Magna Mining Acquires Producing Copper Mine in Sudbury from KGHM International Ltd. Acquisition Includes a Portfolio of Critical Mineral Exploration and Development Assets in the Sudbury Basin Mining District
Magna Mining Acquires Producing Copper
Mine in Sudbury from KGHM International Ltd.
Acquisition Includes a Portfolio of Critical Mineral Exploration
and Development Assets in the Sudbury Basin Mining District
Sudbury, Ontario--(Newsfile Corp. - September 12, 2024) - Magna Mining Inc. (TSXV: NICU) (OTCQB:
MGMNF) (FSE: 8YD) ("Magna" or the "Company") is pleased to announce that it has entered into a
definitive share purchase agreement dated September 11
th
2024 (the "Agreement") with a subsidiary of
KGHM International Ltd. ("KGHM") to acquire a portfolio of base metals assets located in the Sudbury
Basin (the "Transaction"). Magna will acquire the producing McCreedy West copper mine ("McCreedy
West"), the past-producing Levack mine ("Levack"), Podolsky mine ("Podolsky") and Kirkwood mine
("Kirkwood") as well as the Falconbridge Footwall (81.41%), Northwest Foy (81.41%), North Range and
Rand exploration assets (together, the "Sale Assets").
Transaction Highlights
Purchase Price:
C$5.3 million in cash and $2.0 million of Magna common shares on the closing
of the Transaction and C$2.0 million in cash on December 31, 2026, plus future contingent
payments of up to C$24.0 million.
Funding:
Magna is negotiating a commitment letter for a C$10 million three-year Term Loan
facility and a C$10 million Letter of Credit facility with Fédération des caisses Desjardins du
Québec ("FCDQ"), a subsidiary of Desjardins Group.
Acquisition Properties
: (see Figure 1)
McCreedy West Mine:
Currently an operating mine which had 2023 production of 317,660
tonnes at grades of 1.59% copper, 0.23% nickel, 0.01% cobalt, 1.03 g/t platinum, 1.34 g/t
palladium, 0.41 g/t gold and 14.05 g/t silver.
Levack Mine:
On care and maintenance since 2019 with current activities underground to
maintain the ramp, shaft and pumping infrastructure. Shaft access extends to the 2650 Level
and ramp access to the 5400 Level. Near surface high grade nickel and copper zones to be
evaluated for mine restart.
Podolsky Mine
: On care and maintenance since 2013 with both ramp access from surface
and shaft access to the 2450 Level. Near surface mining potential in the copper rich North
Zone as well as potential to develop the Nickel Ramp deposit.
An extensive exploration property portfolio in the Sudbury Basin;
This includes the
past-producing Kirkwood Mine and the Falconbridge Footwall, Northwest Foy, North Range
and Rand exploration properties.
CEO Jason Jessup stated "Upon closing this acquisition, Magna will immediately become a copper and
nickel mining company with an extensive portfolio of development and exploration assets in the premier
critical mineral mining district in Canada. We are not only acquiring a producing mine. Along with the
mine properties there is a dedicated team of management, technical, administrative and safety
professionals, miners and maintenance personnel. The talented people and safety culture are a key
consideration in making this acquisition and we believe it will have many synergies with our Crean Hill
Project. We believe that there is significant mineral resource potential remaining and the Sale Assets
have exceptional exploration potential. The Sale Assets are non-core to their owners and due to this, we
believe, have not been allocated the capital needed to realize their full potential. We plan to re-invest
most of the profits that may be generated from McCreedy West back into additional capital development
and exploration focused on expanding resources, increasing production and making new discoveries.
This acquisition creates a clear pathway to realizing our stated goal of having three or more producing
mines within 3 to 5 years."
Commenting on the proposed financing structure for the Transaction, Mr. Paul Fowler, SVP of Magna
added "Magna intends to finance the purchase price using debt facilities that we are negotiating with
FCDQ. Successful execution of these facilities would mean that Magna is less dependent on raising
external equity capital to close the Transaction, which would be consistent with our stated objective of
growing our company in a highly capital efficient fashion. This acquisition accelerates Magna's timeline
to becoming a significant critical minerals producer alongside two major mining companies in the
Sudbury mining camp."
