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Magnetite Mines lifts mass recovery to 19.4% in Iron Peak resource update; project economics enhanced

Published 09/02/2023, 11:30 am
Updated 09/02/2023, 12:30 pm
© Reuters.  Magnetite Mines lifts mass recovery to 19.4% in Iron Peak resource update; project economics enhanced

© Reuters. Magnetite Mines lifts mass recovery to 19.4% in Iron Peak resource update; project economics enhanced

Magnetite Mines Ltd (ASX:MGT) is celebrating the latest mineral resource estimate (MRE) update for the Iron Peak deposit – where mass recovery has increased from 16.8% to 19.4% – within the Razorback Iron Ore Project in South Australia.

This update makes the Iron Peak resource the highest quality deposit in the MGT portfolio and offers the opportunity for improved early mine life project economics.

The update includes new drilling data that substantially increases the size and quality of Iron Peak and reinforces its superior metallurgical performance, relative to the wider project.

Growth figures

As well as mass recovery significantly improving, tonnage has increased from 419 million tonnes to 503 million tonnes.

As for the overall Razorback Project, the resource has increased to 3.3 billion tonnes at 16.0% mass recovery. The total indicated resource available for potential conversion to ore reserves has increased to 1.7 billion tonnes, up 12%.

Taking an even broader lens, the update takes the MGT global mineral resource to 6 billion tonnes, an increase of 4% (inferred and indicated).

MGT CEO Tim Dobson said: “MGT has systematically increased the scale of its flagship Razorback Iron Ore Project over recent years, creating the long-life, large-scale mine plan needed to support investment in opening South Australia’s massive but undeveloped Braemar iron province.

“Now we have turned our eye to improved product quality to not only enhance early-year project economics but to also target the production of premium-grade DR products increasingly in demand by the decarbonising iron and steel sector.

Turning point for MGT

“This Iron Peak mineral resource update represents a turning point for MGT, with the deposit now boasting materially improved mass recovery to complement the previously announced superior metallurgical performance, including the capability of producing premium-grade DR products.

“Taking advantage of this new information, we have now commenced work aimed at processing high-grade Iron Peak mineralisation into the critical first years of the production plan.

"In summary, Iron Peak presents MGT with an outstanding opportunity to process high-quality mineralisation early in the project, reducing technical risk, decreasing costs and improving project economics.”

Material improvements to project economics

Iron Peak is now of suitable size and quality to investigate processing the deposit in the first years of operations. The company recognises that this means material improvements to the project risk profile, cost base and overall economics on the horizon.

Processing higher-grade mineralisation translates to lower mining and processing volumes for a given concentrate output. It also increases the likelihood of achieving target concentrate grades, including premium-grade products suitable for feed into Direct Reduced Iron (DRI) facilities.

Demand for premium-grade DR products, with associated price premiums, is forecast to continue growing over the coming five to 15 years as the global iron and steel industry transitions to fully decarbonised production by 2050.

South Australia the ideal location

South Australia is a proven mining-friendly jurisdiction. In under 20 years, the state has increased its renewable energy generation from 1% to 70% and is on track to achieve 100% by 2030.

The South Australian Government has also recently committed $600 million to initiate a green hydrogen industry.

MGT sees it as an ideal location to establish value-adding industries such as iron ore pelletising – for downstream iron and steel making – and future ‘green steel’ production, which requires carbon-free energy and hydrogen production.

Read more on Proactive Investors AU

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