A Definitive Feasibility Study (DFS) is underway at the Razorback Iron Ore Project in South Australia with major contracts awarded to Hatch – a global engineering firm, and global drilling company Foraco.
Significant steps were taken throughout the December quarter towards Magnetite Mines’ (ASX:MGT) goal of becoming a robust, high-grade iron ore business.
The DFS is on track to arrive at a go-forward mine plan soon, which will provide the optimal business case across a range of iron ore pricing scenarios.
Speaking to the latest results, executive chairman Peter Schubert said the DFS envisages a capital-efficient, long-life mine producing an attractive, high-grade iron ore product.
“A rare combination”
“Iron ore grade is becoming increasingly significant to steelmakers globally as they look toward energy-efficient steel production, with premiums for higher-grade ores continuing to reflect this position,” he said.
The project has a large resource, totalling 5.7 billion tonnes of JORC compliant iron ore mineral resources within the tenements, which includes the recently upgraded 3 billion tonnes resource estimate at the Razorback Iron Ore Project.
“We often highlight but can’t over-emphasise the fact that these resources are in a tier 1 mining jurisdiction with a supportive state government, access to abundant infrastructure and the opportunity of a very long-life mining operation,” he said.
“In my view, a rare combination.”
The beginning of an iron ore shift
Discussions with potential project partners and financiers continue are ongoing, with the company’s ESG initiatives being a critical factor for many industry participants, Schubert added.
As highlighted by Technical Director Mark Eames in MGT’s recent white paper, ‘Where Will Future Iron Ore Supply Come From?’ the company believes they are at “the beginning of a substantial shift in the iron ore industry” which will undoubtedly see winners and losers over time as commodity and asset markets evolve.
“Capital markets are encouraging business models that support carbon efficiency and we believe that the Razorback product will be well suited to lower-emission steelmaking,” Schubert said.
“We’re encouraged by the recent uptick in enquiry for the high-grade concentrate we plan to produce.”
Top tier appointments
In December, Magnetite brought Sam Chee on board as the company’s strategic advisor for project financing. The investment banker has over 27 years of banking and finance experience across financial advisory, debt arrangements and structuring mandates in mining, energy and infrastructure. Most notably he was a key figure in the US$7.2 billion funding package that bankrolled Gina Rinehart’s Roy Hill mine — the largest debt financing for any greenfields mining project in the world.
Earlier this month, MGT strengthened their board with the appointment of two new non-executive directors, Jim McKerlie and Paul White.
The Magnetite (ASX:MGT) board will now comprise a majority of independent non-executive directors, in line with ASX best practice recommendations.
Both new appointees bring a wealth of knowledge to the iron ore miner, and both are strong believers in the role high-grade iron ore will play in a greener world economy.
McKerlie has more than 30 years’ experience transforming digital, media, technology, energy, and professional services organisations and White has a long history of experience in mining, with expertise in business transformation and community stakeholder relations including global mining giants Anglo American and Glencore-Xstrata.
Commenting on the appointments, Magnetite Mines Executive Chairman and CEO Peter Schubert said: “Sam, Jim and Paul all bring significant experience, expertise and business networks to Magnetite Mines at this important phase in the development of the Razorback Iron Ore Project.”
Geology and mining
Metallurgical drilling and camp installations at Razorback were carried out and completed during the reporting period to complete 11 vertical PQ diamond drill holes.
Drilling will provide samples for metallurgical and mineralogical test work at the Peak prospect with existing core samples to be utilised for the proposed Razorback mining area.
A second, shallow infill drilling program at Peak was also initiated to provide additional data in near surface mineralisation.
Drilling here aims to improve resource confidence in some underexplored sections of the current resource and provide improvements to the characterisation of mineralisation in line with DFS level interrogation of the orebody.
Results will focus on the DFS metallurgical test work, with up to 8500kg of material to be delivered to domestic and international laboratories for analysis.
General resource assay including XRF, SATMAGAN and Davis Tube Recovery methods will follow with results anticipated in March/April 2022.
Metallurgy and process plant estimates
MGT’s metallurgical test work program has been designed and managed by global magnetite and engineering experts Hatch.
The program is utilising a new diamond drill core generated by the metallurgical drill program for the Iron Peak deposit as well as existing core samples acquired in previous drilling programs for the Razorback deposit.
It will optimise and validate the processing flow sheet produced by Hatch to class AACE 4 standards during the Pre-Feasibility Study (PFS), announced in July, 2021.
Environment assessments
During the quarter, Magnetite Mines and Eco Logical Australia (ELA) entered into a new contract for project regulatory approvals.
Under the new contract, ELA will also lead the primary approvals program for off-site infrastructure developments as well as secure secondary approvals for all project elements, such as the Program for Environmental Protection and Rehabilitation required under the Mining Act 1971 (SA).
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