Magnetic Resources upgrade lifts LJN4 gold resource past magic million mark, reaches 1.49moz

Magnetic Resources upgrades LJN4 resource by ~57% to 1.49Moz of gold
Combined Mineral Resource Estimate of 1.87Moz
More upgrades likely as drilling continues to intersect deep gold

Special Report: The rich potential of the Lady Julie North 4 deposit has been clearly outlined after Magnetic Resources upgraded resources by more than 50% past the million ounce mark to 1.49Moz of gold.

That the upgrade comes just four months after a previous upgrade that cranked up resources by 11% to 948,200oz speaks volumes about its potential.

This is especially true since Magnetic Resources (ASX:MAU) is continuing extensional drilling and has flagged the potential for further upgrades given that the northern strongly pervasively altered zones are thick and are still open at depth.

Additionally, there is also potential for drilling beneath the footwall of the stacked lode sequence at the deposit – an area that has seen limited previous evaluation – to uncover more gold.

Highlighting this, recent deep drilling at LJN4 returned a 26m intersection grading 2.49g/t gold from a down-hole depth of 567m in MLJDD039, which was drilled in the northern part of the deposit.

Along with other holes, this has proven that the northern zone, which is associated with strong silica and green fuchsite, is substantially larger than the southern silica pyrite and breccia zone.

Upgraded resources are also likely to drive improvements to the Lady Julie project’s economics, which are already looking lucrative what with pre-tax IRR and NPV – both indicators of profitability – estimated at 85% and $547m in the pre-feasibility study.

Lady Julie 4 wireframe model in green. Pic: Magnetic Resources

Drilling paying off

The resource upgrade to 23.2Mt at 2.01g/t gold at LJN4 incorporates recent drilling results at the deposit.

There is also a great deal of certainty in the latest upgrade with 74% of the resource reporting to the higher confidence indicated category – including most of the mineralisation that would sit within a potential open pit.

It also takes global resources at the broader Laverton and Homeward Bound South projects to 32.6Mt at 1.79g/t gold, or 1.87Moz of contained gold, at a cut-off grade of 0.5g/t.

This is based on a large-scale open pit operation that in the case of LJN4 is applied to a depth of 440m, deeper than the 310m assumed in the PFS.

MAU adds that mineralisation deeper than 440m shows strong continuity and is amendable to underground mining.

“The LJN4 resource has been the company’s primary drilling focus over recent months. LJN4 has multiple stacked lodes with several thick intersections that have not been closed off at depth,” Managing Director George Sakalidis said.

“Mineralisation consists of thick strongly altered zones mainly associated with intensely fuchsite altered ultramafic rock types in the northern half of the deposit and breccia silica pyrite altered zones within the southern half of the deposit.

“The LJN4 deposit sits within a regional structure called the Chatterbox Shear Zone that extends over a 12km length within the Magnetic tenements.”

Sakalidis adds that the company has started work on an updated economic study while work is well advanced on taking the resource up to a feasibility level of accuracy.

“Preparations are also underway on the development of a mining proposal. One mining lease application has already been lodged over LJN4 – others will follow the lodgement of the mining proposal,” he noted.

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.