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Magna Mining approved a $70.1 million restart of its Levack nickel-copper mine near Sudbury, with commercial production targeted for mid-2028. The project would give Magna a second producing mine, but it carries execution and resource risks because the company approved the investment without a feasibility study or mineral reserves.
Magna Mining has approved a $70.1 million restart of the Levack nickel-copper mine near Sudbury, Ontario, targeting commercial production by mid-2028. The project would make Levack the company’s second producing mine alongside McCreedy West, as Magna seeks to build a multi-mine business using the region’s existing mining infrastructure.
A preliminary economic assessment (PEA) released Thursday puts Levack’s after-tax net present value at $227 million, using a 7% discount rate. The study forecasts a 92% after-tax internal rate of return and a 7.3-year commercial production period. The PEA’s base case assumes copper at US$5.10 per pound, nickel at US$8 per pound and gold at US$3,600 per ounce.
The mine plan calls for processing 5.75 million short tons at about 2,140 tons per day. Annual average output is forecast at 12.9 million payable pounds of copper, 10.9 million pounds of nickel and 21,400 ounces of platinum, palladium and gold combined. The study also estimates average operating costs of $157.80 per ton processed and $168 million in sustaining capital during commercial production.
Magna’s initial capital estimate is $70.1 million, including $12.6 million in contingency, for spending from January through June 2028. The company expects $55.9 million in operating cash flow before commercial production and $5.6 million in refundable tax credits to reduce its net cash outlay by the end of the ramp-up to $8.6 million. Those anticipated offsets do not lower the initial capital requirement; tax credits are subject to eligibility requirements.
A Second Sudbury Mine in the Plan
Levack would broaden Magna’s production base beyond McCreedy West and advance its strategy of developing several mines around Sudbury’s established mining network. Magna plans to send mined material to third-party mills in the Sudbury area, rather than relying on a new processing facility as part of the restart plan described in the PEA.
The study’s projected economics are meaningful to the company’s development plans, but they are not a guarantee of results. Desjardins analyst Bryce Adams valued Levack at $497 million using comparable metal prices, more than twice the PEA’s $227 million after-tax value. Adams nevertheless described the contact-zone plan as stronger than his model and considered the restart a positive step, according to a Thursday note cited by The Northern Miner.
The different valuations underline how estimates depend on assumptions about mine planning and future production. The PEA also uses only part of Levack’s resource, which could leave room for changes if further drilling adds or converts material. That potential remains uncertain, rather than part of the current production case.
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Levack’s Existing Mine Infrastructure
Levack last operated in 2018. Magna said much of the mine’s infrastructure has been maintained because the site provides secondary access for McCreedy West and nearby mines. The restart plan includes rehabilitating underground workings and equipment, refurbishing the production hoist and loading pocket, and establishing access and drilling platforms.
The updated resource reported for Levack includes 7.8 million tons indicated, grading 1.12% copper and 1.48% nickel, and another 5.83 million tons inferred, grading 1.27% copper and 1.41% nickel. The PEA draws on only part of that resource and includes 2.1 million tons classified as inferred, a category with less geological confidence than indicated material.
Magna’s plan for a second Sudbury restart is also moving forward at Crean Hill. The company expects a prefeasibility study for Crean Hill this month, according to the report. That work is separate from Levack’s approved restart and does not establish when Crean Hill might begin production.
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Execution and Resource Risks Remain
The restart has not been supported by a feasibility study or mineral reserves demonstrating that the project is economically viable. A PEA is an early-stage assessment, and its forecasts depend on assumptions about mine development, operating performance and metal prices. Magna has acknowledged the risk of technical and economic failure in proceeding without further study.
Project costs and funding also need to be distinguished: the $70.1 million initial capital estimate is not the same as the company’s projected net cash outlay after expected operating cash flow and tax credits. The credits depend on eligibility, and actual operating cash flow before commercial production could differ from the study forecast.
The PEA does not include R2, a copper and precious-metals discovery that has not yet been included in a resource estimate. Three underground rigs are testing the area, but drilling results, a resource estimate and any impact on Levack’s mine life or economics remain unknown. The report also notes a gap between the PEA’s valuation and Adams’ estimate, without resolving which assumptions account for the difference.
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Underground Work and Drilling Ahead
Magna expects underground development and surface construction to accelerate over the coming months. Work identified in the restart plan includes rehabilitating mine workings, preparing underground access and drilling platforms, and refurbishing equipment needed to return the site to production.
Further drilling at R2 could help establish whether the discovery supports a resource estimate or changes the mine plan, but the company has not provided a confirmed outcome from that work in the source report. The next material project milestone remains the development work required to reach the stated mid-2028 commercial production target.
Separately, Magna expects to publish a Crean Hill prefeasibility study this month. That study may clarify the status of the company’s other planned Sudbury restart, while Levack’s costs, construction progress and ability to meet its schedule will need to be tracked as work advances.
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Key Questions
What has Magna approved at Levack?
Magna approved an estimated $70.1 million restart of the Levack nickel-copper mine near Sudbury, Ontario. The company is targeting commercial production by mid-2028.
Would Levack be Magna’s second producing mine?
Yes. If the restart reaches production, Levack would join McCreedy West as Magna’s second producing mine. The company plans to ship Levack material to third-party mills in Sudbury.
What does the Levack study forecast?
The PEA estimates a $227 million after-tax net present value at a 7% discount rate and forecasts a 7.3-year commercial production period. Its output, costs and valuation are projections based on the study’s assumptions, not guaranteed results.
Why does the restart carry added risk?
Magna approved the investment without a feasibility study or mineral reserves demonstrating economic viability. The mine plan also includes inferred resources, which carry less geological confidence than indicated resources.
What is R2, and is it included in the mine plan?
R2 is a copper and precious-metals discovery being tested by three underground rigs. It has not yet been included in a resource estimate and is excluded from the PEA, so any effect on mine life or project economics is not yet established.
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