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Developments in SQUID-based technology have enabled direct measurement of magnetic tensor data for geophysical exploration. For quantitative interpretation, we introduce 3D regularized inversion for magnetic tensor data. For mineral exploration-scale targets, our model studies show that magnetic tensor data have significantly improved resolution compared to magnetic vector data for the same model. We present a case study for the 3D regularized inversion of magnetic tensor data acquired over a magnetite skarn at Tallawang, Australia. The results obtained from our 3D regularized inversion agree very well with the known geology of the area.