Consensus community valuation
23rd June 2025: Lady Julie Resource Significantly Increases to 2.14Moz.PDF [today]
That's what they've released today, and it's interesting, however the biggest problem with MAU is their MD, George Sakalidis, and his mouth, which tends to operate without his brain providing any filtering, a little like me after a few glasses of red.
Just a few weeks ago, on May 30th, they had to release this: Retraction of production target.PDF
--- end of announcement ---
East Coast Research is widely known to provide "coverage for a fee" research which is always positive because otherwise they wouldn't be able to charge the companies for their services, or the demand wouldn't be there anyway. I'm not saying that every piece of research that ECR release is bought and paid for by the company covered in that research, but that it does happen, so take what they say with a grain or three of salt.
They are not always wrong by the way. They recently talked up and slapped a Buy call on one of my larger real life positions, GR Engineering Services (GNG), which certainly contributed to a recent uptick in the GNG SP, not complaining about that, but it's just something to be aware of.
For those who don't know, East Coast Research is a Corporate Authorised Representative of Havana Financial Services Pty Ltd and provides equity research for ASX-listed companies. Shares in Value is their investor-focused division with over 35,000 active subscribers. SiV is basically a subscription-based stock picking or stock advisory service.
But back to George S. He has a habit of saying things that either he and/or the rest of his Board regrets. At the tail end of May, as shown above, George talked about MAU being able to potentially produce 150 koz gold per annum for up to 10 years from their Lady Julie Gold Project (LJGP) near Laverton in WA, and the company then had to retract that - in writing (as shown above) - because there is no basis yet to back up that claim.
George has a happy knack of making statements like that, and about how there are many companies sniffing around and keen to buy Magnetic Resources, which often causes spikes in the MAU SP (share price) - and while these statements are based on SOMETHING, they don't always come to anything, or pan out as George was expecting or indicating they probably would.
MAU have been finding more gold and the gold price has risen strongly over the past year, so you would expect to see a rising share price, and MAU's SP has indeed risen over the past year, but it's also been choppy, and some of that is certainly down to George.
That SP graph above is for the past 3 years, and the pattern is of share price spikes followed by retracements as part of a broader uptrend since mid-2023, so for the past 2 years.
Here's an example of why MAU's MD, George Sakalidis, is widely seen as being over-promotional:
Seven gold producers attracted to Magnetic Resources’ Lady Julie project near Laverton
by Adrian Rauso, The West Australian - Fri, 9th May 2025:
Magnetic Resources boss George Sakalidis John Koh. Credit: John Koh/The West Australian
The voracious appetite for WA’s gold-rich rocks and dirt shows no signs of being subdued with seven miners jumping in a data room for the marquee development of $400 million West Perth company Magnetic Resources.
Rumours have been swirling that ASX-listed Magnetic’s Lady Julie gold project near Laverton is on the cusp of being sold.
Magnetic managing director George Sakalidis told The West Australian there was no formal sales process being run for Lady Julie, but more than half a dozen companies were peering under its hood and crunching the numbers for a potential deal.
“We’ve opened a data room and there are seven companies, all active (gold) producers, some locals and two from overseas,” he said.
Lady Julie has a mineral resource of 28.1 million tonnes at 1.93 grams per tonne of gold, equating to approximately 1.75 million ounces of the precious metal. The Lady Julie North 4 deposit is the centrepiece of the project with a resource of 23.6mt at 2.04g/t for 1.55moz.
Mr Sakalidis believes interest in Lady Julie could become even more intense once a definitive feasibility study is completed and released — potentially as soon as next month.
An August pre-feasibility study of Lady Julie highlighted a pre-tax net present value of $925 million, assuming a gold price of $3,200 per ounce. Gold is currently trading a shade below $5,200/oz.
While Mr Sakalidis declined to reveal which seven companies are in the data room, Lady Julie is surrounded by gold processing plants, which could shed light on who the interested parties are.
In the vicinity of Lady Julie’s boundaries is Genesis Minerals’ Mt Morgans, Focus Minerals’ Barincoat, AngloGold Ashanti’s Sunrise Dam, and Gold Fields’ Granny Smith. AngloGold and Gold Fields are headquartered in South Africa.
Gold Fields on Monday agreed to pay Gold Road Resources $3.7 billion to consolidate the Gruyere mine — about 100km east of Lady Julie — the latest in a spate of local gold deals over the past year amid bullion’s record price run.
Northern Star Resources’ $6 billion takeover of De Grey Mining and its prized Hemi gold development in the Pilbara was also officially wrapped up on Monday.
Magnetic has a market capitalisation of approximately $413m.
