Magnetite Mines is an ASX-listed iron ore company focused on the development of magnetite iron ore resources in the highly-prospective Braemar iron region of South Australia. The Company has a total Mineral Resource Estimate of 6 billion tonnes across a portfolio of tenements – all 100% owned – located approximately 240km northeast of Adelaide.
The Company’s current focus is its flagship Razorback Iron Ore Project which is comprised of the Razorback and Iron Peak deposits. The Project has many unique geographical advantages. The iron ore is hosted in siltstone which is soft relative to WA magnetite ores and the resource outcrops, allowing for minimal stripping. The Project also benefits from access to existing infrastructure and is located close to heavy rail and iron ore ports. High-voltage grid power is available from the South Australian grid, which is forecast to be 100% renewables powered by 2030. The Project’s access to grid-scale renewables gives it a distinctive advantage in reducing, and possibly eliminating, the carbon footprint associated with its operations.
In response to rapidly-evolving market conditions and downstream industry feedback, in September 2022 Magnetite Mines announced a decision to increase the initial production scale of the Razorback Project to a minimum of 5Mtpa and assess production options for high-value concentrate product streams. The expected benefits of this strategic shift include:
- enhanced project economics as a result of economies of scale and widening premiums for high-grade and DR-grade products
- increased attractiveness to potential iron and steel industry partners & customers, institutional investors, and project financiers
- alignment of Project scale with large Mineral Resource Estimates
- potential to re-estimate Ore Reserves as a direct result of expanded production scale
- improved ESG credentials associated with enhanced concentrate specifications and potential electrification of key infrastructure and equipment supported by larger- scale development
Optimisation Studies were commenced in September 2022 to redefine the go-forward scope of the Razorback Iron Ore Project based on an initial production scale of at least 5Mtpa. The Company was able to leverage much of the work undertaken in the 2.5Mtpa DFS initiated in August 2021 encompassing mine planning, process plant design, tailings dam design, site layout, power supply and logistics solutions. The Optimisation Studies were completed on time in March 2023 and affirmed the viability of the redefined Project scope.
As part of the Optimisation Studies, Magnetite Mines commissioned additional metallurgical testwork based on new ore samples from its 2022 drill program targeting prospective areas of the Razorback and Iron Peak deposits. The testwork, undertaken by Bureau Veritas, Weir Minerals, Loesche and Eriez, validated the ability of the Razorback Project’s processing flowsheet to produce 5Mtpa of high-grade iron ore on a Life-Of-Mine (LOM) basis. Additionally, the testwork also demonstrated the ability of the current flowsheet, designed by global engineering consultancy Hatch, to produce ultra-high grade 70% Fe concentrates from select Iron Peak samples with a combined silica and alumina level of just 2.6%. The flowsheet has been designed with the flexibility to adjust the final concentrate specification as market demands dictate.
The studies undertaken in FY2023, including the additional testwork, have supported a remarkable 418% increase in the Project’s Probable Ore Reserves estimate from 473 million tones to 2 billion tonnes, including a maiden Probable Ore Reserve of 362 million tonnes declared for the Iron Peak deposit. The updated estimates, released in two stages in March and June 2023, were prepared by mining consultancy AMC Consultants and were derived from an open pit optimisation of the February 2023 block model incorporating Mineral Resources from both the Razorback and Iron Peak deposits which now stand at 3.3 billion tonnes.