Magna Mining (TSXV

MAGNA MINING

MAGNA MINING

The management team of Canadian base metals exploration and development company Magna Mining has deep roots in Ontario’s famed Sudbury Basin, which is historically one of the richest nickel producing districts in the world. Co-founder and current CEO Jason Jessup has lived and worked in this world-class minerals basin for the best part of two decades, as have several of his colleagues from their time together at FNX Mining (the hugely successful Sudbury-based nickel and copper producer which was eventually bought by Quadra in 2010). Together, the group behind Magna have made significant regional discoveries and have experience of successfully building and operating mines in the Sudbury area. They are now aiming to replicate that success by reawakening the Shakespeare nickel-copperplatinum group metals (PGM) mine, 70 km Southwest of Sudbury. “We wanted to leverage our experience in Sudbury, which includes knowledge of the local geology, mine development, and many of the local assets which could become available and potentially fit well with a junior like Magna.” In 2017, the TSXV company’s search for an appropriate asset in the region led to the acquisition of Ursa Major Minerals, which at the time was the owner of the past producing Shakespeare Mine. Today, Magna’s leadership has set two key objectives for the project: to grow the existing resource, and to make regional discoveries across the 180 km2 contiguous land package. The Sudbury Basin – formed by a comet colliding with the Earth around 1.8 billion years ago - has been an active mining camp for 120 years and hosts one of the largest known concentrations of nickel globally, with 40 billion pounds of nickel produced to date, as well as 36 billion pounds of copper.

No better place

Extensive magmatic nickelcopper-PGM mineralisation in the basin, plus two large mills, two smelters and a nickel refinery within the broader mining camp, make Sudbury a bustling hive of activity. Majors such as Vale and Glencore operate large assets in the area alongside only a select few exploration firms combing the region for new discoveries. In fact, Magna is the only junior in the region to own an advanced stage project.

Other factors coalesce to make Sudbury a genuine world-class mining district, including a highly supportive

Ontario Government, relative ease of permitting and local communities – including First Nations groups – that welcome new mining activity.

“The people here understand how important mining is for the economy and a lot of expertise has grown in the Sudbury Basin,” Jessup stresses. “Aside from the mining activities, service providers and mining contractors use Sudbury as a hub and we think this is great as it lowers costs during exploration as well as in development and production.”

Another locational advantage for Magna is derived from the project’s close proximity to a hydroelectric power plant on the Spanish River in Espanola. The company plans to power the future operations at Shakespeare via a direct line to the hydro plant, which will provide clean, 24/7 energy to the project.

This is just one aspect of Magna’s long-term ESG strategy, which is anchored around a broad commitment to minimise environmental impacts, build local community relationships and govern with ethics and transparency.

Carbon neutrality

In May 2021, Magna announced a carbon offsetting deal for its greenhouse gas emissions over the entire year, making it the first carbon neutral nickel exploration company in the world. The offsetting credits will support the Niagara Escarpment Forest Carbon Project, which promotes and maintains the function and diversity of ecosystems along Ontario’s Niagara escarpment.

“We fully believe that the world is going to need more nickel to feed this electric vehicle (EV) revolution that is currently underway. We want to be able to help provide that, but it has to be in a responsible way. Consumers will not tolerate high carbon emitting

nickel going into EV batteries. So with that in mind we wanted to take this first step.”

It is somewhat unusual for a mining company to achieve carbon neutrality this early in the project development cycle, however Jessup talks about wanting to build a culture based around sustainability from the scoping stages through to mine closure.

“It helps us to start measuring what our impact is as an exploration company so we can start making decisions going forward that are going to be positive towards carbon neutrality and ESG in general,” the CEO proclaims. Magna will also produce an ESG scorecard at the end of the year to track its short-term performance.

A distinct past life

The Shakespeare land package was formerly owned by the well-known base metals miner Falconbridge, who undertook four drill campaigns over four decades across the property before flipping it to Ursa in 2000.

Ursa soon made a significant discovery on the Shakespeare property at what is now called the East Deposit and developed a significant NI 43-101 resource following sustained drilling between 2002-05. At this point, Ursa decided to stop exploration and move into feasibility studies in order to take advantage of the climbing nickel price.

By 2007, the company had received all major permits for the construction of a 4,500 tonnes per day (tpd) open pit mine, mill and tailings storage facility. However, the global financial crisis of 2008 prevented project lift-off until 2010, when it was only able to commence through toll milling.

Despite not being able to build the mill as planned, Ursa started mining ore and ended up processing 490,000 tonnes at an average grade of 0.33% nickel, 0.38% copper and 0.9 g/t PGM through an existing mill in Sudbury between 201012.

“This gave us a lot of confidence in the metallurgy, knowing the recoveries that can be produced through a mill, as well as the concentrates that could be produced,” Jessup says. “As well, it allowed us to have a positive reconciliation against the block model. Those things gave us a lot of de-risking of the project.”

“We fully believe that the world is going to need more nickel to feed the EV revolution. We want to be able to help provide that, but it has to be in a responsible way. Consumers will not tolerate high carbon polluting nickel going into EV batteries.” Jason Jessup, Magna Mining CEO

But the project soon fell into care and maintenance after the toll milling agreement wasn’t extended at the end of 2011. Subsequently, Ursa was acquired by another junior, but Shakespeare remained a non-core, idle project until 2017 when Magna acquired it. However, the major permits for a 4,500 tpd mining operation remain in place, with just a few minor permits and approvals remaining for Magna to obtain.

MAGNA MINING

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Restarting exploration

After more than 15 years of inaction on the exploration front across the Shakespeare land package, Magna commenced a 9,000 metre near-mine drilling campaign earlier this year, with the aim of adding additional resources between the East and West deposit in an area called the Gap Zone.

At the time of writing, Magna has completed around 5,500 metres of the campaign and is awaiting assays for the majority of the holes drilled, aside from two holes which have returned significant results, including a 33 metre intersection relatively close to surface within the open pit resource shell.

The other portion of Magna’s exploration strategy is focused on testing some of the regional targets identified across the 180 km2 land package, most of which remains unexplored.

“We used airborne geophysical surveys to identify 12 electromagnetic anomalies throughout the property that have never been drill tested. Because of all the focus previously on getting Shakespeare into production, the regional package has seen very little exploration.

“We’re trying to prove up the potential for additional deposits to be discovered on this property. These can feed into a future hub and spoke type model and we believe Shakespeare can be the hub,” Jessup asserts.

One of the areas that Magna has prioritised is the ‘Shakespeare-like’ P4 target, located just 5 km East of the main deposit. From the limited drilling that has taken place along this magnetic trend to date, Magna has identified similar lithologies to what hosts Shakespeare, which bodes well for the target.

A multi-mine hub?

Even one additional economic deposit discovery – particularly of a higher grade than the current Shakespeare resource – would make a material impact on the future mine plan, according to Jessup.

“We believe there is definitely potential for those types of deposits in this area. What it could become is a real

extension of the Sudbury Basin as a mining district. We’ve done a great job of consolidating the area into a regional package. With that, it opens up the door for us to become a multi-mine producer within the next five years.”

There are only a handful of nickel projects as advanced as the Shakespeare project in the Western hemisphere, which presents a unique opportunity for Magna to leverage a growing battery metals supply chain geared towards the production of high performance, nickel-intensive EV batteries.

And with President Biden attempting to reduce US reliance on Asian battery producers in favour of North American battery plants, Magna could not be better located to take advantage of this tsunami of investment. The company’s ESG first approach is also set to win over the growing number of climate-conscious investors across today’s capital markets.

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