Magnetite Mines Limited Announces an Updated Ore Reserves Estimate for Its 100% Owned Razorback Iron Ore Project
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.