Killi Acquires 110Mt Lodestone Resource and Raises $15 Million

Killi Resources Lands Major WA Iron Ore Asset

Killi Resources (ASX:KLI) has taken a significant leap in its iron ore ambitions by signing a binding agreement to acquire an 80% stake in the Lodestone Iron Ore Project, located in Western Australia's Midwest Iron Ore District. The project, just 200 kilometres from the Port of Geraldton, comes with a maiden inferred resource of 110 million tonnes at 33% Davis Tube Recovery (DTR), producing a high-grade 69% Fe magnetite concentrate.

Resource Quality and Geological Edge

Lodestone's standout feature is its coarse-grained, fully recrystallized magnetite ore body stretching over 25 kilometres. This geological blessing enables the production of a premium concentrate at coarse grind sizes up to 250 microns, a rarity compared to other WA magnetite deposits that require finer grinding. The concentrate's low impurities, notably silica at under 4%, promise a substantial market premium, particularly in the growing direct reduction (DR) steel feedstock segment.

The current resource accounts for roughly 20% of the known mineralisation, underscoring significant upside potential through planned infill and extensional drilling campaigns. Killi plans to aggressively ramp up exploration with a 20,000-metre RC drilling program targeting resource upgrades over the next 12 months.

Strategic Location with Infrastructure Advantages

Proximity to existing infrastructure is a key advantage for Lodestone. The project is adjacent to grid power and connected by sealed roads and a rail network directly to Geraldton port, which has underutilised capacity. This infrastructure reduces capital expenditure hurdles and supports a potentially lower-cost development pathway compared to peers.

Capital Raising and Deal Structure

Killi has secured firm commitments for a $15 million placement priced at $0.22 per share, representing a modest discount to recent trading levels. The placement proceeds will fund exploration and development activities at Lodestone, including metallurgical test work and engineering studies, as well as ongoing work at Killi’s existing gold and copper projects.

The acquisition consideration includes the issue of approximately 92.7 million Killi shares valued at $20.4 million and a 2.5% gross revenue royalty to the vendors. The vendors, comprising mining executives Hamish Halliday and Steve Parsons among others, will retain a 20% interest, free-carried until a final investment decision. Halliday joins the Killi board as a Non-Executive Director, while Parsons and Michael Naylor will serve as consultants.

Experienced Leadership and Growth Focus

Chairman Nev Power, former long-serving MD of Fortescue Metals Group, emphasised Lodestone as a "company-making acquisition" with clear pathways to production and cash flow. The management team’s deep iron ore experience and the project's geological and infrastructure advantages position Killi to capitalise on the rising demand for green steel feedstocks.

The company’s growth strategy includes multiple resource upgrades, detailed metallurgical programs, and advancing towards a prefeasibility study, fully funded by the recent capital raise. The project’s coarse grind size and high concentrate quality could deliver operating cost savings and capital efficiencies rare in the magnetite space.

Disclosure and Market Compliance

Killi disclosed that it was in confidential negotiations over the acquisition since April 2026, which coincided with unusual trading activity in its shares. The company responded to ASX queries by confirming the acquisition talks and pending assay results from its Mt Rawdon West Project, which were subsequently announced. A trading halt and voluntary suspension were requested to manage market disclosure obligations, with trading reinstated following announcement releases.