Minnova Corp (TSXV:MCI) Infrastructure Advantage Towards 2027 Production with 300% Value Increase

Key Concepts

• PL Gold Mine: A past-producing gold mine in northern Manitoba, Canada, being developed by Manovva Corp.
• Open Pit Development: A mining method where ore is extracted from the surface, as opposed to underground mining.
• Underground Development: A mining method where ore is extracted from beneath the surface.
• Feasibility Study (FS): A comprehensive study to assess the technical and economic viability of a mining project.
• Preliminary Economic Assessment (PEA): An early-stage economic study that provides a conceptual overview of a project's potential.
• Mineral Resource Estimate (MRE): An estimation of the quantity and grade of mineralized material.
• Strip Ratio: The ratio of waste rock to ore that must be removed in an open pit mine.
• Nameplate Capacity: The maximum designed output of a processing plant.
• Metallurgical Test Work: Laboratory tests to determine the optimal methods for extracting minerals from ore.
• Recoveries: The percentage of gold that can be extracted from the ore.
• After-Tax IRR (Internal Rate of Return): A measure of a project's profitability, considering taxes and the time value of money.
• Capex (Capital Expenditure): Funds used by a company to acquire, upgrade, and maintain physical assets.
• Opex (Operating Expenditure): Ongoing costs associated with running a business.
• NI 43-101: A Canadian National Instrument that sets standards for disclosure of mineral projects.

Manovva Corp. - PL Gold Mine Development Update

This summary details Manovva Corp.'s strategy to restart the past-producing PL Gold Mine in northern Manitoba, focusing on a new open-pit development plan driven by higher gold prices. Gourd Glenn, CEO of Manovva Corp., outlines the company's approach, updated studies, and financing plans.

1. Project Overview and Rationale for Restart

• Project: PL Gold Mine, northern Manitoba.
• Status: Past producer (late 1980s).
• Existing Assets: Significant infrastructure on-site, in good condition; key permits in place.
• Key Driver: Higher gold prices make the project economically attractive.
• Previous Feasibility Study (2017): Showed viability as an underground operation but faced financing challenges due to market conditions and lower gold prices.
  • 2017 FS Parameters: 800 tons per day (tpd) operation, producing 46,000 ounces of gold per year for a 5-year reserve life.
  • Resource Basis: Mineral Resource Estimate based on a gold price of $1,250 per ounce.
  • Resource Life: Approximately 10 years of resources.

2. New Development Plan: Open Pit Strategy

• Shift in Strategy: Transitioning from an underground-focused approach to an initial open-pit development.
• Rationale: Mineralized structures at PL extend to surface, making them amenable to open-pit mining. Higher gold prices allow for a higher strip ratio, making surface mining economically viable for potentially over 5 years.
• Engineering Partner: A&B Global Mining (South Africa) engaged for their expertise in open-pit and underground, particularly shallow-dipping, narrow-vein projects.
• Updated Plan Focus:
  • Underground Development: Re-evaluation at higher gold prices.
  • Open Pit Development: Development of a preliminary plan for open-pit mining from the start.
• Mill Capacity: The existing mill has a 1,000 tpd nameplate capacity.
  • Previous FS: Considered underground development at 600 tpd, with open pit as supplemental (max 200 tpd).
  • New Plan: Aims for 1,000 tpd run-of-mine throughput, utilizing the full mill capacity.

3. Open Pit Potential and Resource Expansion

• Surface Expression: Mineralized structures at PL project to the surface, passing through a swampy area.
• PL North Trend: Identified post-2017 FS, an extension of the main PL deposit not included in previous resources.
  • Drilling (5 years until 2021): Demonstrated a continuous mineralized zone over several hundred meters along strike and down dip.
  • Notable Intercept (2021): 101 grams per ton (g/t) over 0.5 meters at 208 meters vertical depth, described as a high-grade narrow-vein intercept.
• Economic Viability: Higher gold prices enable a higher strip ratio for efficient and economic mining from surface.
• Data Utilization: Significant data from original mine operations (drill hole database) and Manovva's $20 million investment to date are available for engineering assessment.
• Preliminary Work: Advanced stages of preliminary open-pit mine design, including cone flotation, engineered pit identification, strip ratios, throughput rates, and equipment selection.

4. Updated Technical Studies and Timeline

• Phase One (Target Q1 Next Year):
  • Preliminary Economic Assessment (PEA): To establish new economics at current gold prices.
  • Updated Mineral Resource Estimate (MRE): Based on a gold price of $2,500 per ounce.
• Phase Two (Target Q3 Next Year):
  • Feasibility Study (FS): Focused entirely on a 100% open-pit mine startup.
• Production Timeline: Targeting production in late 2027 or early 2028, following 12 months of engineering design (PEA, FS) and mine finance/development.

