Magna Mining Inc (TSX-V:NICU) has unveiled an initial resource estimate for the Denison project in Sudbury, Ontario, which it recently acquired, and which showed a total indicated resource of more than 31 million tonnes, sending shares surging.
The company has just closed the acquisition of Lonmin Canada, which owned the property that includes the past producing Crean Hill mine, a significant producer of nickel-copper-platinum-palladium and gold for over 80 years.
"We believe that this Mineral Resource Estimate clearly demonstrates that the Denison Project has considerable remaining mineralization, and has the potential to, once again, become a significant producing mine," said Magna Mining CEO Jason Jessup.
"The proximity of our other project, the permitted mine and mill site at Shakespeare, means that this asset is a natural fit for our company and gives us a unique advantage in exploring and developing Crean Hill.
READ: Magna Mining edges towards closing 'transformational' C$16M acquisition of Lonmin Canada Inc
"Now that the acquisition has closed, we plan to commence our maiden exploration program at Crean Hill and commission a new technical study to demonstrate the potential synergies between Crean Hill and Shakespeare," he added.
Notably, the resource starts at surface and could be amenable to open pit mining as well as near surface underground mining, noted Magna.
In the higher confidence indicated category, underground, the resource is pegged at 14.05 million tonnes at 2.07% nickel-equivalent. In the open-pit, the report showed 16.8 million tonnes at 1.08% nickel-equivalent.
Overall, the contained metal in the indicated category was put at 500 million pounds of nickel, 450 million pounds of copper, and 1.7 million ounces of platinum plus palladium plus gold.
The company also highlighted that the mineralization was "well defined" and mainly in the indicated category from surface to around 1,200 metres below surface.
Historical production at the Crean Hill mine was focused on contact-style nickel-copper mineralization, while more recent exploration on the property has demonstrated the potential for high-grade platinum-palladium-gold mineralization in the footwall of the contact nickel zone, it added.
Magna Mining is focused on nickel, copper and PGM projects in the Sudbury Region of Ontario, Canada and has two advanced assets; the past producing Shakespeare mine, which has major permits for the construction of a 4,500 tonnes-per-day open pit mine, processing plant and tailings storage facility and the past producing Crean Hill mine.
Shares in Toronto rushed up nearly 41% to C$0.50 each.
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Contact the author at giles@proactiveinvestors.com