Magna Mining (NICU) - Market Leading High Grade Nickel Results

Magna Mining Corp. is a Canadian exploration and development company focused on the advancement of its nickel, copper and PGM projects in the Sudbury Region of Ontario, Canada. The flagship project of the company, the Shakespeare project, is a past-producing Nickel, Copper and PGM mine located 70 km southwest of Sudbury, with a mineral resource estimate of 20.34 million tons of mineralisation at 0.55% NiEq in the indicated category and 2.36 million tons of mineralisation at 0.57% NiEq in the inferred category. The company’s Crean Hill project holds the past-producing Crean Hill Nickel, Copper and PGE mine. The Crean mine was in production for three separate periods between 1906 and 2022 and produced approximately 20.3 million tons of ore at a grade of 1.3% Nickel, 1.1% Copper and a combined palladium, platinum and gold grade of 1.6 g/t.

The company has recently seen an increase in its share price, which it accredits to the exploration drilling results that it has published from its Crean Hill project. The highlights include the company intercepting 3.8% nickel, 1.8% copper, and 0.5 g/t Pt+Pd+Au over a 10.8 m in December 2022 and intercepting 4.0% nickel over 31.1 m at the project as well as 3.7% nickel, 2.8% copper and 20.2 g/t Pt+Pd+Au over 7.1 m in January 2023.

The company announced on the 10^th of January a best-efforts private placement for the aggregate gross proceeds of approximately CAD$ 13 million to the company through the issuing of charitable flow-through shares and CAD$ 3 million through the issuing of common shares of the company. The company plans to conduct exploration initiatives at both its Shakespeare and Crean Hill projects in 2023.

Increased share price and PEA

Magna Mining Corp. has recently seen an increase in its share price, which it accredits to the exploration drilling results that it had published from its Crean Hill project. Jason Jessup the CEO of Magna Mining Corp. explains that the company is pleased with how the drill results were met by the market with the company’s announced private placement adding to its share price success.

“We are definitely pleased. It's been a great reaction and not overly surprising, but you never know. We put out some great drill results, we had a very well-received financing, a private placement that we announced last week, so things are on track and moving forward quite well and the markets are receiving it very positively.”

The highlights of the published drill results include the company intercepting 3.8% nickel, 1.8% copper, and 0.5 g/t Pt+Pd+Au over a 10.8 m in December 2022 and intercepting 4.0% nickel over 31.1 m at the project as well as 3.7% nickel, 2.8% copper and 20.2 g/t Pt+Pd+Au over 7.1 m in January 2023.

The significance of the drill results, according to Jessup, is that it shows two distinct Sudbury breccia-hosted footwall zones. One zone is predominantly nickel dominant, whilst the other is more precious metals dominant.

“…in our first program, we drilled 10 holes back in November. That was drilling within the resource to support our PEA which is well underway. The drilling has given us new data and a better understanding specifically and especially in the footwall areas of the 101 Footwall and the 109 Footwall. These are two areas that were previously misinterpreted by the previous owners, and now that we've drilled in, we have our own core. We studied them and we recognize that these are two Sudbury breccia-hosted footwall zones. One is very dominant in nickel, and one is rich in precious metals and lower sulphide, but still with a very high-grade massive sulphide nickel-copper PGM core. We are taking this data and using this to optimise our PEA mine plan.”

Magna Mining Corp. plans to publish the PEA of its Crean Hill project in early Q2 2023, with Jessup explaining that the PEA will be able to guide the company regarding which further studies are required to enable a commercial production decision.

“We're working through that process. We still are targeting early in Q2 to have the PEA completed, and we think it will be able to demonstrate the potential economics very well and give us some recommendations for further work that needs to be done looking forward towards potential construction and a commercial production decision.”

Private placement and Exploration initiatives

The company announced on the 10^th of January a best-efforts private placement for the aggregate gross proceeds of approximately CAD$ 13 million to the company through the issuing of charitable flow-through shares and CAD$ 3 million through the issuing of common shares of the company. Jessup explains that before the placement the company planned to conduct 15,000 m of exploration initiatives at its projects, but that the placement has provided the company with the option to conduct additional drilling initiatives at its Crean Hill and Shakespeare projects which are being investigated.

“Prior to this financing, we had budgeted 15,000 m of exploration drilling at Crean Hill and another 3,000 m to 5,000 m in 2023 for Shakespeare and the regional targets that we have. Now with this larger financing, it does beg the question: we have the capacity to do quite a bit more drilling. We're looking at that right now, trying to determine exactly how much more drilling we want to do. We have until the end of 2024 to spend all of this flow through, so we can spread it out over 2 years essentially. We're just trying to determine that.”

