mining project finance case study

Mining Financial Model & Valuation

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Recommended Prep Courses

• Building a 3 Statement Financial Model
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Mining Financial Modeling & Valuation Course Overview

Mining Financial Modeling & Valuation Course Objectives

• Understand key mining terms and definitions used in the industry and in valuation
• Understand the mining life cycle from start to finish for assets, projects, and operating mines
• Read and extract the important information from a mining technical report (feasibility study)
• Input key assumptions into a financial model that will drive revenue, expenses, and cash flow in the forecast
• Calculate production statistics based on a detailed mine plan from the technical report
• Build financial statements based on the mine plan
• Perform a discounted cash flow DCF valuation of the mining asset in Excel
• Build sensitivity analysis to test for different input assumptions
• Output relevant graphs and charts to illustrate the investment opportunity
• Understand valuation methods such as Net Asset Value (NAV), P/NAV, P/CF, Total Acquisition Cost (TAC)

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• Excel Crash Course
• Building a Financial Model in in Excel
• Business Valuation

Mining Financial Model & Valuation

Approx 5h to complete

100% online and self-paced

What you'll learn

Introduction to the mining industry, valuation metrics, financial model - assumptions section, financial model - mining section, financial model - financial statement section, financial model - dcf valuation, sensitivity analysis, summary charts & graphs, completed model & case study, qualified assessment, this course is part of the following programs.

Why stop here? Expand your skills and show your expertise with the professional certifications, specializations, and CPE credits you’re already on your way to earning.

Financial Modeling & Valuation Analyst (FMVA®) Certification

• Skills Learned Financial modeling and valuation, sensitivity analysis, strategy
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Towards an understanding of project finance in the mining sector in the sustainability context: a scientometric analysis.

1. Introduction

Knowledge gap, objective, and contributions, 2. materials and methods, 3. scientometric analysis, results, and discussion, 3.1. co-author analysis, 3.1.1. co-authorship network, 3.1.2. network of countries and regions, 3.1.3. co-word analysis, 3.2. citation analysis, 3.2.1. journal citation network, 3.2.2. author citation network, 3.2.3. document citation network, 3.3. cluster analysis, 4. conclusions.

• Incentives that can lead sponsors to adopt a compensation approach at all costs for damages caused. This will allow a better understanding of how the variables E (environmental) and S (social) impact financial results, mainly Return on Assets and Return on Equity.
• Comparative studies of PF application by minerals’ class and companies’ size. This will allow analyzing if there are specifics characteristics according to financial mechanisms used.
• The role of PF and mining industry on the considerable increase in the developing of renewable energy technologies and electric mobility. This will allow correlating ESG criteria in order to analyze the importance of the mining industry in the low carbon economy.
• According to type of mineral, carry out analyses on the main financial mechanisms used in PF schemes. This will allow identifying how transition bonds could boost the mining industry.

Author Contributions

Institutional review board statement, informed consent statement, data availability statement, acknowledgments, conflicts of interest.

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Share and Cite

González-Ruiz, J.D.; Mejia-Escobar, J.C.; Franco-Sepúlveda, G. Towards an Understanding of Project Finance in the Mining Sector in the Sustainability Context: A Scientometric Analysis. Sustainability 2021 , 13 , 10317. https://doi.org/10.3390/su131810317

González-Ruiz JD, Mejia-Escobar JC, Franco-Sepúlveda G. Towards an Understanding of Project Finance in the Mining Sector in the Sustainability Context: A Scientometric Analysis. Sustainability . 2021; 13(18):10317. https://doi.org/10.3390/su131810317

González-Ruiz, Juan David, Juan Camilo Mejia-Escobar, and Giovanni Franco-Sepúlveda. 2021. "Towards an Understanding of Project Finance in the Mining Sector in the Sustainability Context: A Scientometric Analysis" Sustainability 13, no. 18: 10317. https://doi.org/10.3390/su131810317

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How better project management can boost mining’s capital productivity

EY Oceania Business Transformation, Transformation Delivery Leader

Contributors

• Paul Mitchell
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How better project management can boost mining's capital productivity (PDF)

Improving five key elements of project management can overcome the productivity challenges of mining and metals megaprojects..

• Capital productivity is a common problem in mining and metals, with 64% of megaprojects running over schedule or over budget
• A holistic approach to project management that includes five key elements can help companies realize synergies and efficiencies to enhance productivity.
• Miners that improve capital productivity now will be better positioned to navigate ongoing uncertainty and drive better project outcomes.

C apital productivity has long been a concern for the mining and metals sector, with recent volatility and uncertainty, including the disruption of COVID-19, only exacerbating the problem. A June 2021 study of 192 global mining and metals projects worth more than US$1b found that 64% ran over budget or schedule – or both – with the average cost overrun sitting at 39%.

Capital productivity – what it is and how to improve it

Capital productivity is a measure of the efficiency and effectiveness of capital investments in generating operational outputs; it is defined by the Australian Bureau of Statistics as the “ratio of output to capital input.” In short, capital productivity assesses value for money on a multibillion-dollar scale.

