underground mining methods). The zone has been delineated from the top of the Proterozoic sequence, which starts at a vertical depth of ~35 metres below the surface, to a depth of 1,200 metres where it remains open. Lens 3 and Lens 4 are discontinuous semi-massive to massive sulphide zones located stratigraphically above and below Lens 2 respectively.

http://www.foranmining.com/i/misc/2013-04-08-FIG2.jpg



McIlvenna Bay Cross Section


Copper-gold-rich mineralization is associated with (1) the Upper West Zone, a semi-massive sulphide lens that parallels Lens 2 and remains open down plunge (1.6- to 13.3-metre true thickness; 4.8-metre average), and (2) the Copper Stockwork Zone, which underlies and is in contact with the Upper West Zone and the western half of Lens 2. Spatially, the Upper West Zone composes the updip portion of McIlvenna Bay’s main lens, and Lens 2 composes the downdip portion. The Copper Stockwork Zone is thickest underlying the Upper West Zone, where it is considered to be the proximal feeder zone for the hydrothermal system that deposited the main lens massive sulphides. Stockwork mineralization in this area is hosted in chlorite-altered rock. The true thickness of the Copper Stockwork Zone averages 9.7 metres, but locally increases up to 34.6 metres and remains open down plunge.



Size Matters

World-class VMS camps are typically centred on one or two giant deposits (+20 million tonnes) situated among a cluster of smaller deposits (< 5 million tonnes each). However, The Flin Flon greenstone belt is truly prolific. On a tonnage basis (total resource), McIlvenna Bay (25.2 million tonnes; open) is the third largest deposit discovered in the region to date, just behind Hudbay’s Lalor deposit and ahead of the Company’s Trout Lake and 777 mines (each +20 million tonnes). We note the region’s giant Flin Flon deposit (62.5 million tonnes) is now depleted. Most other known deposits (~28; current and historical) contain(ed) less than 5 million tonnes each.

Flin Flon is clearly a (the) staple of Hudbay’s project portfolio, in part evidenced by the Company’s commitment to build the ~$794 million Lalor mine and mill complex near Snow Lake. We believe Hudbay will eventually need to look beyond Lalor to support its major infrastructure in the region (including a zinc refinery). Hudbay is actively working to replace/grow its Flin Flon resource inventory, in part, through a number of joint-venture agreements with junior exploration companies. However, Foran’s McIlvenna Bay deposit arguably offers the most significant single source of additional resource potential / concentrate feed. Unlike most other notable advanced-stage VMS development projects in the region, McIlvenna Bay is not subject to a pre-emptive back-in right by Hudbay. The deposit is currently 100% owned by Foran, giving investors full exposure to successful project execution.

Flin Flon / Snow Lake VMS Deposit Size Comparison




APPENDIX II – VMS Primer

Volcanogenic massive sulphide (VMS) deposits are piles of iron, copper, zinc, and lead sulphides formed by the venting of hot metal-rich fluids onto (or immediately beneath) the sea floor. These fluids are generated when normal seawater is drawn down beneath the sea floor by hydrothermal convection associated with a nearby hot magmatic intrusion. During this process, these fluids can reach temperatures in excess of 350oC and dissolve metals from the surrounding rock. Metals may also be contributed from the intrusion. Eventually, the hot (buoyant) metal-rich fluids rise back towards the sea floor and vent as a black cloud of metal sulphide particles. The cloud is formed by the hot (+350oC) hydrothermal fluid from depth mixing with the cold (approximately 2oC) seawater at the sea floor, causing metal sulphides to precipitate from the hot fluid. The jets of spewing fluid build sulphide chimneys known as black smokers, which in turn develop into larger accumulations (mounds) of metal-rich sulphides over time—typically 5,000 to 100,000 years.

Zonation in a VMS deposit refers to the all-important distribution of ore-forming minerals within the sulphide body and is typically a function of fluid temperature (and chemistry). Copper is generally less soluble at lower temperatures relative to lead and zinc, and therefore tends to precipitate in the hotter core zones of a VMS deposit. In contrast, lead and zinc, generally more soluble at lower temperatures relative to copper, are deposited around the cooler periphery of a VMS deposit as the hot hydrothermal fluid mixes with progressively greater amounts of cold seawater.

