Magna Mining Completes Updated Preliminary Economic Assessment of the Crean Hill Project Study Demonstrates 13 Year Mine Life, Modest Pre-Production Capital and Short Payback Period
Magna Mining Completes Updated Preliminary
Economic Assessment of the Crean Hill
Project
Study Demonstrates 13 Year Mine Life, Modest Pre-Production
Capital and Short Payback Period
Sudbury, Ontario--(Newsfile Corp. - September 17, 2024) - Magna Mining Inc. (TSXV: NICU) (OTCQB:
MGMNF) (FSE: 8YD) ("Magna" or the "Company") is pleased to announce the successful completion of
its Updated Preliminary Economic Assessment ("PEA") by SGS Geological Services (SGS) on its
100% owned Crean Hill Project (the "Project") located in Sudbury, Ontario, Canada.
The PEA envisions an underground only mining operation, with Life of Mine ("LOM") potentially mineable
resource being sold to a third-party existing mill in Sudbury. Underground mining would be initiated with
a 15-month Advanced Exploration ("AdEx") program followed by a 12-month pre-production ramp-up
period and 13 years of commercial production.
Initial mining will be done with ramp access via a new
surface portal with the eventual rehabilitation and re-establishment of the historic #2 shaft for personnel
access and hoisting as mining progresses deeper.
Note: All dollar values are reported in Canadian Dollars unless otherwise stated.
2024 PEA Highlights
Low pre-production capital cost of $27.7M following AdEx period;
Payback of pre-production period capital within the first year of commercial production,
and payback of all capital including AdEx period capital within the second year of
commercial production;
Underground average production rate of 2,200 tonnes per day ("tpd") consisting of 1,650
tpd of higher-margin primary feed and 550 tpd of lower grade, incremental feed;
Pre-tax NPV (8%) of $265.3 million and an Internal Rate of Return ("IRR") of 142% at
conservative metal prices.
Magna Mining COO Jeff Huffman commented: "This updated Preliminary Economic Assessment
focuses efforts on a high margin, underground-only mine plan.
A low capital approach of establishing a
new surface portal will provide quick access to the resource, allowing us to offset capital costs with early
revenues. This PEA also benefits from increased certainty on third party processing terms. The project
timeline has been derisked by having environmental permits approved and in-hand, as well as more
detailed stope planning and sequence optimization.
The PEA metal pricing assumptions have been
updated to reflect a more conservative long term nickel price. We are excited and encouraged by the
results of this PEA and look forward to continuing to advance the Crean Hill Project".
The primary feed is designed to ensure rapid payback and minimize upfront capital requirements while
simultaneously mitigating the potential impact of low metal prices.
The lower cut-off grade of incremental
material allows more complete extraction of the resource and the two-pronged nature of the mining
sequence facilitates lower-cost extraction of the incremental material.
Financial Analysis
The Crean Hill PEA uses metal prices of US$ 8.50/lb nickel, US$ 4.00/lb copper, US$ 13.00/lb cobalt,
US$ 900/oz platinum, US$ 1000/oz Palladium, US$ 2,150/oz gold, and a 1.35 C$/US$ exchange rate
as outlined in Table 2.
The Base Case generates a pre-tax NPV (8%) of $265.3 million and an Internal Rate of Return ("IRR") of
142%, after-tax NPV (8%) is $194.1 million, with an IRR of 129%.
See Table 1 for a summary of PEA results.
Table 1: PEA Summary
Units
Total
Total Resource Mined
tonnes
10,688,606
Mine Life
years
13
Average Production Rate
tpd
2,193
Operating Cost
$/tonne
158
Advanced Exploration Bulk Sample*
$M
32.1
Pre-Production Capital
$M
27.7
Sustaining Capital
$M
212.8
Ni in Resource Sold
M lbs
195.5
Cu in Resource Sold
M lbs
169.5
Co in Resource Sold
M lbs
6.8
Pt in Resource Sold
koz
313
Pd in Resource Sold
koz
359
Au in Resource Sold
koz
117
Average NSR
$/tonne
240
Average Annual Pre-Tax Cash Flow
$M
40.5
Payback Period (overall)
years
1.5
Pre-Tax NPV (8%)
$M
265.3
Pre-Tax IRR
%
142
Post Tax NPV (8%)
$M
194.1
Post Tax IRR
%
129
Note: AdEx Bulk Sample revenue is not included in PEA economics.
