The project is one of Australia’s lowest cost, undeveloped gold projects. Pic: Getty Images
Mining
Special Report: Magnetic Resources has received firm commitments from professional, sophisticated and institutional investors to raise $10m at A$1.25 per share to advance commercialisation of its Lady Julie gold project in WA.
Lady Julie is a near-surface, high-grade project which makes it a financially attractive as a standalone open cut project with low-cost, high-margin gold production of 817,470oz, averaging 104,000 oz/year, over an eight-year life of mine.
That study does not include any economics from the underground, which will be include in an upcoming feasibility study.
Magnetic Resources’ (ASX:MAU) is planning to deliver that from an open pit mining inventory of 16.03Mt at 1.71g/t gold, containing 883,000oz gold.
The company received strong support for the placement from several high-quality new and existing investors, including multiple specialist resources funds, along with participation from both domestic and international investors.
Argonaut Securities acted as sole lead manager to the placement.
Lady Julie’s low-cost profile and strong financial return metrics are primarily driven by the extraordinary near-surface, high-grade nature of the Lady Julie Central and Lady Julie North 4 deposits.
The Lady Julie Project, which includes Lady Julie North 4, Lady Julie Central and Hawks Nest 9, will be the second highest grade open cut deposit in WA.
Featuring a resource of 27.6Mt at 1.91g/t for 1.70moz at a 0.5g/t cut-off, at a gold price of $3200/oz the NPV clocks in at $925M (pre-tax) with an IRR of 135% and life of mine EBITDA of $1.487 billion. At all in sustaining costs of just $1386/oz – in the bottom quartile of the global cost curve – payback would take just 12 months.
This funding will be used for resource definition drilling, deeper drilling for resource expansion and exploration drilling, as well as ongoing feasibility work and general working capital.
Lady Julie sits within the South Laverton project, one of the most exciting new gold development prospects in a part of the world renowned for its production of the yellow metal, home to multi-million-ounce mines like Granny Smith, Wallaby and Sunrise Dam.
“The company continues to expand the gold resources at the South Laverton project, and on behalf of the Magnetic board, I would like to thank our existing shareholders for their ongoing support and welcome new shareholders as we continue to expand the highly promising Lady Julie gold project,” MAU Managing Director George Sakalidis said.
“I’d also like to acknowledge the lead manager for building a strong book as part of this offer.
“The Lady Julie gold project in Laverton continues to expand in size, and with an increasing gold price, the company continues to be excited by the potential for a financially robust low cost, high margin gold production.
“Funds from this raising will allow the company to continue to drill for deeper resource extensions at the same time as advancing feasibility work with the view to establishing a long mine life.”
Interest has been surging in MAU, with the explorer’s shares 36.5% higher in the year to date on the opening of trade this morning.
That’s come as MAU has pushed the resource at Lady Julie North 4 to 1.49Moz this year, with overall resources across South Laverton of 1.87Moz, with gold prices also climbing over 25% to an all-time high of US$2687/oz.
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.
Mining
Mining
Mining