The rocks beneath a VMS deposit are commonly altered by the hydrothermal fluids passing through them. This alteration pipe can be significantly larger than the VMS deposit itself and therefore a useful exploration tool. The alteration pipe is also a common depositional site for high-grade footwall copper (and gold) stringer sulphide mineralization directly beneath a massive sulphide mound.

Schematic Volcanogenic Massive Sulphide (VMS) Model (not to scale)


sea floor

copper-rich core

massive sulphide mound

lead- and zinc-rich periphery

seawater circulates down beneath theseafloor where it is heated, thusenabling it to leach and transportmetals

alteration ‘pipe’ (chlorite) created by theupwelling of hot fluids through theseafloor rock

a deep-seated intrusion acts as a heatsource to drive hydrothermal convectionand may supply some of the metalssubsequently deposited on the sea floor

hot metal-rich hydrothermal fluid risestowards the sea floor where it mixeswith cold seawater to precipitate basemetal-rich sulphides

black smoker venting metal-rich fluids



Modern-Day Active Black Smokers on the Sea Floor

Source: www.google.com

Tectonic activity over time can expose old sections of rock that originally formed on the sea floor, some of which may contain ancient VMS deposits. For example, about 2.6 billion to 2.7 billion years ago (half the Earth’s age), much of what is now Northern Ontario and Northern Quebec was a region of submarine volcanoes. One of the richest copper and zinc VMS accumulations created at that time, Kidd Creek near Timmins, contains approximately 143 million tonnes of massive sulphide ore averaging 2.5% copper and 6.0% zinc. The deposit was originally mined as an open pit beginning in 1965 and continues to produce ore from an underground operation that now extends to a depth of about 10,000 feet below surface. The deposit remains open at depth.

VMS deposits commonly occur in (volcanic) sediments or directly on top of felsic or mixed felsic and mafic (bimodal) volcanic rocks. Furthermore, the deposits typically occur in groups, which have led to the development of mining camps, as at the historic Matagami district in Quebec where ~20 deposits, ranging from 0.1 million to more than 25 million tonnes (including Xstrata/Donner’s Bracemac-McLeod mine) have been discovered since the late 1950s. We note that the size of Foran’s +43,000-hectare land package in east-central Saskatchewan compares favourably to the footprint of a number of world-class VMS camps. Multiple known VMS occurrences and deposits already clearly demonstrate the prolific greenstone tenure of the Company’s property. Hence, we would not be surprised to see the land package yield additional VMS discoveries over time. Other topical VMS deposits/districts include Nevsun’s (NSU-T) Bisha project in Eritrea, Lundin’s (LUN-T) Neves Corvo mine in Portugal, and Hudbay’s (HBM-T) 777 and Lalor mines / Flin Flon camp in Manitoba.

VMS Camp Size Comparison


http://www.google.com/



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Haywood Securities, or certain of its affiliated companies, may from time to time receive a portion of commissions or other fees derived from the trading or financings conducted by other affiliated companies in the covered security. Haywood analysts are salaried employees who may receive a performance bonus that may be derived, in part, from corporate finance income.

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Important Disclosures Of the companies included in the report the following Important Disclosures apply:



Ticker Company 1 2 3 4 5 6 7 8

TSX:CS Capstone Mining Corp. X

TSX:CUM Copper Mountain Mining Corp. X

TSX:COP Coro Mining Inc. X X X

TSX:FM First Quantum Minerals Ltd. X

TSXV:FOM Foran Mining Corp. X X

TSXV:HI Highland Copper Company Inc. X X

TSX:HBM Hudbay Minerals, Inc. X

TSX:LUN Lundin Mining Corporation X X X X

TSX:NSU Nevsun Resources Ltd. X

TSX:NCQ NovaCopper Inc. X

TSX:RNX Royal Nickel Corporation X X X

TSXV:SGC Sunridge Gold Corp. X

TSX:TLO Talon Metals Corp. X X

TSX:TV Trevali Resources Corp. X

TSX:ZAZ Zazu Metals Corp. X X

1 The Analyst(s) preparing this report (or a member of the Analysts’ households) have a financial interest in this company.

