Increased Underground Scope Raises Costs and Risks for Lady Julie Gold Project
Magnetic Resource NL has significantly increased the underground production target for its Lady Julie Gold Project, extending mine life and improving production rates in a new scoping study update.
- Underground production target raised to approximately 13 million tonnes at 2 g/t gold
- Mine life extended to 14–19 years with higher average and peak production rates
- Estimated underground mining costs reduced to $116–$122 per tonne including $181–$222 million CAPEX
- Scoping study level results pending further geotechnical and metallurgical validation
- Board maintains unanimous support for Genesis Scheme takeover proposal
Significant Underground Expansion
Magnetic Resource NL has unveiled a substantial update to the underground production target for its 100% owned Lady Julie Gold Project, located in Western Australia's Eastern Goldfields. The recently completed scoping study optimisation work has expanded the conceptual underground production target to around 13 million tonnes at an average grade of 2 grams per tonne gold, a marked increase from the 3.1 million tonnes outlined in the 2025 feasibility study.
Extended Mine Life and Enhanced Production
This expansion translates into an indicative underground mine life stretching between 14 and 19 years, significantly longer than the previous 8-year estimate. The average annual production rate, excluding the first year, is now projected between 710,000 and 920,000 tonnes, equating to 41,000 to 52,000 ounces of gold mined per year. Peak production over a sustained five-year period could reach up to 1.25 million tonnes annually, or 76,000 ounces of gold, underscoring the project's growing scale and potential.
Cost Efficiency and Capital Investment
The scoping study estimates total underground mining costs, inclusive of capital expenditure, at approximately $116 to $122 per tonne of ore. This represents a reduction compared to the previous feasibility study's $149 per tonne estimate, despite the capital expenditure rising to between $181 million and $222 million to support the expanded underground operations. The study incorporates both longitudinal and transverse longhole open stoping mining methods with paste fill, reflecting a comprehensive approach to underground extraction.
Study Status and Next Steps
While the results are promising, the study remains at a scoping level, requiring further geotechnical investigations; particularly for decline and ventilation infrastructure; and paste fill testwork before advancing to a pre-feasibility standard. The underground operation is planned to commence approximately two years after the start of the Lady Julie North 4 open pit, utilising a portal within the open pit for access and ventilation.
Corporate and Strategic Context
Magnetic's Managing Director, George Sakalidis, highlighted the project's robust economics and ongoing drilling success as key drivers behind the updated production target. The Board continues to unanimously support the Genesis Scheme takeover proposal, recommending shareholders vote in favour, contingent on the absence of a superior offer and confirmation from an independent expert that the Scheme serves shareholders' best interests.
Bottom Line?
With a larger underground footprint and extended mine life, Lady Julie’s next development phase will be closely watched for its potential to reshape Magnetic’s value under Genesis ownership.
Questions in the middle?
- How will further geotechnical and metallurgical test results impact the feasibility and cost estimates?
- What are the implications of the 29% Inferred Resources on the project's risk profile and financing?
- How might the timing of underground operations affect overall project economics and shareholder returns?