There are two key levers for companies to enhance their capital productivity:

• Minimized and predictable “input” through controlled project delivery
• Maximized and sustainable “output” through earlier asset operationalization (e.g., schedule acceleration) or operational efficiency (e.g., improved equipment availability and utilization processes and skills)

Successful capital projects in mining drive enhanced capital productivity outcomes by addressing both these levers. By contrast, at-risk capital projects commonly face challenges of both input inflation (such as cost and schedule variance) and compromised output performance (such as operational impacts of poor design).

According to our experience of supporting mining and metals companies on large, complex capital programs around the world, six major risks are behind the productivity challenge:

• Project management factors, including inadequate cost and schedule estimation methodology
• Stakeholder conflicts that arise from a failure to articulate the project’s value effectively to the economy and community or achieve constructive relationships with partners
• Supply chain disruption due to a lack of resilience in supply chains of materials, equipment and workforce
• Workforce disruption, including difficulties finding talent and navigating the mobility challenges created by COVID-19
• Digital disruption as miners work to integrate digital capabilities into projects and operations
• Unstable and uncertain external environment, with geopolitical issues now a top 10 risk for miners, according to EY’s Top 10 business risks and opportunities for mining and metals in 2021 report

Improving capital productivity through enhanced project management

While miners have less direct influence over some of these risks, project management is clearly within their control. Our research shows that miners that invest in the right project management capabilities and toolsets can reap between 15% and 30% of project value. Five key elements can build a holistic approach to capital project delivery to realize synergies and efficiencies, and boost productivity.

1. Front-end design informing scenario planning

Scenario planning can enhance the robustness of risk-based cost and schedule estimates and the performance of core project management processes across all disciplines (including project controls, risk management and quality management). Effective scenario planning also allows miners to identify and understand the impact of potential events, enabling them to respond with agility and confidence when issues arise. This ability to act quickly and decisively can make the difference between projects, programs and portfolios achieving high levels of capital productivity or stalling.

2. Adequate cost and time contingency

Appropriate levels of contingency in business cases ensure investment decisions are based on the best possible information and help miners reduce the potential for unforeseen and unmitigated cost and schedule impacts. The best contingency approaches are not “set and forget,” but revalidated at key stage-gating intervals.

Miners with the most mature risk management processes ensure that the negative impacts on cost and schedule are considered equal to the upside through cost- and time-saving initiatives. They also engage contractors within the process, transferring risk and rewards to those best placed to influence and control risks and opportunities. And the organizations with the most successful approaches encourage their teams to commit to the process by innovating around how to protect budgets and schedules, and drive true productivity across the project life cycle.

3. Resilient supply chains of materials, equipment and workforce

Miners’ supply chains can be weakened through factors such as vendor concentration , low levels of safety stock, limited flexibility, and outdated contingency plans. COVID-19 has added further disruption, and the rise of national protectionism is a growing concern for mining executives.

Ensuring business and project continuity requires a greater focus on upfront planning, including identifying critical risk scenarios and potential points of failure, then defining potential responses. Early warning systems and digital twins can help build end-to-end supply chain resilience.

4. Agile governance to enable fast, informed decision-making

It’s acknowledged that a well-structured and defined governance framework with clear roles and responsibilities can significantly enhance capital productivity but, often, a lack of relevant, usable information can hinder these informed decisions. This data deficit is particularly common around “outer-horizon” key risks — risks that aren’t in the “firefighting” stage currently but are material and require timely action. Embedding leading indicators into reporting dashboards can flag these risks as they emerge, empowering management with the insights they need to make fast, effective decisions.

5. Capital portfolio management to improve long-term business performance

Organizations need to adapt their capital portfolio management strategy so that it remains both fit for purpose now and can rapidly transform to respond to changing business needs. But many miners lack confidence in their current capital portfolio management strategies and are constrained by a shortage of capital to fund all projects. This reaffirms the need for companies to address potential long-term changes to their market, refocus their portfolios on their core business, and carefully plan and prioritize which initiatives to fund in line with defined strategic objectives and goals.

Using leading indicators to mitigate risks to capital productivity

Reporting dashboards that incorporate leading indicators to monitor delivery performance can raise early awareness of potential risks to capital productivity and enable timely intervention. For example, stakeholder management could be monitored via metrics such as the number of stakeholder queries, including complaints. Other effective lead indicators include contingency drawdown rates (i.e., contingency funding consumption over time) and orphan-risk levels (i.e., no owners or mitigations), which assess risk management and planning alignment maturity. Bespoke indicators directly relevant to a project and its success factors can add more value, giving delivery teams the tailored information they need to keep projects on track and optimize productivity.

Uncertainty creates opportunity for change

Uncertainty is likely to continue for mining and metals companies, creating challenges around capital investment decisions but also providing an opportunity for change. Companies that act now to improve capital productivity can better navigate current volatility while also building stronger foundations for enhanced project outcomes in the future.

Capital productivity is a major concern for mining and metals executives, with several internal and external risks making it difficult for large, complex projects to stay on schedule and on budget. COVID-19 exacerbated the challenge, and uncertainty around investment decisions is likely to continue for some time. Miners that seize the opportunity to rethink how projects are managed can better navigate this volatility now, and build the capabilities to enhance the capital productivity of future projects.