--- ends ---
It's a bit of a stretch comparing the potential takeover of MAU at some point as being anywhere similar to DEG being acquired by NST for $5 Billion.
The trouble is that people/companies running their ruler over Magnetic Resources do NOT want the company's MD publicly discussing the fact that the company is in play and is receiving interest. It creates further competitive tension, and drives the share price even higher, which could be good for MAU, but is not generally positive for any potential acquirer of MAU.
And ultimately, if these interested parties ultimately walk away without lobbing in any offers, the MAU SP is going to come back down again.
George was doing the same thing at last year's D&D (Diggers and Dealers conference in Kalgoorlie) last year, except that during his presentation at D&D he went so far as to name some of the gold companies showing interest and who had been or were in MAU's data room at that time according to George. We saw a big drop in the MAU share price shortly after that as rumours circulated that all of those parties had walked away in disgust at that behaviour by George - and left the data room empty.
He has recently (last month) been talking up the M&A interest again - as shown above - and now saying that there are even more companies showing interest than there were last year, but there is one more significant fly in George's ointment that he doesn't mention, and that is that the planned open pit for MAU's Lady Julie North gold deposit runs right up to the very edge of a tenement that MAU do NOT own and have NOT been able to secure from the previous owners, Focus Minerals (FML), who refused to sell that tenement (directly north of Lady Julie) to MAU or anybody else because they knew that it contains gold (the extension of Lady Julie which remains open to the north) and they also knew that the tenement has significant strategic value for anybody thinking about acquiring MAU.
Genesis Minerals (GMD) - who I hold shares in - recently (late last month) acquired that tenement from FML (see: Sale-of-the-Laverton-Gold-Project.PDF) but only as part of a large tenement package, basically all of FML's tenements around Laverton. FML, which is majority Chinese owned now through Shandong Gold, is now focused on their Coolgardie Gold Project (CGP) south of Kalgoorlie (see map below) and also needed cash, so they sold all of their tenements north of Kalgoorlie to GMD for $250 million up front (the deal has now completed with that money having been paid by GMD to FML), and FML now have some cash to progress their CGP.
Source: https://www.focusminerals.com.au/our-projects/
This puts GMD in the box seat to acquire Magnetic (MAU) when they're ready to do so, as full development of MAU's Lady Julie North requires access to that tenement that GMD now own.
However, Raleigh Finlayson at Genesis (GMD) is a patient man and also a very smart and strategic one who hates to overpay for assets. Exhibit One is Red 5 (RED, now known as Vault Minerals with the ticker code VAU) and their KOTH ("King of the Hills") gold mine and gold mill which is surrounded on three sides (north, east and south) by GMD tenements. People have been expecting GMD to move on RED (now VAU) for over 2 years, and they haven't done so yet. I have no doubt that KOTH will eventually be owned by GMD, but not until Raleigh decides to pull that trigger. And the same thing now applies to MAU, in my opnion.
I think that MAU as an acquisition opportunity is worth significantly less without that tenement to their north that GMD now own, and as such, the only people likely to be seriously interested in acquiring MAU now are people who think that GMD will eventually acquire Lady Julie regardless of who owns it or what they have to pay for it, and Ral's past history shows me that this assumption is fundamentally flawed. There are plenty of assets that Ral would like GMD to own, but he does not like to overpay and he likes his moves to surprise rather than be telegraphed by others. He has the luxury of time, and George Sakalidis at MAU is behaving like he does NOT have that luxury.
Further Reading:
- GMD: Acquisition of Laverton Gold Project.PDF [26th May 2025]
- GMD: Corporate Presentation - Focused [10th June 2025]
- MAU: Investor Presentation - June [23rd June 2025]
Disc: Holding GMD, NOT holding MAU or FML.
Same old same old
Maybe a good thing I sold (although it was good timing MAU put out more spectacular drill results!)
Then again, maybe I should ask George a question about whether a Reserves statement will be put out?
Thanks to Trav, he managed to pick up the mumbling from George that Genesis and Goldfields are in the Dataroom.
Kudos for Travis for his sharp hearing which I did not manage to make out.
https://x.com/TRAVmoneyofmine/status/1822220868958736756
I also agree on the negatives such as not having a reserve.
But I'm only holding to see how far this deposit goes at depth and the desperation for those companies for extra ounces.
If this trades above the NPV of nearly $1bn I'll be selling.
[held]
Don't usually like writing about gold stocks now but I'll make an exception here because of the similarity between Karlawinda (CMM) and Lady Jane
Lady Jane (Magnetic):
Karlawinda (CMM)
I wouldn't be surprised if Lady Jane turns out to be same as Karlawinda.