Magnetic Resources (ASX:MAU) is continuing discussions with several parties currently in its data room that have shown interest in the Lady Julie Gold Project, situated in the Laverton, Western
Australia gold region.
Speaking to Mining.com.au on the sidelines of the Diggers & Dealers Mining Forum in Kalgoorlie, Managing Director George Sakalidis says the data room remains open, however Magnetic is moving forward as though the project will be a standalone operation with no certainty or expectations of any deal or agreement to emerge from the data room.
Magnetic Resources previously reported it has been receiving strong interest since releasing a Prefeasibility Study (PFS) in March 2024. The company has also received several unsolicited inbound enquiries from potential financiers. As a result, it engaged Argonaut PCF to support it in structuring and securing financing for Lady Julie.
Today (5 August 2024) the company released the results of an economic update for the Lady Julie project, which shows development capital of $111.3 million (including 15% contingency provision for the plant cost estimate) will be required, assuming a standalone 2.2Mtpa processing plant and three months pre-production activities.
The outcomes of the study show Lady Julie’s gold production will be 817,470 ounces averaging 104,000oz a year over an eight-year life of mine (LOM). With a payback period of 12 months from beginning of production, the study shows an IRR of 135% at $3,200/oz for total EBITDA of $1.49 billion at $3,200/oz.
The project is expected to have LOM average C1 (operating) cost of $1,377/oz and all-in sustaining costs (AISC) of $1,386/oz, including sustaining capital of $8 million. The study also shows pre-tax NPV8 of $925 million at $3,200/oz.
With an open pit mining inventory of 16.03Mt @1.71g/t Au, containing 883,000oz gold, total LOM production includes about 84% indicated and 16% of inferred mineral resource with the indicated resource forming the basis of the production schedule in the first 6.5 years.
as the project develops, the company is gaining a better understanding of the potential value of the Lady Julie North 4 (LJN4) resource.
On 24 June 2024, the company appointed Argonaut PCF as debt advisor for its 100% owned Lady Julie Gold Project, located 30km west of Laverton in Western Australia. Perth-based Argonaut PCF is a corporate advisory firm with a 20-year history in the metals and mining sector, including experience in Western Australia’s gold sector.
In a 26 July ASX announcement, Sakalidis said with the Australian gold price at record levels, the Laverton project resources encompassing Lady Julie Central, Lady Julie North 4, HN9, Mt Jumbo, and Homeward Bound South, are shaping up and have potential for large-scale shallow open-cuttable deposits.
The gold price has been hitting new highs in 2024, driven by central bank buying and Chinese household demand for alternative investments amidst property and share market weakness.
Gold prices averaged about US$2,200 an ounce in H1 2024, up 15% year-on-year due to strong demand from investors and central banks, according to the Department of Industry, Science and Resources’ (DISR) latest issue of its Resources and Energy Quarterly: June 2024.
As of 1 August 2024, the gold price was $3,741 per ounce. Prices are forecast to remain elevated throughout 2024 and 2025, before easing slightly in 2026.
On 26 July, Magnetic reported the project has exceptional average ounces of resource per vertical metre with a strong average of 3,700 ounces per vertical metre (ozpvm) from 30m to 400m depth and a 4700ozpvm average within an enhanced zone from 100m to 300m. The 100m to 300m zone corresponds with the proposed open pit as set out in the PFS.
From surface, the company says there is a continuous rise in ounces as the sequence progresses from transported material through oxidised and into fresh rock at 200m depth.
From 200m to 400m depth, the resource is still of sufficient strength to support a large open pit mining operation. Below 400m from surface, there is still a strong mineralised presence but with insufficient drill intercepts to match the numbers closer to surface and further drilling is being carried out.
Unlike many resources in the Goldfields region where there is a single mineralised structure requiring the need to go underground closer to surface and increasing the mining cost, the stacked lodes and consistent grade at LJN4 provide compelling support for a more productive open pit to greater depth.
A pit expansion has followed each resource upgrade.
The Lady Julie North 4 deposit is 2.5km north of the Lady Julie Central deposit, which in turn is 2.5km northeast of the HN9 deposit. These three areas are all shallow deposits and Lady Julie Central and HN9 start from surface and Lady Julie North 4 from 30m depth, which provide low strip ratios and potential for economic ore that is open-cuttable and are effectively part of one mining centre.
Write to Adam Orlando at Mining.com.au
Images: Magnetic
