Magna Mining Advancing High-Grade Copper-Nickel Projects in Sudbury, Ontario Towards Production

• Magna Mining provides updates on the company's copper-nickel projects in Sudbury, Ontario and discusses the overall nickel market.
• Magna received key approval to move its Crean Hill project from closure to production, starting with a surface bulk sample followed by underground development. The plan outlines 400,000 tons, providing 2.5 years of production.
• Magna expects to announce an ore selling agreement by the end of March and obtain a dewatering permit in Q2 2024 to start the underground portion.
• The company is considering grants and selling a royalty/stream on precious metal byproducts to fund Crean Hill's development, estimated at $48 million based on a previous PEA. An updated resource estimate is expected by June.
• CEO Jason Jessup emphasizes the simplicity of the projects as past-producing nickel mines that are near-surface and high-grade. The focus is on thoughtful de-risking and moving to production relatively quickly.‍

Crean Hill Project Advances Towards Production

Magna Mining, a Sudbury-focused exploration and development company, is advancing its copper-nickel assets with a strategic plan to move efficiently into production. CEO Jason Jessup provided an informative update on the company's progress and shared insights into the overall nickel market.

A significant milestone was achieved this week as Magna received approval of its final closure plan for the Crean Hill project. This key approval allows the company to transition from a state of closure to initiating production. The first phase will involve extracting a surface bulk sample from the 109 footwall zone, which boasts high-grade platinum group metals (PGMs) along with nickel and copper mineralization.

Following the bulk sample, Magna plans to develop a ramp to access the underground portions of the deposit. The amended closure plan outlines a 400,000-ton program, providing at least 2.5 years of production. Jessup explained, "It's going to give us lots of runway to figure out exactly what the life of mine plan looks like and to continue selling ore to one of the existing mills."

Interview with CEO Jason Jessup

Ore Selling Agreement and Permits on Track

Investors can expect a significant announcement by the end of March, as Magna is on track to secure an ore selling agreement. Jessup expressed enthusiasm about this development, stating, "I think it's going to be really exciting for our company and really set the framework for the economics of what this can really look like."

Additionally, the company is making swift progress on obtaining the necessary permit to dewater the mine and commence the underground phase of the advanced exploration program. Magna fully anticipates receiving this permit during the second quarter of the year.

Financing Strategy: Grants and Royalty/Streaming

To fund the development of Crean Hill, estimated at $48 million based on a previous Preliminary Economic Assessment (PEA), Magna is pursuing a prudent financing strategy. The company is actively seeking grants from the government to support advanced exploration and construction activities.

Furthermore, Magna is considering selling a royalty or stream on the precious metal byproducts from the project. Jessup highlighted the potential for this approach to fully fund Crean Hill's development without the need for equity dilution. He stated, "Partially because it's the right thing to do and just also it's sort of the easiest thing to do in the capital markets right now."

Updated Resource Estimate and Revised Plan

Magna is currently updating the resource estimate for Crean Hill, building upon the previously announced 31 million tons in the indicated category between the open pit and underground portions. The company completed approximately 19,000 meters of drilling last year, which yielded some spectacular grades, particularly in the footwall areas.

Jessup expressed optimism about the potential impact of the new drilling on the resource, stating, "We think this is going to really improve the resource in those areas." The updated resource estimate is expected to be announced before the end of June.

Based on the updated resource, Magna will develop a revised mine plan. Jessup indicated that the new plan will likely target higher cutoff grades and slightly lower tonnages over the life of the mine, resulting in much higher margins compared to the previous PEA.

Simple Projects with a Focus on Execution

Jessup emphasized the simplicity of Magna's projects, describing them as past-producing nickel mines that are near-surface and high-grade. He explained,

"These aren't complicated projects. I always joke with people I only do projects that are simple so I understand them. It is a simple project - you drive a ramp, you bring ore to surface, you crush it, you sample it, you ship it to a mill, you get paid. Very simple."

The company's focus is on thoughtful de-risking and moving efficiently into production. With the hiring of Jeff Huffman as Chief Operating Officer in November, Magna has strengthened its operational expertise. Huffman brings valuable experience from his previous roles, including serving as the president of a mining contractor involved in building mines across North America.

Jessup expressed utmost confidence in Huffman's ability to lead the team in advancing Crean Hill, stating, "Jeff's done a great job at identifying risks, mitigating risks, doing the engineering work, continuing to de-risk the project."

