How we can say that we can locate northern and southern parts of the world with the help of a magnet?

We can locate northern and southern parts of the world with the help of a magnet because Earth itself behaves as a magnet which causes a freely suspended magnet to point always in a particular direction: north and south.

The north pole of the earth's magnet is in the geographical south because it attracts the south pole of a suspended magnet. Similarly, the south pole of the earth's magnet is in the geographical north because it attracts the north pole of a suspended magnet.