2 As of the end of the month immediately preceding this publication either Haywood Securities, Inc., one of its subsidiaries, its officers or directors beneficially owned 1% or more of this company.

3 Haywood Securities, Inc. has reviewed lead projects of this company and a portion of the expenses for this travel have been reimbursed by the issuer.

4 Haywood Securities Inc. or one of its subsidiaries has managed or co-managed or participated as selling group in a public offering of securities for this company in the past 12 months.

5 Haywood Securities, Inc. or one of its subsidiaries has received compensation for investment banking services from this company in the past 12 months.

6 Haywood Securities, Inc. or one of its subsidiaries has received compensation for investment banking services from this company in the past 24 months.

7 Haywood Securities, Inc. or one of its subsidiaries is restricted on this company at the time of publication.

8 Haywood Securities, Inc. or one of its subsidiaries expects to receive or intends to seek compensation for investment banking services from this company in the next 3 months.

Other material conflict of interest of the research analyst of which the research analyst or Haywood Securities Inc. knows or has reason to know at the time of publication or at the time of public appearance:

Haywood Securities Inc. pro group holdings exceed 10% of the issued and outstanding shares of Zazu Metals Corp. (ZAZ-T).

Rating Structure Each company within an analyst’s universe, or group of companies covered, is assigned: (i) a recommendation or rating, usually BUY, HOLD, or SELL; (ii) a 12 month target price, which represents an analyst’s current assessment of a company’s potential stock price over the next year; (iii) an overall risk rating which represents an analyst’s assessment of the company’s overall investment risk; and (iv) specific risk ratings or risk profile parameters which in their aggregate support an analyst’s overall risk rating. These ratings are more fully explained below. Before acting on our recommendation we caution you to confer with your Haywood investment advisor to determine the suitability of our recommendation for your specific investment objectives, risk tolerance and investment time horizon.

Recommendation Rating BUY – The analyst believes that the security will outperform other companies in their sector on a risk adjusted basis or for the reasons stated in the research report the analyst believes that the security is deserving of a (continued) BUY rating.

HOLD – The analyst believes that the security is expected to perform in line with other companies in their sector on a risk adjusted basis or for the reasons stated in the research report the analyst believes that the security is deserving of a (continued) HOLD rating.



SELL – Investors are advised to sell the security or hold alternative securities within the sector. Stocks in is expected to under-perform other companies on a risk adjusted basis or for the reasons stated in the research report the analyst believes that the security is deserving of a (continued) SELL rating.

TENDER – The analyst is recommending that investors tender to a specific offering for the company’s stock.

RESEARCH COMMENT – An analyst comment about an issuer event that does not include a rating or recommendation.

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Haywood’s focus is to search for undervalued companies which analysts believe may achieve attractive risk-adjusted returns. This research coverage on potentially undervalued companies may result in an outweighed percentage of companies rated as BUY. Management regularly reviews rating and targets in all sectors to ensure fairness and accuracy.

For further information on Haywood Securities’ research dissemination policies, please visit: http://www.haywood.com/research_dissemination.asp

Overall Risk Rating Very High Risk: Venture type companies or more established micro, small, mid or large cap companies whose risk profile parameters and/or lack of liquidity warrant such a designation. These companies are only appropriate for investors who have a very high tolerance for risk and volatility and who are capable of incurring temporary or permanent loss of a very significant portion of their investment capital.

High Risk: Typically micro or small cap companies which have an above average investment risk relative to more established or mid to large cap companies. These companies will generally not form part of the broad senior stock market indices and often will have less liquidity than more established mid and large cap companies. These companies are only appropriate for investors who have a high tolerance for risk and volatility and who are capable of incurring a temporary or permanent loss of a significant loss of their investment capital.

