Sudbury mine developer Magna Mining expects to start test mining nickel and copper at its Crean Hill Project before the end of 2024. And a good chunk of this early production will be headed to Vale for processing.
Magna announced March 27 that it’s signed an ore-selling agreement — known as an off-take — with mining giant Vale Base Metals, the former owners of Crean Hill.
Magna acquired Crean Hill from Vale in November 2022 and are wasting little time in making preparations to put it back into production in gathering permits, carrying out economic and technical studies, and carrying out more than 19,000 metres of resource drilling on the property last year.
Crean Hill, a former INCO mine (now Vale), is situated in the southwest corner of the Sudbury basin. It operated from 1900 to 2002.
Magna sees both open-pit and underground mining opportunities on the property.
In a note to shareholders and a news release, Magna management said this deal goes a long way toward eliminating much of the risks associated with the project.
“This agreement is the culmination of several months of work with Vale and we are quite pleased with the outcome,” said Magna CEO Jason Jessup in a statement.
Magna said its mine closure plan is in place and the company is waiting on a final key permit, a Permit to Take Water, from the provincial environment ministry, which it expects to pocket by the second quarter.
This permit allows Magna to begin pumping water out of the mine and start driving a ramp from the surface for advanced underground exploration work to begin early-stage mining. This will set them up for a “future commercial production decision,” said Jessup.
Under the agreement, early Crean Hill production would be shipped to Vale’s Clarabelle Mill in Sudbury for processing. The company’s news release didn’t specify the agreement’s term and tonnage, but said mined material would come from the Main, Intermediate, 9400, 9400 Footwall and 101 Footwall zones at Crean Hill.
Ore from the project’s 109 Footwall zone is not included in the agreement. Plans are to process this material “through an alternative mill with potentially increased precious metal recovery,” the company said.
The cost to put Crean Hill back into production hasn’t been finalized, but a preliminary economic assessment published last year put the initial price tag at $48 million. The estimated mine life ranges between 15 and 19 years.
Crean Hill contains 500 million pounds of nickel, 450 million pounds of copper and 1.7 million ounces of platinum, palladium and gold. A revised mineral estimate will be posted by the end of June.
To finance the mine project, Magna said it’s looking into government grants and signing streaming deals on metals from Crean Hill that it considers byproducts.
The company said it’s fully funded to continue exploration to make new discoveries at Crean Hill and an outlying nickel, copper, platinum group metals near McKerrow called Shakespeare. Drills are turning at both sites with assay results coming out monthly for the remainder of the year.
