Magna Mining board approves Levack restart with C$70.1M initial capital estimate
A PEA models 36.8 million payable pounds of annual copper equivalent output and a C$8.6 million net initial funding need.
Mara Quinlan
Magna Mining Inc. TSENICU OTCMKTSMGMNF said on Thursday its board approved restarting Ontario's Levack mine after a preliminary economic assessment estimated C$70.1 million in initial capital and 36.8 million payable pounds of copper equivalent a year. The study calculates a C$8.6 million net initial funding requirement after projected operating cash flow before commercial production and refundable tax credits.
Magna shares were unchanged at C$2.41 at the Oct. 8 Toronto close, according to the TSENICU Google Finance quote as of 4 p.m. EDT. The company anticipates commercial production in mid-2028 from the fully permitted underground mine in Sudbury's North Range.
The C$70.1 million initial capital estimate covers Jan. 1, 2027, through the start of commercial production, anticipated in mid-2028, after equipment financing timing effects. Magna's calculation subtracts C$55.9 million of expected pre-commercial operating cash flow and C$5.6 million in refundable Clean Technology Manufacturing Investment Tax Credits to arrive at the C$8.6 million net requirement.
The PEA estimates an after-tax net present value of C$227.0 million at a seven per cent discount rate, with a 92.4 per cent internal rate of return under its base-case prices. It models a 0.6-year after-tax payback measured from Jan. 1, 2028.
The mine plan calls for 5.75 million short tons over 7.3 years of commercial production. Its average mining rate is 2,141 short tons a day, while all-in sustaining costs are estimated at US$3.71 for each payable copper-equivalent pound.
Annual payable output in the model averages 12.9 million pounds of copper and 10.9 million pounds of nickel. It also includes 21,400 ounces of platinum, palladium and gold combined, which the study converts into the reported copper-equivalent total using its base-case metal prices.
Those base prices include US$5.10 a pound for copper and US$8.00 a pound for nickel. Using September 2026 average commodity prices instead, Magna's illustrative case raises the after-tax value to C$313.6 million and the internal rate of return to 115.8 per cent.
The board's restart decision follows an assessment with no supporting mineral reserves with demonstrated economic viability, Magna said. The plan excludes any production from the R2 Footwall Zone; the C$168.0 million sustaining capital estimate is separate from the initial capital bill.
"The low capital intensity reflects the significant capital previously invested in the mine, as well as the current state of its existing infrastructure," Magna chief executive Jason Jessup said in the Oct. 8 release.
Underground development and surface construction are expected to ramp up over the coming months. The PEA estimates pre-tax cash flow of about C$96.5 million a year in 2028 and 2029 using its base-case prices.
Magna anticipates commercial production at Levack in mid-2028.
