Magna Mining Inc (TSX-V:NICU) unveiled what it called a “transformational” acquisition of Lonmin Canada Inc (Loncan), which includes the Denison project and covers the elements of the nickel-copper-platinum group of Crean Hill (PGE ) assets, in connection with a transaction valued at C$16 million.
In the release, the company also announced plans for a private placement of up to approximately 74 million C$0.27 subscription receipts to raise aggregate gross proceeds of up to C$20 million.
“The Crean Hill Mine has been a significant producer in the Sudbury Basin for over 80 years and we believe the Denison Project has the potential to add significant value through the development of remaining historic mineral resources and further exploration on ownership,” said Magna CEO Jason. jessup.
“The successful closing of this transaction will be transformative for Magna and has several potential synergies with Magna’s fully licensed late-stage Shakespeare project,” he added.
READ: Magna Mining commissions second drill at Shakespeare Nickel project in Ontario
The Denison property is located 37 kilometers (km) east of Magna’s advanced Shakespeare project. The Crean Hill mine operated for three distinct periods, from 1906 to 2002, with past production totaling 20.3 million tonnes (Mt) grading 1.3% nickel, 1.1% copper, 1.6 grams per tonne (g/t) of platinum, palladium and gold. Prior to 2018, several zones of low-sulfide, high-PGE footwall mineralization were discovered and defined by Loncan.
A total of 91,390 meters (m) of diamond drilling in 279 holes was completed, intersecting both low-sulfide, PGE-rich footwall mineralization and high-grade nickel contact mineralization -copper.
In 2018, following the closure of the mine, Loncan entered into an agreement with Vale Canada Limited (Vale) regarding the transfer and development of the Denison asset.
Denison has the potential to provide power to extend the life of Shakespeare’s mine or operate at short notice through toll milling or a combination of the two, Magna pointed out.
The acquisition, subject to customary closing conditions, will be completed following a purchase agreement between Magna, Loncan and current Loncan shareholders, namely Sibanye UK Limited (formerly Lonmin Limited and a subsidiary of Sibanye Stillwater Limited), Wallbridge Mining Company Ltd. and certain other minority shareholders of Loncan.
The aggregate purchase price for the outstanding shares of Loncan is C$16 million, consisting of a closing payment of C$13 million in cash and a deferred payment of C$3 million, payable on a pro rata basis to the sellers. The deferred payment is payable no later than the 12-month anniversary of the closing.
To fund the cash component of the acquisition, as well as ongoing exploration and development activities at Denison, the Company is undertaking a concurrent private placement.
The Subscription Receipts will be issued pursuant to and governed by a Subscription Receipt Agreement between Magna and Computershare Trust Company of Canada in its capacity as Subscription Receipt Agent.
The closing of the private placement is expected to occur on or about August 30 of this year.
Magna Mining is focused on nickel, copper and PGM projects in the Sudbury area of Ontario, Canada. The company’s flagship asset is the former Shakespeare producing mine, which holds major permits for the construction of a 4,500 tonnes per day surface mine, processing plant and facility. tailings storage facility and is surrounded by a contiguous prospective land package of 180 km2.
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