Killi Resources has received regulatory approval to launch a major drilling campaign at its newly acquired Lodestone iron ore project, aiming to expand and upgrade a 110Mt inferred resource with a high-purity magnetite concentrate.
- Regulatory approvals granted for maiden drilling at Lodestone
- 20,000m program targets resource growth and category upgrade
- Lodestone’s premium 68-70% Fe concentrate suits electric arc furnaces
- Project benefits from proximity to Geraldton port and infrastructure
- Strong cash position of ~$18.5m following $15m placement
Drilling Greenlight Unlocks Lodestone’s Untapped Potential
Killi Resources (ASX:KLI) has cleared a crucial regulatory hurdle with approvals in hand to commence a maiden drilling program at its recently acquired Lodestone iron ore project in Western Australia’s Mid-West. The company is gearing up to drill approximately 20,000 metres, aiming to significantly expand and upgrade the current 110 million tonne JORC Inferred Resource.
The existing resource covers only about 20% of the 25-kilometre strike of known magnetite mineralisation, offering a substantial runway for growth. The upcoming program includes 155 reverse circulation and 35 diamond core holes designed not only to increase tonnage but also to elevate resource confidence to the Indicated category, a vital step towards future mining studies.
Premium Magnetite Product Targets Growing Electric Arc Furnace Market
Lodestone’s standout feature is its coarse-grained magnetite mineralisation capable of producing a high-grade concentrate of 68-70% iron at grind sizes up to 250 microns. This product quality is well suited to electric arc furnace steel mills, which are increasingly favoured for their lower carbon footprint compared to traditional blast furnaces. Killi anticipates commanding a significant price premium over the 62% Fe benchmark index due to the concentrate’s low impurities and high purity.
"It is already clear that our product will be in strong demand from electric arc furnace operators and will therefore attract a significant premium to the benchmark iron ore price," said Killi Chairman Nev Power, underscoring the strategic positioning of the project.
Strategic Location Bolsters Project Economics
Located just 200 kilometres from the Port of Geraldton, Lodestone benefits from access to underutilised power, rail, and sealed road infrastructure. This proximity to established logistics corridors is expected to reduce capital and operating costs, enhancing the project’s economic viability.
The deposit itself dips steeply westward and features a thick eastern magnetite unit along with narrower hanging and footwall lenses. The ore’s coarse metamorphic recrystallisation and partial surface oxidation add complexity but also potential for selective processing strategies.
Capital Raising Strengthens Funding for Exploration
Killi has bolstered its balance sheet with a $15 million placement, of which $10.8 million has been raised in the first two tranches, subject to shareholder approval for the remainder. This funding positions the company with approximately $18.5 million in cash to execute the drilling program and advance metallurgical testing and engineering studies.
The drilling campaign will focus on infill and extensional drilling over a 15-kilometre strike of the magnetite system, along with density and Davis Tube Recovery test work to support resource upgrades. Metallurgical sampling will underpin future processing and economic studies, aiming to accelerate the project’s development timeline.
Exploration Pipeline Beyond Lodestone
While Lodestone takes centre stage, Killi’s portfolio also includes the West Tanami Gold Project in Western Australia and two gold-copper projects in Queensland, alongside copper rights at the Balfour Project in the Pilbara. This diversified pipeline reflects a methodical approach to mineral exploration across multiple commodities and regions.
Dr Stuart Owen, the Competent Person overseeing the mineral resource estimate, confirms the technical robustness of the existing resource and the continuity of mineralisation, lending confidence to the upcoming drilling’s potential impact.
Bottom Line?
Killi’s drilling approvals and strong cash position set the stage for a potentially transformative resource upgrade at Lodestone, but the scale of growth and timing of commercial outcomes remain to be proven.
Questions in the middle?
- Will the drilling confirm continuity and expand the resource beyond the current 20% strike coverage?
- How will metallurgical test results influence processing strategies and product premium assumptions?
- What timelines can investors expect for resource upgrade announcements and feasibility studies?