Table 2: Metal Prices and Exchange Rates
Item
Units
Base Case Pricing
Nickel
$US/lb
8.50
Copper
$US/lb
4.00
Cobalt
$US/lb
13.00
Platinum
$US/oz
900
Palladium
$US/oz
1000
Gold
$US/oz
2150
Exchange Rate
CAD:USD
1.35
USD:CAD
0.74
Capital and Operating Costs
The Study was prepared in accordance with National Instrument 43-101 of the Canadian Securities
Administrators (NI 43-101). The capital and operating cost estimates for the Advance Exploration, Pre-
Production and Production phases of the Project are summarized below in Tables 3-5. Capital costs are
based on planned development of a ramp from surface to the bottom of the orebody and the rehab of #2
shaft to the mid-shaft loading pocket. The company is planning on commencing an AdEx bulk sample
underground to confirm resource grade, continuity and dilution impacts in an effort to de-risk the project.
It is envisioned that positive results from this program will lead to a pre-feasibility study and continued
development of the Crean Hill Project.
Table 3: AdEx and Pre-Production Cost and Revenue Summary
Item
Units
AdEx
Pre-Production
Capital Cost
$M
48.5
27.7
Operating Cost
$M
-
62.9
Revenue
$M
16.4
78.3
Total Cost Net Revenue
$M
32.1
12.3
Table 4: Capital Costs by Period - Detail
Item
Units
Pre-Production
(Initial Capital)
Production
(Sustaining Capital)
Total Capital Cost
Development
$M
12.8
143.5
156.3
Infrastructure
$M
14.5
58.7
73.1
G&A and Indirects
$M
0.4
4.8
5.2
Closure
$M
-
5.8
5.8
Total Capital Cost
$M
27.7
212.8
240.5
Table 5: Operating Costs by Period - Detail
Item
Units
Pre-Production
Production
Average Operating Cost Per
Resource Tonne Mined ($/t)
Mining
$M
40.3
894.7
$87.47
Crushing, Haulage and Processing
$M
17.3
635.7
$61.09
G&A
$M
5.3
92.9
$9.19
Total Operating Costs
$M
62.9
1623.3
$157.75
Figure 1: Life of Mine Pre-Tax Cash Flow
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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 is based on
underground mining only. A new ramp will allow rapid access to initial, near-surface, mining areas and
dewatering will be carried out from the historic #2 shaft.
As mining proceeds beyond 700m depth,
rehabilitation of the existing shaft and key infrastructure will be completed.
This capital expenditure will
allow hoisting and personnel access via the #2 shaft and will enable ramp-access mining to continue at
depth.
Operating costs assumptions are based on use of a mining contractor during the advanced
exploration phase, and owner operated equipment during the pre-production and operation phase for all
mine development and production.
Underground production mining will be completed utilizing conventional longhole stoping methodology
with hydraulic backfill. Power lines capable of supporting mining activities are in close proximity to the
project and heating requirements will be met using propane.
On-site crushing and sampling activities will
occur before the ore is shipped to the local processing facility. Water treatment will be managed through
a service agreement with the existing third-party treatment facility.
Figure 2 illustrates the historical mining and PEA mine plan. Figure 3 illustrates the LOM production
profile and Table 6 summarizes the mine production statistics.
