Lodestone Mines could IPO after bringing its SA iron ore mine online in 2022


  • Lodestone Mines plans to start shipping iron ore from its project in South Australia in 2023
  • “We have letters of intent in Asia, the Middle East and North Africa for a maximum of 20 million tonnes”
  • Demand for iron ore is growing due to China’s booming economy, and Brazil’s supply is limited

South Australian Iron Ore Company Magnetite mines aims to commission its Olary Flats project at the end of 2022 and start shipping its high-grade ore to customers in 2023.

The unlisted public limited company is in the process of completing a high-level cost estimate for the project located in the vast magnetite ore province of Braemar in South Australia.

The properties of the Lodestone tenements have a geological potential of over 10 billion tonnes of mineralization containing magnetite.

“The first ore is scheduled for 2023 and [we are] look to load from the ports of Adelaide, ”said Robert Williamson, director and COO of Lodestone Mines. Storer.

The motto of the company is to “start small and grow fast”, starting with an initial production rate of 1.5 million tonnes per year, and funding further production expansions from its flow of products. Treasury.

“Current resources have the geological potential to maintain production of 50 million tonnes per year for 50 years,” he said.

The Olary Flats project is served by a rail line from Olary in South Australia, which connects to several ports in South Australia, over a distance of 300 to 400 km depending on the port choice.

The company’s infrastructure arm, Braemar Infrastructure, is exploring other export options for the project.

They include a possible floating port in the Spencer Gulf. Such a port would be capable of loading Capesize ships up to 250,000 deadweight tonnes.

Customers in the Middle East and Asia

Lodestone Mines has already signed letters of intent with a number of potential direct debit customers in Asia, the Middle East and North Africa (MENA).

“We are also in discussions with new direct debit customers. We have letters of intent in Asia and the MENA region for up to 20 million tonnes, ”said Williamson, a former Rio Tinto executive.

Letters of Intent can turn into sales and purchase contracts as the project progresses.

The company is close to completing the feasibility studies for the project and is already working to raise capital from existing shareholders and new investors for its construction phase.

Olary Flats has some of the highest in situ magnetite grades in the Braemar, and the project has a JORC drilled resource base of 1 billion tonnes.

The iron ore market is currently very hot with spot prices trading at a nine-year high as demand mostly from China exceeds available supply.

Shipments of iron ore to be delivered to Chinese ports are trading this week at US $ 168 per tonne ($ 215 / tonne), according to Metal Bulletin.

High iron ore

In laboratory tests, the iron content of Olary Flats’ concentrate reached 70 percent iron, and concentrate production is expected to be around 68 to 69.5 percent iron.

Western Australian premium hematite iron ore has an iron content of approximately 62 percent.

Ore with a higher iron content is in demand and attracts a significant premium in the market.

Magnetite is found in soft siltstone with little metamorphosis, which facilitates its transformation into products suitable for a wide range of high quality steel production processes.

“The Lodestone buildings are located in the best areas of the Braemar iron ore province with higher grade in situ magnetite levels and waste to ore ratios than other projects. The resources are at or near the surface, which requires minimal pre-stripping, ”said Williamson.

“Lodestone’s magnetite concentrate can be used in direct reduction steel production in the Middle East and North Africa, as well as as a sinter mixture in Asia.

Braemar’s magnetite concentrates have very low levels of sulfur, phosphorus, and alumina, which means its products can fetch premium prices in the market.

In some large iron ore producing regions, “the levels and resources of hematite decrease and the associated deleterious elements increase, [therefore] The bringing to market of a high quality concentrate with few deleterious elements is timely and eagerly awaited by the global steel industry, ”he said.

Possible IPO at a later date

There are many potential funding avenues open for further development of Olary Flats and Lodestone Mines.

“For example, an IPO is an option as the feasibility studies reach a clearer stage,” Williamson said. “Direct debit financing and unincorporated joint ventures are other avenues. “

The company will complete a class four pre-feasibility study for the project in the first quarter of 2021 and is halfway through a high-level bankable feasibility study.

Once these are finalized, the company can move on to the construction phase of the project.

Lodestone Mine President Gordon Toll has a long and solid track record in the iron ore industry.

Toll worked for several large mining companies throughout his career, including BHP, Rio Tinto and Ivanhoe Mines, before embarking on a more entrepreneurial path.

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