The Conversation (0)
Magnetic Resources’ (ASX:MAU) Lady Julie North 4 (LJN4) project in Western Australia could be a sleeping giant after recent drilling revealed significant discoveries unfolding, according to a report released by advisory, stockbroking, research and investment house Argonaut Research.
The report included a potential inventory of 778Koz at 2.34g/t (1.0g/t Cut-off) for LJN4.
“Extensional drilling at depth for LJN4 is currently underway so we anticipate the next LJN4 resource update will exceed our estimates and likely turn into a +1Moz deposit captured within a large 1000m x 600m single open pit,” the report stated.
Figure 1: Cross section of Argonaut’s completed Leapfrog model for LJN4 with recent significant intercepts
Argonaut recommended a “speculative buy” for MAU with a price target of $1.80/share on the back of a pending LJN4 resource upgrade and further exploration drill results.
Highlights of the report include:
- Using currently reported drilling by MAU, Argonaut models a potential inventory of 778Koz at 2.34g/t (1.0g/t Cut-off) for LJN4.
- LJN4 resource update will exceed Argonaut estimates and likely turn into a +1Moz deposit captured within a large 1000m x 600m single open pit.
- Growing deposit in an active M&A region: The LJN4 deposit location is ideal - only 15km from two existing mills (Mt Morgans (ASX:GMD) & Granny Smith (JSE:GFI).
- Consolidation of the Leonora region by Genesis first focused on securing milling capacity. With two mills now under GMD ownership, consolidating ounces in the ground may be the next step before other producers in the area start making their own moves.
- The Granny Smith Mill is running under capacity - treating 1.58Mt in 2022, less than 50 percent of its 3.5Mtpa
Click here for the full report
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