Medium-High Risk: Typically mid to large cap companies that have a medium to high investment risk. These companies will often form part of the broader senior stock market indices or sector specific indices. These companies are only appropriate for investors who have a medium to high tolerance for risk and volatility and who are prepared to accept general stock market risk including the risk of a temporary or permanent loss of some of their investment capital

Moderate Risk: Large to very large cap companies with established earnings who have a track record of lower volatility when compared against the broad senior stock market indices. These companies are only appropriate for investors who have a medium tolerance for risk and volatility and who are prepared to accept general stock market risk including the risk of a temporary or permanent loss of some of their investment capital.

Risk Profile Parameters – Mining and Minerals Sector Forecast Risk: High (7-10) – The Company’s primary project(s) is at an earlier stage of exploration and/or resource delineation whereby grades, tonnages, capital and operating costs, and other economic/operational parameters are not yet reliably established. Moderate (4-6) – The Company has taken steps to de-risk its primary producing, or soon to be producing project(s) and has established reasonably reliable operational and economic parameters. Low (1-3) – The Company has de-risked the majority of its primary project(s) through operational history and established production profile(s).

Financial Risk: High (7-10) – The Company’s near- and medium-term (capital) expenditure considerations, including the current year or next forecast year, are not fully funded through a combination of established debt facilities, cash on hand, and/or anticipated cash flow from existing operations—successful project execution depends, in part, on future (equity) financing(s). Existing and/or forecast levels of leverage are above average relative to the Company’s peer group. The risk of a significant capital cost overrun(s) is high given the early stage of project development. Moderate (4-6) – The Company’s near-term (capital) expenditure program, in the current year or next forecast year, is fully funded through a combination of established debt facilities, cash on hand, and/or anticipated cash flow from existing operations. Medium-term funding requirements will likely require additional financing consideration, but should be achievable assuming no significant uncontrollable events impede



access to capital. Existing and/or forecast levels of leverage are in-line with the Company’s peer group. The risk of a significant capital cost overrun(s) is moderate given the advanced stage of project development. Low (1-3) – the Company’s near- and medium-term (capital) expenditure program is fully funded through a combination of established debt facilities, cash on hand, and/or anticipated cash flow from existing operations. Existing and/or forecast levels of leverage are below average relative to the Company’s peer group.

Valuation Risk: High (7-10) – The current valuation is at a premium to peers. The valuation reflects considerable future exploration success and/or commodity appreciation. Where applicable, the current capitalization exceeds the ‘DCF’ evaluation by more than 50%. Moderate (4-6) – The current valuation is within historic ranges and generally consistent with peers. The valuation reflects reasonable exploration success and/or commodity appreciation. Where applicable, the current capitalization exceeds the DCF valuation by 15% to 50%. Low (1-3) – The current valuation is at the low end of historic ranges and at a discount to peer valuations. The valuation reflects limited new exploration success and no commodity appreciation. Where applicable, the current capitalization exceeds the DCF valuation by less than 15% or falls below the current market value.

Political Risk: High (7-10) –Obtaining permits is challenging. Properties are located in an area(s) with high geo-political uncertainty, limited access, and/or have significant new infrastructure requirements. Moderate (4-6) – Properties are located in an area(s) with moderate geo-political risk, reasonable or manageable access, and some established infrastructure. Low (1-3) – Properties are located in areas with a manageable geo-political risk profile and established access/infrastructure.

Distribution of Ratings (as of April 17, 2015)

Distribution of Ratings IB

Clients

% # (TTM)

Buy 50.4% 70 95.0%

Hold 9.4% 13 5.0%

Sell 1.4% 2 0.0%

Tender 0.0% 0 0.0%

UR (Buy) 0.0% 0 0.0%

UR (Hold) 0.0% 0 0.0%

UR (Sell) 0.0% 0 0.0%

dropped (TTM) 38.8% 54 0.0%

Price Chart, Rating and Target Price History (as of April 17, 2015)

B: Buy; H: Hold; S: Sell; T: Tender; UR: Under Review Source: Capital IQ and Haywood Securities

Foran Mining Corporation (FOM-V, $0.40)

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