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From exploration to production: structured credit solutions for mining projects

Home / From exploration to production: structured credit solutions for mining projects

Note:   PEA = Preliminary Economic Assessment; DFS = Definitive Feasibility Study

Mining project valuations are lowest in the earliest stages of their development, reflecting the inherently higher risk, and are typically limited to raising capital through equity offerings. Early-stage equity raises are the most dilutive and expensive, reflecting the higher level of project risk that translates into a lower implied project valuation. As mining projects advance up the development curve, the inherent risk is reduced through technical and economic studies, resulting in higher valuations and unlocking a broader range of capital sources. For example, asset-linked products such as royalties and streams typically become available following the definition of a resource and initial economic studies, providing access to non-dilutive capital through the sale of an economic interest in the project’s future production.

Only as projects approach the completion of a Definitive Feasibility Study does the cheapest source of capital, debt, typically become accessible. However, following the last mining super-cycle in 2012, many traditional lenders (typically banks) have not resumed lending to mining projects, due in part to the highly technical nature of mining which makes it challenging to adequately assess key project risks. Debt-financing options for projects being developed by pre-revenue, middle-market mining companies are particularly limited, with the rigidity of traditional bank project finance structures and covenants ill-suited for many companies. To help fill this need, Appian provides creative, flexible, capital solutions to mining companies in the form of loan facilities and asset-linked royalties and streams that allow owners to expedite their projects into production.

Figure 2:   Lender comparison

Appian as your financing partner

Appian is uniquely positioned as a financier for miners seeking to develop their projects, combining creative capital solutions with deep mining technical, development, and operational experience that borrowers can leverage to maximize the value of their projects. Appian’s Investment Team has nearly 500 years of collective mining experience, having been involved in over 60 mine builds, and advised on over US$200bn of mining transactions. The team represents a full spectrum of technical disciplines. Appian takes a ‘partnership approach’, providing borrowers with full access to its in-house resources and expertise through development and production.

Partnership with Appian includes support across:

• Geology, geostatistics, and resource estimation
• Introductions and negotiations with consultants, contractors, and technical providers
• Open pit / underground mine design and optimization
• Metallurgical engineering and plant design
• Project development, including EPCM, construction, and commissioning
• Marketing of intermediate and refined mineral products
• Corporate governance advice
• Capital markets strategy including introductions to banking relationships and equity research
• Permitting advice
• Country and political risk assessments
• Environmental, health & safety, and social best practices

Appian’s technical experience enables it to evaluate each project’s specific merits and complexities, identify value accretive optimizations, and lower project risk by recognizing areas requiring further definition or technical support. Appian works alongside borrowers to develop flexible structures that enhance value for all parties.

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• Masoro Peru (A)

This is a disguised case about a Canadian mining company that had the opportunity to invest in a gold mining project in Peru. The project promised to bring high returns but the local company that ran the mine had been criticized by external stakeholders for its poor record in sustainability. The Peruvian company had been accused of failing to take into account the full costs of the mining project, failing to consult with indigenous peoples and causing widespread pollution of soils and waterways. The (A) case follows the Atlas team’s visit to Peru and their interviews with the mine’s different stakeholders.

The (A) and (B) cases serve as the starting point for a discussion of the challenges of acting in a responsible way. In particular, the case series provides an excellent forum to discuss how companies can balance the need to (a) grow shareholder value, (b) treat their employees ethically and (c) manage projects that have minimal impact on the environment. The fact that most companies have a mixed track record when it comes to responsible leadership is a testament to the difficulty of getting the balance right. The cases illustrate that, too often, firms view their challenges of responsible leadership as zero-sum when they should be looking for ways to grow the pie for all stakeholders.

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Raising Mining Capital: Best Practices

• First Online: 22 November 2019

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Mining capital involves large sums of money and the processing of raising capital must be systematic and structured to entice investors to invest their capital. This chapter covers the key topics to enable a successful capital raise for the different mining project stages, exploration, feasibility studies, mine development, construction and operation.

We unpack the different types of mining capital and the transaction structure behind each type, the processes of combining different types of mining capital to finance projects, the due diligence process for both the investor and mine developer, term sheets and the transaction structure applicable to each mining capital type, the process of raising mining capital, the human aspects and psychology that influence decisions to invest capital into mining projects and operations and non-fundable deal proposals and action plans to rectify.

The chapter concludes with a mining capital game plan, a model for developers that can be applied to any mining project, at any development stage and within any commodity, seeking capital.

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The Northern Miner . (2017, January). New frontiers in mining finance – Research report.

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Solomons, S.-L. (2018, August). South Africa: Investing in junior mining is a game of patience. Mining Review Africa. https://www.miningreview.com/news/south-africa-investing-junior-mining-game-patience/

James, N. (2019, June). Strategic partnerships with midtiers, majors key to securing funding for juniors. Junior Indaba . https://www.engineeringnews.co.za/print-version/strategic-partnerships-with-midtiers-majors-key-to-securing-funding-for-juniors-2019-06-05

Seeger, M. (2007). Development of a strategic and tactical game plan for junior mining companies . PhD thesis, University of the Witwatersrand, South Africa.

Norton Rose Fulbright. Finding finance in the mining and minerals sector – A guide for mine developers . http://www.nortonrosefulbright.com/knowledge/publications/28747/finding-finance-in-the-mining-and-minerals-sector-a-guide-for-mine-developers

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Fisher, B. (2014). Six secrets of capital raising . San Francisco, CA: Berret–Koehler.

