Killi extends Lodestone magnetite system beyond existing resource

Step-out drilling pushes beyond Lodestone resource

Killi Resources Limited (ASX:KLI) has put early geological distance between Lodestone’s existing 110Mt Inferred Mineral Resource and the limits of its magnetite system, with two step-out holes drilled south of the resource returning broad visual zones of coarse crystalline magnetite. KKDD001, drilled about 100 metres south of the resource, intersected approximately 80.2 metres of magnetite downhole, with an estimated true thickness of 40 to 50 metres. KKDD004, drilled 600 metres south of the resource boundary, intersected a main zone of about 50 metres and a separate parallel lode of roughly 16 metres.

“KKDD004 drill collar location map (left) and cross-section 6,781,600mN showing magnetic susceptibility readings (right). See cautionary statement.”

“Tenure Summary – Adjacent to quality key infrastructure.”

Caption and image © Killi Resources Limited. From “Quarterly Activities/Appendix 5B Cash Flow Report”, 29 Oct 2026.

The results extend the company’s geological picture across a mineralised trend that stretches for more than 25 kilometres, compared with the roughly five-kilometre strike currently covered by the resource. The 20,000-metre campaign, which began in August, is targeting resource growth, category upgrades and additional zones that could potentially support open-pit mining. The program builds on the 20,000m Lodestone drilling launch, which earlier targeted expansion beyond the existing resource.

“Representative drill hole cross section – annotated with DTR MR and Fe% concentrate grade from 4 metre composite samples.”

That remains an exploration result, not a resource upgrade. The reported magnetite proportions are visual estimates from geological logging and cannot be treated as substitutes for assays, Davis Tube Recovery results, concentrate grades or metallurgical performance. Core from the nine-hole, 1,332.9-metre first diamond phase is still being processed for geotechnical, geophysical and geochemical analysis before detailed laboratory testing.

Second rig and magnetic survey widen the search

Killi added a reverse-circulation rig after the quarter, allowing faster infill and step-out drilling alongside the diamond rig. The company says the two rigs will prioritise northern and southern extensions of the resource, while diamond drilling continues to provide core for geological and metallurgical work. A drone magnetic survey covering the full Lodestone trend has also been completed, with 1,844 strike kilometres flown on 50-metre east-west line spacing. Its interpretation is expected in the coming weeks and is intended to refine targets beneath cover.

“RC drilling at Killi Resources’ Lodestone Iron Ore Project.”

“Lodestone Iron Ore Project location”

Caption and image © Killi Resources Limited. From “Quarterly Activities/Appendix 5B Cash Flow Report”, 29 Oct 2026.

The attraction is not simply tonnage. Lodestone’s current Inferred Resource is reported at 110Mt, with 33% Davis Tube Recovery mass recovery and a 69% Fe concentrate at the stated zero-percent lower cut-off. Killi is targeting a 68% to 70% Fe direct-reduction concentrate, supported by the deposit’s coarse, recrystallised magnetite and its proximity to Geraldton port, rail, roads and grid power. Whether those characteristics translate into a commercially attractive product still depends on the pending testwork and future engineering studies.

Acquisition completed with funding in place

The quarter also converted Lodestone from a proposed transaction into an operating asset: Killi completed the acquisition of an 80% interest in Yukon Resources, the project holder, on 20 August after shareholder approval. The company issued 92.7 million consideration shares and completed the second tranche of a A$15 million placement priced at A$0.22 a share. Hamish Halliday became managing director on 24 August, while former interim chief executive Brett Smith moved into the General Manager - Technical role. Kathryn Cutler departed as chief executive by mutual agreement.

Killi reported A$16.4 million in cash and A$0.4 million in listed investments at 30 September. September-quarter exploration spending was A$1.34 million, while net operating cash outflow was A$1.77 million. On the Appendix 5B calculation, the company had 9.26 quarters of funding at the quarter-end run rate, although accelerating two-rig drilling and metallurgical work could change future spending levels.

Queensland drilling waits on access and permits

Lodestone now dominates the quarter’s investment case, but Killi’s other exploration assets have not disappeared. At Mt Rawdon West in Queensland, the King Louie Breccia carries a two-kilometre strike and surface anomalies reaching up to 33 times background for gold, 15 times for copper and 28 times for molybdenum. Drill testing is being held up by access arrangements and environmental surveys, with the company warning that work may move beyond the summer fire season.

“Mt Rawdon West Project – Area of activity, including prospects, key interpreted structure and geochemical areas of interest over an aeromagnetic geophysical image.”

“Location of Killi Resources’ Projects in Australia.”

Caption and image © Killi Resources Limited. From “Quarterly Activities/Appendix 5B Cash Flow Report”, 29 Oct 2026.

At West Tanami, Gold Fields is progressing exploration under an earn-in that could deliver it an 85% interest after A$13 million of expenditure over seven years. Killi said 1,488 soil samples collected in August were submitted for analysis, with results expected before year-end. The immediate test for shareholders, however, is whether Lodestone’s visual promise survives the less forgiving sequence of assays, recovery testing and resource estimation.