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Mitsui expresses interest to partner with Magna at Sudbury nickel project

1st February 2022

By: Mariaan Webb

Creamer Media Senior Deputy Editor Online

     

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TSX-V-listed Magna Mining has entered into a nonbinding memorandum of understanding (MoU) with global trading and investment group Mitsui & Co in what it hopes will be a long-term partnership to create a nickel mine in Sudbury, Canada.

Mitsui will potentially acquire between 10% and 12.5% in Magna’s Shakespeare mine, in exchange for C$8-million to C$10-million, Magna said in an announcement on Monday.

“We anticipate that coupling our operational and geological expertise with Mitsui’s balance sheet strength is a perfect combination in furtherance of advancing the Shakespeare mine into production and developing a significant nickel-producing company,” commented Magna CEO Jason Jessup.

The MoU is limited to 2 590 ha of the more than 18 000 ha Shakespeare project. The MoU property covers the location of the existing Shakespeare deposit, the proposed location of the Shakespeare openpit mine, mill, tailings storage facility and immediately adjacent claims.

The Shakespeare feasibility study, published on Monday, demonstrates that the project is an attractive standalone operation at current nickel and copper prices.

According to the study, C$232.9-million will be required to build a mine that will recover 65.7-million pounds of nickel, 86.7-million pounds of copper, 3-million pounds of cobalt and 177 000 oz of platinum-group metals over a 7.1-year mine life.

The base case demonstrated an aftertax net present value, at a 6% discount, of C$140-million, an internal rate of return of 21.5% and a 3.5-year payback period, using $8.50/lb nickel, $3.95/lb copper and $24/lb cobalt.

Revenue for the project will primarily be from nickel (49%) with copper as the second-biggest revenue contributor (32%).

The operating costs are estimated at $41.18/t ore over the mine life which includes the purchase of carbon offsets and financing of the mining fleet with a 20% initial payment.

Jessup said that building the project as outlined in the feasibility study would give Magna a cornerstone asset with which to pursue its vision of developing a hub-and-spoke production model in the Sudbury mining camp.

Magna senior VP Paul Fowler added that the recent successful drill campaigns at Shakespeare and the adjacent P-4 exploration target provided encouraging evidence that the company would be able to potentially extend the mine life and make new discoveries.

Edited by Creamer Media Reporter

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