Funding Crunch Looms as Magnetite Mines Pushes for Razorback Approvals

Strategic Milestone: Mining Lease Proposal Lodged

Magnetite Mines Limited (ASX: MGT) marked a significant development in the quarter ending 31 March 2025 by submitting a comprehensive Mining Lease Proposal (MLP) for its Razorback Iron Ore Project to South Australia's Department for Energy & Mining. This submission initiates the formal assessment process under the South Australian Mining Act, encompassing detailed plans for mining operations, environmental management, and community engagement. The MLP represents a critical step towards securing mining approval and advancing the project towards production.

Progress on Strategic Partnerships and Funding

The company is actively advancing its strategic partnership with JFE Shoji Australia Pty Ltd, with Definitive Agreements for funding and joint venture arrangements targeted for execution in the second quarter of 2025. This follows extensive technical due diligence and site visits by JFE and its funding partners. Additionally, Magnetite Mines is engaging with other potential strategic partners, with multiple parties conducting due diligence and transactional discussions underway. These partnerships are pivotal to securing the necessary capital to complete the Definitive Feasibility Study (DFS) and reach a Final Investment Decision (FID).

Complementing these efforts, Magnetite Mines secured a $7 million flexible funding facility through unsecured Convertible Notes from US-based C/M Capital Partners. To date, $2.5 million has been drawn down in two tranches, with shareholder approval ratified at an Extraordinary General Meeting held in March 2025. The funding supports ongoing technical work, regulatory submissions, and general working capital as the company advances the Razorback Project.

Technical Innovation: Saline Water Processing Patent

A standout technical achievement this quarter was the filing of a provisional patent application for Magnetite Mines’ proprietary saline water flotation method. This innovation, developed in-house, could revolutionize magnetite ore processing by significantly reducing reliance on fresh or desalinated water, a critical advantage in water-constrained regions like Australia. Confirmatory testwork is underway, with results expected in May 2025, to validate the method’s applicability across the Razorback deposit. The patent filing not only strengthens the company’s intellectual property position but also highlights its leadership in sustainable mining technologies.

Government and Industry Support for Green Iron

Magnetite Mines benefits from robust government backing aligned with Australia’s decarbonisation agenda. The Braemar Iron Province, home to Razorback, was prominently featured in South Australia’s 20-Year State Infrastructure Strategy 2025, which emphasizes the potential for green iron industry development and recommends feasibility studies for shared infrastructure solutions, including water supply. Federal initiatives, such as the $1 billion Green Iron Investment Fund and substantial grants for electric arc furnace projects, further underscore the supportive policy environment. The company’s participation in the Green Iron SA consortium, alongside major infrastructure partners, positions it well to capitalize on these developments.

Corporate Developments and Financial Position

On the corporate front, Magnetite Mines experienced a leadership change with the resignation of CFO and Co-Company Secretary Simon Smith, with Inthu Siva assuming sole Company Secretary responsibilities. The company also implemented cost-saving measures to reduce overheads by over $600,000 annually. Financially, the company reported negative operating cash flows of $585,000 for the quarter and exploration expenditure of $1.23 million, reflecting its pre-development status. Cash and cash equivalents stood at $1.48 million at quarter-end, with approximately 0.8 quarters of funding available based on current expenditure rates, highlighting the importance of securing further funding tranches and strategic partnerships.

Looking Ahead

Magnetite Mines is focused on finalizing Definitive Agreements with JFE and other partners, completing DFS scope and budgets, and advancing regulatory approvals. The company’s innovative saline water processing technology and alignment with green iron industry trends position it to meet growing demand for premium, environmentally sustainable iron ore products. However, the timing and success of these developments remain contingent on ongoing negotiations, testwork outcomes, and market conditions.