The company booked a material upgrade to its Indicated resource, which rose 50% to 1.5 billion tonnes.

For Magnetite Mines (ASX:MGT), a diligent and methodical approach to developing its Razorback High Grade Iron Ore Concentrate Project continues to pay off, after the company announced an important new resource upgrade this morning.

The upgrade is the result of MGT’s advanced pre-feasibility study (PFS), which involved a re-modelling of the deposits using gridded seam modelling software (MINEX) to improve geological understanding of mineralisation distribution.

The high-resolution modelling, carried out in partnership with McElroy Bryan Geological Services (MBGS) and Widenbar and Associates, allowed MGT to further optimise its mineral resource estimate.

Of particular note is the fact that MGT’s Indicated mineral resource – where an assessment can be made at a higher level of confidence than an Inferred mineral resource, in line with JORC standards – has now increased materially.

MGT announced a 50 per cent improvement in the total Indicated mineral resource at Razorback, to 1.5 billion tonnes.

Combined with an Inferred mineral resource of 1.5 billion tonnes, total tonnage at the site has now increased to 3 billion tonnes.


Major upgrade

Commenting on the upgrade, MGT’s technical director Mark Eames said the company now has a “firm foundation” to optimise the project as the PFS nears completion.

“This resource upgrade is the result of 12 months of systematic and careful work by our company’s geology team working closely with our trusted external advisers,” Eames said.

He added the milestone is an “essential step” in completing the PFS. And investors can expect more updates in the near future, with the PFS on track for completion by the end of June.

Importantly, the advanced geological study confirmed that MGT can now include the majority of the near-surface weathering zone at Razorback as an Indicated resource.

Indicated mineral resources are an important step forward from Inferred mineral resources, and the 50 per cent uplift means MGT now has “sufficient detail to support mine planning and evaluation of the economic viability of the deposit”, the company said.

MGT also announced that the latest stage of testing resulted in higher mass recovery levels, to 15.8% (up from 15.3%).

The higher mass recovery levels makes the deposit more amenable to mineral processing and “should lead to better overall concentrate recovery”, MGT said.

All in all, the mineral resources upgrade marks another exciting step forward for the Magnetite team, as it takes a diligent approach to proving out a high-level mineral mineral resource as iron ore prices stay elevated near all-time highs.

Institutional investors are on board, after the company raised $7m in a share placement earlier this month to advance the project through its next key stages of development.

With the PFS scheduled for completion by the end of June, MGT expects to have more exciting news flow in the months ahead as it looks to become Australia’s next major iron ore success story.

“We would like to thank our external advisers, McElroy Bryan Geological Services, Widenbar and Associates and Mr Richard Harmsworth. Their support for our geology team was pivotal in this work,” Eames said.

This article was developed in collaboration with Magnetite Mines (ASX:MGT), 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.