RE:Research Capital Report on Magna - $1.10 Share Price TargetHere are some summary points as Stockhouse not allowing pasting of pdf.
First Drill Results from P-4 Look Very Encouraging
ACTION: Maintaining BUY and $1.10/sh Target Price
On September 20, 2021, Magna Mining Inc. (Magna) released the first two drill hole results from its P-4 target, approximately 5 km from its Shakespeare deposit (see Figure 1). We believe the results are very promising given the geological model and potential in this area; however, we recognize that two holes are not sufficient to draw any firm conclusions. We are maintaining our BUY rating for Magna and $1.10/sh target price which is based on 0.4x of our NAV estimate.
DETAILS: P-4 Delivers and Helps Prove the Exploration Methods and Hypothesis
Two holes, MP4-21-01 and MP4-21-02 were drilled to test an EM (electromagnetic) plate derived from the airborne geophysical survey. Geologically, the P-4 target sits at the contact of the Nippising Gabbro and the sedimentary rocks – the mineralization appears to be confined to the sedimentary package (see Figure 3).
MP4-21-01 was drilled at a depth of approximately 70 m below surface and intercepted 2.33m grading 0.25% nickel, 0.36% copper, 0.02% cobalt, 0.35 g/t platinum, 0.45 g/t palladium and 0.28 g/t gold.
MP4-21-02 was drilled from the same platform as the first hole and intersected mineralization at approximately 90 m below surface. The intercept was wider than the first returning 3.66 m @ 0.45% nickel, 0.55% copper, 0.03% cobalt, 0.34 g/t platinum, 0.37 g/t palladium and 0.28 g/t gold.
For reference, the Shakespeare deposits indicated and inferred resource grades 0.34% nickel, 0.37% copper, 0.02% cobalt, 0.34 g/t platinum, 0.37 g/t palladium and 0.19 g/t gold (see Figure 2 for the comparison).
We believe it is potentially very significant that the mineralization is increasing in thickness and grade with depth. The conceptual geological model is that there is a larger source of sulphide mineralization at depth that was squeezed/injected along the plane of weakness in the sedimentary rock unit. This implies that there may be a larger target at depth. Magna is going to conduct downhole geophysical surveys to help better define the deeper target. Additionally, there is another EM plate 400 m to the east of the drilling location which has a large magnetic high between the two plates (see Figure 4). Given the limitations of depth penetration for the airborne survey, there may be a larger target to be explored. Considering this discovery in the context of the Shakespeare, we think there is now potential for discovery along much of the 5 km trend between the Shakespeare deposit and P-4 (and maybe more to the east, see Figure 1).
IMPACT: A Great Start with Potential for More
We believe the initial results from P-4 are very promising and have helped develop a model which will likely be tested more extensively in the near-term. Given the proximity to the Shakespeare deposit, even a modest deposit may be economic to develop to feed a mill at Shakespeare.