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PARTNER CONTENT

Case study: platform finance.

A similarly disruptive solution to those provided by platforms such as Uber and Airbnb could transform junior capital raising

Richard Lloyd, Minexia chief executive

A technology driven alternative has been needed for some time in order to overcome the challenges of a fragmented industry that is overly reliant on brokers, fickle markets and personal business connections.

High net-worth individuals already possess a high level of digital literacy, yet, to date, there has not been a viable online investment product available to investors with a specific mining, project development or exploration sector focus. If investors and issuers alike are treated fairly and in an open and transparent manner, the concept should not only complement, but disrupt the way mining and exploration is funded at the junior to mid-cap levels.

A parallel can be drawn against other platform intermediaries such as Airbnb or Uber and their transformation of the traditional accommodation and transport spaces, respectively, using platform technology.

The equity financing market for junior mining, project development and exploration is tightly controlled by investment banking and brokerage firms that typically target a limited pool of capital in the form of private equity groups. Mining companies raising through public markets are also competing for capital with thousands of companies across dozens of industry sectors as well as their own huge sector where there are many sub-standard companies or projects.

There are in excess of 90 AIM-listed resources stocks, more than 700 ASX entities, 212 TSX equities and 935 TSXV firms - it's an overwhelming selection among which to stand out.

Given the specialist nature of mining and exploration companies, these companies are more likely to thrive in an environment where they are competing only within their own sector and on their own merit. Additionally, mining companies should know that this source of capital is actively investing or looking to invest in the mining and exploration sector.

To attract these investors into such an environment, companies presenting financing opportunities should be vetted.

There is some $200 trillion of high net worth capital globally, yet this wealth does not have a clear path through to the small resources space. Additionally, with a shift in high net worth and family office investors increasingly looking to deploy capital to direct investments rather than through managed funds and ETFs, a dedicated sector platform approach should prove an attractive proposition for investors.

The platform

These are the facts that have encouraged Minexia to create the NR Private Market platform. When designing platform objectives and functionality, several key considerations were addressed.

Market neutrality: a platform-based financing model should be neutral, never promoting one opportunity over another, or providing investment advice.

Transparency and standardisation: any platform should provide a level playing field giving all members access to the same information presented in a standardised format.

Exclusive mining and capital focus: the platform should be for a mining- focused investor base only, unlike many brokers who may have a broader investor base often across a vast range of industry sectors.

Cost advantage: any disruptive or technology-based approach should be cost effective and provide an advantage to all users. Approved investors in that sense should have free and uncommitted access, without fees or spreads on transactions. The aim was to establish competitive transaction closing fees for issuers 40% below the industry standard.

Full deal execution: service should start with deal origination and proceed through to facilitating investor due diligence, then conclude with online document execution and transaction completion. The industry need is for a full-execution, online mining-finance platform.

Once established …

Traditional sources and mechanisms for broker-sourced finance are failing to inject much needed capital into early and intermediate-stage natural resource projects. This failure is complex but is in many ways a function of communications. The irony is that in this digital age there is simply too much information, resulting in over-saturation and proliferation of low quality ‘noise'.

Platforms are bringing users (or subscribers) and providers together. Nobody purchases anything any longer without first looking at availability and price on the internet. The overheads for this model are lower and these cost savings can be passed on.

Returning to the Airbnb example, the company doesn't have to locate a plot of land, build a hotel, furnish rooms, restaurants and a gymnasium then then refurbish those every three years. Airbnb does not own a single property yet is able to find the perfect family cottage in Cornwall for a young family with a dog in tow - assuming the ‘provider base' is sufficient.

There is no shortage of projects in the mining and exploration space. Vetting these assets and providing investor access to pre-screened deals in a similar but more rigorous and market-compliant process to that used by Airbnb would only accelerate the development of quality projects - Airbnb would surely remove a poorly-rated, damp, cold, unfit property from its platform.

The NR Private Market platform is striving to provide clarity and focus to a junior mining finance space devoid of both. In essence, a vetting or filtering of the plethora of public and private opportunities available would provide information in a standardised and comprehensive format to a community of investors with an appetite for resources.

From the Issuer perspective, the platform approach reaches a far wider retail and, perhaps otherwise opaque, high net worth or family office investor base. The requirement for direct issuer or unsolicited broker communication is removed, whilst also protecting the investor identity until the final stages - subscription - of the fundraising process. The private companies and issuers would also benefit from this wider and deeper audience.

Moreover, a global platform-based approach is agnostic to investor location and requires only that said investor is qualified/sophisticated and/or of sufficient wealth, as per regulatory definitions. This challenges the traditional and nepotistic broker model when investment opportunities are limited to a narrow part of the investor spectrum.

The platform-based approach therefore seeks to maximise the opportunity provided by international, 24/7 accessibility and complete transaction functionality.

For the investor

The overriding investor rational is the ‘level playing field'. Platform investors are provided with the same information that institutional investors receive and the transactions are on the same terms.

NR Private Market's first transaction, which was oversubscribed, raised $4.75 million (C$6.25 million) complementing private placement and brokered solutions. Retail investors were provided with the opportunity to invest alongside a billion-dollar Asia-based asset manager on identical terms. Due to the scale achieved through pooling of smaller investors, all investors had access to company management and due diligence data rooms; a privilege generally reserved for institutional investors. Costs, and therefore fees to the issuers, are also kept to a minimum and below the current broker rates as overheads are minimal.

