Magna Mining Planning to be Sudbury’s Next Nickel Producer
Magna Mining is an emerging nickel mining company based in Sudbury and is the only junior company with advanced-stage assets in the world-renowned Sudbury Basin. Magna’s two flagship projects are the Shakespeare and Crean Hill mines. Shakespeare is a project with major permits in place to re-commence production, while Crean Hill was operated for over 80 years as a high-grade underground mine by Inco until the early 2000s. Magna Mining is currently planning to develop a new nickel production hub in Sudbury, with the objective to be in production within the next two years.
Mining Life & Exploration News had the chance to meet up with Jason Jessup, CEO and co-founder of Magna Mining while doing a presentation during the Canadian Mining Expo in Timmins this past June. Magna Mining’s growth strategy has been consistent since the start. They are looking to be a low-cost operator with low-cost development. They are looking to do this through what Jason called a hub-and-spoke production model in Sudbury, which is very similar to what Vale and Glencore are doing now in Sudbury, where you have a centralized mill and multiple sources of feed coming into that mill.
“Magna acquired the Shakespeare project in 2017. Shakespeare is believed to be the perfect fit to become that hub of our hub-and-spoke production model,” stated Jason. “Shakespeare is a past producer that utilized toll milling at the time. What really attracted Magna to the project was it had an approved closure plan and all the major permits for the construction of a 4,500-ton per day open pit mine-mill and tailing storage facility which was very strategic in our plans to create a hub-and-spoke production model.”
“So now the question is, how do we create those spokes? There are two ways to do it. One’s through exploration. We have a significant land package in Sudbury of over 180 square kilometres. Our exploration ground is both on trend with our Shakespeare project, as well as on the contact of the Sudbury Basin itself, which lends itself to both contact-style nickel deposits and footwall-style deposits.
And then the other way is to develop our spokes for the hub and spoke model is through acquisitions. We believe this is really the best opportunity for growth in Sudbury, acquiring non-core assets that the owners are not going to develop and advance to production. This could provide feed for a future mill at Shakespeare.”
In 2022, Magna acquired their second significant asset, the Crean Hill Mine. In looking at a map of the Sudbury Basin one couldn’t help but notice how significant the size of the Magna Mining land package is.
The Shakespeare project is just to the west of the Sudbury Basin and is about 50 road kilometres away from the Crean Hill Mine.
Sudbury has all the infrastructure in place, including two mills, one owned by Glencore, one owned by Vale, that do have some capacity for processing other ore (toll milling), as well as two smelters, which again is a huge advantage to Magna Mining. These are the only two operating nickel smelters in North America which speaks to how strategic Sudbury is as a nickel-producing region.
The hub and spoke production model as outlined will be to take the Shakespeare Mine, which has a closure plan and major permits in place for a 4,500 ton per day open pit mine and combine that with the Crean Hill Mine.
At the time of Jason’s presentation in June, Magna Mining was working on a Preliminary Economic Assessment (PEA) for the Crean Hill project to determine how much of the 31 million tonnes of indicated resource can be put into a mine plan.
Magna believes that by combining both the 20 million tonnes of indicated resource at Shakespeare and approximately 31 million tonnes at Crean Hill, the combined over 50 million tonnes of indicated resource can create a long-life mining operation. With Crean Hill having higher grades than Shakespeare, there’s potential to improve on the economics.
Jason stated, “The great thing about Crean Hill is because of the higher-grade material and deposit starting right at the surface, there’s that potential to start toll milling and creating cash flow quickly, and for very low initial capital expenditures.
And this is something we’re actively pursuing, and we think can be a great way to help fund some of the construction of Shakespeare.”
A feasibility study was completed in 2022, that estimated the capital cost to build the Shakespeare mine mill and co-disposal tailings facility came in at C$233 million which was a reasonable capital cost for a new 4,500 ton per day nickel mine and plant.
