Killi Begins 20,000m Drill Campaign to Grow 110Mt Iron Ore Resource Across 25km System
Killi kicks off 20,000m maiden drilling program to expand premium Lodestone iron ore resource
Killi Resources (ASX: KLI) has commenced its maiden drilling campaign at the Lodestone Iron Ore Project in Western Australia’s Mid-West region, launching a 20,000m reverse circulation (RC) and diamond (DD) program designed to grow and upgrade the existing 110Mt JORC Inferred Mineral Resource. The program targets a 25km-long mineralised corridor, with management believing that expanding the resource base can “materially re-rate the project.” Lodestone was acquired under an agreement announced 11 June 2026, making this the first major work program since the transaction.
The existing 110Mt resource sits within just a 5km stretch of the broader system and carries a 33% mass recovery for a 69% Fe concentrate. The project is located approximately 200km from the Port of Geraldton, with established infrastructure including sealed roads, rail access, and grid power.
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Why the drilling targets a 25km corridor of known mineralisation
The drilling program is designed to unlock the resource potential across the full extent of the Lodestone system, which extends far beyond the currently defined 110Mt footprint. While the existing resource occupies a 5km stretch, the host geology continues for a further 20km with extensive known mineralisation along the extension. The campaign has four primary objectives:
- Significantly grow the resource base and upgrade the confidence category of the existing 110Mt JORC Inferred Mineral Resource Estimate
- Infill and extend drilling coverage across approximately 15km of the 25km-long Lodestone recrystallised magnetite system
- Provide metallurgical samples to support ongoing testwork targeting a premium, high-purity DR-grade concentrate
- Support the delivery of a resource of sufficient confidence to underpin a future economic study
Drilling is being carried out alongside ongoing geological mapping and surface sampling programs, which are targeting additional mineralised horizons and parallel zones for future drill testing. A drone-based magnetic survey covering the full recrystallised magnetite system remains on track for completion by the end of the month.
Chairman Nev Power
“The existing 110Mt Resource sits within a 5km stretch. We know the host geology continues for another 20km and that there is extensive mineralisation along this extension. The goal is to start bringing this into the resource. We have the product that the global steel industry wants and by growing the size of the resource, we can materially re-rate the project.”
Understanding DR-grade iron ore and why it commands a premium
Direct reduction (DR) grade iron ore is a high-purity feedstock used in electric arc steel furnaces, a technology gaining traction as the global steel industry decarbonises. Unlike traditional blast furnace routes, DR processing requires iron ore with minimal impurities to produce high-quality steel while reducing carbon emissions. Lodestone’s unique, recrystallised, coarse-grained characteristics make it well-suited to producing a high-purity, high-value DR-grade product.
This extremely rare product is expected to attract a substantial price premium to the 62% Index, though no specific premium figure has been disclosed. As steelmakers shift toward lower-emission production methods, demand for high-purity DR-grade feed is growing, positioning Lodestone in a scarce, higher-value segment of the iron ore market. The combination of premium product quality, resource expansion potential, and established infrastructure creates a compelling value proposition for investors.
| Attribute | Lodestone Detail | Investor Impact |
|---|---|---|
| Product type | High-purity DR-grade concentrate | Targets premium steel market |
| Resource | 110Mt at 33% mass recovery for a 69% Fe concentrate | Base for expansion |
| System length | 25km (only 5km drilled) | Significant growth runway |
| Infrastructure | ~200km from Geraldton; sealed roads, rail, grid power | Lowers development risk |
| Pricing | Premium to 62% Index | Higher potential margins |
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What comes next for Killi shareholders
Assay results will be progressively received and interpreted as drilling advances, with the company anticipating multiple resource updates over coming quarters as the program matures. The drone-based magnetic survey is expected to be completed by the end of August 2026, providing additional geological data to support future drill targeting and resource delineation.
Beyond Lodestone, Killi maintains a broader project portfolio including the West Tanami Gold Project in Western Australia, the Mt Rawdon West and Ravenswood gold-copper projects in Queensland, and copper rights to the Balfour Project in the Pilbara.
For investors, the near-term catalyst pipeline offers a clear, news-driven pathway to potential value re-rating:
- Progressive assay results as drilling advances
- Drone-based magnetic survey results (end of August 2026)
- Multiple resource updates over coming quarters
- Metallurgical testwork supporting DR-grade concentrate
The combination of a scarce premium product, significant resource expansion potential across a largely undrilled 25km system, and established infrastructure creates a compelling re-rating thesis as the maiden drilling campaign progresses.
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