Magnetic Resources NL (Magnetic or the Company) is pleased to announce the results of a Prefeasibility Study( PFS) on its 100% owned Lady Julie Gold Project (Project), situated in the Laverton, Western Australia gold region. The outcomes of the study show a technically and financially robust Project.
PFS Highlights:
Confirming a financially robust Project with low-cost, high margin gold production of 720,000 oz (averaging 87,000 oz/year) over a 9-year life of mine (LOM).Pre-tax IRR of 85% at A$2,800/oz, increasing to 108% at the current spot price of A$3,100/oz.Total EBITDA of A$982M at A$2,800/oz, increasing to A$1,191M at the current spot price of ~A$3,100/oz.Life of mine average C1 (operating) cost of A$1,434/oz and AISC of A$1,445/oz, including sustaining capital of $8M.Pre-tax NPV8 of $547M at A$2,800/oz, increasing to A$690M at the current spot price of ~A$3,100/oz.Payback period of 15 months from production.Open pit Mining inventory of 13.6Mt @1.78g/t Au, containing 773,700oz gold. Total life of mine production includes approximately 77% Indicated and 23% of Inferred Mineral Resource, with the initial 5 years of production from the Indicated Resource.Development capital of A$93.4M (including 15% contingency provision for the plant cost estimate), assuming a standalone 1.8 Mtpa processing plant and 3 months pre-production activities.Cost estimates have been based on the current inflationary environment and supported by industry quotes for personnel, equipment and consumable unit costs. Plant capital is based on 2021 P&ID level quotes updated to present.A Mining Proposal will now be prepared and submitted to advance a further mining lease application and regulatory approval to allow for mining.The PFS is shown at the end of this ASX Release.
Commenting on the PFS outcomes, Magnetic’s Managing Director, George Sakalidis, said:
“The excellent PFS outcome demonstrates that Magnetic’s Lady Julie Gold Project is one of the highest margins, undeveloped gold projects in Australia. The Project’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. This low-cost profile places the Project in the bottom half of the cost curve of gold producers in Australia.”
“The PFS focuses on mining the Indicated and Inferred resources of Lady Julie North 4, Lady Julie Central and Hawks Nest 9. Lady Julie North 4 is by far the largest contributor to the study producing over 11.5Mt of ore during its operation.”
“Further refinement of the Project’s economics will be carried out in 2024 with scope to further improve the economics of the Project from boosting process recoveries and modifying processing scenarios. More significantly, potential exists to further increase production and mine life estimates from the inclusion of resources drilled since the last update provided in November 2023. The Magnetic team has been very successful in defining new targets and making new discoveries with recent deep drilling confirming the resource continuity below Lady Julie North 4. 2024 promises to be a very exciting year for the Company”.
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