Foundation Resources Inc. (FDN-TSXV)

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December 24, 2010 Issue

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With A Power Grid, A Railway And Highways All Within 5 To 10 Kilometers Of Their Coldstream Property In Ontario, Foundation Resources Inc. Has The Infrastructure In Place To Continue Exploration And Deliver Strong Drilling Results

Ike A. Osmani, M.Sc., P.Geo.
Position: President & Director

Mr. Osmani brings 27 years of Canadian and International mineral exploration experience in gold, platinum-group and base metals providing exploration consulting services for numerous resource companies as well with the Ontario Geological Survey. Most recently, he was the Chief Geologist of TNR Gold Corp. ("TNR"), a multi-commodity explorer in Canada and South America. Prior to joining TNR in 2007, Mr. Osmani was vice president - exploration and director of a Canadian junior company exploring for gold and base metals in India. His contribution while working with the Ontario Geological Survey included the discovery of numerous mineral occurrences of precious and base metals, which are documented in over 38 publications. His contribution to the mineral industry includes both exploration and development of mineral properties from grass-roots to advanced levels.

Company Profile:

Foundation is a mineral exploration company focused on exploration and development of gold properties in Canada and Mexico. Its Coldstream Property is located in the Western Superior geological province of the Canadian Shield, which is noted for hosting prolific gold deposits in Ontario, Canada. The San Rafael property is located approximately 150 km northwest of Durango in the Durango State, Mexico.

Resources
Gold Exploration
(FDN-TSXV)

Foundation Resources Inc.
Suite 620, 650 West Georgia Street
PO Box 11604
Vancouver BC Canada V6B 4N9
Phone: 604-681-0405
 

Interview conducted by: Lynn Fosse, Senior Editor, CEOCFOinterviews.com, Published – December 24, 2010

CEOCFO: Mr. Osmani, you have a long history in the industry; what particularly attracted you to Foundation Resources?

Mr. Osmani: I have been working in Ontario for the majority of my 27 year career. While I was working in the 1990s for the Ontario Geological Survey (OGS), the Coldstream Property of Foundation Resources Inc. (“Foundation”), which is located 115 km west of Thunder Bay in the Shebandowan Greenstone Belt (“SGB”), was already on my radar since. At that time, Noranda was conducting exploration on the project. I have visited the property many times during this time and afterwards, so I really knew the property inside and out, in terms of both geology and gold potential. I have been waiting for an opportunity to get my hands on this property for a long time. During the downturn one and a half years ago, opportunity came knocking from my friend, who is the president of Alto Ventures Ltd. (“Alto”) and I was delighted to present this excellent gold project to Foundation which was only a Canadian Pool Company (CPC) at the time. That is when all the negotiations started between the two companies. Foundation had signed an agreement with Alto to acquire up to 70% of the Property in 2009. Initially, I was involved with Foundation as a consultant and then in June 23, 2010 I became the president of the company.

CEOCFO: What do you like about the Coldstream Property?

Mr. Osmani: What I like about the Coldstream Property is its easy accessibility and its strategic location within the western SGB which hosts several past producing metal mines including, gold (Ardeen Mine), copper (North Coldstream Mine) and nickel (Shebandowan Mine). Alto, our joint venture partner on this property, had consolidated this large property package by acquiring claims from various previous operators over the past few years. The Property now extends approximately15 km from northeast to southwest, covering an area of 5,738 hectares. This huge property is host to one past producer (North Coldstream copper-gold mine), an advanced stage deposit with historical gold resource (East Coldstream Deposit), Span Lake deposit, and the Moss Lake Deposit with NI 43-101 compliant gold resources (1.1 million ounces gold inferred and 560, 000 ounces gold in indicated categories) located adjacent to the southern Coldstream claims.

The East Coldstream Deposit, which is the most advance of all deposits within the Coldstream property, is the focus of recent drilling by Foundation. The deposit is modeled as a bulk tonnage operation, which has tremendous potential of becoming an open-pit mine. It has also potential of becoming an underground operation one day but we have not tested the deposit greater than 280 metres vertical depth of the mineralizing system. From our recent drilling, gold grades appear to increase with depth so there is a possibility that they may reach to the levels when underground operation can possibly be economically justified. In summary, all I can say at this point is that the Coldstream Property hosts a large shear zone system which has the potential of hosting a huge gold system, and this is one of the main reasons why I have been attracted to this property since early1990s.