Figure 1: Location of Sale Assets, Magna Mining Existing Properties, and Key Sudbury
Infrastructure
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Property Descriptions
The property portfolio includes the operating McCreedy West Mine, three past producing mines (Levack,
Podolsky and Kirkwood), as well as four exploration properties (Falconbridge Footwall, Northwest Foy,
North Range and Rand) (Figure 1). Magna believes that the current and past producing properties have
significant mineral resource potential remaining, as well as high priority, near mine exploration potential.
McCreedy West Mine
McCreedy West and Levack are adjacent properties, located on the north range of the Sudbury Igneous
Complex ("SIC"), and host both contact nickel-copper mineralization, as well as high grade copper-PGE
footwall deposits. The McCreedy West Mine operates via ramp access from surface, and the Levack
Mine primary access is via the Main Shaft, however the two mines are connected underground on the
1600 Level haulage drift (Figure 2).
Figure 2: McCreedy West and Levack Mines Underground Infrastructure
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Figure 3: McCreedy West Mineralized Zones
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History
McCreedy West mine was initially developed and mined by Inco Ltd. between 1970-1998, and produced
approximately 15.8 million tons of ore, grading 1.7% Cu, 1.4 % Ni, and 1.5 g/t Pt+Pd+Au during this
period. In 2002 the property was acquired by FNX Mining Company Inc., and the mine was re-opened in
2003, and is currently operated by KGHM. From 2003-2023 the mine has produced more than 6.3
million tonnes from three areas at McCreedy West. Production during this period consists of the 3.0
million tonnes grading 0.3% Cu and 1.4% Ni from the contact nickel zones, and 3.3 million tonnes
grading 1.4 % Cu, 0.3% Ni and 4.2 g/t Pt+Pd+Au from the 700 Footwall Cu Zone and the PM Footwall
PGE-Cu Zone combined. McCreedy West total production in 2023 was 317,660 tonnes at grades of
1.59% copper, 0.23% nickel, 0.01% cobalt, 1.03 g/t platinum, 1.34 g/t palladium, 0.41 g/t gold and 14.05
g/t silver and is summarized in Table 1.
Table 1: McCreedy West 2023 Production
Zone
Tonnes
Ni
(%)
Cu
(%)
Co
(%)
Pt
(gpt)
Pd
(gpt)
Au
(gpt)
Ag
(gpt)
700
252,008
0.24
1.80
0.01
0.86
1.06
0.38
15.81
PM
65,652
0.19
0.79
0.01
1.71
2.40
0.55
7.30
Total
317,660
0.23
1.59
0.01
1.03
1.34
0.41
14.05
Current Mineral Resource Estimate
A mineral resource has been estimated for the McCreedy West Mine by SGS Geological Services and
is summarized in Table 2 and Table 3, and sensitivity to cut-off grade is illustrated in Table 4. Mineral
resources are stated for three areas at McCreedy West Mine, and include the Intermain Contact Ni
Zone, the 700 Footwall Cu Zone, and the PM Footwall PGE-Cu Zone (Figure 3).
Table 2: McCreedy West Underground Mineral Resource Estimate, December 31, 2023
Cut-off Grade
NiEq (%)
Tonnes
Ni %
Cu %
Co %
Pt g/t
Pd g/t
Au g/t
Ag g/t
NiEq %
Indicated
1.10
9,345,000
0.89
1.30
0.024
0.96
1.10
0.45
5.28
2.02
Inferred
1.10
123,000
1.60
0.75
0.047
0.21
0.23
0.05
0.55
2.12
The underground base case cut-off grade of 1.10% NiEq considers metal prices of $8.50/lb Ni, $3.75/lb Cu, $17.00/lb Co, $950/oz Pt, $1100/oz
Pd and $1,950/oz Au, metal recoveries of 78% for Ni, 95.5% for Cu, 56% for Co, 69.2% for Pt, 68% for Pd and 67.7% for Au (
Ag is not considered
),
a mining cost of US$80.00/t rock and processing, treatment and refining, transportation and G&A cost of US$42.50/t mineralized material. See
notes on McCreedy West Mine Mineral Resource Estimate at the end of this news release.
