Shares in Magnetic Resources Ltd (ASX: MAU) have been performing well recently, but according to a report by Shaw & Partners, there's still plenty of upside to be had.
Magnetic's flagship asset is the Lady Julie gold project in Western Australia, where the company in January released an updated mineral resource of 39.1 million tonnes of ore containing 2.24 million ounces of gold.
More than 80% of the resource was also in the high-confidence "indicated category''.
Image source: Getty Images
Deposit continues to deliver
Managing Director George Sakalidis said at the time that the LJN4 deposit at the project "continues to deliver" and was an "exceptional ore body''.
He added:
LJN4 is one of the largest and highest grade undeveloped open pit deposits in Western Australia. With the feasibility study completion and the permitting process advancing, Magnetic is rapidly evolving to a position of being 'shovel ready' for development.
The company said that further infill and extension drilling were being carried out to extend the resource.
The company explained:
LJN4 represents an excellent development proposition and is now significantly larger than the resource considered in the LJGP Feasibility Study (released to the ASX on 23 July 2025), both in scale and detail, with the depth of information now available providing increased confidence in the viability of the proposed development and associated value available to be unlocked.
Plenty of share price upside
Shaw & Partners analysts have had a look at Magnetic's plans, and it's fair to say they like what they see.
They said in a note to clients:
Magnetic Resources is entering a critical phase for regulatory de-risking. Management expects to satisfy all Mines Department requirements within 2-3 months, leading to mining approval. With native title in place, the current focus is on finalising technical studies required by regulators, including hydrogeological work and geotechnical drilling for waste and tailings infrastructure.
They noted that Magnetic was also updating its economic studies to take into account a significantly higher gold price, with the feasibility study released in July using a gold price of $4000, while current spot gold prices were closer to $7000.
There were several catalysts for operational upside, as the Shaw team said:
The updated study will also incorporate an additional 280koz-350koz from underground that were excluded from prior iterations. MAU is shifting from an owner-operator model to contracting, which will reduce upfront capex materially. Metallurgical improvements are also being investigated, such as using gravity circuits instead of flotation, which could increase gold recoveries by 3%- 4% above the current 92% average.
Shaw has a target price of $4 per share on the stock, compared with a share price of $1.61 currently.
If that price is achieved, it would constitute a return of 148.4%.
