Magnetic Resources NL (ASX: MAU) – Trading Halt

Overview

Magnetic Resources (ASX:MAU) is an Australian company, developing a portfolio of significant gold projects in the established mining province, Laverton region, in Western Australia.

The company owns a 100-percent interest in the Hawks Nest and Lady Julie projects in Laverton, the Homeward Bound South project in Leonora, and the Benjabbering project in Julimar. The main deposits include Hawks Nest 9 (HN9), Lady Julie Central (LJC), Lady Julie North 4 (LJN4), Mount Jumbo and Homeward Bound South, which are all located in an area with well-endowed regional infrastructure, including three processing plants within 10 to 35 kilometres. These plants are owned by well-known operators including Goldfields Genesis/Dacian; Anglo-Ashanti; and Genesis/Dacian.

The projects’ proximity to these existing processing facilities gives enough options to MAU for toll processing without having to invest millions of dollars in constructing its own processing plant.

Several large deposits such as Wallaby, Sunrise Dam and Jupiter Gold are in this jurisdiction. The company’s projects are adjacent to some of these world-class deposits. The Mt Jumbo and Hawks Nest tenements are only 15 kilometres north of the Wallaby deposit. At both HN9 and Lady Julie, Magnetic Resources had identified multiple thickened stacked lodes near-surface, which have some similarities to Wallaby and Sunrise Dam.

LJN4, a key focus for the Laverton project, hosts thick breccia and silica pyrite zones up to 50 metres thick, which are also prevalent in Anglo Ashanti’s world-class Sunrise Dam deposit, both parallel to near-surface breccia zones and vertical mineralization going downwards into several of their deposits. The Mau breccia zones often carry higher grades and are now being extended by new drilling at depth and further to the east and northeast, potentially growing the LJN4 resource.

In November 2023, the company announced a significant increase in the mineral resource estimates. The deposits in the Laverton and Homeward Bound area have seen a significant 107-percent increase over the last report in February 2023. The updated combined mineral resources estimate for the whole project area stands at 22.7 million tonnes (Mt) @ 1.69 grams per ton (g/t) gold totaling 1.24 million ounces (Moz) of gold at 0.5 g/t cutoff.

LJN4 is now, by far, the largest resource in the project area, as its contained gold rose from 204,000 oz to 852,000 oz, a 317-percent increase. Extension drilling continues and is expected to result in further resource increases.

The significance of LJN4’s gold resource has not gone unnoticed, as research firm Argonaut has called it a ‘sleeping giant,’ noting recent drilling at LJN4 “indicates a significant discovery unfolding in the Laverton region.” If MAU can replicate the recent drilling intercepts, the next resource update at LNJ4 could easily make it a 1-Moz deposit. This will position LJN4 as one of the best undeveloped gold assets in the Laverton region.

Company Highlights

• Magnetic Resources (MAU) is an Australian company focused on gold development projects in Western Australia.
• The company owns a 100-percent-interest in the Hawks Nest and Lady Julie projects in Laverton, the Homeward Bound South project in Leonora, and the Benjabbering project in Julimar.
• MAU’s large tenement positions in the Leonora and Laverton districts of Western Australia, are near numerous large deposits with existing mining operations and good infrastructure.
• The presence of three processing plants close to MAU’s Laverton deposits provides scope for toll processing.
• In November 2023, the company announced a 107-percent increase in the resource estimate for Laverton and Homeward Bound South deposits. The revised resource stands at 22.7 Mt @ 1.69 g/t gold totaling 1.24 Moz of gold at 0.5 g/t cutoff.
• For the Laverton project deposits – Lady Julie North 4,Lady Julie Central and Hawks Nest 9 – early work programs, including project environmental, heritage and technical background studies, are close to completion. The aim is to submit a mining proposal in January 2024.
• In October 2023, the company announced the completion of a AU$4.8-million private placement. The company is now fully funded with AU$7 million cash to aggressively advance to the next stage of development.
• The company’s highly experienced senior leadership team has a proven track record to capitalize on the high resource potential of its projects.

MAU has 179 sq. kilometres. of prospective exploration tenements in the Laverton region comprising three main deposits – Hawks Nest 9 (HN9), Lady Julie Central (LJC) and Lady Julie North 4 (LJN4). All are 100-percent-owned tenements and within 20 to 30 kilometres of three major gold camps collectively hosting more than 25 Moz of gold resource – Granny Smith (owned by Goldfields Australia), Jupiter (owned by Dacian Gold) and Sunrise Dam (owned by AngloGold Ashanti). In the Laverton Project, extensive drilling programs have been completed with 1,898 RC/DD holes for 147,943 metres with further deeper drilling now planned.

MAU’s updated resource estimate stands at 10.4 Mt indicated @ 1.74 g/t gold containing 584,400 oz and 12.2 Mt inferred @ 1.65 g/t gold containing 651,300 oz for a total of 22.7 Mt @ 1.69 g/t gold, containing 1.24 Moz at 0.5g/t cutoff. The depth of drilling averages only 79 metres on all projects. Note that these estimates include the Homeward Bound South project as well. The discovery cost for all these resources is very low at $24/ounce.

