Magnetic Resource NL has updated its scoping study for the Lady Julie Gold Project, significantly increasing the underground production target and extending the mine life. The revised plan also lowers underground mining costs and defers some capital expenditure by prioritising open pit operations.
- Underground production target increased to ~13 million tonnes at 2 g/t gold
- Mine life extended to 14–19 years with higher annual production rates
- Total underground mining costs reduced to $116–$122 per tonne
- Incorporation of longitudinal and transverse mining methods with paste fill
- Board endorses Genesis Minerals acquisition scheme, recommending shareholder approval
Significant Underground Expansion
Magnetic Resource NL has released an updated scoping study for its 100%-owned Lady Julie Gold Project in Western Australia's Eastern Goldfields, revealing a substantial increase in the underground production target. The new conceptual target stands at approximately 13 million tonnes grading 2 grams per tonne gold, a marked rise from the 3.1 million tonnes at 2.6 g/t outlined in the 2025 feasibility study.
This expansion is primarily driven by additional mineral resources identified in the high-grade core zones, notably cores 3 and 4, and is based on a lowered in-situ stope cut-off grade of 1.3 g/t gold. The updated mine plan envisages an underground mine life stretching between 14 and 19 years, with average production rates (excluding the first year) ranging from 710,000 to 920,000 tonnes annually, translating to 41,000 to 52,000 ounces of gold mined per year. Peak sustained production over five years could reach up to 1.25 million tonnes annually, yielding 76,000 ounces.
Optimised Mining Methods and Cost Efficiencies
The scoping study incorporates both longitudinal and transverse longhole open stoping mining methods, supported by paste fill to enhance ground stability. Importantly, the underground operation is planned to commence approximately two years after the start of the Lady Julie North 4 open pit, utilising a dedicated portal within the open pit for access, ventilation, and emergency egress.
Cost estimates indicate total underground mining expenses, including capital expenditure of $181 million to $222 million, will range between $116 and $122 per tonne of ore. This represents a notable reduction from the $149 per tonne estimated in the previous feasibility study, reflecting efficiencies gained through optimisation work conducted by Mining Plus.
Project Development Strategy and Funding Outlook
The updated study suggests a strategic opportunity to focus initial project development on open pit operations, deferring underground pre-production capital expenditure. This phased approach could improve early cash flow and reduce upfront funding requirements.
Magnetic Resource NL acknowledges that while the production target includes 29% inferred mineral resources, which carry a lower geological confidence, the overall project economics remain robust. The company anticipates securing project financing through a combination of debt and equity, leveraging the project's strong fundamentals and Western Australia's favourable mining jurisdiction.
Board Support and Acquisition Context
Magnetic's board continues to unanimously support the proposed acquisition by Genesis Minerals Limited, recommending shareholders vote in favour of the Scheme of Arrangement. Managing Director George Sakalidis highlighted the project's high-margin potential and the value uplift expected under Genesis ownership, reinforcing confidence in the project's future.
Further technical work, including geotechnical investigations and metallurgical testwork, is planned to advance the study to a pre-feasibility level. Meanwhile, baseline environmental studies report limited broader-scale impacts, and all necessary mining leases have been granted, positioning the project well for development.
Bottom Line?
With a significantly expanded underground target and improved cost profile, Lady Julie is poised for a pivotal development phase, but key technical and funding milestones remain ahead.
Questions in the middle?
- How will further geotechnical and metallurgical studies impact the project's timeline and costs?
- What are the prospects and terms for securing project financing amid current market conditions?
- How might the inclusion of inferred resources affect the certainty of production forecasts?