Figure 2: Crean Hill Mine Longitudinal Section Showing Historic Mining, Planned Development
and Future Stoping
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Table 6: PEA Production Statistics
Item
Units
Primary
Incremental
Base Case
Resource Mined
tonnes
7,996,761
2,691,845
10,688,606
Average NSR
$/tonne
258
148
240
NiEq Cut-off Grade
%
1.20
0.90
-
Ni Grade
%
0.92
0.56
0.83
Cu Grade
%
0.79
0.50
0.72
Co Grade
%
0.03
0.02
0.03
Pt Grade
g/t
1.01
0.63
0.91
Pd Grade
g/t
1.16
0.70
1.04
Au Grade
g/t
0.38
0.21
0.34
Figure 3: Life of Mine Production Profile
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Permitting
The Crean Hill project is a brownfield site with an existing footprint and a Closure Plan that has been filed
by Vale. Vale retains surface rights to the property and holds key permits including an Air Environmental
Compliance Approval (ECA) for air emissions and a Sewage ECA for the wastewater management
system. Additional surface infrastructure for new operations will be authorized by an amended Closure
Plan. Other permits that would be required for mine development are an amended Air ECA, amended
Sewage ECA, amended Permit to Take Water for mine dewatering and an additional sewage ECA for
a domestic sewage system. There are no requirements for a federal or provincial environmental
assessment. Permits for the commencement of AdEx at Crean Hill have been received.
Mineral Resources
The PEA potentially mineable resources are a subset of the current Crean Hill Mineral Resource
Inventory (Table 7). Appropriate mining dilution and recoveries were applied to the design stopes
depending on mining method used. Allan Armitage, Ph.D., P. Geo. of SGS Geological Services is an
independent Qualified Person as defined by NI 43-101 and is responsible for the current Crean Hill
MRE.
Table 7: Crean Hill Project Underground Mineral Resource Estimate, April 15, 2024
Classification
Cut-off
Grade
Tonnes
Cu (%)
Ni (%)
Co (%)
Pt (g/t)
Pd (g/t)
Au (g/t)
NiEq %
Indicated
1.1% NiEq
18,444,000
0.87
1.01
0.035
0.98
1.12
0.37
1.96
Inferred
1.1% NiEq
989,000
0.53
0.70
0.026
0.98
1.66
0.29
1.56
Please see notes on Mineral Resource assumptions, at the end of this release, including metal prices and recoveries used. The underground 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, a mining cost of US$80.00/t rock and processing, treatment and
refining, transportation and G&A cost of US$42.50/t mineralized material.
Crean Hill Project Economic Sensitivities
The Crean Hill Project is most sensitive to metal market prices and least sensitive to project capital cost.
Operating costs and exchange rate sensitivities fall between metal prices and capital costs and display
similar sensitivities.
Table 8: Crean Hill Project Sensitivities - Pre-Tax NPV(8%) ($M)
Variance
Metal Price
Exchange Rate
Capex
Opex
-20%
-42
595
294
445
-10%
113
411
280
355
Base
265
265
265
265
10%
423
149
251
175
20%
578
50
236
85
Figure 4: Crean Hill Project Sensitivities - Pre-Tax NPV(8%)
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Table 9: Crean Hill Project Sensitivities - Metal Price Comparison
Units
3 Yr Trailing
Average
2023 PEA
Base Case
Spot Price July
20, 2024
Nickel
$US/lb
9.96
9.50
8.50
7.30
Copper
$US/lb
4.06
3.50
4.00
4.20
Cobalt
$US/lb
19.89
22.00
13.00
12.45
Platinum
$US/oz
971
1000
900
965
Palladium
$US/oz
1622
1800
1000
923
Gold
$US/oz
1915
1700
2150
2401
Pre-Tax NPV (8%)
$M
491.6
481.7
259.3
181.6
Pre-Tax IRR
%
200
185
90
58
Post-Tax NPV (8%)
$M
348
341.2
189.2
135.1
Post-Tax IRR (%)
%
182
168
82
53
Qualified Person
The following Qualified Persons (QPs) oversaw the completion of the work in preparation of the PEA
and are responsible for the contents:
Independent QP for Geology and Mineral Resource Estimates
Mr. Allan Armitage, Ph.D., P.Geo., of SGS Geological Services.
Mr. Armitage conducted personal inspection of the site on May 25-26, 2022, July 25, 2023, July 02,
2024 and July 25, 2024.
Independent QP for Underground Mining and Financial Analysis
Mr. Henri Gouin, P.Eng., of SGS Geological Services.
Mr. Gouin last conducted a personal inspection of the site on May 13, 2024.
Independent QP for Underground Mining, Financial Analysis, Permitting and Environmental
Mr. William van Breugel, P.Eng., B.A.Sc. Geological Engineering, P.Eng., Associate Engineer of SGS
Geological Services.