Early work programs have begun at these deposits and all approvals are expected by December 2023. MAU aims to submit a mining proposal to DMIRS in late January 2024. Blue Cap Mining is helping with all key approvals and assessing the economics of the Laverton Project.

Hawks Nest 9: The HN9 (indicated and inferred) resource is estimated at 3.2 Mt at 1.22 g/t gold for 123,000 oz contained within three main zones within a 2-kilometre by 200-metre-wide area and is largely within the indicated category (63 percent). Widespread surface and shallow east-dipping lodes are present in the project area.

Lady Julie Central: The Lady Julie Central (indicated and inferred) resource is estimated at 1.33 Mt at 1.68 g/t gold for 72,200 oz, covering a 350-metre by 200-metre area. Nearly 59 percent of the resource falls in the indicated category.

Lady Julie North 4: LJN4 is by far the largest resource in the project area. The resource (indicated and inferred) is estimated at 13.1 Mt at 2.20 g/t gold for 852,000 oz, covering an 800-metre by 200-metre area, and is open down dip and to the east, which augers well for the potential size. This resource is partly in the indicated category (52 percent). Thick breccia silica pyrite intersections have now been outlined over a 250-metre length in the central and southern part of LJN4, which are very similar to that found in the world-class Sunrise Dam deposit. These zones containing drilling holes (MLJRC789, MLJRC779 and MLJRC679) are now being extended by new drilling at depth and further to the east and northeast. This provides strong potential to grow the LJN4 resource. A 1,390-metre diamond and a 2,555-metre RC program have started and will be scoping out extensions both to the east and northeast with holes planned between 400-metre to 550-metre depth holes.

Chatterbox Shear Zone

The Chatterbox shear zone is a complex north to northeast-trending, east-dipping structural corridor that covers 32 kilometres extending from Magnetic Resources’ southern boundary at Mt Jumbo and through LJN4 and as far north as the Beasley Creek gold deposit on Magnetic’s northeast boundary. Importantly, this shear zone is closely associated with gold mineralisation at several locations along its length including MAU’s LJN4 and Mt Jumbo deposit. This shear is gold-rich and gold deposits further north of MAU’s tenements contain the Beasley Creek and Apollo deposits and are interpreted to extend south towards the world-class Wallaby deposit.

Julimar Lookalike Projects

It comprises six separate projects, including Benjabbering, Trayning, Trayning West, Goddard, Koorda and Korrelocking, all of which are 100-percent held by the company. These are nickel-copper-PGE (platinum group elements) projects located 90 kilometres to 150 kilometres northeast of Chalice Gold Mines’ Julimar nickel-lead discovery. These projects were selected based on aeromagnetic interpretation after noting the structural setting of the Julimar complex and the Gonneville mineralized discrete magnetic nickel-copper-PGE body.

The 112-square-kilometre Benjabbering project has a large 25-kilometre-long aeromagnetic pattern very similar to the Julimar. Several thickened zones in the area may represent possible feeder areas for potential nickel-copper-PGE mineralization. Both the Trayning and Korrelocking Projects have a 2-kilometre discrete magnetic target prospective for rare earth elements.

Management Team

George Sakalidis – Managing Director

George Sakalidis has been the founding director and shareholder of the company since its inception in 2006. He brings more than 30 years of experience in developing early-stage natural resource projects and bringing the projects to production. He is experienced in various commodities including gold, diamond, base metals and mineral sands. He has been associated with several significant mineral discoveries in Western Australia, including the Three Rivers and Rose gold deposits, the Blackmans gold deposit, the Dongara Mineral Sands Deposits, the Boonanarring, Gingin South, and the Hyperion Mineral Sands Deposits. He has held several directorships in ASX-listed companies, such as Image Resources and Meteoric Resources. Moreover, he is a founding director of ASX-listed companies Emu and Potash West. He holds an honours degree in geology and geophysics from the University of Sydney.

Eric Lim – Non-Executive Chairman

Eric Lim holds an MBA degree from the Kellogg School of Management and a Bachelor of Accounting from the Nanyang Technological University of Singapore. He is an international investment banker, who built his career in leading financial institutions in Southeast Asia. He has served in several senior roles at UOB, Standard Chartered Bank, OCBC Bank and General Electric Capital.

Chan Hian Siang – Non-Executive Director

Chan Hian Siang holds a Bachelor of Arts (economics) from York University in Toronto, Canada, and a Master of Business Administration from McGill University, Montreal, Canada. He is also a council member of the Singapore Chinese Chamber of Commerce and Industry. He is the founder, executive director and CEO of SP Chemicals in Singapore. He has also been associated with Asiawide Holdings and Asian-American Merchant Bank.

Ben Donovan – Non-Executive Director and CFO

Ben Donovon brings in-depth experience in the areas of compliance, corporate governance, regulations and capital markets. He is currently a director and company secretary of several ASX-listed and public unlisted companies involved in the resource and technology industries. He was a senior adviser at the Australian Securities Exchange in Perth for nearly three years, including as a member of the ASX JORC Committee.

This article was written in collaboration with Couloir Capital.