Iron ore company Magnetite Mines has obtained a new iron ore tenement after a competitive process run by South Australia’s Department for Energy and Mining.

The award of the Muster Dam tenement to Magnetite Mines (ASX:MGT) adds to its existing Razorback high grade iron ore project also in South Australia’s Braemar iron formation.

“We believe market conditions are ideal to advance high-grade iron ore projects in regions endowed with extensive infrastructure such as the Braemar iron formation,” chairman, Peter Schubert, said.

The company was delighted to have been selected by the South Australian government to progress the Muster Dam project and further increase its footprint in the Braemar ore province, he added.

Muster Dam tenement contains an inferred resource for iron ore of 1.5 billion tonnes and is situated 110km to the northeast of the company’s Razorback project.

The explorer said it intends to review all available exploration and technical data for Muster Dam and develop exploration targets for a drilling program.

Magnetite Mines passes muster after competitive tender

Magnetite Mines was awarded the Muster Dam tenement after the company participated in a competitive application and tender process overseen by the Department for Energy and Mines.

The company’s winning application highlighted the exploration company’s industry experience and capabilities, proven management skills, and ability to explore and evaluate iron ore tenements.

Aeromagnetic and extensive past exploration data show the new exploration area is highly prospective for the Braemar iron formation a high-grade iron ore prospect.

Muster Dam is included in the South Australian government’s Magnetite Strategy policy.

For these reasons, the Muster Dam iron ore tenement offers a new development opportunity for Magnetite Mines and is a natural complement to its Razorback project.

Muster Dam
Muster Dam iron ore tenement is strategically located near rail, power and Magnetite Mines’ Razorback project. Image: company supplied

Synergies to be reaped

The Muster Dam project will enable Magnetite Mines to capture a range of synergistic benefits when integrated with its existing Razorback iron ore project, located 250km from Adelaide.

Magnetite Mines is pressing ahead with the accelerated development of Razorback and is currently going through its pre-feasibility study stage and expects to ship first ore as early as 2024.

The company expects to publish the PFS in the first half of the year which will outline the scope of mine development for its Razorback project

“Magnetite Mines has assembled an extremely talented team of experts to deliver the Razorback pre-feasibility study, and there are many overlapping synergies that can be immediately and advantageously applied to the Muster Dam iron project,” said Schubert.

Several iron ore prospects are contained within the Muster Dam tenement including Duffields, Muster Dam, Peaked Hill and Surrender Dam.

The Muster Dam tenement is located 40km southeast of the railway town of Olary, 75km from a high voltage powerline, and 110km from the mining town of Broken Hill.

Exploration company Minotaur (ASX:MEP) explored the Muster Dam tenement in the past, and reported a mineral resource estimate in an ASX announcement in November 2011.

This article was developed in collaboration with Magnetite Mines, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.