The concept can, of course, only be successful - as with the Airbnb and Uber examples - with an established level of integrity and trust. Initially, this will be built on the foundations of Minexia executives, a team of experienced mining professionals who have all worked with highly reputable mining companies and financial organisations across both the technical and financial aspects of mining. Though the team does not recommend any opportunities, it commits to screening or vetting each deal presented against an institutional standard. This ensures only quality and credible investment opportunities are showcased.

The future of the platform will be decided by the ability of this process to put genuine opportunities together with investors. Only through the maintenance of standards will trust ultimately be built and the pool of investors and capital raising opportunities deepen.

This future would enable a platform on which secondary trading of private stocks, bond issuance can be executed and a library of previous deals, where exploration and development updates are constantly available to subscribers.

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MINEXIA is a mining investment, development and advisory company based in London and Luxembourg and has been formed by a multi-disciplinary team with over 80 years’ experience in the mining, mining finance and risk management sectors with organisations including; Barrick Gold, Reservoir Minerals, Nevsun Resources, Standard Bank, BP and SRK Group.

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Mining Capital: Methods, Best-Practices and Case Studies for Financing Mining Projects 2019th Edition

Mining is a capital-intensive industry, and involves long lead times to develop projects that demand a structured approach, from mine exploration to exit. This book provides mine developers, investors, owners, shareholders, and mineral policymakers a comprehensive game plan to raise capital for the development of new mining projects or to bolster operational mines.

The author, an experienced mining capital consultant, shows how mine developers and mine owners can secure capital in any phase of the commodity price cycle, at any site, and at any project stage. The book follows a proven and structured approach that enables mine developers and owners to successfully raise capital for their projects. With the aid of case studies and practical methods, the reader will learn the essentials on topics ranging from developing and marketing a business case for investment, to the types and sources of mining capital for different project stages, as well as the structure andsignificance of due diligence. The author presents actual mining projects and their funding plans, transaction structures and term sheets for capital. The mining projects discussed represent various project stages, commodities, and parts of the globe, offering a comprehensive reference guide for mine developers, investors and promoters alike.

• ISBN-10 3030312275
• ISBN-13 978-3030312275
• Edition 2019th
• Publication date November 29, 2020
• Language English
• Dimensions 6.1 x 0.63 x 9.25 inches
• Print length 276 pages
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• Publisher ‏ : ‎ Springer; 2019th edition (November 29, 2020)
• Language ‏ : ‎ English
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• ISBN-10 ‏ : ‎ 3030312275
• ISBN-13 ‏ : ‎ 978-3030312275
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Magna Mining Completes Updated Preliminary Economic Assessment of the Crean Hill Project

In this article:.

Study Demonstrates 13 Year Mine Life, Modest Pre-Production Capital and Short Payback Period

Sudbury, Ontario--(Newsfile Corp. - September 17, 2024) - Magna Mining Inc. (TSXV: NICU) (OTCQB: MGMNF) (FSE: 8YD) ("Magna" or the "Company") is pleased to announce the successful completion of its Updated Preliminary Economic Assessment ("PEA") by SGS Geological Services (SGS) on its 100% owned Crean Hill Project (the "Project") located in Sudbury, Ontario, Canada.

The PEA envisions an underground only mining operation, with Life of Mine ("LOM") potentially mineable resource being sold to a third-party existing mill in Sudbury. Underground mining would be initiated with a 15-month Advanced Exploration ("AdEx") program followed by a 12-month pre-production ramp-up period and 13 years of commercial production. Initial mining will be done with ramp access via a new surface portal with the eventual rehabilitation and re-establishment of the historic #2 shaft for personnel access and hoisting as mining progresses deeper.

Note: All dollar values are reported in Canadian Dollars unless otherwise stated.

2024 PEA Highlights

Low pre-production capital cost of $27.7M following AdEx period;

Payback of pre-production period capital within the first year of commercial production, and payback of all capital including AdEx period capital within the second year of commercial production;

Underground average production rate of 2,200 tonnes per day ("tpd") consisting of 1,650 tpd of higher-margin primary feed and 550 tpd of lower grade, incremental feed;

Pre-tax NPV (8%) of $265.3 million and an Internal Rate of Return ("IRR") of 142% at conservative metal prices.

Magna Mining COO Jeff Huffman commented: "This updated Preliminary Economic Assessment focuses efforts on a high margin, underground-only mine plan. A low capital approach of establishing a new surface portal will provide quick access to the resource, allowing us to offset capital costs with early revenues. This PEA also benefits from increased certainty on third party processing terms. The project timeline has been derisked by having environmental permits approved and in-hand, as well as more detailed stope planning and sequence optimization. The PEA metal pricing assumptions have been updated to reflect a more conservative long term nickel price. We are excited and encouraged by the results of this PEA and look forward to continuing to advance the Crean Hill Project".

The primary feed is designed to ensure rapid payback and minimize upfront capital requirements while simultaneously mitigating the potential impact of low metal prices. The lower cut-off grade of incremental material allows more complete extraction of the resource and the two-pronged nature of the mining sequence facilitates lower-cost extraction of the incremental material.

