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Magnetic Resources NL, gaining traction

Team Veye | 27 Feb 2021 ASX - MAU
Magnetic Resources NL, gaining traction

Magnetic Resources NL (ASX: MAU)

Magnetic Resources NL (ASX: MAU) on 15 February presented HN9 – Lady Julie 2D Shallow Seismic Initial Results. A shallow 2D seismic survey and a passive seismic survey were completed in early January. EW 8km long 2D shallow seismic section with initial interpretation showing major thrust packages associated with HB9 and Lady Julie. Great depth extents are shown down to 1-2km – Individual thrust correlates with mineralisation at HN9 and Lady Julie. – Further interpretation forthcoming from NS 2D seismic 6km line, passive seismic covering 30sq km and 27km along Old Laverton Road and 25km through Wallaby provides a structural framework for the region and allowing targeting for deeper drilling along with these thrusts.

The HN9 2km-wide thrust zone contains six individual thrusts which come close to the surface. The Lady Julie thrust zone is 500m wide and has three persistent thrusts that go down to a 1km depth.

(Chart Source: Trading View)

On 12 February 2021, The Company) has received a payment from Northam Resources Pty Ltd (Northam) in relation to the sale of its Iron Ore Projects, as announced to ASX on 13 November 2017. The $500,000 payment is the First Development Delay payment and will be used by the Company for ongoing gold exploration

On 27 January 2021, the company presented its quarterly activities report:

  • Major drill programmes have accelerated in the New Year at HN9 and Lady Julie with two rigs being used. These programmes are proceeding with 108 RC holes for 12,519m at HN9 and 97 RC holes for 7,595m at Lady Julie. The aim is to define Indicated JORC Resources at both HN9 and Lady Julie which collectively have potential for a mining centre. The expanded zones that will be tested cover 4km at HN9 and 3km at Lady Julie.
  • A new thickened Southern Zone has an intersection of 90m at 0.37g/t Au from 80m which includes 8m at 2.5g/t from 80m in MHNRC780 was found in the southern part of HN9. This intersection is only 60m north of an intersection of 7m at 3.04g/t Au from 108m in MHNRC718. The areal extent of the mineralisation is growing in the southern direction where three NNE parallel zones are present which remain open to the SSW and at depth.

(Graphic Source – Company Reports)

  • The Central Thickened Zone has some very thick intersections including 104m at 0.82g/t Au from 8m in MHNRC582 and 70m at 0.49g/t Au from 13m in MHNRC54 and is 600m north of the Southern Thickened Zone.
  • Within the 3km long HN9 mineralised shear zone there are many new shallow intersections with a total of 564 intersections greater than 0.5g/t Au, which includes 240 greater than 1g/t Au, 89 greater than 2g/t Au, 44 greater than 3g/t Au and 32 greater than 4g/t Au.
  • Very encouraging metallurgical results at HN9 with combined gravity and leach recoveries over HN9 averaging 88.5% in the oxide zones, 91.2% in the Transition zone and 93.4% in the Fresh zone with no deleterious elements and having low cyanide and lime reagent consumptions.
  • The Lady Julie tenements are well mineralised with 242 gold intercepts (1-19m) greater than 0.5g/t, which include 101 greater than 1g/t, 34 greater than 2g/t, 20 greater than 3 g/t and 13 greater than 4 g/t. (Data Source – Company Reports)

 

Veye’s Take

MAU with a market cap of $325.3M holds no long term liabilities and short term liabilities are well covered by short term assets. MAU is debt free. Its returns exceeded the Australian Metals and Mining industry which returned 41.4% over the past year. The stock has gained momentum from November 2020 after forming a “long legged Doji” candle indicating strong rejection to further downside. The Upside momentum is well supported by RSI and MACD. Veye recommends a “Buy” on “Magnetic Resources NL” at the current price of $1.490

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