Why Investors Should Be Watching Magna Mining’s Nickel and Copper Play

Magna Mining has been steadily building a portfolio of high-potential base metal assets in the Sudbury Basin, focused on nickel and copper. The recently updated PEA for Crean Hill shows real promise, the $21.85M private placement gives them the firepower to keep pushing forward, and the KGHM acquisition could be a game-changer if they pull it off.

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There’s a lot happening with this company right now, and while challenges remain, it feels like Magna is entering a critical phase in its growth story. Let’s take a closer look.

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Why We Like The Stock 

Crean Hill Project

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The Crean Hill Project is central to Magna Mining’s growth plans, offering a combination of strong economics and promising near-term potential. The updated PEA, filed in November 2024, outlines a 13-year mine life with an after-tax NPV of $194.1 million. This, combined with a payback period of just 1.5 years, sets the stage for the project to deliver both quick returns and long-term value.

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This is not just theory. Crean Hill is already proving its worth. Bulk sampling has generated $1.28 million in revenue, demonstrating the project’s ability to contribute to cash flow even during development. With ongoing exploration, there is also room to expand resources, which could further extend the mine’s life and increase its value. Its location in the Sudbury Basin is another key advantage, providing access to existing infrastructure and smelters, which simplifies operations and helps manage costs.

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What makes Crean Hill especially compelling is its ability to serve multiple markets. With a mix of nickel, copper, and PGMs, the project aligns perfectly with the growing demand for critical metals, particularly in the energy transition. For Magna, Crean Hill is not just a cornerstone asset. It is a real opportunity to establish themselves as a meaningful player in the critical metals industry.

KGHM Acquisition

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The KGHM acquisition is a pivotal moment for Magna Mining as it transitions from a development-focused company to an emerging producer with a significantly expanded portfolio. Announced in September 2024, the deal includes the producing McCreedy West Mine, the care-and-maintenance Levack and Podolsky mines, and five exploration properties, including the past-producing Kirkwood mine. This move is about more than just acquiring assets. It is a strategic step toward unlocking immediate production potential while laying the foundation for future growth.

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McCreedy West is the cornerstone of this acquisition. In 2023, the mine produced 317,000 tons from its copper-rich 700 Complex, with grades of 1.6 percent copper alongside nickel and PGMs. This production history gives Magna a major advantage, allowing the company to focus on improving and optimizing operations rather than starting from scratch. Modest investments planned for the mine aim to boost production and improve grades, with the goal of full optimization by late 2025. Cash flow from McCreedy West will be instrumental in advancing other flagship projects like Crean Hill and Shakespeare.

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The financial structure of the deal adds to its appeal. Magna will pay $5.3 million in cash and $2 million in shares upfront, followed by a deferred $2 million payment in 2026. Additional milestone-based payments tied to future production provide flexibility, helping Magna avoid excessive financial strain in the short term. This staggered approach allows the company to allocate capital strategically while focusing on integrating these new assets.

Shakespeare Project

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The Shakespeare Project adds another layer of potential to Magna Mining’s portfolio. As a feasibility-stage project, it is permitted for a 4,500-tonne-per-day open-pit mine with a processing facility and tailings storage, making it effectively ready for construction when the timing is right. While development has been strategically deferred in favour of prioritizing cash flow from other operations, recent exploration has shown there is still plenty to get excited about at Shakespeare.

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In November, Magna announced a new copper discovery in the Southwest Copper Zone, located just 1.5 kilometres from the main Shakespeare deposit. Drilling intersected 1.4 percent copper over 32.4 meters, including 2.3 percent over 13.9 meters, reinforcing the underexplored potential of this 180 km² land package. This find not only adds upside to the project’s existing resource base but also highlights the untapped value in the surrounding area.

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The strategic value of Shakespeare lies in its flexibility. With major permits in hand, Magna has the ability to fast-track development once cash flow from McCreedy West and Crean Hill is secured. This approach minimizes the risk of overextension while keeping the project in Magna’s pipeline of growth opportunities. At the same time, ongoing exploration ensures that the resource potential continues to grow, strengthening its case for future development.

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Risks & Considerations

Magna Mining’s growth strategy relies heavily on securing and maintaining financial stability. While the $21.85M private placement ensures short-term liquidity, the company remains dependent on external funding for future development and exploration. The deferred payments and milestone obligations tied to the KGHM acquisition, while staggered, add financial pressure that will require strong operational cash flow to meet.

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The success of Magna’s projects, particularly McCreedy West, is critical for generating the cash flow needed to fund other flagship developments like Crean Hill and Shakespeare. Any delays or underperformance at McCreedy West could strain the company’s ability to sustain its growth trajectory.

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Additionally, Magna is exposed to commodity price fluctuations, particularly in nickel and copper markets. Sustained low nickel prices could compress margins and prolong the timeline for returns, even as copper provides some near-term balance.

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Sources 

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All information has been sourced from Magna Mining's official website, investor presentation, financial statements, and recent news releases.

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