Magnetite Mines (ASX: MGT) Recasts Razorback Development Plan

Magnetite Mines has recast the development plan for its Razorback Iron Ore Project in South Australia. The revised scoping study targets a simpler project configuration with lower infrastructure requirements and reduced development risks.

The work remains preliminary and does not include a production target or forecast financial information. However, Magnetite Mines said results so far justify advancing exploration and development, subject to funding.

A Leaner Project Configuration

At the centre of the redesign is a plan to use saline water with conventional processing. This could remove the coastal desalination plant and water pipeline considered in earlier studies.

Eliminating that infrastructure has the potential to reduce capital requirements and simplify Razorback’s water-supply pathway. More metallurgical testing is still required to increase confidence in recovery performance using saline water.

The revised mine strategy also prioritises higher-grade areas during the early years of potential production. Further drilling and mine-planning work will be needed to support that approach.

Meanwhile, the logistics concept now includes a dedicated 55-kilometre rail spur. It would connect Razorback with the existing main rail line and support a potential export route. Technical and commercial work on the rail and port infrastructure remains outstanding.

Scale Provides the Backdrop

Razorback is located 240 kilometres northeast of Adelaide within South Australia’s Braemar Iron Formation. Magnetite Mines acquired the project tenements in 2009.

The combined project has a Mineral Resource Estimate of 3.837 billion tonnes. That includes 1.973 billion tonnes classified as indicated and 1.864 billion tonnes as inferred.

Probable Ore Reserves remain unchanged at 1.977 billion tonnes. The revised study has not established sufficient technical or economic support to update those reserves.

Unlike much of the hematite ore mined in the Pilbara, magnetite requires processing before shipment. That processing can produce a high-grade concentrate with low levels of unwanted elements. Magnetite Mines describes Razorback as capable of producing premium direct-reduction-grade concentrate at scale.

Drilling Before Financial Detail

The company plans additional drilling to convert inferred resources into the indicated category. It also expects further metallurgical testing and engineering work covering rail and port capital.

Subject to funding, Magnetite Mines expects additional drilling to be completed by the end of 2027. It then aims to update the scoping study with production and financial information.

The longer-term pathway is to progress from scoping work to a pre-feasibility study and then a definitive feasibility study.

Executive Chair Scott Lowe said: “While the current work remains preliminary, the outcome to date is very encouraging, and the Company intends to continue advancing the Project, subject to funding.”

Funding Remains a Condition

Magnetite Mines requires additional capital to complete the proposed feasibility studies and advance Razorback. It has appointed ProspEx Group to evaluate possible royalty funding for the project.

The company is also speaking with strategic, financial and industry participants about funding, partnerships and potential business transactions. Those alternatives may include a sale, partial sale or joint venture involving Razorback.

Separately, Magnetite Mines is engaging with South Australia’s Department of Energy and Mining. Those discussions concern the revised plan and requirements for the project’s mining lease application.