The city of Sudbury is the centre of nickel mining in Canada, so it makes perfect sense for nickel-focused Magna Mining to set its sights on building the region’s next mining operation.
Magna actually has the goods to back up that aim with its past-producing Shakespeare mine, located 70 kilometres southwest of Sudbury.
CEO Jason Jessup has spent most of career working in the Sudbury region and knows a good project when he sees one.
“The original Shakespeare discovery and deposit was owned by Falconbridge, which is now Glencore, who are currently the second biggest mining company active here in Sudbury,” Jessup told Proactive. “It was drilled in four different campaigns over about four decades, and it had a historic, near-surface resource of 2.5 million tons. But at that time it wasn’t large enough for a company like Falconbridge to see as a core asset, so it sat dormant for many years.”
Shakespeare eventually came under ownership by a junior called Ursa Major Minerals. As Jessup explains, the project was ready to start construction in 2008, but the financial crisis put a stop to those plans. By 2010 however, nickel prices had recovered, and the mine went into commercial production as an open-pit operation before subsequently being put on care and maintenance a couple of years later. Subsequently, Magna acquired the property in 2017 and started its first drill program in 2018.
Shakespeare boasts an existing NI 43-101 open-pit indicated resource totaling 14.4 million tonnes grading 0.634% nickel equivalent (NiEq), and an additional 1.7 million tonne in the inferred category at 0.54% NiEq. In addition, the project has an underground resource of 2.5 million tonnes at 0.62% NiEq (indicated), and 2.9 million tonnes at 0.64% NiEq (inferred). But with nickel prices currently hitting multi-year highs, perhaps the most important feature of the project is that it maintains major permits for the resumption of operations and the construction of a mine and mill at the project site.
The Shakespeare project also has significant exploration potential, according to Jessup. “When we looked at it, we recognized the exploration potential right away and we concluded that this is a deposit that has not reached anything like its full geological potential,” the CEO said. “It has really just been limited by a lack of drilling.”
Blue sky potential
The current resource has not yet been updated to include Magna’s recent drilling success during their 2021 campaign. In July, the firm made a new nickel discovery, at the P-4 target, which is only five kilometres to the northeast and along trend from the Shakespeare deposit. Drilling at P-4 hit highly encouraging nickel, copper and platinum group metals (PGM) semi-massive sulphide mineralization close to surface, confirming the potential for new nickel and copper discoveries on Magna’s 180 square kilometre land package.
P-4 has blue sky potential for Magna shareholders, but the firm already has a development-ready project in Shakespeare. An upcoming feasibility study is due to be published in 1Q 2022, but based only on the resources in place prior to the 2021 drilling campaign. Jessup estimates that the reserves will be “in the 11 million tonne range,” implying a seven-year mine life at 4,500 tons per day. Shakespeare currently has major permits and an approved closure plan for these operating parameters.
Jessup also expects that the feasibility will highlight another attractive feature of the Shakespeare project – an initial capital cost that is relatively low in comparison to other base metal projects.
“In today’s high inflationary environment, we’ve seen other companies report some very disappointing results and large cost overruns. But we want to be able to demonstrate today, even in this high cost, inflationary environment, that this is a very reasonable capex project to bring into full commercial production and produce nickel and copper concentrates,” he said.
Future plans at Shakespeare
There is still more work being done in and around Shakespeare to follow up on 2021 drilling. At some point over the next 18 months, Jessup is aiming to publish an updated resource at Shakespeare that will eventually be incorporated into an updated life of mine plan and increase the current reserves.
“What we want to demonstrate with this feasibility study is that the project itself right now has a very reasonable capex, and that all this drilling that we’re doing is showing additional potential to extend the mine life which will greatly enhance the economics,” he said.
Jessup and his team certainly have the collective experience to put the project, whatever the size, into production. Jessup himself led the operations team that brought the Morrison deposit into commercial production. Most of the team have worked in Sudbury for much of their careers, making discoveries, building mines and operating them successfully.
“When you combine that all together, we have the right ingredients to be not just the next nickel producer, but the potential to be the best nickel producer in Sudbury,” Jessup pointed out.
And with a strong shareholder base including Dundee Corporation, which owns 20% of the stock, and the Canadian Mining Hall of Fame’s David Elliot, one of the founders of Haywood Securities, the team has good pedigree backing Magna’s vision to become an integrated nickel producer.
In a region dominated by major producers like Glencore, Vale and KGHM, it could be a daunting task to transition from development to operation, but Jessup and the Magna team are unfazed – they’ve done it before.
“Aside from the three large mining companies, the only company that has a significant property package and an advanced nickel project in Sudbury is Magna,” Jessup concluded, “which is an impressive statement when you consider the rich, storied history of nickel production in this region. We’re in a very enviable position to be the next junior to come into production and be very successful here in the Sudbury basin. There’s really no other junior that is positioned to do that.”
Contact Angela at [email protected]
Follow her on Twitter @AHarmantas
Story by ProactiveInvestors
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