OVERVIEW

A Past Producing High Grade Nickel Mine

Magna Mining’s Crean Hill mine is a past producing underground mine in the world-famous Sudbury Basin nickel district. Crean Hill hosts an existing NI 43-101 resource (completed August 2022). While under the previous ownership of Vale (Inco), the mine was a significant producer of nickel and copper for over 80 years. Historical production at Crean Hill was focused on the “contact” style nickel-copper mineralization that is typical of the Sudbury region, while more recent exploration on the property by Lonmin Canada Inc. (2003 to 2022) demonstrated the potential for high grade Pt-Pd-Au mineralization in the footwall of the contact nickel zones where limited drilling has been completed to date.

As a past producing mine, Crean Hill is a brownfield site with a closure plan still in place.

Significant Existing Open Pit & Underground Indicated Resource

The Crean Hill mine has a NI 43-101 compliant resource (completed August 2022) with contained metal (Indicated category) of over 500 million pounds (227,000 tonnes) of nickel, 450 million pounds (204,000 tonnes) of copper, and 1.7 million ounces of platinum + palladium + gold.

Crean Hill Mineral Resources – Highlights

• Contained metal (Indicated category) of 500M lbs nickel, 450M lbs copper, and 1.7M oz platinum + palladium + gold
• High grade underground Indicated Resource of 14.5 M tonnes at 2.07 % nickel equivalent*
• Resource starts at surface and could be amenable to open pit mining as well as near surface underground mining methods
• The total indicated resource incorporates mineralization from the contact style Ni-Cu dominated zones, as well as the Pt-Pd-Au rich, low sulphide footwall mineralization
• Mineralization is well defined and primarily in the Indicated category from surface to approximately 1200 m below surface

HISTORY

The Crean Hill Mine operated from 1900 to 2002 under the ownership of INCO. Production was from the Main, Intermediate and West zones, and focused on the Sudbury Igneous Complex (SIC) contact Nickel – Copper mineralization.

Table 1: Summary of historical production from the Crean Hill Mine, 1900 to 2002.

Since the mine closure in 2002, approximately 90,000m of drilling was been completed following the execution of an option agreement between Lonmin Canada and Inco. During their ownership, Lonmin Canada remained focused on the low sulphide, high PGM potential at the deposit which is typically associated with the footwall host rocks. This resulted in minimal exploration directed to nickel / copper contact mineralization over this period.

LOCATION & INFRASTRUCTURE

The Crean hill mine is located in the south-west corner of the Sudbury Basin, and proximal to much of the extensive infrastructure in Sudbury that has been developed over the last 100 years of mining operations. The property is directly accessible by road and is located less than 45 km from Magna Mining’s proposed Shakespeare mine and mill site. Crean Hill is also located close to grid power and a water treatment plant.

Several existing mines and development projects are located within 10km of the Crean Hill Mine in this south-west section of the Sudbury Basin. These include KGHM’s Victoria project and Vale’s Totten Mine.

GEOLOGY

The Crean Hill Mine is in the South Range of the The Sudbury Igneous Complex (“SIC”). Denison hosts part of a large trough structure at the base of the SIC, which contains a number of previously mined ore deposits including Crean Hill Main Orebody, Crean Hill Intermediate Orebody, Crean Hill West Orebody, Ellen Mine, and Lockerby Mine, each sitting in embayments (terraces) within the larger trough. Much of the mined Ni-Cu contact mineralization in Sudbury is associated with the embayment structures in the SIC, and the embayments largely control the distribution of Ni-Cu mineralization.

Though the distribution of much of the mineralization is controlled by embayments, additional structural settings and controls may be present, principally shear zones. The association between shear zones and Ni-Cu sulphide orebodies is common in the South Range of the Sudbury basin, with Ni-Cu sulphide orebodies in the Creighton and Garson deposits associated with large shear zones.

The South Range Shear zone and Creighton and Murray faults are the manifestation of the deformation events that have shaped the present-day South Range of the SIC where the Denison property is located. Many of the rocks are sulphide-bearing. The sulphides are dominantly pyrrhotite with minor amounts of pyrite and trace chalcopyrite.

MINERALISATION

There are two distinct syles of mineralization at Crean hIll; the SIC contact nickel-copper mineralization and the low sulphide PGE mineralization found in the footwall.

Nickel Contact Mineralization

Historically Sudbury Igneous Complex (SIC) contact Ni-Cu deposits have been the most important ore type in Sudbury and have been mined for more than 100years. This style of deposit is associated with the base of the SIC and is typically hosted in Sublayer Norite. The sulfide assemblage is dominated by pyrrhotite and lesser pentlandite, and ranges from blebby to semi-massive or massive sulphide. Cu/Ni ratios of approximately 0.7 and Pt+Pd+Au contents of approximately 1 gram are common.

Prior mining from the Crean Hill mine focused on the nickel / copper mineralization in the Contact zone. The grey outlines of the mined stopes can be seen in figure 1.

