The final session of the day, hosted by William M. Thomson of Massif Capital, provided a fascinating micro-cap case study that exemplified many of the day’s themes: entrepreneurial leadership, acquiring undervalued assets, and executing a repeatable, value-creating playbook. Jason Jessup, CEO of Magna Mining (TSXV: NICU), detailed how he is re-running the strategy that led to the legendary success of FNX Mining in the 2000s.
The FNX Playbook: A Low-Risk, High-Return Mining Strategy
The “FNX playbook” is an elegant and capital-efficient strategy for value creation in the mining industry, specifically tailored to the unique characteristics of the Sudbury Basin in Ontario, one of the world’s most prolific mining districts. Jason was a key operations manager at the original FNX, which acquired five written-off mines from mining giant Inco in 2002 and grew into a multi-billion-dollar company over the next decade.
The strategy is as follows:
Acquire Non-Core Assets: Identify and acquire fully permitted, past-producing mines from major global mining companies like Vale and Glencore. For these giants, smaller Sudbury assets are often non-core distractions, and they are unwilling to allocate the modest capital required to maintain or expand them.
Leverage Existing Infrastructure: Sudbury is home to a vast network of existing infrastructure, including nine operating mines, two large processing plants, and two smelters. By acquiring mines that can tap into this network, Magna avoids the multi-billion-dollar capital expenditures and decade-long permitting processes required to build a new mine from scratch.
A Simple Business Model: Magna’s model is to simply mine the ore and sell it directly to Vale’s or Glencore’s underutilized processing mills. This allows for rapid restarts and a focus on operational excellence rather than capital-intensive construction.
Self-Funded Growth: The cash flow generated from the first restarted mine is then reinvested to bring the next mine online, creating a self-funding growth engine.
Magna’s Flawless Execution
Jason founded Magna in 2016 with this vision. His acquisition history is a testament to the strategy’s power. He started by buying his first property for just $50,000 in cash. This culminated in the acquisition of the original FNX properties from KGHM in early 2025. In a transaction that was eight years in the making, Magna acquired assets with a replacement cost in the hundreds of millions of dollars for just $5 million in cash and $4 million in stock and deferred payments.
The company is now executing its growth plan. Over the next three years, it intends to bring three mines into production, funded largely by internal cash flow. This has the potential to generate $100 to $200 million in annual cash flow for a company with a current market capitalization of approximately $600 million. The strategy is also flexible; the unique geology of Sudbury allows Magna to pivot between mining copper-rich or nickel-rich zones depending on which commodity offers better economics. The entire enterprise is led by Jason, an entrepreneurial CEO with deep operational expertise and significant skin in the game, owning approximately 5% of the company.
Magna Mining serves as a powerful real-world example of the search fund model applied to a specific industrial niche. Jason is the expert operator with a specific thesis, and the major mining companies are the “retiring founders” who view these smaller assets as non-core. It is a textbook case of creating value by exploiting a structural inefficiency that is ignored by larger players.
Let’s go deeper.