5. Mill Refurbishment and Infrastructure

• Mill Condition: In good condition, shut down properly, and partially electrified.
• ACOM Condition Assessment Report: Highlighted refurbishment requirements.
• Refurbishment Needs: Primarily electrification, new electrical wiring, and upgraded process components/equipment.
• Estimated Cost (2017 FS): $10 million.
• Estimated Cost (Current): $15-20 million due to time and inflation.
• Upcoming Work (Late Fall/Early Winter):
  • Engagement of an electrical contractor to assess mill refurbishment needs and provide estimates.
  • Assessment of refurbishing the owned power line to re-energize it and bring direct power to the site.
• Mill Status: "Well in hand," with current work providing updated numbers for the PEA and FS.

6. Market Conditions and Investor Interest

• Gold Price: Currently high, though with recent fluctuations. Manovva considers anything north of $2,500 per ounce "unbelievable" and attractive for their base case modeling.
• Investor Appetite:
  • High overall interest in the gold sector.
  • Summer 2025 Financing: Secured first institutional shareholder from Australia, noting a greater appetite for development stories among Australian investors compared to some Canadian ones.
  • New Investors: Attracted European and US-based investors.
• Investor Criteria: Interest in short timelines to production, existing infrastructure, and existing permits.
• Supportive Factors: High gold prices are driving investor interest and are expected to support the path to production.

7. Business Model and Revenue Generation

• Strategy: Leverage existing infrastructure (mill) for near-term revenue generation to cover G&A and fund further exploration.
• Exploration Upside: Significant exploration potential remains.
  • Current Drilling Program: Targeting mineralization outside the existing resource.
  • Infill Drilling: Aiming to upgrade mineralization categories from inferred to indicated and indicated to measured.
• Technical Studies Support: Updated NI 43-101 studies will support attracting institutional investors and debt financing.
• Timeline to Production: Approximately 12 months from FS completion, with a development timeline of 12-15 months (potentially quicker due to open-pit method).
• Project Advantages:
  • Low relative capex due to existing mill and infrastructure.
  • Access to low-cost, renewable Manitoba power.
  • High leverage to gold price.

8. Metallurgical Process and Recoveries

• Historical Recoveries: Up to 90% in the 1980s, based on mill operating results.
• Modern Technologies: Plan to incorporate modern process technologies and equipment.
• Upcoming Metallurgical Program:
  • Drilling specific metallurgical holes for core samples.
  • Basic process flow sheet work.
  • Evaluation of ore sorting technologies.
  • Investigation of new gravity recovery technologies (e.g., Falcon Concentrators) for fine-grained gold.
• Gold Characteristics: Visible gold, nuggety gold, and fine gold present.
• Historical Issue: Mine closure in the 1980s attributed to mill head grade being significantly lower than planned (3.5 g/t delivered vs. 7.2 g/t planned).
• Expected Recoveries: Aiming to approach 95% with updated metallurgy, consistent with similar deposits achieving high recoveries.

9. Financing Strategy and Alternative Financing

• Financing Needs: Capital required between now and the end of next year for mill upgrades, G&A, and other costs.
• Market Interest: High interest from various groups, including those interested in the derisking provided by the open-pit strategy.
• Open Pit Advantages for Financing:
  • Lower operating costs and less risk.
  • Shorter timeline to production compared to underground operations.
  • Reduced risk of delays and cost overruns common in underground mining.
• Robust Project Assessment: Lenders and investors see the revised open-pit plan as a robust project capable of handling debt and achieving quick payback.
• Financing Approach:
  • PEA as Foundation: The PEA will be robust and will facilitate project finance discussions.
  • Contractor Engagement: Early engagement with contractors for open-pit planning to obtain solid quotes.
  • Integrated Approach: Involving project finance groups and contractors early in the feasibility study process to build confidence.
• Financing Buckets:
  • Drilling and Exploration: For mineral resource updates.
  • Feasibility Study Costs: PEA and FS expenses.
  • Site Infrastructure Upgrades: Work that can be done in advance.
• Accelerated Development: Project can be accelerated with relatively low capital costs due to existing infrastructure and location.

10. Open Pit Bulk Sampling and Trade-off Studies

• Bulk Sampling: Not deemed necessary for the current plan.
• Alternative: Taking PQ (very large diameter) drill core for metallurgical test work is more efficient and quicker.
• Data Availability: Extensive mill production data (14 months) from the 1980s and original metallurgical test work provide a strong basis for updates.
• Efficiency: Metallurgical test work is expected to be completed quickly.

11. Next Steps and Upcoming News

• Drilling Results: Expected soon, as drilling commenced in early September and samples are being processed.
• Preliminary Pit Design Update: Progress report on the preliminary pit design work, part of the PEA planned for Q1 next year.
• Tonnage and Development Vision: Potential to highlight overall tonnages and the attractiveness of an open-pit development adjacent to existing infrastructure.
• Marketing Efforts: Increased marketing activity planned to communicate the new development plan and its advantages.

Conclusion

Manovva Corp. is strategically repositioning the PL Gold Mine for a near-term restart by shifting to an open-pit development model, leveraging higher gold prices and existing infrastructure. The company is undertaking updated technical studies (PEA and FS) with a clear timeline, aiming for production by late 2027 or early 2028. The focus on an open-pit approach, combined with mill refurbishment and a robust financing strategy, positions PL as a highly leveraged and derisked gold restart project.