Financial Analysis

The Crean Hill PEA uses metal prices of US$ 8.50/lb nickel, US$ 4.00/lb copper, US$ 13.00/lb cobalt, US$ 900/oz platinum, US$ 1000/oz Palladium, US$ 2,150/oz gold, and a 1.35 C$/US$ exchange rate as outlined in Table 2.

The Base Case generates a pre-tax NPV (8%) of $265.3 million and an Internal Rate of Return ("IRR") of 142%, after-tax NPV (8%) is $194.1 million, with an IRR of 129%.

See Table 1 for a summary of PEA results.

Table 1: PEA Summary

Table 2: Metal Prices and Exchange Rates

Capital and Operating Costs

The Study was prepared in accordance with National Instrument 43-101 of the Canadian Securities Administrators (NI 43-101). The capital and operating cost estimates for the Advance Exploration, Pre-Production and Production phases of the Project are summarized below in Tables 3-5. Capital costs are based on planned development of a ramp from surface to the bottom of the orebody and the rehab of #2 shaft to the mid-shaft loading pocket. The company is planning on commencing an AdEx bulk sample underground to confirm resource grade, continuity and dilution impacts in an effort to de-risk the project. It is envisioned that positive results from this program will lead to a pre-feasibility study and continued development of the Crean Hill Project.

Table 3: AdEx and Pre-Production Cost and Revenue Summary

Table 4: Capital Costs by Period - Detail

Table 5: Operating Costs by Period - Detail

Figure 1: Life of Mine Pre-Tax Cash Flow

To view an enhanced version of this graphic, please visit: https://images.newsfilecorp.com/files/8002/223536_ff141bcd34c969fb_001full.jpg

Mining and Infrastructure

Previous mining activity at the Crean Hill site makes this project particularly favorable for revitalization. The site is located near the Trans-Canada Highway, approximately 35km from Sudbury with access to a well-established supply and service sector focused on the mining industry. The PEA is based on underground mining only. A new ramp will allow rapid access to initial, near-surface, mining areas and dewatering will be carried out from the historic #2 shaft. As mining proceeds beyond 700m depth, rehabilitation of the existing shaft and key infrastructure will be completed. This capital expenditure will allow hoisting and personnel access via the #2 shaft and will enable ramp-access mining to continue at depth. Operating costs assumptions are based on use of a mining contractor during the advanced exploration phase, and owner operated equipment during the pre-production and operation phase for all mine development and production.

Underground production mining will be completed utilizing conventional longhole stoping methodology with hydraulic backfill. Power lines capable of supporting mining activities are in close proximity to the project and heating requirements will be met using propane. On-site crushing and sampling activities will occur before the ore is shipped to the local processing facility. Water treatment will be managed through a service agreement with the existing third-party treatment facility.

Figure 2 illustrates the historical mining and PEA mine plan. Figure 3 illustrates the LOM production profile and Table 6 summarizes the mine production statistics.

Figure 2: Crean Hill Mine Longitudinal Section Showing Historic Mining, Planned Development and Future Stoping

To view an enhanced version of this graphic, please visit: https://images.newsfilecorp.com/files/8002/223536_ff141bcd34c969fb_002full.jpg

Table 6: PEA Production Statistics

Figure 3: Life of Mine Production Profile

To view an enhanced version of this graphic, please visit: https://images.newsfilecorp.com/files/8002/223536_ff141bcd34c969fb_003full.jpg

The Crean Hill project is a brownfield site with an existing footprint and a Closure Plan that has been filed by Vale. Vale retains surface rights to the property and holds key permits including an Air Environmental Compliance Approval (ECA) for air emissions and a Sewage ECA for the wastewater management system. Additional surface infrastructure for new operations will be authorized by an amended Closure Plan. Other permits that would be required for mine development are an amended Air ECA, amended Sewage ECA, amended Permit to Take Water for mine dewatering and an additional sewage ECA for a domestic sewage system. There are no requirements for a federal or provincial environmental assessment. Permits for the commencement of AdEx at Crean Hill have been received.

Mineral Resources

The PEA potentially mineable resources are a subset of the current Crean Hill Mineral Resource Inventory (Table 7). Appropriate mining dilution and recoveries were applied to the design stopes depending on mining method used. Allan Armitage, Ph.D., P. Geo. of SGS Geological Services is an independent Qualified Person as defined by NI 43-101 and is responsible for the current Crean Hill MRE.

Table 7: Crean Hill Project Underground Mineral Resource Estimate, April 15, 2024

Crean Hill Project Economic Sensitivities

The Crean Hill Project is most sensitive to metal market prices and least sensitive to project capital cost. Operating costs and exchange rate sensitivities fall between metal prices and capital costs and display similar sensitivities.

Table 8: Crean Hill Project Sensitivities - Pre-Tax NPV(8%) ($M)

Figure 4: Crean Hill Project Sensitivities - Pre-Tax NPV(8%)

To view an enhanced version of this graphic, please visit: https://images.newsfilecorp.com/files/8002/223536_ff141bcd34c969fb_004full.jpg

Table 9: Crean Hill Project Sensitivities - Metal Price Comparison

Qualified Person

The following Qualified Persons (QPs) oversaw the completion of the work in preparation of the PEA and are responsible for the contents:

Independent QP for Geology and Mineral Resource Estimates Mr. Allan Armitage, Ph.D., P.Geo., of SGS Geological Services. Mr. Armitage conducted personal inspection of the site on May 25-26, 2022, July 25, 2023, July 02, 2024 and July 25, 2024.

