Special Report: Magnetite remains on track to complete the accelerated pre-feasibility study for its key Razorback iron ore project during the first half of this year.

The PFS aims to narrow the scope of a potential mine development towards a single optimised go-forward case that could lead to shipping first ore as early as 2024.

During the December 2020 quarter, Magnetite Mines (ASX:MGT) progressed infrastructure and permitting studies in tandem with technical studies that were focussed on the processing flowsheet and geological modelling.

“The Magnetite Mines team has a clear vision and commitment to deliver value by building an iron ore business based on the globally significant Razorback high-grade resource in the most capital efficient and timely manner possible,” executive chairman Peter Schubert noted in a Twitter post.

The company is also continuing to aggressively market and pursue all opportunities that make good commercial sense.
 

Razorback PFS progress

During the December quarter, the company completed a geological model for the Razorback project, which will serve as the basis for mining and pit optimisation.

This has also modelled the discrete banding of mineralisation as given by down hole geophysical logging as well as geochemical analysis while demonstrating the nature of the banded, stratabound mineralisation demonstrated in many lithological units at the project.

Resolving the bands will allow Magnetite to carry out a more selective approach to mineralisation that will minimise internal dilution where possible, resulting in higher ore grades.

The company also started mining studies focussed on the first pass pit optimisation that reported grades and tonnes of material available for a number of mining scenarios.

Work is ongoing with further geotechnical, mining methodology and pit design refinements being made to the model.

Flow sheet optimisation is also underway that is refining the processing flow sheet for the first five years of mining while appraising the potential recovery of hematite as an additional beneficiated product.

Infrastructure studies are assessing key components such as roads, rail and power.

The 2019 scoping study had identified the availability of high-voltage power within 100km from the project area, local gazetted roads, federal rail and several port options.

An assessment of the offtake, capacity and capital requirements of these options and studies is well underway to determine the most economic options towards a scalable, low-cost, small scale start-up mining development.

Other work includes the completion of a Spring flora and fauna survey, the completion of a permitting pathway and gap analysis study and the development of a new financial model.

Magnetite is also close to completing recruitment of its PFS team.
 

Financing

While this work is made possible by the $5.95m rights issue it completed in late September 2020, Magnetite also expects revenue from its Rothsay gold royalty to begin in the second half of this year.

Under the agreement with Silver Lake Resources (ASX:SLR), the company is entitled to a royalty of $10 per ounce of gold extracted from the Rothsay tenements once Silver Lake has sold 10,000oz.

The royalty payable to the company will cease once payments hit a total of $595,000.

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.

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