Pierre Lassonde (former CEO of Newmont, and now CEO of Franco-Nevada) has become a big shareholder of Foran per a press release of June 21, 2010.

Newmont has, in the past (and is probably still doing it), shipped its gold (at least from its Nevada operations) to Switzerland by secret jet flights to be refined. Darren Morcombe (a new major financer of Foran) ran that refinery. He later sold out to Newmont.

An article from April of 2006 mentions Darren Morcombe owning a gold refinery in the first paragraph. But if you keep reading, about halfway down, it talks about Morcombe's refinery in southern Switzerland again, and how Newmont was shipping gold to them from Nevada.

Morcombe has been, and is involved, in other companies (e.g., Springtide Capital, an investment firm specializing in micro-cap stocks; Bondi Mining; etc.). A little biographical information on him can be found at this Reuters link for Bondi Mining.

It appears he has "deep pockets" and he and Lassonde have connections certainly back from the days when Newmont was shipping gold to Morcombe's refinery in Switzerland prior to 2006.

FOM had been steadily trading at 12 cents for months. On May 7th, it gained 100% to close at 24 cents on trading of 17 million shares. And the next day closed at 40 cents on trading of 680,000 shares. Then it traded mostly between 30 and 45 cents on much lower volume until June 24 when it closed at 48 cents (three days after the announcement of Lassonde's purchase) on volume of 50,000. At the end of last week it closed at 50 cents on Thursday on miniscule volume of 1,000 shares, and 57 cents on Friday on volume of 2,000 shares. This is all clearly shown on a multi-month trading chart for Foran.

I checked the news just prior to the big price jump on May 7th, and what I found was a May 5th press release announcing a company reorganization and a consolidation of shares (4 old shares for 1 new share) and a private placement financing. Then when I saw the terms under which a private placement was done with Springtide Capital (owned by Darren Morcombe), I realized what a deal he was getting. Springtide Capital received 4,166,667 "post-consolidation shares" at a cost of 12 cents a share. In other words, they received a 75% discount (to the current price), plus they received the same number of warrants to purchase shares at 12 cents as well. The result, per a May 5, 2010, press release, is:

"This private placement represents 12.1% of the issued and outstanding shares on a non-diluted basis, and 21.5% on the assumption that all of the warrants are exercised."

Besides Morcombe's company, Springtide Capital, owning 16.7% of Foran (reduced from the 21.5% announced on May 7th, due to subsequent issuance of additional shares), Darren Morcombe, is personally acquiring the same number of shares (representing 16.7% of Foran) on the same terms as his company (i.e., 12 cents per share for 4,166,667 shares, with the same number of warrants), as evidenced by the “early warning” press release of 7/7/2010.

Foran's June 2nd press release discusses the other major entities that were acquiring the "lion's share" of the remaining stock of Foran. At the end of that press release, it says:

"These shareholders plus the recently announced private placement to Darren Morcombe of Springtide Capital are the first steps in the reorganization of Foran which will provide the foundation to potentially develop the McIlvenna Bay deposit. "

If this is indeed the whole truth, then this company reorganization and financing is simply to mine the approximately 12 million tonnes of Zinc/Copper resource (averaging about 6.25% Zn, and 0.85% Cu, and 25 g/t silver). There is also good potential to expand this resource. This information I gathered from the 105 page Technical Report of 2006 on Foran's web site.

Zinc is currently trading for around 80 cents/lb.Copper is trading around $3.00/lb.And silver is trading around $18/oz.Using these figures and assuming a very optimistic 100% recovery of all metals from this deposit.The value would be (ignoring for the moment all the costs of building a mine, mining, transporting, milling, smelting, refining the ore) as follows.

Zinc:Each metric tonne (2,205 lbs) would contain about 138 lbs of zinc (at 6.25% zinc content).Thus, 12 million tonnes of this ore would contain 1.656 billion lbs of zinc.Thus, at 80 cents per lb, the ‘in situ’ value of these 12 million tonnes of zinc is $1.325 billion.

Copper:Each metric tonne would contain about 18.75 lbs of copper (at 0.85% Cu content).Thus, 12 million tonnes of this ore would contain 225 million lbs of copper.Thus, at $3.00 per lb, the ‘in situ’ value of copper in this deposit would be $675 million.

Silver:Each metric tonne would contain about 25 grams of silver.Thus, with 31.1 grams equal to one troy oz, you would have 9,646,302 ozs of silver, which, at $18/oz, would have an ‘in situ’ value of silver of $173,633,430.

Thus, the total ‘in situ’ value of this deposit at McIlvenna Bay Property in Saskatchewan is approximately $2.174 billion.A typical discount applied to ‘in situ’ mineral deposits (for terms of valuing a company thereby) is 90%.Using that discount, the present value of the company, based only on this one ‘in situ’ deposit is about $217 million.Now, if you divide the number of outstanding shares (actually using the fully diluted number – assuming the warrants will be cashed in – is a better figure) you can arrive at an approximate reasonable current value per share of stock.

The current outstanding shares are 46,256,072.However, almost as many warrants were recently issued as shares.So, to have a more conservative figure, let us double this number and assume this number will be all of the outstanding shares ‘fully diluted’ (i.e., after all the warrants are exercised within the next 2 years).That gives us about 92.5 million shares.Dividing the ‘in situ’ discounted value of the deposit, $217 million, by 92.5 million, we arrive at a price of about $2.35.This is an approximate value of each share of Foran stock based on the value of the McIlvenna Bay deposit alone.The stock traded at 57 cents last Friday (7/9/2010).I would say that presently, the stock is undervalued by the market.

I have previously speculated to others that the reason for the big new investments in Foran may have been because of a new significant discovery that has not yet been publicly disclosed, or possibly because Foran was in the process of acquiring a significantly rich ore-deposit that has not been disclosed. I'm no longer as confident this is what is happening (though it very well could be). Nevertheless, the fact that Lassonde and Morcombe and three other large institutional investors have acquired most of the company, indicates to me that they certainly believe they are going to profit from the deal.

Also, per a press release of 7/7/2010, consolidation of the shares were approved by shareholders at a meeting on 6/29/2010, by which shareholders would receive one new share for every 4 old shares previously held.As a result, the issued and outstanding shares (taking into consideration also the recent private placements) comes to 46,256,072 shares.Foran also now has a little over $4 million cash in their treasury to use for exploration.