Magna Mining Completes Preliminary Economic Assessment ON the Crean Hill Project Study Demonstrates Base Case 15 Year MINE Life and Significant Potential Synergies with the Shakespeare Project
MAGNA MINING COMPLETES PRELIMINARY ECONOMIC ASSESSMENT ON THE
CREAN HILL PROJECT
STUDY DEMONSTRATES BASE CASE 15 YEAR MINE LIFE AND SIGNIFICANT POTENTIAL
SYNERGIES WITH THE SHAKESPEARE PROJECT
SUDBURY, ONTARIO, CANADA, JULY 31, 2023 – Magna Mining Inc. (TSX.V: NICU) (OTCQB: MGMNF) (FSE:
8YD) (“Magna” or the “Company”) is pleased to announce the successful completion of its Preliminary
Economic Assessment ("PEA") by Stantec on its 100% owned Crean Hill Nickel Project (the "Project")
located in Sudbury, Ontario, Canada.
The Base Case scenario (“Base Case”) for the PEA envisions a combination of open pit and underground
mining, with Life of Mine (“LOM”) 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 surface, prior
to rehabilitation of the existing shaft to access and hoist from the lower elevations. Resources are mined,
crushed, and sampled onsite, 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
(“Alternative Processing”) 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 sch edule 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 tha t 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 r obust 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. “
Financial Analysis
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 (Table 2).
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 $516.1 million, with an IRR of 38.4%.
See Table 1 for a summary of PEA results (all results are reported in Canadian Dollars unless otherwise
noted).
Table 1: PEA Summary
Table 2: Metal Prices and Exchange Rate
Base Case Alternative
Processing
Total Resource Mined (Tonnes) 20,102,605 28,197,495
UG Resource Mined (Tonnes) 16,274,220 21,791,858
OP Resource Mined (Tonnes) 3,828,385 6,405,636
OP Waste Mined (Tonnes) 29,349,432 37,406,582
Strip Ratio 7.7 5.8
Mine Life (Years) 15 19
Ni in Resource Sold (Million lbs) 276.6 351.2
Cu in Resource Sold (Million lbs) 243.5 309.0
Co in Resource Sold (Million lbs) 9.8 12.5
Pt in Resource Sold (Thousands oz) 367.5 464.8
Pd in Resource Sold (Thousands oz) 401.6 496.8
Au in Resource Sold (Thousands oz) 220.2 273.8
Average NSR (C$/Tonne) $179.07 $165.20
Operating Cost (C$/Tonne) $116.57 $88.33
Pre-Tax NPV (8%) (C$ Million) $290.4 $668.8
Pre-Tax IRR 23.9% 39.6%
Post Tax NPV (8%) (C$ million) $230.4 $516.1
Post Tax IRR 23.4% 38.4%
Advanced Exploration Capital (C$ million) $48.4 $47.9
Initial Project Capital (C$ million) $81.1 $81.3
Sustaining Capital (C$ million) $248.9 $256.7
$ US / lb or Oz
Nickel $9.50
Copper $3.50
Cobalt $22.00
Platinum $1,000.00
Palladium $1,800.00
Gold $1,700.00
Exchange C$/US$ 1.3
Capital and Operating Costs
The Study was prepared in accordance with National Instrument 43 -101 (NI 43 -101 of the Canadian
Securities Administrators). The Base Case capital and operating cost estimates for the Advance
Exploration, Project Development and Operation phases of the Project are summarized below in Tables
3-8. Capital cost s assume development of a ramp from surface to access initial mining areas and
dewatering and rehabilitation of the existing main shaft and selected infrastructure as mining progresses
to lower levels.
Operating costs assume contractor surface mining and project period underground development, with
owner operated underground development and production during the operating period.
