Magna Mining (TSX: NICU) formally approved restarting production at its past-producing Levack nickel-copper mine in the Sudbury Basin, Ontario, on the strength of a preliminary economic assessment the board deemed strong enough to back with capital. The plan calls for C$70.1 million of initial capital, including C$12.6 million of contingency, with spending starting January 1, 2027 and commercial production targeted for mid-2028. The 7.3-year mine life would process 5.75 million tonnes at roughly 2,200 tonnes a day, using the mine’s existing headframes, shafts, hoist and loading infrastructure.
The PEA economics, after tax at a 7 percent discount rate, show a C$227 million net present value, a 92.4 percent internal rate of return and a payback period of just 0.6 years. Net initial funding required is only C$8.6 million once pre-commercial cash flow and tax credits are netted out, which is why Magna’s shares ticked up 0.4 percent to C$2.42 on Thursday, valuing the company at about C$758 million, with limited dilution risk from the usual junior financing treadmill.
Two caveats travel with the economics. The PEA is built mostly on inferred resources with no mineral reserves yet, so the numbers are preliminary by definition; the company approved the investment without a feasibility study. And part of the tax-credit math leans on legislation the company itself admits is not yet law. Desjardins analyst Bryce Adams put a $497 million value on the project at comparable metal prices, well above the PEA’s C$227 million, though he views the stronger Contact Zone production plan as a plus.
Levack joins Magna’s producing McCreedy West mine, putting the company on a two-mine path around Sudbury’s existing infrastructure. Excluded from the PEA is the R2 footwall discovery, a copper and precious-metals system drilled to intercepts as high as 29.7 percent copper equivalent over 3.4 metres in June, which the company is still chasing with three underground drill rigs as future optionality.