Table 3: McCreedy West Mineral Resource Estimate by Zone, December 31, 2023
700 Zone
Cut-off Grade
NiEq (%)
Tonnes
Ni %
Cu %
Co %
Pt g/t
Pd g/t
Au g/t
Ag g/t
NiEq %
Indicated
1.10
5,230,000
0.70
1.92
0.014
1.08
1.17
0.57
6.48
2.16
Inferred
1.10
63,000
1.63
1.23
0.040
0.40
0.43
0.10
0.82
2.43
PM Zone
Cut-off Grade
NiEq (%)
Tonnes
Ni %
Cu %
Co %
Pt g/t
Pd g/t
Au g/t
Ag g/t
NiEq %
Indicated
1.10
1,438,000
0.27
0.95
0.002
2.27
2.84
0.82
10.43
1.87
Intermain Zone
Cut-off Grade
NiEq (%)
Tonnes
Ni %
Cu %
Co %
Pt g/t
Pd g/t
Au g/t
Ag g/t
NiEq %
Indicated
1.10
2,677,000
1.59
0.27
0.055
0.01
0.02
0.00
0.15
1.83
Inferred
1.10
61,000
1.58
0.24
0.054
0.01
0.02
0.01
0.27
1.80
See notes on McCreedy West Mine Mineral Resource Estimate at the end of this news release.
Table 4: McCreedy West Mineral Resource Estimate, at Various NiEq Cut-off Grades,
December 31, 2023
Cut-off Grade
NiEq (%)
Tonnes
Ni %
Cu %
Co %
Pt g/t
Pd g/t
Au g/t
Ag g/t
NiEq %
Indicated
0.80
14,039,000
0.72
1.07
0.020
0.81
0.92
0.37
4.81
1.66
1.00
10,690,000
0.83
1.22
0.023
0.91
1.04
0.42
5.12
1.90
1.10
9,345,000
0.89
1.30
0.024
0.96
1.10
0.45
5.28
2.02
1.20
8,209,000
0.94
1.38
0.025
1.00
1.16
0.47
5.43
2.14
1.30
7,223,000
1.00
1.46
0.026
1.05
1.21
0.50
5.59
2.27
Inferred
0.80
192,000
1.28
0.56
0.041
0.18
0.20
0.05
0.59
1.69
1.00
137,000
1.52
0.70
0.045
0.20
0.22
0.05
0.54
2.01
1.10
123,000
1.60
0.75
0.047
0.21
0.23
0.05
0.55
2.12
1.20
109,000
1.70
0.80
0.049
0.22
0.23
0.05
0.55
2.25
1.30
96,000
1.80
0.85
0.051
0.23
0.22
0.05
0.51
2.38
1.
Underground mineral resources are reported at a base case cut-off grade of 1.10% NiEq. Values in this table reported above and below the
base case cut-off grades should not be misconstrued with a Mineral Resource Statement. The values are only presented to show the
sensitivity of the block model estimate to the base case cut-off grade.
2.
All values are rounded to reflect the relative accuracy of the estimate and numbers may not add due to rounding.
The technical report in support of the above noted mineral resource estimates will be filed by Magna
Mining within 45 days of this press release.
Exploration Potential
Significant exploration potential exists at McCreedy West mine, both for discovery of new footwall
deposits, and expansion of the known resources currently being mined. Figure 4 highlights some of the
recent 2023 and 2024 diamond drilling results within the remnants of the main deposit and 700 FW Zone
and provides support for the high grade potential of these areas. The footwall breccia between the
McCreedy West and Levack mines remains under explored and has the potential to host a new footwall
Cu-PGE deposit. Significant intersections in this area that warrant follow-up include
30.3 % Cu and 4.0
g/t Pt+Pd+Au
over 0.6 metres in drillhole FNX30678 (Figure 5). Drillhole FNX3255, intersecting 2.2%
Ni over 3.3 metres, demonstrates the potential to extend the Intermain contact Ni deposit down-dip with
continued infill diamond drilling (Figure 5).
