Magna Mining signs MOU with Mitsui for Shakespeare mine JV, Ontario
Magna Mining Inc. [NICU-TSXV] has entered into a non-binding memorandum of understanding (MOU) with Mitsui & Co. Ltd., whereby Magna and Mitsui will discuss the possibility of Mitsui’s acquirement of a 10- to 12.5% interest in Magna’s Shakespeare mine 70 km southwest of the Sudbury Basin, Ontario, in exchange for cash consideration ranging between $8-million to $10-million on such terms as to be further negotiated between the parties. In connection with the transaction, it is expected that the parties will enter into a joint venture agreement to jointly pursue the development of the Shakespeare Mine, with Magna being the operator of the Project.
Magna Mining CEO Jason Jessup commented, “This MOU is the beginning of what we hope will be a long-term partnership between Magna Mining and Mitsui, the objective of which is to create the next nickel producer in the world-class nickel mining region of Sudbury, Ontario. The signing of an MOU with a global trading and investment company of Mitsui’s stature underlines the strategic importance of our Shakespeare Mine and the growth potential of our company. We anticipate that coupling our operational and geological expertise with Mitsui’s balance sheet strength is a perfect combination in furtherance of advancing the Shakespeare Mine into production and developing a significant nickel producing company.”
The MOU is limited to 2,590 hectares of the more than 18,000-hectare Shakespeare Project. The MOU property covers the location of the existing Shakespeare deposit, the proposed location of the Shakespeare open pit mine, mill, tailings storage facility and immediately adjacent claims. The remainder of the Shakespeare Project and regional exploration targets, such as the P-4 Discovery, will remain 100% owned by Magna.
Each participant in the JV will retain the offtake right for the amount of the products (including nickel, copper and/or other by-products) from the Shakespeare Mine pro-rata to their ownership percentage in the JV. In addition to the 10 to 12.5% interest to be acquired in the transaction, Magna and Mitsui shall evaluate and discuss cooperatively, the potential for Mitsui to acquire an additional 12.5% to 15% stake in the JV prior to the start of construction, on terms and valuation mutually agreed upon by the Parties.
The parties anticipate entering into a definitive purchase and joint venture agreement setting out in more detail the proposed terms of the transaction.
The transaction is subject to a number of customary conditions.
Magna’s flagship asset is the past-producing Shakespeare mine, 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 180 km2 prospective land package.