Magnetite Mines (ASX:MGT) CEO Tim Dobson hosted an investor webinar to update on the company’s progress and optimisation studies currently underway at the Razorback Iron Ore Project in South Australia.
Dobson talked about the company's recent strategic shift to increase the planned production scale at Razorback to at least 5 million tonnes per annum from the earlier 2.2 million tonnes to meet the growing market demand for premium iron ore products.
Optimisation studies are underway to investigate a range of higher-grade iron ore products, potentially including high-value Direct Reduction (DR) grade concentrates, which will lead to a refocused definitive feasibility study (DFS).
Dobson talked about the company’s three key focuses, all running in parallel, which will help minimise the timeframe to development:
The expected benefits of Razorback’s strategic shift include:
- enhanced project economics resulting from economies of scale and widening premiums for high-grade and DR-grade products, as demonstrated in recent expansion study outcomes;
- increased attractiveness to potential iron and steelmaking industry partners and customers, institutional investors, and project financiers; and
- alignment of initial development scale with rapidly increasing market demand and the large Mineral Resource Estimate;
The iron and steelmaking sector currently contributes 8% of global CO2 emissions and has started shifting permanently away from coal-based technologies over a relatively short time frame to meet Paris Agreement 2050 net zero targets, reinforced most recently at COP26 last year.
Crucially, steel production is transitioning away from traditional blast furnace based ironmaking to Electric Arc Furnace (EAF) based technologies, which require high-grade iron ore feed such as high-grade magnetite concentrates.
Magnetite’s discussions with potential strategic partners and customers have confirmed that demand for high-grade magnetite concentrate products over the coming 5 to 15 years is rapidly increasing, and that the supply-side response to meet this demand is far from clear.
These discussions will continue to be advanced in parallel with technical workstreams further de-risking the Razorback Iron Ore Project with the objective of establishing enduring partnerships to support the development of and offtake for the project.
Next steps
Magnetite’s optimisation studies will draw heavily on all work undertaken to date, including all transferable information from DFS-level engineering work completed during 2022.
Accordingly, the optimisation studies are expected to be completed in a relatively short timeframe, with results expected in the first quarter of 2023, following which the timing for completion of the subsequent refocused DFS will be determined.
Dobson said during the webinar that Magnetite’s cash outflows have recently reduced and that the company is well funded until mid-2023.
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