Magnetite Mines says it can mine five million tonnes of iron ore annually for 45 years
Magnetite Mines will progress a definitive feasibility study at its iron ore project near Yunta in South Australia after an optimisation study firms up a five million tonne per year project.
Magnetite Mines’ South Australian iron ore project could produce five million tonnes of iron ore per year for 45 years, with the potential to produce double that, the company has told the Australian Securities Exchange.
Shares in the company rose 15.5 per cent to 63.5c following the announcement.
Magnetite Mines said it had increased the iron ore reserves at its Razorback project to 1.6 billion tonnes of ore, up from the maiden ore reserve of 473 million tonnes released in 2021.
The company also released the results of an optimisation study into the project, saying the work backed the case for a five million tonne per year operation.
Chief executive Tim Dobson said the company was also completing mining studies on the separate, high-grade Iron Peak deposit and “we can expect a further uplift in project ore reserves to be announced in the near future’’.
“The project has been optimised on all fronts, headlined by a substantial, but manageable, stage one production scenario capable of producing of five million tonnes per year, with potential staged expansion up to 10 million tonnes a year,’’ Mr Dobson said.
“We are now prioritising the assessment of Iron Peak for ore reserves, enabling the completion of financial modelling for the new project configuration, and taking advantage of Iron Peak’s superior mass recovery and metallurgy.
“We are well positioned to now enter a final study phase and deliver a definitive feasibility study based on a superior project design, which will generate significant, sustainable value for all shareholders.”
Recent metallurgical studies conducted by the company also indicate that the project would produce “direct reduction pellet feed products” which are used in lower-emissions steelmaking.
The company said last month demand for such products was expected to increase five-fold by 2050, however they were in short supply.
“Magnetite Mines is creating an extraordinary opportunity to capitalise on the fast-growing momentum towards Green Steel, with the focus of regional steelmakers now increasingly on supply from tier one jurisdictions with renewable energy grids and emerging green hydrogen production such as South Australia,’’ the company said on Monday.
The Razorback project is about 55km south of Yunta in regional SA.
Magnetite Mines is envisaging a “drive in, drive out” mining project which would process 38 million tonnes of ore per year into five million tonnes of concentrate.
Overall the company has 4.5 billion tonnes of iron ore resources at the project, which would be developed in a staged process.
The company also recently signed a non-binding memorandum of understanding with Flinders Ports to investigate suitable existing and proposed port locations for the export of the concentrate, and also has an MOU with GFG Alliance’s Simec to export through Whyalla.
The 5 million tonne per year phase would involved trucking the ore concentrate to a rail siding for transport to the port, while the 10 million tonne per year configuration would involved the construction of a rail spur line to the mine.
Magnetite said on Monday the mining plan for the proposed project would focus on low-cost deposits in the early stages.
“The ore reserves assumes open pit mining with truck and shovel with drill and blast, to feed the process plant with an average of 36.2Mtpa of ore,’’ the company said.
“The resulting schedule for the project generates a life of mine strip ratio of just 0.42 (waste to ore).
“To note, the strip ratio over the first 5 years is 0.17, indicating there is effectively no pre-stripping required and lower cost mining operations are front ended to increase project value.’’