Magnetite Mines is closing in on key PFS for Razorback iron project

Magnetite Mines remains on track to deliver a pre-feasibility study for the Razorback iron ore project in South Australia in the current quarter.

This is thanks to the receipt of initial capital and operating costs estimates for the project from the company’s contractors, partners and suppliers engaged in completing studies, proposals and quotations for input during the March quarter.

These studies, which comprise the various PFS Chapters, are now in the optimisation phase and are nearing completion.

During the March quarter, Magnetite Mines’ (ASX:MGT) directors also shifted into senior operational positions to accelerate development of Razorback while progressing the marketing strategy.

The company was also awarded the Muster Dam tenement that includes the Muster Dam project, which has an older JORC 2004 inferred resource of 1.5 billion tonnes, and has a range of potential synergies with Razorback.

Executive chairman Peter Schubert says the company remains on track and on budget with its plans to deliver a robust, high-grade iron ore business.

“The PFS, currently well-advanced, aims to arrive at a single go-forward option that provides a sound and compelling business case across the range of iron ore pricing scenarios,” he added.

“Importantly, the PFS scope envisages a capital efficient, long-life mine producing an attractive high grade iron ore product.”

Schubert also noted that while the company is designing Razorback to compete throughout the commodity cycle, strong demand and a muted supply response supports robust iron pricing.

Pre-Feasibility Study progress

During the March quarter, external reviews resulted in an updated geological model for the Razorback project that seeks to selectively exploit the strata bound mineralisation in the most efficient manner.

This is important given that it is the project’s geology that forms the basis for the potential economic viability of the deposit.

Based on this modelling, an updated resource estimate is currently being evaluated based on updated assumptions and additional data derived from Davis Tube Recovery analysis of historical core samples.

Results to date indicate that near surface ‘weathering zone’ mineralisation which is currently excluded from the mine plan may be amenable to processing and is the subject of optimised mine modelling to be completed in the coming quarter.

Magnetite Mines has also developed a mine schedule and haulage model while mine planning is being optimised and evaluated.

The current mine plan has already identified several advantages of the deposit. These are:

The outcropping mineralisation at Razorback Ridge will negate the need for pre-strip at the commencement of mining;
Mineralisation begins at shallow depths, leading to low strip ratios across the mine;
The rock mass across the mine is generally stable, leading to low risk mining and pit geometry that minimises strip ratio;
Ore hauls from top of pit to plant for the majority of ore mined are flat;
Waste hauls from the top of pit are either down hill or flat;
There is an opportunity to build some of the Tailing Storage Facility (TSF) directly with waste rock, saving on rehandle; and
The mine methodology concept can separate large amounts of waste from ore to save on the cost of hauling this interstitial waste to the plant as well as the cost of processing it.

A flow sheet has also been developed that is well suited to Braemar Iron Formation ores and exploits its favourable ore body characteristics such as relatively low work-index, soft rocks and liberation characteristics.

This flow sheet forms the basis of design for the proposed processing plant and further optimisation work is ongoing to maximise value and obtain further efficiencies in capital intensity.

Other work includes the tailings design, which is currently located next to mining activities to minimise transport distance and exploit local topographic features to minimise wall construction length, while engineering consultants GHD have completed indicative capital and operating cost estimates for non-process infrastructure.

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