For 2023 Magna was looking at doing some drilling and testing some areas at Shakespeare they think are quite exciting as they could be potential feeder zones for this large intrusion. The plan is to take some big step-outs and drill some deep holes to make a new discovery at depth.
The Crean Hill Mine was an old Inco mine, that shut down in 2001 and produced over 20 million tons of ore under the operation of Inco. Magna came out with a resource in November of 2022 of about 16.8 million tonnes of open pit resource at about 1% nickel equivalent and 14.5 million tonnes of underground indicated resource at just over 2% nickel equivalent. “These were great grades again starting right at surface, including both contact and some footwall mineralization. We have two drills turning on site right now, we’ll continue drilling for the remainder of 2023,” stated Jessup.
Magna is excited about the 109 FW area exploration work that has been done to date. A release was done in June and they are seeing both low sulfide, high precious metal type mineralization over quite wide widths in the breccia corridor, but also within that they’ve identified a very high-grade trend where they are seeing up to 6% nickel plus copper within this intersections from 1 to 8 meters in length and precious metals running in some of these intersections over 1 ounce per tonne.
July of 2023 was a busy month for Magna Mining as they released additional assay results from the ongoing 2023 diamond drilling program. Drilling continues to intersect high-grade nickel mineralization in the 101 Footwall (“FW”) Zone and in a footwall zone between the 101 and 109 FW Zones, referred to as the 105 FW Zone, which intersected 6.0% Ni, 2.2 % Cu, 5.8 g/t Pt + Pd + Au over 2.2 metres.
Dave King, SVP Technical Services stated, “Diamond drilling is ongoing at Crean Hill, where two drill rigs remain active. The assays released today include results from our initial drilling within the 105 FW Zone, which is a high tenor nickel zone similar to the 101 FW Zone, and hosted within a footwall breccia structure trending southwest from the Main Contact Zone. Both the 101 FW and the 105 FW Zones have the potential to produce high grade nickel ore using selective mining methods. Although some of the assay intervals released today are narrow, this style of massive sulphide veins can pinch and swell over relatively short distances, and it is encouraging to see these zones extending beyond the current Mineral Resource models. Diamond drilling is ongoing in these areas, and we look forward to providing additional assay results as they are received.“
In July the Crean Hill preliminary economic assessment (PEA) was also completed. The study demonstrated a base case 15 year mine life and significant potential synergies with the Shakespeare Project. The PEA envisions a combination of open pit and underground mining, with the life of mine potential mineable resource being sold to a third-party existing mill in Sudbury.
Initial underground mining would be accessed from a new ramp developed from the surface, prior to rehabilitation of the existing shaft to access and hoist from the lower elevations. Resources are mined, crushed, and sampled on site, then trucked to the third-party mill for processing. An alternative milling scenario was studied comparing the economics of the Base Case with an Alternative Processing scenario through a future mill at the Company’s Shakespeare Project.
Magna Mining CEO Jason Jessup commented: “This Preliminary Economic Assessment demonstrates why we think the Crean Hill Nickel Project has the potential to be the next nickel producing mine in Canada. The results of the Base Case study show positive economics, a long mine life, modest upfront capital cost, and minimal permitting required before commencing advanced exploration development. The Crean Hill Project contains a large potentially mineable resource, and the current PEA schedule has not yet been fully optimized. The next technical study will look at further optimization of cut-off grade, stope design and scheduling to maximize revenues during the first years of mine life. It will incorporate not only the diamond drilling that Magna has completed on Crean Hill since the acquisition in 2022 but also the economics of a fully integrated mining complex with Magna’s Shakespeare Project. The results of the Alternative Processing scenario considered in the PEA demonstrate potential robust economics, which makes a compelling case to proceed with this work. This is consistent with Magna’s vision of developing a hub and spoke production model in the world class Sudbury nickel mining camp.“
Both the Base Case and Alternative Processing use metal prices of US$ 9.50/lb nickel, US$ 3.50/lb copper, US$ 22.00/lb cobalt, US$ 1000/oz platinum, US$ 1800/oz Palladium, US$ 1700/oz gold, and a 1.3 C$/US$ exchange rate. The Base Case generates a pre- tax NPV (8%) of $290.4 million and an Internal Rate of Return (“IRR”) of 23.9%, after-tax NPV (8%) is $230.4 million, with an IRR of 23.4%. The Alternative Processing generates a pre- tax NPV (8%) of $668.8 million and an IRR of 39.6%, after-tax NPV (8%) is $516.1 million, with an IRR of 38.4%.