Table 3: Base Case Advanced Exploration Costs
Table 4: Base Case Costs UG and Open Pit (after Advanced Exploration)
Item Cost (millions)
ADEX Direct Capital Costs $20.18
ADEX Indirect Costs $4.04
ADEX Contingency $8.47
ADEX Capitalized Operating Costs $15.68
ADEX Total Capital Costs $48.36
Item UG Cost
(millions)
OP Cost
(millions)
Combined Cost
(millions)
Project Period Direct Capital Costs $34.63 $15.42 $50.06
Project Period Indirect Costs $6.93 $3.08 $10.01
Project Period Contingency $14.55 $6.48 $21.02
Sustaining Capital Costs $247.16 $1.70 $248.86
Total Capital Costs $303.27 $26.69 $329.96
Operating Costs during Project Period $13.33 $21.57 $34.90
Opex during Operating Period $1,921.02 $371.70 $2,292.73
Total Operating Costs $1,934.35 $393.27 $2,327.62
Closure Costs $5.85 $11.24 $17.09
Royalties $90.42 $14.42 $104.84
Pre Tax NPV8% (includes ADEX) $251.99 $38.44 $290.43
Pre Tax IRR (includes ADEX) 22.43% 37.82% 23.91%
Taxes $146.86 $16.69 $163.29
Post Tax NPV8% (includes ADEX) $203.02 $26.12 $230.44
Post Tax IRR (includes ADEX) 22.39% 29.62% 23.37%
Table 5: Base Case Capital Costs UG – Detail
Table 6: Base Case Capital Costs Open Pit – Detail
Table 7: Base Case Operating Costs UG – Detail
Table 8: Base Case Operating Costs OP – Detail
Item Project Period
(millions)
Sustaining
(millions)
Total
(millions)
Development $20.48 $131.71 $152.19
Infrastructure $14.15 $115.46 $129.61
Closure $0.00 $5.85 $5.85
Subtotal $34.63 $253.01 $287.64
Indirects $6.93 $0.00 $6.93
Contingency $14.55 $0.00 $14.55
Total UG Capital Cost $56.11 $253.01 $309.12
Item Project Period
(millions)
Sustaining
(millions)
Total
(millions)
Site Preparation $1.28 $1.70 $2.98
Existing Waste Rock Pile $14.15 $0.00 $14.15
Closure $0.00 $11.24 $11.24
Subtotal $15.42 $12.94 $28.37
Indirects $3.08 $0.00 $3.08
Contingency $6.48 $0.00 $6.48
Total UG Capital Cost $24.99 $12.94 $37.93
Item ADEX
(millions)
Project Period
(millions)
Operating Period
(millions)
Total Operating
(millions)
Cost per Tonne of
Mineralized Resource
Mined
Mining $0.63 $3.59 $651.05 $655.27 $40.26
Indirects and G & A $13.06 $6.30 $470.28 $489.64 $30.09
Diamond Drilling $1.06 $1.00 $15.88 $17.94 $1.10
Surface Handling and Processing Related $0.93 $2.44 $783.81 $787.17 $48.37
Total Operating Costs $15.68 $13.33 $1,921.02 $1,950.03 $119.82
Item ADEX
(millions)
Project Period
(millions)
Operating Period
(millions)
Total Operating
(millions)
Cost per Tonne of
Mineralized Resource
Mined
Mining - Pit Waste $0.00 $15.90 $168.18 $184.08 $48.08
Mining - Pit Mineralized Resource $0.00 $0.65 $23.36 $24.01 $6.27
Processing Related $0.00 $5.02 $180.16 $185.18 $48.37
Total Operating Costs $0.00 $21.57 $371.70 $393.27 $102.73
Mining and Infrastructure
Previous mining activity at the Crean Hill site makes this project particularly favorable for
revitalization. The site is located near the Trans-Canada Highway, approximately 35km from Sudbury
with access to a well-established supply and service sector focused on the mining industry. The PEA
envisions both surface open pit and underground mining. The open pit surface mining has been
constrained to not interfere with the existing main shaft to the south and water control dam north of
the mineralized zones. Initially underground mining areas will be accessed from a newly developed ramp
from surface, and dewatering and rehabilitation of the existing main shaft and selected infrastructure
will be completed as mining progresses to lower levels. Surface mining will consist of conventional truck
and shovel mining, and underground mining will utilize a combination of conventional longhole and cut
and fill stoping. Power lines capable of supporting mining activities are in close proximity to the project,
and heating requirements are to be fueled by propane. Mined resource crushing and sampling activities
will occur on site prior to shipment to the processing facility. Water treatment is managed onsite
utilizing the existing third-party treatment facility.
