Magnetite Mines Limited (ASX:MGT) is an Adelaide-based ASX-listed company developing the South Australian, Razorback Iron Ore Project located in the Braemar, Australia’s emerging iron ore mining region.
The Razorback Iron Ore Project (Project) is the Company’s flagship project. The Project contains a 3.0 billion tonnes Mineral Resource inclusive of 473 million tonnes at Probable Ore Reserve, estimated as part of a Pre-Feasibility Study released in July 2021.
The Company has a total Mineral Resource of 5.7 billion tonnes of iron ore within the Braemar Iron Formation.
The Razorback Iron Ore Project has unique advantages which allow for low capital, staged development. The resource outcrops, allowing minimal stripping. The Project is located close to heavy freight rail and existing iron ore ports. High voltage grid power is available, connecting to the main Southeast Australian grid, with a high renewable energy component.
The Company recently completed a Pre-Feasibility Study that optimised the project configuration around comparatively low and competitive capital cost. The engineering was managed by highly capable and respected engineers, Hatch for the plant and GHD for non-process infrastructure. The optimized scope for Stage 1 development is a plant capacity of 3Mtpa high grade concentrate at a capital cost of some US$500M using magnetic separation and flotation.
The Project will produce a premium high grade iron ore concentrate at about 68% iron content, compared to 62% iron for the standard iron ore price reference, with low levels of impurities such as alumina and phosphorus. As general iron ore grades decline and steel mills are under pressure to decarbonize, the premium Razorback product is expected to be in demand. Project evaluation is based on a premium equivalent to US$4 per 1% Fe.
The Pre-Feasibility Study was completed using an iron ore (62% Fe) of US$110 with the 20+ year mine life projecting a post-tax NPV of A$669 million for the go-forward case and a post-tax IRR of 20%. The project breakeven after construction for the 62% reference price of $54/CFRt.
Following the positive PFS result, the Company has commissioned a Definitive Feasibility Study for the Project. Negotiations are underway with engineering companies to finalise design and technical programs (including drilling, metallurgical and environmental programs). The Company devotes major effort to community and other stakeholder relationships and is working in an open and participative fashion with community and indigenous groups.
The Company is committed to working to the highest levels of environmental, social, and corporate governance. In practice, this means working with stakeholders and minimizing environmental impacts. In particular, the Company is targeting a low emissions footprint for its operations and products, with a higher-grade product helping steel mill customers in reducing emissions.