Magna Mining, a fast-moving Sudbury mining startup company, has taken a giant leap forward by acquiring a working copper mine in the Sudbury basin along with a raft of promising properties from Polish-headquartered miner KGHM International.
Magna, known locally for its redevelopment of the former Crean Hill mine, has signed an agreement to acquire the operating McCreedy West copper mine and a stable for exploration and development properties across the Sudbury basin in a $33.3-million cash-and-share deal.
“Since the inception of our company, Magna has strived to acquire past producing mines in Sudbury, and the acquisition of these particular properties has always been a primary objective of ours,” said the company in a Sept. 12 news release. “It has taken many years to get to this point, but we believe this is just the beginning of the growth of our company."
The deal is expected to close by the fourth quarter of this year or early 2025.
The terms of the transaction are $5.3 million in cash and $2 million in Magna common shares upon closing the transaction, $2 million in cash on Dec. 31, 2026, plus future payments of up to $24 million.
On how it's funding this, Magna said it’s negotiating a commitment letter for a $10-million three-year term loan and a $10-million Letter of Credit with Fédération des caisses Desjardins du Québec (FDQ), a subsidiary of Desjardins Group.
The leading asset of the property pickup is McCreedy West, which produced 317,000 tonnes of copper, nickel, platinum group metals, gold and silver in 2023.
Also in the mix is the shuttered Levack and Podolsky nickel and copper mines, which have been on care and maintenance since 2019 and 2013, respectively. On more of the development front, Magna will acquire the former Kirkwood Mine and the Falconbridge Footwall, Northwest Foy, the North Range and Rand properties.
Led by CEO Jason Jessup, Magna has assembled a team with intimate knowledge of the mineralization in the Sudbury basin and what’s inside of some of these past-producing properties where many of them once worked.
Many of our senior executives and directors have operated and explored these assets while working at FNX Mining,” the company said. “We believe that our company has the ability to help these mines realize their full potential.
“We believe that there is significant mineral resource potential remaining and the Sale Assets have exceptional exploration potential,” added Jessup in a statement.
KGHM’s main asset in the Sudbury basin is its Victoria copper and nickel mine project, which is currently under development. Jessup said since the properties they’re picking up are deemed non-core to KGHM, they haven’t seen the exploration and development attention to reach their full potential.
“We plan to reinvest most of the profits that may be generated from McCreedy West back into additional capital development and exploration focused on expanding resources, increasing production and making new discoveries. This acquisition creates a clear pathway to realizing our stated goal of having three or more producing mines within three to five years.”
Magna's senior vice-president, Paul Fowler, added the debt-financing arrangement they’ve put together with FDQ makes them less reliant on raising outside equity capital to close the transaction.
“This acquisition accelerates Magna’s timeline to becoming a significant critical minerals producer alongside two major mining companies in the Sudbury mining camp.”
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