Figure 1 illustrates the existing development and historical mining, the base case open pit, underground
development and stopes. Figure 2 illustrates the LOM production profile and Table 9 summarizes the
Base Case production statistics.
Figure 1: Crean Hill Mine Longitudinal Section Showing Existing Workings, Planned Development and
Stoping, Looking North.
Table 9: Base Case Production Statistics Including Potentially Minable Resources
The Potentially Mineable Resource is based on NSR cut-off of $43.28/Tonne for open pit mining, $123.50/Tonne for underground
longhole stoping, and $134.50/Tonne for underground mechanized cut and fill.
Item UG Open Pit Combined
Tonnes Mined 16,274,220 3,828,385 20,102,605
Average NSR $/tonne $190.36 $131.05 $179.07
Ni (%) 0.65 0.53 0.62
Cu (%) 0.58 0.41 0.55
Co (%) 0.02 0.02 0.02
Pt (grams per tonne) 0.62 0.36 0.57
Pd (grams per tonne) 0.71 0.22 0.62
Au (grams per tonne) 0.38 0.17 0.34
Figure 2: Life of Mine Production Profile
Permitting
The Crean Hill project is a brownfield site with existing disturbance and a Closure Plan that has been filed
by Vale. Vale retains surface rights to the property and responsibility for the permitting of surface
activities. All surface infrastructure for new operations will be captured in an amended closure plan. Other
permits that may be required for new future operations would include a new or amended Environmental
Compliance Approval (ECA) for air and noise related to cru shing and transportation, and for drilling and
blasting in a future open pit scenario. An additional ECA will be required for domestic sewage along with
a regional health authority authorization. As currently designed in the PEA, there are no requirements for
a federal or provincial environmental assessment(s) on site. The PEA assumes that all relevant permits for
the commencement of advanced exploration at Crean Hill will be received in Q4, 2023.
Mineral Resources
The PEA potentially mineable resources (Table 9) are a subset of the current Crean Hill Mineral Resource
Inventory (Table 10). Appropriate mining dilution and recoveries were applied to the design stopes
depending on mining method used. Current Mineral Resources at Crean Hill were est imated by SGS
Geological Services. Mineral Resources include near surface mineralization with potential for open pit
mining, as well as higher grade mineralization amenable to conventional underground mining methods.
The full technical report, titled “Mineral Resource Estimate for the Denison Ni-Cu-PGE Sulphide Deposit,
Denison Project, Sudbury, Ontario, Canada” with an effective date of August 19th, 2022 and a report date
of December 14th, 2022, was prepared in accordance with NI 43-101 – Standards of Disclosure for Mineral
Projects and is available on SEDAR (www.sedar.com) under the Company’s issuer profile.
Table 10: Denison Mineral Resources as of August 19, 2022 (Denison is now referred to as th e “Crean
Hill Project”). Please see notes on Mineral Resource assumptions, at the end of this release, including
metal prices and recoveries used.
(A) Open Pit Resources
(B) Underground Resources
Crean Hill Project Economic Sensitivities
The Crean Hill Project is most sensitive to metal price and metal grade, and least sensitive to project capital
cost. Project sensitivities are illustrated in Table 11 and Figure 3.
Table 11: Crean Hill Project Sensitivities – Post-Tax NPV (millions)
Cut-off
Grade Tonnes Ni % Cu % Co % Pt g/t Pd g/t Au g/t NiEq %
0.3% NiEq 16,760,000 0.53 0.49 0.02 0.48 0.37 0.25 1.08
0.3% NiEq 434,000 0.43 0.49 0.02 0.29 0.14 0.07 0.82
Indicated
Inferred
Cut-off
Grade Tonnes Ni % Cu % Co % Pt g/t Pd g/t Au g/t NiEq %
1.1% NiEq 14,531,000 0.96 0.84 0.03 0.88 1.02 0.54 2.07
1.1% NiEq 1,170,000 0.61 0.46 0.02 0.64 1.09 0.21 1.41
Indicated
Inferred
Variance Metal Price Metal Grade Capex Opex
-20% -$85.4 -$94.6 $272.7 $431.4
-10% $78.9 $73.7 $251.6 $331.6
Base $230.4 $230.4 $230.4 $230.4
10% $363.0 $376.6 $209.3 $127.6
20% $492.7 $519.3 $188.2 $22.9