Gushan mining area is located in the southern edge of Nishan uplift, and close to Zaozhuang fault. It is the western extension of Cangyi iron ore belt. This area is covered by Quaternary. By using highprecision magnetic method and three component magnetic survey in the well, two magnetic anomalies have been circled. Through 2D inversion on the abnormal section, it is inferred that C2 is caused by the rock mass with low magnetite content and C1 is caused by the magnetite ore body. Through drilling verification, the magnetic body at C2 is amphibolite rock containing magnetite and augite. C1 is the magnetite ore body in Shancaoyu formation of Taishan group. According to the ore occurrences in the area and adjacent areas and the analysis of magnetic anomaly characteristics, Gushan mining area has good ore prospecting prospects.