Typical Sudbury Contact Ni-Cu ore. Blebby to massive, pyrrhotite, pentlandite rich sulphide.

Typical Sudbury Footwall Cu-PGE ore. Chalcopyrite rich sulphide, with high grade Platinum, Palladium and Gold associated.

Figure 1: Crean Hill cross section; location of existing nickel – copper contact mineralization and selected historical drill holes

Low Sulphide PGM Mineralization

The second style of mineralization found at Crean Hill are low suphide, high PGE mineralized zones. This style of mineralization is commonly associated cross cutting structures and footwall breccias near the base of the SIC. The sulfide assemblage is dominated by chalcopyrite and pyrrhotite and lesser pentlandite, and typically ranges from disseminated to stringer sulphide. Cu / Ni ratio is increased compared to the contact deposits and Pt+Pd+Au contents of >10 g/t are common.

MINERAL RESOURCE ESTIMATE

Magna Mining published a Mineral Resource Estimate for Crean Hill in November 2022. The resource was based on the existing historical drill database for the Crean Hill Mine up to 2002, along with an additional drilling that was completed over the period 2003 to 2018. The resource was estimated by SGS Geological Services and includes both an open pit and underground component. The resource estimate is summarised in Table 1 below, and contained metal summarized in Table 2. Mineral Resources include near surface mineralization with potential for open pit mining, as well as higher grade mineralization amenable to conventional underground mining methods (Figure 3). below.

Figure 3:

Table 1: Denison Mineral Resources, August 2022.

*See notes on Mineral Resource assumptions, at the end of this section, including metal prices and recoveries used.

Table 2: Contained metal estimates for Crean Hill

Notes on Mineral Resource assumptions:

1. The classification of the current Mineral Resource Estimate into Indicated and Inferred is consistent with current 2014 CIM Definition Standards – For Mineral Resources and Mineral Reserves .
2. All figures are rounded to reflect the relative accuracy of the estimate and numbers may not add due to rounding.
3. All Resources are presented undiluted and in situ, constrained by continuous 3D wireframe models, and are considered to have reasonable prospects for eventual economic extraction.
4. 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 the majority of Inferred Mineral Resources could be upgraded to Indicated Mineral Resources with continued exploration.
5. It is envisioned that parts of the Denison deposit may be mined using open pit mining methods. In-pit mineral resources are reported at a cut-off grade of 0.3 % NiEq within a conceptual pit shell.
6. The results from the pit optimization are used solely for the purpose of testing the “reasonable prospects for economic extraction” by an open pit and do not represent an attempt to estimate mineral reserves. There are no mineral reserves on the Property. The results are used as a guide to assist in the preparation of a Mineral Resource statement and to select an appropriate resource reporting cut-off grade.
7. Underground (below-pit) Mineral Resources are estimated from the bottom of the pit and are reported at a base case cut-off grade of 1.1 % NiEq. The underground Mineral Resource grade blocks were quantified above the base case cut-off grade, below the constraining pit shell and within the constraining mineralized wireframes. At this base case cut-off grade the deposit shows good deposit continuity with limited orphaned blocks. Any orphaned blocks are connected within the models by lower grade blocks.
8. Based on the size, shape, location and orientation of the Denison deposit, it is envisioned that the deposit may be mined using longhole open stoping (a bulk mining method that has long been utilized in the Sudbury region).
9. High grade capping was done on 10 ft (3.05 m) composite data.
10. Bulk density values were determined based on physical test work from each deposit model and waste model.
11. NiEq grades are based on metal prices of $8.50/lb Ni, $3.75/lb Cu, $22.00/lb Co, $1000/oz Pt, $2000/oz Pd and $1,750/oz Au and consider metal recoveries of 78% for Ni, 95.5% for copper, 56% for Co, 69.2% for Pt, 68% for Pd and 67.7% for Au.
12. The in-pit base case cut-off grade of 0.3% NiEq considers a mining cost of US$2.50/t rock and processing, treatment and refining, transportation and G&A cost of US$38.00/t mineralized material, and an overall pit slope of 55 degrees. The below-pit base case cut-off grade of 1.1 % NiEq considers 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.
13. The estimate of Mineral Resources may be materially affected by environmental, permitting, legal, title, taxation, socio-political, marketing, or other relevant issues

Qualified Person

The Denison project 2022 Mineral Resource Estimate was prepared by Allan Armitage, Ph.D., P.Geo., of SGS Geological Services, an independent Qualified Person, in accordance with the guidelines of the Canadian Securities Administrators’ National Instrument 43-101 – Standards of Disclosure for Mineral Projects (“NI 43-101”), with an effective date of July 5, 2022.  Armitage conducted a site visit to the property on May 25 – May 26, 2022.

Certain technical information has been reviewed and approved by David King, M.Sc., P.Geo. Mr. King is the Senior Vice President of Technical Services for Magna and is a qualified person under Canadian National Instrument 43-101.