Independent QP for Underground Mining and Financial Analysis Mr. Henri Gouin, P.Eng., of SGS Geological Services. Mr. Gouin last conducted a personal inspection of the site on May 13, 2024.

Independent QP for Underground Mining, Financial Analysis, Permitting and Environmental Mr. William van Breugel, P.Eng., B.A.Sc. Geological Engineering, P.Eng., Associate Engineer of SGS Geological Services.

Independent QP for Processing and Recovery Mr. Dominic Fragomeni, P.Eng., Frago-Met Solution Ltd.

Technical information in this press release has been reviewed and approved by David King, M.Sc., P.Geo. Mr. King is the Senior Vice President, Exploration and Geoscience for Magna Mining Inc. and is a qualified person under Canadian National Instrument 43-101.

Crean Hill Property Mineral Resource Estimate Notes:

The effective date of the Crean Hill Property Mineral Resource Estimate (MRE) is April 15, 2024. This is the close out date for the final mineral resource models and mine out models (as-builts).

Allan Armitage, Ph.D., P. Geo. of SGS Geological Services is an independent Qualified Person as defined by NI 43-101 and is responsible for the current Crean Hill MRE. Armitage conducted multiple site visits to the Crean Hill Property including on May 25-26, 2022, July 25, 2023, July 02, 2024 and July 25, 2024.

The classification of the current MRE into Indicated and Inferred mineral resources is consistent with current 2014 CIM Definition Standards - For Mineral Resources and Mineral Reserves.

All figures are rounded to reflect the relative accuracy of the estimate and numbers may not add due to rounding.

The mineral resource is presented undiluted and in situ, constrained by 3D grade control resource models, and are considered to have reasonable prospects for eventual economic extraction. The mineral resource is exclusive of mined out material.

Mineral resources which are not mineral reserves do not have demonstrated economic viability. An Inferred Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource and must not be converted to a Mineral Reserve. It is reasonably expected that most Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.

The Crean Hill mineral resource estimate is based on a validated drill hole database which includes data from 4,646 surface and underground diamond drill holes completed between 1951 and March 2024. The drilling totals 739,448 m. The resource database totals 103,952 assay intervals representing 290,253 m of data.

The mineral resource estimate is based on a three-dimensional ("3D") resource model of the main mineralization and a broader dilution envelope. 3D models of mined out areas were used to exclude mined out material from the current MRE.

Grades for Ni, Cu, Co, Pt, Pd, Ag and Au are estimated for each mineralization domain using ~2.0 m capped composites assigned to that domain. To generate grade within the blocks, the inverse distance squared (ID2) interpolation method was used for all domains.

Specific gravity values were assigned to each block based on a regression formula defined by a database of 32,592 samples. SG=(0.2057xNi%+2.88).

Based on the size, shape, and orientation of the Crean Hill Deposit, it is envisioned that the deposits may be mined using both bulk and selective mining methods including Longhole Stoping.

The MRE is reported at a base case cut-off grade of 1.10% NiEq. The mineral resource grade blocks are quantified above the base case cut-off grade and within the constraining mineralized wireframes (considered mineable shapes).

The underground cut-off grade of 1.10% NiEq considers metal prices of $8.50/lb Ni, $3.75/lb Cu, $17.00/lb Co, $950/oz Pt, $1100/oz Pd and $1,950/oz Au, metal recoveries of 78% for Ni, 95.5% for Cu, 56% for Co, 69.2% for Pt, 68% for Pd and 67.7% for Au (Ag is not considered), a mining cost of US$80.00/t rock and processing, treatment and refining, transportation and G&A cost of US$42.50/t mineralized material.

The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues.

About Magna Mining Inc.

Magna Mining is an exploration and development company focused on nickel, copper and PGM projects in the Sudbury region of Ontario, Canada. The Company's flagship assets are the past producing Shakespeare and Crean Hill Mines. The Shakespeare Mine is a feasibility stage project which has major permits for the construction of a 4,500 tonne per day open pit mine, processing plant and tailings storage facility and is surrounded by a contiguous 180km 2 prospective land package. Crean Hill is a past producing nickel, copper and PGM mine with a technical report dated August 2022. Additional information about the Company is available on SEDAR ( www.sedar.com ) and on the Company's website ( www.magnamining.com ).

For further information, please contact:

Jason Jessup Chief Executive Officer

Paul Fowler, CFA Senior Vice President 416-356-8165 Email: [email protected]

Cautionary Statement

This press release contains certain forward-looking information or forward-looking statements as defined in applicable securities laws. Forward-looking statements are not historical facts and are subject to several risks and uncertainties beyond the Company's control, including statements regarding the production at the Shakespeare and Crean Hill Mines, the economic and operational potential of the Shakespeare and Crean Hill Mines, potential acquisitions, plans to complete exploration programs, potential mineralization, exploration results and statements regarding beliefs, plans, expectations, or intentions of the Company. Resource exploration and development is highly speculative, characterized by several significant risks, which even a combination of careful evaluation, experience and knowledge may not eliminate. All forward-looking statements herein are qualified by this cautionary statement. Accordingly, readers should not place undue reliance on forward-looking statements. The Company undertakes no obligation to update publicly or otherwise revise any forward-looking statements whether as a result of new information or future events or otherwise, except as may be required by law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accept responsibility for the adequacy or accuracy of this press release.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/223536

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12+ case studies that drive home the power of process mining

Discover how top businesses have used process mining and Celonis to drive value and take company performance to the next level.

