Magnetic Resources [ASX:MAU] Update September 2025
Metals & Mining
De-Risking Toward Production on the Back of a Robust Feasibility Study
We are revising our target share price for Magnetic Resources (ASX: MAU) upwards to $3.44, implying a compelling 164.8% total upside from the current $1.30 share price and a 15.5% uplift from our last report in July 2025. Our recent market re-rating reflects a significant step-change for Magnetic as they de-risk their project and move closer to generating cash flow. This is underpinned by a robust Feasibility Study for their Flagship Lady Julie Gold Project. It confirms a 9-year mine life based on a maiden Ore Reserve of ~997,000 ounces and delivers a strong NPV with a rapid payback. Furthermore, a successful A$35 million capital raise fully funds our next critical steps, allowing MAU to accelerate drilling and advance early works. Finally, granting the key LJN4 mining lease is a major de-risking milestone, removing a critical hurdle to their pathway to production.
Accelerating Development on the Back of a Robust Feasibility Study
The July 2025 Feasibility Study for LJGP confirms a technically simple and financially robust operation. It outlines a 9-year mine life based on a maiden Ore Reserve of 997,300 ounces, delivering a powerful pre-tax NPV of A$1,668 million at A$5,145/oz gold price. With the project's economic viability now proven, Magnetic is confidently transitioning from study to delivery, using its strengthened balance sheet to accelerate development and unlock further value through resource growth.
Funded for a Clear Path to Production
The recent A$35 million capital raise in August 2025 fully funds the next critical phase of de-risking and development. Proceeds are being allocated to advance early site works, secure long-lead time equipment to protect the project schedule and expand the mine life through targeted drilling. Their project's simple metallurgy and Tier-1 jurisdiction provide a distinct advantage in securing project financing in a market with a record-high Australian dollar gold price.
Strong Gold Prices, Execution Roadmap and Near-Term Catalysts
Record Australian-dollar gold prices are lifting Lady Julie’s economics, expanding margins, accelerating payback, and strengthening funding capacity through improved hedging and reserve conversion. MAU is converting this tailwind into execution: A$35m raised, the mining lease granted, engineering advancing, and long-lead orders underway. MAU-specific catalysts: (1) drill results at LJN4, Lady Julie Central and HN9 to drive reserve conversion and mine-life growth; (2) an updated Mineral Resource/Reserve incorporating the 2024–25 program. Together, these steps de-risk the path from developer to near-term producer.
Stock Rerating Driven by Feasibility Study and Increased Gold Prices
We value MAU at A$3.16/ share in our base case (+143.3% upside) and A$3.72/share in our bull case (+186.2% upside). Using the midpoint, our A$3.44/ share target price implies +164.8% potential upside from current price at A$1.30. This valuation is underpinned by the company's excellent execution in growing its resource base and completing a robust Feasibility Study, amplified by a strong gold price tailwind. Magnetic now represents a compelling investment: a recently funded, permitted, and conventional project. We see a clear pathway to first gold production, with significant scope for further valuation uplift as each milestone is met and execution risk continues to fall.
Disclaimer: Directors of East Coast Research hold shares in Magnetic Resources (ASX: MAU).