Nickel Market Outlook

Addressing the recent concerns about Indonesian nickel supply flooding the market, Jessup offered a measured perspective. While acknowledging that the nickel price has been impacted, he believes the predictions about the magnitude and timing of Indonesian nickel entering the market may be overstated.

Jessup referenced an article by Jim Lennon from Macquarie, which suggests that the nickel market dynamics may be more balanced than initially feared. He noted, "I think that some of the predictions about how much nickel and how quickly it was going to come onto the market were probably wrong."

Over the past few weeks, the nickel price has rebounded by approximately 10%, approaching $8 per pound. Jessup emphasized that this price level is highly favorable for Magna, given its exposure to both nickel and copper. Looking ahead, Jessup expects the nickel price to trade in a range between $8 and $10 per pound over the next couple of years. He cited several factors supporting this outlook, including delays in permits, slower ramp-ups, and potentially less production coming online from Indonesia than previously predicted.

Jessup also highlighted the lack of transparency regarding production costs in Indonesia, suggesting that even Indonesian nickel operations likely require a price of around $8 per pound to sustain investment and growth. Magna Mining is making significant strides in advancing its copper-nickel projects in Sudbury, with a focus on efficiently moving into production. The company's receipt of key approvals, progress on ore selling agreements and permits, and prudent financing strategy demonstrate a well-executed plan.

Investors can look forward to the forthcoming updated resource estimate and revised mine plan, which is expected to showcase improved grades and higher margins. Magna's emphasis on simplicity, operational expertise, and thoughtful de-risking positions the company well for successful project execution.

While the nickel market has faced recent challenges, Jessup's insights suggest a more balanced outlook, with prices likely to stabilize in a range supportive of Magna's economics. Overall, Magna Mining presents a compelling opportunity for investors seeking exposure to high-quality copper-nickel assets in a world-class mining jurisdiction.

The Investment Thesis for Magna Mining

• Magna is transitioning its Crean Hill project from closure to production, with a clear path to generating revenue within 2.5 years.
• The company is securing key approvals, ore selling agreements, and permits to de-risk the project and move efficiently into production.
• Magna is pursuing a prudent financing strategy, seeking grants and potentially selling a royalty/stream on precious metal byproducts to fund development without equity dilution.
• An updated resource estimate and revised mine plan are expected to demonstrate improved grades and higher margins compared to the previous PEA.
• Magna's projects are simple, near-surface, and high-grade, with a focus on operational excellence and thoughtful de-risking.
• The nickel market outlook appears more balanced than initially feared, with prices likely to stabilize in a range supportive of Magna's economics.

Key Takeaways

Magna Mining is making significant progress in advancing its Crean Hill copper-nickel project towards production. With key approvals in place, ore selling agreements and permits on track, and a prudent financing strategy, the company is well-positioned to efficiently transition into revenue generation. The upcoming updated resource estimate and revised mine plan are expected to showcase improved grades and higher margins, further enhancing the project's economics. Magna's focus on simplicity, operational expertise, and thoughtful de-risking, combined with a more balanced nickel market outlook, presents a compelling opportunity for investors seeking exposure to high-quality base metal assets in a world-class mining jurisdiction.

The global transition towards a low-carbon economy is driving unprecedented demand for critical minerals, including nickel and copper. As countries and corporations set ambitious targets for electrification and renewable energy, the need for these metals in electric vehicles, batteries, and infrastructure is expected to surge.

However, the nickel market has recently faced concerns about the potential oversupply from Indonesian nickel projects. This has led to a temporary pullback in nickel prices and sentiment. Despite these short-term challenges, the long-term fundamentals for nickel remain robust. The increasing adoption of electric vehicles and the growth of the battery storage sector are expected to drive significant demand for nickel in the coming years.

Magna Mining CEO Jason Jessup provided a balanced perspective on the nickel market, suggesting that the impact of the Indonesian nickel supply may be overstated. He referenced analysis indicating that the timing and magnitude of Indonesian nickel entering the market may be more gradual than initially feared. The company's outlook for nickel prices to stabilize in a range between $8 and $10 per pound over the next couple of years is supported by factors such as delays in permits, slower ramp-ups, and potentially less production coming online from Indonesia than previously predicted.