Independent QP for Processing and Recovery
Mr. Dominic Fragomeni, P.Eng., Frago-Met Solution Ltd.
Technical information in this press release has been reviewed and approved by David King, M.Sc.,
P.Geo. Mr. King is the Senior Vice President, Exploration and Geoscience for Magna Mining Inc. and is
a qualified person under Canadian National Instrument 43-101.
Crean Hill Property Mineral Resource Estimate Notes:
1
.
The effective date of the Crean Hill Property Mineral Resource Estimate (MRE) is April 15,
2024. This is the close out date for the final mineral resource models and mine out models (as-
builts).
2
.
Allan Armitage, Ph.D., P. Geo. of SGS Geological Services is an independent Qualified Person
as defined by NI 43-101 and is responsible for the current Crean Hill MRE. Armitage conducted
multiple site visits to the Crean Hill Property including on May 25-26, 2022, July 25, 2023, July
02, 2024 and July 25, 2024.
3
.
The classification of the current MRE into Indicated and Inferred mineral resources is consistent
with current 2014 CIM Definition Standards - For Mineral Resources and Mineral Reserves.
4
.
All figures are rounded to reflect the relative accuracy of the estimate and numbers may not add
due to rounding.
5
.
The mineral resource is presented undiluted and in situ, constrained by 3D grade control
resource models, and are considered to have reasonable prospects for eventual economic
extraction. The mineral resource is exclusive of mined out material.
6
.
Mineral resources which are not mineral reserves do not have demonstrated economic viability.
An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated
Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected
that most Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with
continued exploration.
7
.
The Crean Hill mineral resource estimate is based on a validated drill hole database which
includes data from 4,646 surface and underground diamond drill holes completed between
1951 and March 2024. The drilling totals 739,448 m. The resource database totals 103,952
assay intervals representing 290,253 m of data.
8
.
The mineral resource estimate is based on a three-dimensional ("3D") resource model of the
main mineralization and a broader dilution envelope. 3D models of mined out areas were used
to exclude mined out material from the current MRE.
9
.
Grades for Ni, Cu, Co, Pt, Pd, Ag and Au are estimated for each mineralization domain using
~2.0 m capped composites assigned to that domain. To generate grade within the blocks, the
inverse distance squared (ID2) interpolation method was used for all domains.
10
.
Specific gravity values were assigned to each block based on a regression formula defined by a
database of 32,592 samples. SG=(0.2057xNi%+2.88).
11
.
Based on the size, shape, and orientation of the Crean Hill Deposit, it is envisioned that the
deposits may be mined using both bulk and selective mining methods including Longhole
Stoping.
12
.
The MRE is reported at a base case cut-off grade of 1.10% NiEq. The mineral resource grade
blocks are quantified above the base case cut-off grade and within the constraining mineralized
wireframes (considered mineable shapes).
13
.
The underground 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.
14
.
The estimate of Mineral Resources may be materially affected by environmental, permitting,
legal, title, taxation, socio-political, marketing, or other relevant issues.
About Magna Mining Inc.
Magna Mining is an exploration and development company focused on nickel, copper and PGM projects
in the Sudbury region of Ontario, Canada. The Company's flagship assets are the past producing
Shakespeare and Crean Hill Mines. The Shakespeare Mine is a feasibility stage project which has
major permits for the construction of a 4,500 tonne per day open pit mine, processing plant and tailings
storage facility and is surrounded by a contiguous 180km
2
prospective land package. Crean Hill is a
past producing nickel, copper and PGM mine with a technical report dated August 2022. Additional
information about the Company is available on SEDAR (
www.sedar.com
) and on the Company's
website (
www.magnamining.com
).
For further information, please contact:
Jason Jessup
Chief Executive Officer
Or
Paul Fowler, CFA
Senior Vice President
416-356-8165
Email:
Cautionary Statement
This press release contains certain forward-looking information or forward-looking statements as
defined in applicable securities laws. Forward-looking statements are not historical facts and are
subject to several risks and uncertainties beyond the Company's control, including statements
regarding the production at the Shakespeare and Crean Hill Mines, the economic and operational