950,000oz and counting: Magnetic goes deep to find more gold at Lady Julie

Gold grading up to 4.73g/t intersected at Magnetic Resources Lady Julie project
Resource expansion and development progressing after an oversubscribed $12m cap raise
Three diamond drill rigs currently spinning at depth at Lady Julie North 4

Special Report: Drilling at Magnetic Resources’ ~950,000oz Lady Julie gold deposit has struck more thick gold intersections within a 750m-long mineralised target. How big could it get?

A recent pre-feasibility study (PFS) of Magnetic Resources’ (ASX:MAU) Lady Julie (LJN4) gold deposit, part of the overall Laverton project in WA has shown remarkable economic metrics as a low-cost, high-margin and open-pittable mining operation.

The current Laverton resource stands at 24.9Mt at 1.66g/t totalling 1.33Moz gold after a 7.7% increase in March and an 11% increase to the LNJ4 deposit to 948,200oz.

The PFS outlined the ability to produce 720,000oz gold over a nine-year mine life at an all-in sustaining cost (AISC) of $1445/oz using a conservative gold price of $2800/oz.

At that price, the pre-tax internal rate of return (IRR) sits at a sizeable 85% and values the project at $547m, with earnings edging towards nearly $1 billion.

As of writing, the current spot price of gold is buoyant at $3545/oz.

Those margins tip potential earnings well over $1.3 billion.

Striking gold at depth at Lady Julie North

Three diamond drill rigs are continuing to spin at MAU’s Lady Julie gold project, with the latest seven holes concentrated on ascertaining depth continuity in the northern part of the deposit.

2354m holes averaging 336m were drilled within the 750m long Lady Julie North 4 (LJN4) deposit, returning grades of up to 4.73g/t gold from 380m.

Gold mineralisation has been found to run deep. Hole MLJDD039 — 100m down dip of hole MLJDD033 which itself showed a significant 16m at 4.51g/t from 411m — is the deepest to date, turning up 28m at 1.19g/t from 432m, including 7m at 2.57g/t from 432m.

The follow up deeper diamond holes have tested and are looking to extend up to two – and in some cases eight – stacked lodes mainly found in the central parts of LJN4.

Hole MLJDD053 is a whopping 600m deep hole designed to investigate for further stacked lodes below the current bottom stacked lode.

Many of these are outside the existing resource and have potential for the enlargement of LJN4’s 15.4mt at 1.92g/t for 948,200oz at a 0.5g/t cutoff resource.

Magnetic Resources (ASX:MAU) — Numerous thick intersections from the latest drill program at Lady Julie North 4. Pic supplied: (MAU)

MAU MD George Sakalidis says that with the Aussie gold price at record levels the Laverton project economics are looking very attractive.

“The resource that encompasses Lady Julie Central, LJN4, HN9, Mt Jumbo and Homeward Bound South, is shaping up as potentially large-scale shallow open-cuttable mining operation, especially now after recent drilling at LJN4 showed visible and strong depth potential now greater than 400m,” Sakalidis says.

Three rigs spinning

A number of deeper step-out holes have now been carried out to see whether the LJN4 resource appears to extend further at depth and there are assays pending for seven diamond drillholes for 1980m at an average depth of 396m.

Results are also pending for an additional 14 RC drillholes for 946m.

With three diamond rigs operating, six holes are being drilled for 2800m at an average depth of 466m and are expected to be completed by the end of the month.

This article was developed in collaboration with Magnetic Resources, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.