Sudbury’s Magna Mining has tabled an economic and technical report to bring a former Inco nickel mine back into production.
The exploration outfit and would-be mine developers released a preliminary economic assessment (PEA) showing strong mineable economics on its Crean Hill Project located in the southwest corner of the Sudbury Basin. A PEA is an initial report on what a mine operation could look like.
In the company’s evaluation of the property, Crean Hill has the potential for a 15 to 19-year mine life depending upon the mineral processing scenario they eventually choose, and bring it online at a “modest” cost.
Magna has aspirations to be the next new nickel miner in Sudbury.
The company acquired the former Crean Hill Mine last November and has continued drilling it off. Crean Hill originally closed in 2002 after 80 years in operation. The site located 35 kilometres from Sudbury and is just off the Trans-Canada Highway.
There remains untapped mineral potential with nickel, copper, cobalt, platinum, palladium and gold still in the ground, the kind of commodities that gets the battery and electric vehicle industries charged up.
Crean Hill contains an indicated resource of more than 500 million pounds (227,000 tonnes) of indicated nickel, 450 million pounds (204,000 tonnes) of copper, and 1.7 million ounces of platinum, palladium and gold.
Magna said Crean Hill has both underground and open-pit mine potential; the latter would allow them to go into production fairly quickly. Permits can be obtained in months instead of years. The company continues drilling on the property to further delineate the resources there.
Underground mining will involve driving a new ramp from surface to tie into an existing shaft that needs to be rehabilitated and upgraded for production. Surface operations will involve conventional truck and shovel mining.
Their pre-production capital costs amount to $81.1 million for both open pit and underground operations, after spending $48.4 million on advanced exploration.
Want to read more stories about business in the North? Subscribe to our newsletter.
In a note to shareholders, Magna called the posting of the PEA as “the first step in demonstrating the immense potential that this property has as a key component of our hub-and-spoke model for new nickel production in the Sudbury Basin.”
Magna is a Sudbury-centric company with a keen focus on developing mineral properties in the Sudbury Basin, an area their experienced management team is very familiar with. They hold two properties, Crean Hill near Whitefish, and Shakespeare, 70 kilometres west of Sudbury near McKerrow.
Magna is looking at two processing options for Crean Hill.
One is to truck the mined material to an existing mill in Sudbury or mill the material themselves with a processing plant they would have to finance and build at their Shakespeare property. Shakespeare has nickel potential but also is permitted to be the host site for a processing plant.
The PEA shows the project economics look “strong” if they farm the processing out to someone to do. If they process their own minerals, the economics are “exceptional.”
Magna said it’s proceeding to the stage of technical assessment, a prefeasibility study, to further map out the economics of the project while continuing exploration and pump out more drill assay results, which will be coming within the next month.
“This preliminary economic assessment demonstrates why we think the Crean Hill Nickel Project has the potential to be the next nickel producing mine in Canada,” said company CEO Jason Jessup in a July 31 release.
“The results of the base case study show positive economics, a long mine life, modest upfront capital cost, and minimal permitting required before commencing advanced exploration development.”