Figure 4: McCreedy West Mine Vertical Section Looking Southeast Showing Recent Drilling
Highlights
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Figure 5: McCreedy West Mine Vertical Section Looking Northeast Showing Footwall and
Contact Exploration Potential
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Levack Mine
The Levack Mine is adjacent to and connected to the McCreedy West mine with underground
development (Figure 2 and Figure 6). The Levack Mine was originally developed by the Mond Nickel
Company and operated between 1915-1929 when the surface plants were destroyed by fire. The mine
was re-opened in 1937 by Inco Ltd. and historical records for the Levack Mine during the period
between 1937-1997, indicate the mine produced approximately 60.0 million tons of minerals, grading
1.3% Cu, 2.0 % Ni, and 1.5 g/t Pt+Pd+Au. FNX Mining Inc. commenced exploration activities at the
Levack property in April 2002 and continued until March 2006, when production was commenced.
Commercial production was achieved in January 2007 from the contact nickel zones, producing 411,000
tonnes grading 0.5% Cu and 1.3% Ni, before stopping nickel mining at the end of 2008 due to low metal
prices. The Morrison Footwall deposit was discovered in 2005 and produced 2.0 million tonnes grading
7.1% Cu 1.4% Ni and 8.1 g/t Pt+Pd+Au 2009 to 2018. As of 2022, Levack serves as a secondary
egress to the Craig Mine (owned by a third party), including the Onaping Depth Project, and McCreedy
West Mine and provides dewatering infrastructure from both McCreedy West and Levack.
Figure 6: Levack Mine Mineralized Zones and Underground Infrastructure
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Historical Resource Estimate
A mineral resource estimate (MRE) at Levack Mine has been completed internally by KGHM
International and is summarized in Table 5. The MRE for the Levack Mine is considered historical in
nature. Although the resource estimate has been prepared and disclosed in compliance with all current
disclosure requirements for mineral resources set out in the National Instrument
43-101 Standards of
Disclosure for Mineral Projects ("NI 43-101") and the classification of the historical resource as a
Measured, Indicated and Inferred resource is consistent with current 2014 CIM Definition Standards -
For Mineral Resources and Mineral Reserves, a qualified person has not done sufficient work to classify
the historical resource estimate as a current mineral resource and Magna is not treating the historical
resource estimate as a current mineral resource.
Table 5: Levack Mine Historical Resource Estimate, December 31, 2022
Property
Deposit Type
Tonnes
Ni
(%)
Cu
(%)
Co
(%)
Pt
(gpt)
Pd
(gpt)
Au
(gpt)
Ag
(gpt)
Measured and Indicated
Levack
Contact
4,112,000
2.12
1.14
0.07
Levack
Footwall
546,000
0.78
0.64
0.02
0.64
0.81
0.10
1.97
Morrison
Footwall
721,000
0.94
4.20
0.01
1.50
2.93
0.70
12.84
Total
5,379,000
1.82
1.50
0.05
0.27
0.47
0.10
1.92
Inferred
Levack
Contact
938,000
2.16
0.81
0.07
Levack
Footwall
767,000
0.69
1.62
0.01
1.22
1.67
0.37
5.10
Morrison
Footwall
122,000
0.96
2.53
0.01
1.43
1.90
0.84
13.88
Total
1,827,000
1.46
1.26
0.04
0.61
0.83
0.21
3.07
Exploration Potential
The footwall environment at Levack has high potential for discovery of Cu-PGE footwall deposits as
demonstrated by the discovery of the Morrison Footwall deposit in 2005. Additional areas of known
footwall mineralization include the Keel Zone and No. 3 Footwall Zone, which is the equivalent to known
mineralization found on the east side of the Fecunis fault which separates the No.3 and No.4 contact
deposits. Figure 7 illustrates some historical high-grade diamond drillhole intersections in these areas.
Additionally, the footwall breccia between the McCreedy West PM Zone and the Levack Morrison
Deposit remains relatively underexplored.