ASX-listed Magnetic Resources said on Wednesday it is advancing its Lady Julie gold project in Western Australia toward development, with a new feasibility study confirming the project’s technical and economic viability and supporting a shift from exploration to construction readiness.

The company said the feasibility study represents a material progression from its March 2024 prefeasibility study and the August 2024 economic update. The improvements reflect ongoing resource growth at the LJN4 deposit, refined understanding of ore characteristics, further metallurgical testing, and stronger gold price assumptions.

Yearly average gold production is forecast at 140 000 oz over a planned nine-year mine life, at an all-in sustaining cost of A$1 908/oz, which includes sustaining capital of A$101-million. 

The total capital cost of the project is estimated at A$375-million.

The study yielded a pre-tax net present value, using an 8% discount, of A$970-million and an internal rate or return (IRR) of 45% assuming a gold price of A$4 000/oz. This increases to a NPV of A$1.67-billion and IRR of 66% at the current gold price of A$5 145/oz.

Over its nine-year life, Lady Julie will deliver "outstanding" earnings before interest, taxes, depreciation and amortisation of A$2.23-billion, assuming a gold price of A$4 000/oz.

“This excellent outcome demonstrates that Magnetic’s Lady Julie gold project is one of the highest margin undeveloped gold projects in Australia. The project’s 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," commented MD George Sakalidis.

The project, located 17 km south-west of Laverton, will include three open pits – LJN4, Lady Julie Central and Hawkes Nest 9 – alongside an underground operation at LJN4 and a 2.75-million-tonne-a-year processing plant.

Supporting infrastructure will include a 20 MW hybrid gas and solar power station, process water bore fields, and a fly-in fly-out workforce accommodation village in Laverton capable of housing 300 personnel.

Construction is expected to begin in March next year, with processing plant foundations scheduled to be poured by November 2026. Development of the pits and underground access is planned to begin in January and February 2027, with commercial production targeted for July 18, 2027.

“In parallel with our current efforts to secure mining leases and associated development approvals, other near-term priorities are to recruit and build a project development team to take Lady Julie into construction,” the company said in a statement.

“The board has already engaged Stuart Gula as project director (operation readiness). Stuart has over 30 years project development experience, having successfully advanced other Australian and overseas gold and base metal projects into production.”

The company said it will also finalise its funding plan and begin detailed engineering to enable ordering of long lead-time items.

“This is an important time for the company as it now pivots its focus from exploration to construction readiness – while the board remains open to all options to deliver value for our shareholders, it is now increasingly focused on executing a standalone development as the primary pathway.”