Killi Resources Doubles Drill Capacity at Lodestone to Unlock 80% of 25km Iron System
Key Takeaways
- A second drill rig has commenced at Lodestone, doubling capacity across a 25km magnetite system where only ~5km (~20%) is currently defined as a 110Mt JORC Inferred Resource.
- The 20,000m dual-rig program targets infill and step-out drilling across approximately 15km of untested strike, with multiple resource updates anticipated over coming quarters.
- A 600m step-out hole drilled in late September 2026 intersected a 50m wide zone of coarse, crystalline magnetite well beyond the current resource boundary, confirming the system extends materially further than defined.
- Lodestone's resource grades 69% Fe in concentrate at 33% DTR mass recovery, positioning it in premium product territory and targeting DR-grade feedstock for electric arc furnace steelmaking.
- RC samples are being dispatched for assay as holes are completed, with diamond core submitted to ALS Labs for DTR analysis — near-term newsflow is expected to be active and sustained.
Second drill rig arrives at Lodestone as Killi doubles down on resource growth
A second drill rig has arrived and commenced drilling at Killi Resources’ Lodestone Iron Ore Project in Western Australia’s Mid-West region, joining the existing diamond core rig already on site. Two rigs are now turning across a 25km magnetite system where only ~5km, approximately 20% of the total strike length, has been defined as a 110Mt JORC Inferred Resource.
That gap between what has been defined and what the system appears to offer is the central investment thesis at Lodestone. The 20,000m drilling program, which commenced in August 2026, is designed to close that gap by growing and upgrading the resource toward a confidence level sufficient to underpin a future economic study.
Key data on the current resource and system scale:
| Metric | Detail |
|---|---|
| Current JORC Resource | 110Mt Inferred |
| Grade | 69% Fe in concentrate |
| Mass Recovery (DTR) | 33% |
| System Strike Length | 25km |
| Resource Defined Over | ~5km (~20% of system) |
Hamish Halliday, Managing Director, Killi Resources
“The arrival of a second rig sees us significantly increase our capacity to drill out the 25km long Lodestone system. Recent diamond drilling also continues to deliver impressive intersections of coarse, crystalline magnetite well beyond our current resource boundary.
“Our priority target area continues to grow as step-out holes intersect broad zones of mineralization further highlighting the potential for Killi to deliver more of this rare, premium product into resource growth over the coming months…”
When big ASX news breaks, our subscribers know first
What the 20,000m program is designed to achieve
The dual-rig program has four stated objectives:
- Significantly grow the resource base and upgrade the confidence category of the existing 110Mt Inferred Mineral Resource
- Infill and extend drilling coverage across approximately 15km of the 25km Lodestone system
- Provide metallurgical samples to support ongoing testwork targeting a premium, high-purity DR-grade concentrate
- Support delivery of a resource of sufficient confidence to underpin a future economic study
Each rig plays a distinct role. Reverse circulation (RC) drilling, which uses high-pressure air to bring rock chips to the surface for sampling, is faster and more cost-effective for infill and step-out work. Diamond core drilling, which extracts a continuous cylindrical sample of rock, provides the detailed geological information and physical core required for metallurgical testwork.
The Lodestone project acquisition established Killi’s foothold over the full 25km magnetite system, with the initial 110Mt Inferred Resource representing the defined portion of a much larger geological target from the outset.
Running both rigs simultaneously gives the company pace and precision at the same time. The RC rig accelerates coverage of the strike extensions; the diamond rig keeps the metallurgical programme advancing in parallel.
The case for extending the resource footprint received a significant boost in late September. A 600m step-out hole, drilled well beyond the current resource boundary, intersected a 50m wide zone of coarse, crystalline magnetite, demonstrating that the system extends meaningfully beyond what is already defined (ASX announcement 21 September 2026).
Why magnetite concentrate for electric arc furnaces matters
Not all iron ore is created equal, and the distinction matters considerably when evaluating Lodestone’s potential economics.
Conventional iron ore, the bulk material shipped in enormous quantities from WA’s Pilbara region, is sold on grade and volume. Magnetite is different. It requires processing through beneficiation, which involves crushing the ore and using magnetic separation to produce a high-purity iron concentrate. The Davis Tube Recovery (DTR) method, which uses a small-scale magnetic separator to simulate this process, is the standard way to measure how much concentrate you get and at what grade.
Lodestone’s resource grades 69% Fe in concentrate at 33% DTR mass recovery. That concentrate grade sits in premium product territory.
DR-grade concentrate, the target Killi is working toward, takes this a step further. Direct reduction (DR) grade material must meet very high purity standards because it is used as a feedstock in electric arc furnaces (EAFs), which produce steel from scrap metal or direct reduced iron rather than from blast furnaces fed with coal coke. EAFs are the steelmaking technology of choice for low-emissions steel production, and they require iron inputs with lower impurity levels than conventional blast furnace routes can tolerate.
The commercial implication is straightforward: higher purity means higher value, and the global push to decarbonise steel production is expanding demand for exactly this type of product.
Key points for investors evaluating the Lodestone opportunity:
- Magnetite concentrate is beneficiated through DTR processing to produce a high-purity iron product
- 69% Fe in concentrate positions Lodestone in premium product territory
- Electric arc furnaces require high-purity feedstock, where lower impurities translate to higher value
- Global steel decarbonisation is expanding demand for DR-grade and premium magnetite products
The next major ASX story will hit our subscribers first
What comes next: catalysts to watch
With two rigs now operating, the pace of drilling is expected to increase materially. The near-term newsflow is likely to be active.
- RC samples are being dispatched for assay as holes are completed; diamond core is submitted to ALS Labs for DTR analysis and metallurgical testwork
- Assay results will be progressively received and interpreted as drilling advances
- The company anticipates multiple resource updates over coming quarters as the program matures
- Ongoing geological mapping and surface sampling programmes are targeting additional mineralised horizons and parallel zones for future drill testing
With only approximately 20% of the Lodestone system defined, two rigs are now turning, and the recent 600m step-out success confirms the mineralised system extends well beyond the current resource boundary. For investors tracking Killi, the coming months are shaping up to be a sustained period of resource-building newsflow rather than a single announcement event.
Ready to Learn More About the Lodestone Iron Ore Project?
With two rigs now turning across a 25km magnetite system and only ~20% defined as a 110Mt JORC Inferred Resource, Killi Resources’ Lodestone Project presents a compelling resource-growth opportunity in Western Australia’s Mid-West region. The recent 600m step-out success confirming mineralisation well beyond the current resource boundary underscores the scale of what remains to be defined.
Investors tracking this story can explore Killi Resources’ full project profile and latest announcements on Discovery Alert to stay ahead of the expected newsflow as the 20,000m dual-rig drilling programme advances.