Magnetite Mines Limited announced an updated Ore Reserves estimate for its 100% owned Razorback Iron Ore Project located in the Braemar Iron Formation in South Australia: The updated Ore Reserves estimate for the Project has been derived from the recently updated Mineral Resources1 by generating schedules with an estimated tonnage and grade which, in the opinion of the Competent Person, form the basis of a technically and economically viable project, after taking account of material relevant Modifying Factors. The term 'economically mineable' as used in the JORC 2012 guidelines implies that, in the judgement of the Competent Person, extraction of the Ore Reserves has been demonstrated to be both economic and viable using reasonable technical and financial assumptions. These assumptions have been provided by the Company, by various consulting and advisory groups commissioned by the Company, and by AMC Consultants, and have been reviewed by the Competent Person. Studies have confirmed a mine plan and production schedule that are technically achievable and economically viable and from which the Ore Reserves are derived. Summary Of Reporting Criteria. The updated Ore Reserves are classified as Probable Ore Reserves following JORC 2012 guidelines and are based on the Indicated Mineral Resource at the Razorback Iron Project. The Ore Reserves has been determined by AMC Consultants after consideration of all relevant geological, mining, metallurgical, social, environmental, statutory and financial aspects of the Project. The material assumptions which support the Ore Reserves estimate are based on Pre-Feasibility Study level (PFS) results with a combination of AACE Engineering standards to Class 3, 4 and 5 level estimates with a targeted accuracy of +-25%. Ore Reserves were estimated only on the Indicated portion of the Razorback Mineral Resource Estimate. The Ore Reserves was based on an open pit optimisation of the February 2023 block model for the Razorback deposit utilising appropriate modifying factors, followed by detailed mine design and mining production schedules. The Ore Reserves do not include material from the recent Iron Peak Mineral Resource update as mining studies have not yet been completed for this portion of the Resource Estimate. The Ore Reserves have been classified as Probable based on guidelines specified in JORC Code (2012) subject to mine designs,
Modifying Factors and economic evaluation. Mining Methods and Assumptions: The Ore Reserves assumes open pit mining with truck and shovel with drill and blast, to feed the process plant with an average of 36.2Mtpa of ore. The resulting schedule for the Project generates a Life of Mine (LOM) strip ratio of just 0.42 (waste to ore). To note, the strip ratio over the first 5 years is 0.17, indicating there is effectively no pre-stripping required and lower cost mining operations are front ended to increase project value. All mine planning was undertaken by AMC Consultants Pty Ltd, leveraging off their 2022 work on the Razorback deposit to develop an optimised mine plan. The previous work showed that, at the higher mining rates required for 5Mtpa of concentrate, 10m benches provided the best compromise between ore dilution, drill and blast cost intensity and mining cost intensity. AMC also reviewed the 2013 Geotechnical review completed by Golder Associates, which recommended a wall angle of 75°, berm width of 8.5m and a batter height of 20m for a safe pit design. Following the development of pit geometry, AMC diluted the Razorback Resource Model (using Indicated classified material only as ore) by consolidating based on cut-off grade and minimum mining width and ran pit optimisations using the Whittle 4X® implementation of the Lerchs-Grossman (LG) algorithm. This work defined the ultimate pit extents identifying that the majority of the Indicated Mineral Resources generated a positive cash flow when the base case parameters were applied. The Minemax® schedule optimiser was used with a conceptual haulage model to identify the pit development sequence which would maximise the value of the project. The LG shell and sequencing
results were then used to guide the ultimate and staged pit designs. The pit is developed as a series of thirteen stages, a detailed haulage model was developed, and the stages were scheduled using Minemax to identify the optimal schedule to deliver the required concentrate. The bench turnover rated required for the schedule are generally low and illustrate that mine development should not be a potential risk to achieving the plan. Revenue inputs for the mining schedule used a 97% eDTR to plant mass recovery conversion factor (as advised by Hatch) and a 68.5% concentrate quality. All capital and operating cost inputs are based on OEM budget pricing and AMC's various databases. Processing Methods and Assumptions: Extensive metallurgical test work has been completed for the Razorback Iron deposit as previously reported by the Company2,3. The outputs of this work indicated the ore-body's ability to produce 67.5% to 68.5% Fe concentrates with testwork also validating flowsheet and equipment selection. The metallurgical and process engineering work was undertaken by engineering consultants Hatch to refine the flowsheet, which was then used to generate a AACE Class 3 level of accuracy estimate with suitable accuracy for inclusion to PFS levels estimates for capital cost. The selected flowsheet was based on conventional gyratory crushing/cone crushers followed by air separation and HPGR grinding. Separation is based on conventional magnetite separation using LIMS followed by fine grinding and flotation. Following flotation processing, conventional pressure filtration will be used to dewater the resulting high-grade product to 8% moisture content. The average final grind size of P80 38 microns is expected targeting a 67.5% to 68.5% Fe final concentrate product. Tailings will be directed to a Central Thickened Discharge tailings facility (CTD) from which process water is recovered. The Tailings Storage Facility (TSF) design and placement studies were completed by
engineering consultants Hatch to Australian National Committee on Large Dams (ANCOLD) 2019 standards. Economic Assumptions and Analysis: A mining and processing strategy was developed based on consideration of annual processing plant throughput rate of 38 Mt of ore. This was considered in conjunction with assumptions on the availability of capital and the long-term iron ore market. This equates to a base-case concentrate production of approximately 5 million tonnes per year. Capital costs have been completed with a +/-20% accuracy. Operating costs are considered to be of a +/-25% level of accuracy. An 8% discount rate has been used for financial modelling, which includes all project level operating costs as well as initial and sustaining capital costs.