-- Magnetite Mines announces successful Expansion Study demonstrating the business case for further, staged expansions of the Razorback Iron Ore Project from initial production capacity of 3Mtpa of iron ore concentrate to 7Mtpa.
-- The Expansion Study highlights the benefits of increased scale at Razorback and the inherent optionality of the Company’s large resource base with access to established power and transport infrastructure.
-- The major scope elements of the Definitive Feasibility Study (DFS) are unchanged and the DFS work will continue based on 3Mtpa of production capacity and minimum upfront capital. The significant potential of the Project to support higher production rates will be factored into Project design to ensure optionality for future expansion is preserved. DFS progress will be routinely updated in the quarterly reports.
-- The Expansion Study assessed the addition of two processing plant modules to the first stage of development, taking the plant to three modules based on the current DFS engineering design parameters for the first stage. The expanded production capacity at the resource average grade is 7Mtpa of high-grade iron ore concentrate at a nominal 68% Fe specification, well above the 62% reference grade in the iron ore market.
-- The Single-Step Expansion case produced an overall post-tax IRR of 27% and NPV-8 of A$2,455 million on total development capex of A$1,985 million at an iron ore 62% Fe reference price of US$110/t, and AUD:USD exchange rate of 0.71. The incremental post-tax IRR of the expansion stage is 33%. At a reference price of US$150/t, these overall figures increased to an IRR of 42% and NPV-8 of A$4,598 million, and an incremental IRR of 54%.
-- The all-in 62% Fe iron ore breakeven price for the Single-Step Expansion case is US$40/t compared to US$58/t in the PFS’s Plant Optimised Case. The payback on the incremental expansion is approximately 2 years.
-- The attractive financial outcomes reflect economies of scale in operating and capital expenditure, and a material reduction in transportation costs by substituting road haulage with rail.
-- The expansions are based on extensive, well-defined resources. The expansion scenarios are generated from run-of-mine (ROM) ore of some 1.4 billion tonnes covering approximately 30 years of operation, of which 83% is in the Indicated Resource category and 17% is Inferred. In the first 10 years of operation, which includes the payback of all capital, 87% of the contributing material is within the currently declared Probable Ore Reserves.
-- ROM ore represents just 32% of the JORC Indicated and Inferred Mineral Resources attributed to the Razorback tenements and 24% of current company-wide resources across the Braemar Iron Province, with these additional resources supporting further expansion or extended operating life.
-- Key ESG considerations in the Expansion Study included minimising Scope 1, 2 and 3 greenhouse gas emissions, the use of public wastewater to support additional water demand, and long-term, mutually-beneficial relationships with stakeholders including First Nations, suppliers and employees. Low scope 2 emission intensity can be realised, as additional electricity required for expansion is expected to be sourced via the main Southeast Australian grid which has a significant renewable energy component, estimated to be 70% today and forecast to be 97% by 2025.
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