Magna Mining's board has approved restarting the Levack nickel-copper mine in Ontario's Sudbury Basin for C$70.1 million. The mine, shut since 2018, would become the company's second producing mine by mid-2028.
At a glance
- A new economic study puts Levack's payback at 0.6 years and its after-tax return at 92.4%.
- The mine would produce about 12.9 million pounds of copper and 10.9 million pounds of nickel a year.
- Magna approved the restart without a feasibility study or proven mineral reserves.
Background
Sudbury, in northern Ontario, is one of the world's oldest nickel and copper mining districts. Its ores also contain platinum, palladium and gold. A preliminary economic assessment (PEA) is an early study that estimates a project's costs and returns. It is less detailed than a feasibility study and can include resources that are not yet proven reserves.
What happened
Toronto-listed Magna Mining said on October 8 that its board had approved the restart of the Levack mine near Sudbury. The decision followed a PEA prepared by AGP Mining Consultants. Initial capital is estimated at C$70.1 million, or about US$49 million, including a C$12.6 million contingency.
Levack last operated in 2018. Magna kept its infrastructure in working order because it serves as a second exit for the neighbouring McCreedy West mine, which Magna already runs. Underground development and surface construction are set to ramp up over the coming months.
What the study shows
The PEA plans to mine 5.75 million short tons of ore over 7.3 years of commercial production, at about 2,140 tons a day. Average yearly output would be 12.9 million payable pounds of copper, 10.9 million pounds of nickel and 21,400 ounces of platinum, palladium and gold. The ore will be crushed at the site and shipped to third-party mills in Sudbury.
The study puts the after-tax net present value at C$227 million, using a 7% discount rate. Its base case assumes copper at US$5.10 a pound, nickel at US$8 and gold at US$3,600 an ounce. Chief executive Jason Jessup said the low cost reflects the money already spent on the mine and the state of its existing infrastructure.
What it means
Levack would give Magna two producing mines in Sudbury. The company had C$40 million of cash at the end of June and received C$140 million from mining company Alpayana for about a 20% stake. Magna expects pre-production cash flow and refundable tax credits to cut its net funding need to C$8.6 million.
The risk is in the paperwork. Magna approved the restart without a feasibility study or demonstrated reserves, so its numbers rest on less certain resource estimates. Investors were calm: Magna's shares closed up 0.4% at C$2.42 on October 8.
Our read
Outlook: neutral. About 10.9 million pounds of nickel a year from mid-2028 is small next to global supply. The restart matters more for Magna and Sudbury than for nickel or copper prices.
What to watch
- Progress on underground development at Levack through 2027.
- Whether Magna later converts Levack's resources into proven reserves.
- Agreements with the Sudbury mills that will process Levack's ore.
For information only, not investment advice.
Nickel price in India
metalscost.com India reference price as of 2026-10-16.
Detailed analysis
Timeline
- 2026-08-31: Alpayana's C$140 million investment in Magna closes.
- 2026-10-08: Magna publishes the Levack PEA and approves the restart.
Supply Drivers
Levack would add about 10.9 million pounds of nickel and 12.9 million pounds of copper a year from mid-2028.
Mining Production
Reusing existing shafts and infrastructure keeps Levack's start-up cost at C$70.1 million.
What could lift prices
- The study's 92.4% after-tax return points to strong margins at its assumed metal prices.
- Levack's copper and nickel come with by-product platinum, palladium and gold.
What could weigh on prices
- Sumitomo Metal Mining expects the nickel market to stay in surplus in 2027.
- The study assumes nickel at US$8 a pound; lower prices would cut returns.
Country impact
| Country | Impact | Reason |
|---|---|---|
| Canada | Medium | A shut Sudbury mine returns to production with a C$70.1 million restart. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Base Metals Mining | Positive | A low-cost restart adds a second producing mine in the Sudbury Basin. |
Who gains, who loses
- Magna Mining: Levack would make it a two-mine producer by mid-2028.
- Sudbury mills: They would process Levack's ore under third-party arrangements.
- Magna shareholders, if the estimates slip: Without a feasibility study, costs and grades carry more uncertainty.
Other ways this could play out
- If metal prices stay near the study's assumptions, Levack could repay its capital within a year of commercial production.
- If ore grades disappoint without a feasibility study behind them, Magna may need more money or time.
Price risks
- Nickel prices depend far more on Indonesian supply than on small Canadian restarts.
- A delay to Levack's mid-2028 start would defer its modest supply addition.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
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