Magna Mining to acquire Sudbury copper mine from KGHM
Magna Mining (TSXV: NICU) has agreed to purchase a portfolio of base metal assets from a subsidiary of KGHM International.
The deal, announced on Sept. 11, 2024, includes the McCreedy West copper mine, along with three other past-producing mines in the Sudbury basin mining district: Levack, Podolsky and Kirkwood. Magna will also acquire exploration properties, including the Falconbridge footwall and Northwest Foy, among others.
The purchase price consists of C$5.3 million in cash, C$2 million in Magna common shares upon closing, an additional C$2 million in cash due on Dec. 31, 2026, and contingent payments of up to C$24 million, depending on future milestones.
Magna is also in discussions for a C$10 million term loan and a C$10 million letter of credit facility, with Fédération des caisses Desjardins du Québec, a subsidiary of Desjardins Group, to support the deal.
Magna will take ownership of McCreedy West, an active copper mine that produced 317,660 tonnes of ore in 2023, with copper grades of 1.59%. The mine also yielded nickel, cobalt, platinum, palladium, gold and silver. In addition, the Levack mine, which has been on care and maintenance since 2019, will be evaluated for a potential restart, given its near-surface high-grade nickel and copper zones. The Podolsky mine, inactive since 2013, has mining potential in its north zone and nickel ramp deposit.
“We are not only acquiring a producing mine. We believe that there is significant mineral resource potential remaining and the sale assets have exceptional exploration potential,” CEO Jason Jessup said in a news release. “This acquisition creates a clear pathway to realizing our stated goal of having three or more producing mines within three to five years.”
The deal is structured as a share purchase, with Magna acquiring all of the outstanding shares of Project Nikolas from FNX Mining, a KGHM subsidiary. The transaction is subject to regulatory approvals, including from the TSX Venture Exchange, and is expected to close by late 2024 or early 2025.