Magna Mining has reached a definitive offtake agreement with Vale Canada, a unit of Vale Base Metals, for the advanced exploration portion of the Crean Hill Project in Ontario.
As per the agreed terms, the initial production would be shipped to Vale’s Clarabelle Mill in Sudbury for processing. It includes materials from the Main, Intermediate, 9400, 9400 Footwall and 101 Footwall zones.
The 109 Footwall zone is not included in the agreement and is set to be processed at an alternative mill, which may lead to higher precious metal recovery during the advanced exploration period.
Prior to the agreement, Magna conducted a comprehensive test programme at a third-party metallurgical facility using samples from Crean Hill to predict recovery rates and produce a high-grade concentrate in line with the Clarabelle Mill’s flowsheet.
The test work indicated mill recoveries of 80.5% for nickel, 93.6% for copper and approximately 70% for cobalt, platinum, palladium and gold.
Additionally, Magna applied for a permit to take water from the Ministry of Environment, Conservation and Parks.
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It anticipates approval by the end of the second quarter of 2024, which will enable the dewatering of Crean Hill’s underground workings, essential for the start of advanced exploration and test mining.
Advanced exploration grades used in the agreement negotiations were derived from the Mineral Resource Estimate dated 19 August 2022.
Magna plans to update this estimate in the second quarter of 2024 for the final design of underground stopes.
It is also exploring various non-equity capital sources, including potential government grants or a byproduct metal stream, to fund the advanced exploration.
The company also confirmed that it is fully funded for a 25,000m exploration drilling programme in 2024, aimed at new discoveries at both the Crean Hill and Shakespeare projects.
Magna CEO Jason Jessup said: “We are extremely pleased to be able to announce the signing of the Definitive Off-Take Agreement with Vale. This agreement is the culmination of several months of work with Vale and we are quite pleased with the outcome.
“Additionally, the recent announcement of the filed Amended Closure Plan has Magna on track to have all the permits in place to develop the ramp from surface, which will allow for underground test mining and set up for a future commercial production decision.”