Magna Mining Corp. plans to add a second drill to its exploration drilling program at the Crean Hill project in the next 3 to 4 months, with the aim of the additional rig being to test the mineralisation of the breccia-hosted footwall zones at depth.

“We will start up a second drill at Crean Hill sometime in the next 3 to 4 months because we will want to test some deeper targets. These footwall environments can go very deep. There's been some drilling in the first 300 m from the surface, but historically, the Crean Hill mine was mined down to approximately 1,400 m, so there's a lot of mineral-rich environment in the footwall that has never been tested.”

Getting into production and toll mining

Magna Mining Corp. believes that the undertaking of a toll mining agreement with a mill in the Sudbury region provides it with a de-risked avenue to follow to production. A toll mining agreement will lead to the company becoming cash flow positive and as such funding its initiatives, be it exploration or the acquisition of other properties in the region, without diluting its shares.

“When it comes to how serious we are about toll milling, we're very serious. This is something we've done before successfully, and I see it as a great option for us. We are looking at the PEA, we are having discussions with the owners of the mills here in Sudbury, and we'll be able to give more guidance on that in the next quarter or two.”

Jessup explains that the undertaking of a toll mining agreement is seen by Magna Mining Corp. as low-risk because the company’s management has been involved with similar initiatives in the past. The PEA of the Crean Hill mine will provide more certainty going forward.

“We also see it as low risk. As we've done it before, we really understand it. We understand the ins and outs of what's required. We would not want to, for example, take on a bunch of debt before we were cash flow positive. We see this as a good option going forward because it's close to the surface, potentially, and we'll see, once we get the PEA out, we may have enough cash to actually get to the point where we have revenue coming in.”

Jessup explains that the company has been in discussion with two major mining companies in the region. He notes that the major mining companies are interested in such an agreement with the company. Magna Mining Corp. is, according to Jessup, in a position where it has the optionality to not be required to sign any agreement and will, if need be, look at the construction of its own milling facility.

"We have been having conversations with the owners of the mills for months now. It has been a pretty open dialogue. There is definitely interest in working with Magna. Both of the majors who have mills here in the Basin seem to have interest in discussions - let's put it that way. We'll see where that all goes. The one thing we do have that in the past, when I worked for FNX that we didn't have, is the option of saying, we don't have to take these terms; we will take it somewhere else, or we will build our own mill and continue to grow the resource while we're doing that. We do have a bit of leverage and flexibility on how we move forward.”

Future initiatives

Magna Mining Corp. plans to further its envisioned toll mining initiatives throughout 2023, apart from concluding with its PEA set to be published in Q2 2023. The toll mining agreements and the mineralisation of the company’s Shakespeare and Crean Hill projects provide the company with optionality and a larger tolerance for any unforeseen market conditions in the future. Jessup explains that should the price of a certain metal fall, the polymetallic nature of the company’s projects allows Magna Mining Corp. to pivot into another of the metals found in the mineralisation of its projects.

“The nice thing about toll milling, if that's the route that we're going to go down in the near term, is that you can be flexible. We did this at FNX at the end of 2008, after the financial crisis when we had to restructure operations, we actually shut down a bunch of our nickel mining and focused on the copper-rich, precious-metal-rich footwall environments, and that's where all of our mining came from because that's where the economics made sense. We were able to do that pivot and be quite profitable from it. That's the great thing we have.”

The company will continue with the exploration of both the Shakespeare and Crean Hill project in 2023, with Jessup explaining that the raised funds from its recent private placement offering will enable the company to increase the size of the exploration programs at both projects.

“A big program, lots of exploration will be happening both at Crean Hill and at Shakespeare. Our base case, which already gave guidance back in December, was that we will have two drills turning at Shakespeare by Q2, and then one at Crean Hill. More than likely we're going to ramp up the Crean Hill drilling because of the extra funding we're going to have. We'll be looking for footwall targets.”

Magna Ming Corp. will further focus on creating an early mining plan which will better guide the company in its future initiatives. The company also plans to produce a bulk sample in the coming year. The advantage of a bulk sample for Magna Mining Corp. is the insight its processing will give the company regarding the mineralisation of its projects. The processing of a bulk sample will also provide Magna Mining Corp. with an easier entry point into undertaking its envisioned toll mining agreements with a mill in the Sudbury region.

“The other thing is that we will be working very hard on putting together an early mining plan. Again, we hope to give guidance on that in the next 3-5 months. Potentially, that could be starting some kind of bulk sample or advanced exploration within the next 12 months. That's our target.”

To find out more, go to the Magna Mining website