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Sudbury junior miner out to snag deep-pocketed partner to dig $233-million mine

Magna Mining in talks with Mitsui to restart Shakespeare Mine
Magna Mining 5
(Magna Mining photo)

The operators behind a proposed open-pit nickel and copper mine project, west of Sudbury, are in talks with a potential heavyweight international development partner.

In proclaiming it possesses Canada's "next producing nickel mine," Magna Mining, has signed a non-binding memorandum of understanding (MOU) with Mitsui, a global trading and investment company.

The two parties are discussing the possibility of Mitsui coming aboard as a 10 to 12.5 per cent joint venture partner to finance the restart of the former Shakespeare Mine, 60 kilometres southwest of Sudbury and north of the town of McKerrow. 

The earlier version of the Shakespeare Mine operated briefly between 2010 and 2012 but nickel prices are now surging to their highest in a decade, hovering at US$22,800. Copper is the $9,500-per-tonne range.

Magna, a Sudbury junior miner, just posted a feasibility study for Shakespeare, showing a mine life of 7.1 years with the real likelihood of extending that as more mineral discoveries are being made. 

Over the life of mine, the projected haul at Shakespeare is 65.7 million pounds of nickel concentrate, 86.7 million pounds of copper, and to a lesser extent 3.0 million pounds of cobalt and 177,000 ounces of platinum group metals.

Carving out the pit, erecting buildings, and equipping the operation will be a $232.9-million venture in upfront capital costs, followed by $9.2 million in operating costs once it's running. Mitsui could conceivably contribute between $8 million and $10 million, but that's to be negotiated.

Mitsui's global assets are in mining, energy, machinery and the chemical sector, spanning 63 countries and employing 5,600.

Exploration is showing there's mineral potential deeper down, indicating the possibility to transition to underground mining at some point.

By way of a mining fleet, the study recommends using 91-tonne dump trucks, hydraulic excavators, wheel loaders and drills. A 4,500-tonne-per-day mill will be built next to the pit.

Magna said talks with Mitsui are only limited to the Shakespeare deposit, not the rest of its 18,000-hectare property where the company made a promising discovery last year, dubbed P-4.

"Our recent successful drill campaigns at the Shakespeare Mine and the adjacent P-4 exploration target also provide encouraging evidence that we will be able to fulfill our goal of further growing the resources at Shakespeare, potentially extending the life of mine and making new discoveries on our property package," said Paul Fowler, the company's senior vice president in a news release.

Magna is giving every indication there are more opportunities to be had in this particular area, near the north shore of Lake Huron. The company said it's in acquisition mode to pick up more ground.

“This feasibility study demonstrates why we think the Shakespeare Nickel Project has the potential to be the next nickel producing project in Canada," said Magna Mining CEO Jason Jessup in a statement, "and it confirms our belief that Shakespeare is an attractive stand-alone operation at current nickel and copper prices.

"Building the project as outlined in the feasibility would also give us a cornerstone asset with which to pursue Magna’s vision of developing a hub and spoke production model in the world-class Sudbury nickel mining camp," added Jessup.

The company said the Ministry of Northern Development, Mines, Natural Resources and Forestry has approved the mine closure plan. Key permits are already in hand for construction of a 4,500-tonne-per-day mining and milling operation.

The feasibility study notes the real possibility of Shakespeare becoming a carbon neutral nickel mine with the access to nearby hydro power grid and opportunities available to keep its emissions down.