Magnetite Mines Redesigns Razorback Blueprint to Cut Costs and Fast-Track Feasibility
Key Takeaways
- Magnetite Mines has redesigned the Razorback Iron Ore Project configuration, replacing the coastal desalination plant with saline water supply, eliminating a major capital burden from prior studies.
- A new 55km rail spur connecting Razorback to the main rail line has been added, addressing the project's previously unresolved export logistics challenge.
- The project holds 3.8 billion tonnes of Mineral Resources and approximately 2.0 billion tonnes of Probable Ore Reserves, positioning it as one of Australia's largest undeveloped magnetite deposits.
- ProspEx Group Pty Ltd has been appointed to evaluate royalty funding options, with broader engagement ongoing across strategic, financial, and industry partners.
- A scoping study update including production and financial forecasts is targeted for end of 2027, subject to completing additional drilling to convert Inferred Resources to Indicated.
Razorback Iron Ore Project gets a streamlined new development blueprint
Magnetite Mines (ASX: MGT) has announced a strategic redesign of its Razorback Iron Ore Project scoping study, incorporating substantial configuration changes aimed at improving economic potential and reducing development complexity. Early outcomes are described as positive, with the company advancing toward a Pre-Feasibility Study (PFS) and Definitive Feasibility Study (DFS).
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Q1 FY27 scoping study: what’s changed and why it matters
Three significant changes define the new development configuration:
- Saline water supply replacing the previous coastal desalination plant and pipeline option, eliminating a major capital and infrastructure burden from prior studies
- Prioritisation of higher-grade mining areas in the early years of potential mining, improving the early-stage economic profile of the project
- Addition of a 55km rail spur connecting Razorback to the main rail line, addressing logistics and providing a potential export pathway
These changes are designed to simplify the project, reduce development risk, and create a stronger foundation for the next feasibility stage. Several elements from prior studies have been retained, including the mining method and conventional processing approach.
Scott Lowe, Executive Chair
“While the current work remains preliminary, the outcome to date is very encouraging, and the Company intends to continue advancing the Project, subject to funding.”
What is magnetite iron ore and why does it matter for green steel?
Unlike hematite iron ore (the variety commonly mined in the Pilbara and shipped with minimal processing), magnetite requires processing at the mine site to produce a high-grade concentrate. That extra step yields a product with very low deleterious elements, which makes it a premium feedstock for Direct Reduction (DR) steelmaking, a process used to produce lower-emissions green iron without a traditional blast furnace.
This positions Razorback as strategically relevant beyond conventional steel markets. The project holds a combined Mineral Resource Estimate of 3.8 billion tonnes and Probable Ore Reserves of approximately 2.0 billion tonnes (1,977 Mt total), located 240km north-east of Adelaide in South Australia’s North East Pastoral district. The Probable Ore Reserves are summarised below.
| Category | Tonnes (Mt) | eDTR % | Fe % | Mag % |
|---|---|---|---|---|
| Weathered | 149 | 12.9% | 17.9% | 10.7% |
| Primary | 1,828 | 14.8% | 17.5% | 13.9% |
| Total | 1,977 | 14.6% | 17.5% | 13.7% |
Ore Reserves are a subset of Mineral Resources and are quoted at an 8% eDTR (Mass Recovery) cut-off grade. Source: ASX Announcement dated 9 June 2023.
eDTR, or Effective Davis Tube Recovery, is the standard industry measure of the mass of concentrate recoverable from a tonne of magnetite ore under a set of defined processing conditions.
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Funding strategy and the road to feasibility
The company is pursuing three parallel funding and strategic tracks:
- ProspEx Group Pty Ltd has been appointed to evaluate royalty funding opportunities for the Razorback Project
- Engagement with the South Australian Department of Energy and Mining is ongoing regarding the mining lease application, reflecting the updated development configuration
- Broader engagement with strategic, financial, and industry participants on potential business transactions and partnering opportunities is continuing
On timeline, the company expects to provide a scoping study update including forward-looking production and financial information once additional drilling is complete, targeted by end of 2027, subject to funding.
It is important to note that given the proportion of Inferred Resources in the current mine plan, the company is not presently in a position to report a Production Target or forecast financial information. The announcement includes a formal ASX cautionary statement to this effect, and investors should not make investment decisions based solely on this project update.
The next steps for Razorback’s development are:
- Drilling to convert Inferred Resources to Indicated
- Additional metallurgical testing using saline water to enhance recovery confidence
- Engineering work for rail and port capital
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