CEOCFO: What is happening on the ground today?
Mr. Osmani: Right now, we are putting together a compilation of all drill data that we have acquired from two phases of drilling (2010 winter and summer), totaling over 10,000 metres. What we have achieved by these two drilling campaigns is that we may have potentially increased the gold ounces from Noranda’s historical, non-NI 43-101compliant resources of 234,000 ounces gold. We don’t have NI 43-101 compliant figures as yet but we have recently engaged a qualified resource estimator to look into calculating preliminary compliant resources in a reasonable time-frame.  In the mean time, we are in the planning stages of conducting 6,000 metres of drilling program in winter 2011 on the property. This is what we are doing right now. We have already announced almost all drill hole results from our summer program and are very pleased to report that every hole we have drilled contained gold. We are very encouraged in achieving what we had aimed from 2010 drilling programs and look forward to establishing the compliant resource in 2011.

CEOCFO: Is the property accessible?

Mr. Osmani: Our Coldstream Property is located just south of Highway 11 and is 115 kilometer west of Thunder Bay, Ontario. Additionally, a major railway line and electrical power grid run parallel to the highway. Basically, all the major requirements of a mine is readily available: there is a power grid, a railway, and a major highway, all within 5 or 10 kilometers of our Coldstream Property. A secondary highway and several logging roads also criss-cross the property, so the infrastructure is incredible. Skilled and general labor, exploration/mining services and supplies are readily available from Thunder Bay.

CEOCFO: Do you also have property in Mexico?

Mr. Osmani: We do have a property in Mexico and like the potential of the project, but we are still working on finalizing some property administration before we commence work there. Things are moving a little slow in Mexico but we are almost there! The province of Durango, Mexico is well known for the wealth of gold in the famous Sierra Madre Mountains and we can’t wait to get started on it in 2011.

CEOCFO: What is the financial picture like for Foundation Resources?

Mr. Osmani: We set out to maximize shareholder value by drilling and discovering new gold potential, I think we have done that very well. By the end of the drill program this summer, we spent majority of our last financing and had about half million dollars cash remaining. The interest in the project is apparent, as we have just raised around $3.4 million through Fraser-Mackenzie of Toronto this month for our 2011 program. These funds will be enough to conduct 6,000 metres of drilling plus carry out some geophysical surveys this winter (2011) on the property. We intend to raise additional funds to carry out another 8,000-10,000 of drilling program in 2011 summer and fall seasons.

CEOCFO: Are you finding investor interest these days?

Mr. Osmani: Investor interest is certainly surging in Foundation considering we are a fairly new company, having just commenced a short year and a half ago. Since our original drill results from April 2010, we have been fortunate that a lot of interest has been shown in Foundation and its Coldstream property. We believe with the planned work next year should increase valuation further and award loyal investors royally. Our last placement was oversubscribed and we actually had to decline some of the investment, as we believe valuation will increase further from here.

CEOCFO: Do you do much investor outreach?

Mr. Osmani: The Foundation team actively networks and solicits existing and new investors year round. We have engaged a proven investor relations team and also leveraged the management team’s resourceful network of industry contacts spanning media, financial institutions, brokerage firms, and marketing.

CEOCFO: In closing, why should potential investors pick Foundation Resources out of the crowd?

Mr. Osmani: Here are some of the following reasons:

1) Building towards a multi-million gold ounces resource in an accessible and prolific gold belt in Ontario - just 115km from Thunder Bay. Accessible year round with excellent infrastructures.

2) Only 30 million shares outstanding and well structured for share appreciation

3) Over 10,000m of drilling so far with results such as 4.88g/t over 27m and 1.12g/t over 111.3m gold, advancing a historic resource by Noranda from 1990's to a NI 43-101 compliant resource

4) Well cashed with over $3.5 million for 2011 large exploration / drilling program

5) Proven management from geology and finance 

disclaimers

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What I like about the Coldstream Property is its easy accessibility and its strategic location within the western SGB which hosts several past producing metal mines including, gold (Ardeen Mine), copper (North Coldstream Mine) and nickel (Shebandowan Mine). Alto, our joint venture partner on this property, had consolidated this large property package by acquiring claims from various previous operators over the past few years. The Property now extends approximately15 km from northeast to southwest, covering an area of 5,738 hectares. This huge property is host to one past producer (North Coldstream copper-gold mine), an advanced stage deposit with historical gold resource (East Coldstream Deposit), Span Lake deposit, and the Moss Lake Deposit with NI 43-101 compliant gold resources (1.1 million ounces gold inferred and 560, 000 ounces gold in indicated categories) located adjacent to the southern Coldstream claims. The East Coldstream Deposit, which is the most advance of all deposits within the Coldstream property, is the focus of recent drilling by Foundation. The deposit is modeled as a bulk tonnage operation, which has tremendous potential of becoming an open-pit mine. - Ike Osmani, M.Sc., P.Geo.