Magnetite Mines has released its long-awaited pre-feasibility study for its Razorback iron ore project in South Australia, as it marches towards a project DFS and a production target of 2024.

The highly-anticipated study by Magnetite (ASX:MGT) into its flagship project is ideally timed against a backdrop of strong demand and subsequent high prices for the steelmaking material, and the PFS economics do not disappoint.

The study confirms the opportunity to fast-track a high-return, long-life development of the large-scale resource at Razorback, using a staged approach to produce an attractive, high-grade concentrate.

Compared to many new iron ore projects which require significant expenditure from the outset, up-front capital intensity at Razorback is relatively low, enabled by the use of existing infrastructure in the South Australian locale which allows the company to fast-track to producer status.

In a climate where projects of similar scale can be hamstrung but a lack of access to funds, the ability to switch on production at a realistic cost point makes a significant difference to Magnetite’s ability to get up and running quickly and reliably  – allowing for a production target of 2024.

The Razorback PFS outlines a project with an initial capital investment requirement of US$429-506 million, resulting in optimised case results including a net-present value of $669 million and a 20% internal rate of return against the selected go-forward case at long run average iron ore prices – one of a number of economic options explored by Magnetite.  Current prices are almost double the level used to generate these results.

The case selected by Magnetite – known as the head grade improvement case (HGIC) – is based on higher mining rates than the PFS reference case, with a head grade upgrade from selective mining or ore sorting. It would produce 2.7 million tonnes per annum of high-grade concentrate over an initial mine life of 23 years.

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