Drilling results continue to pour in for Magna Mining’s Crean Hill Mine project.
In August the company released a portion of the assay results representing confirmation of a shallow zone of massive sulphides in the vicinity of one of the areas that the company is planning to include as part of the advanced exploration and test mining program in 2024. This defined a thick, high grade nickel core in the 101 FW Zone. Highlights from the new 101 FW Zone assay results included; MCR-23-041: 3.0% Ni, 0.7% Cu, 1.2 g/t Pt + Pd + Au over 31.6 metres and MCR-23-042: 4.2% Ni, 1.4% Cu, 1.0 g/t Pt + Pd + Au over 27.6 metres.
The assay results released in August are an example of wide, high-grade, massive sulphide nickel mineralization remaining at shallow depths within the Crean Hill deposit. This drilling, in conjunction with some of the historic INCO drilling, further defines the strike and dip of the core of the 101 Footwall (“101 FW”) Zone. These drilling results are not reflected in the current block model and Mineral Resource. The company is now using this information in the detailed design of their advanced exploration and test mining program that they plan to initiate in the first half of 2024. “The 101 FW Zone consists of semi-massive to locally massive sulphide veins, hosted within a footwall breccia system, extending southwest into the footwall of the Intermediate Contact Zone. Drilling to date in the 101 FW has defined a wide, high grade, massive sulphide core, transitioning to massive sulphide veins along strike and down-dip, within the footwall breccia structure.
The advanced exploration program planned to commence in 2024 will provide underground drilling platforms allowing detailed definition of this zone, which has potential to provide high-grade, potentially mineable resources early in mine life, which was not represented in the recent PEA. Magna has stated that they expect to have a definitive ore selling agreement, amended closure plan and required permits for the advanced exploration in the fourth quarter of 2023.
In September Magna Mining released additional assay results from the ongoing 2023 diamond drilling program. Drilling continues to intersect high-grade nickel mineralization in the 105 Footwall (“FW”) Zone including drillhole MCR-23-040 which intersected 4.2% Ni, 0.9 % Cu, 1.4 g/t Pt + Pd + Au over 7.0 metres.
The 105 FW Zone is similar to the 101 FW Zone, and consists of high nickel tenor, semi-massive to massive sulphide veins hosted within a breccia structure extending into the footwall from the Sudbury Igneous Complex (“SIC”). Additional diamond drilling within the 105 FW zone continues to intersect high-grade mineralization with increasing precious metals (Pt, Pd, Au) as this structure approaches the Main Zone. The company is encouraged to see high-grade PGE mineralization at the 1500 ft level, down-plunge of the defined 109 FW zone, where these two structures are interpreted to intersect, indicating this style of mineralization may continue to depth. The 105 FW diamond drilling to date has been focused on expanding the current Indicated Mineral Resource, with the objective of better understanding the geologic controls on mineralization and grade continuity. Two high-grade, precious metal-rich, intersections in drill hole MCR-23-040, grading 0.3% Ni, 0.8 % Cu, 38.6 g/t Pt + Pd + Au over 0.3 metres and 0.2% Ni, 0.5 % Cu, 35.2 g/t Pt + Pd + Au over 0.5 metres are related to the 109 FW zone. These two intersections are outside of the current 109 FW Mineral Resource and have the potential to add near surface resources which could be amenable to more selective mining methods.
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