Unsure what process mining can do for your company? Let our clients show you

You’re sitting on gold. In fact, every company is. There is massive value hiding beneath the surface of every business – and that includes your business.

Since you’re here, you’re likely already interested in how process mining unveils hidden value opportunities and enables everyone to take action on them. 

Before we get into how process mining does that in the real world, let’s run through a quick intro. 

What is process mining and how does it work? 

Process mining is an analytical discipline that combines data science and process science to model, analyze, optimize and improve business processes.

Just over a decade ago, Celonis took the discipline out of academia and applied it to businesses. Process mining is widely recognized — by enterprises , analysts , and the media — as the way to get a real, living, breathing picture of how a company’s processes actually work and run. 

By pairing process mining with automation and monitoring technology , businesses can spot the issues and fix the processes automatically.

Interested in learning more about the ins and outs? Take a look at the below. 

The basics of process mining – definitions, use cases, and outcomes 

How does process mining work?  

[Video] Process mining in 91 seconds

Sign up for our process mining course

2023 Gartner® Magic Quadrant™ for Process Mining Tools

Process mining case studies: transforming top, bottom, green lines

Here are 12 process mining case studies — from retail and tech to manufacturing and healthcare — showing how companies are using process mining to improve their processes and ultimately drive performance. 

1. Johnson & Johnson saw 30% reduction in touch time, 40% reduction in price changes and more “We used Celonis to look at data from a single system, uncover the inefficiencies in the process, and understand the value of process mining first-hand,” said the Product Line Owner for Process and Task Mining at J&J.  

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3. Global retail giant ALDI SÜD scored €3.1M in value realized and costs avoided .  ALDI SÜD handles more than two billion transactions through Celonis; the company has redesigned more than 400 business processes in order to transform their efficiency to date. 

4. Deutsche Telekom saved more than €66M by optimizing its Procure-to-Pay process to tackle duplicate payments and cash discount losses .   Deutsche Telekom Services Europe used process mining to maximize P2P performance and tackle duplicate payments and cash discount losses.

5. GE Healthcare boosted free cash flow by $1.3 billion . A great process mining case study in using the technology to streamline day-to-day operations and unlock working capital within a competitive market.

6. PepsiCo unlocked in millions in Accounts Receivable, achieved an 86% reduction in rejected sales orders and more . It started with Accounts Payable in 2019. Today PepsiCo uses Celonis across nine processes, such as Accounts Receivable and Accounts Payable, Procure-to-Pay, Order-to-Cash, and Make-to-Deploy. "Celonis is the genie in a bottle we’ve all been waiting to make our wishes come true," said Chris Knapik, Senior Director of Process Transformation, PepsiCo.

7. Tech Data reduced its P2P total cycle time by 57% in a single year and achieved a 57% reduction in price change ratio in just 6 months .   The business also achieved an automated invoice processing rate of 95%. As far as process mining case studies go, this is an excellent example of the kinds of value you can unlock in Procure-to-Pay. 

8.   Accenture unlocked $35M in annualized working capital benefits .  The consulting firm also reduced request-to-order cycle time by 50% and invoice approval time by 30%. 

9. Avnet scored €10-15M of value year-on-year in working capital impact, productivity gains, and revenue increases . The electronics distributor used process mining across several departments, including Procurement , Sales, and Finance .

10. Sysmex, a leader in hematology diagnostics and testing, increased cash flow by $10M and lowered late payment rate from 61% to 44%.  The healthcare company identified millions in overdue payments and started collecting them with Celonis. In just 30 days, Sysmex recovered $3.4M in overdue service contracts using process mining. 

11. IQVIA freed up $600,000 of working capital and saved millions across Order-to-Cash and Procure-to-Pay.  The leading global provider of advanced analytics, technology solutions, and clinical research services saw massive savings, including a 40% reduction in Shared Services Center cost in just two years. 

12. Swiss Luxury Retailer Globus reduced overall cancellation rate by 20% .  The company also achieved faster throughput times by eliminating the need to manually analyze data. Now, with just one click, Globus teams can gain full visibility into their shipping and eCommerce processes using process mining. 

13.  Saint-Gobain saves 240 weeks per year on internal audits with Celonis A case study in how you can use process mining for internal audit, the global manufacturer put process mining to work across the 120 internal audit missions it conducts each year. They reduced the length of each audit by up to two weeks, saving more than 4.5 years of time, and have transformed the perception of audit from ‘policeman to business partner’.

Click here to learn about how more world-class companies unlock breakthrough performance with Celonis. 

Edward writes about Celonis, its customers, partners, and product. He creates blogs - perhaps the one you’re reading - as well as ads, ebooks, keynotes, and advertorials. Newsweek, The Times, Time, and many B2B magazines have published his work.

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