Magnetite Mines : Second Quarter Activities & Cashflow Reports

	ASX ANNOUNCEMENT
	31 JANUARY 2022
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	SECOND QUARTER ACTIVITIES REPORT
	ENDING 31 DECEMBER 2021
	Highlights
use	 Definitive Feasibility Study (DFS) underway with major contracts awarded to Hatch, a global
engineering firm and Foraco, a global drilling company
 Representative large diameter core samples obtained from significant diamond drilling programme
 Metallurgical testwork program underway with bulk samples sent internationally for testwork
 Continuing data collection for Environmental Baseline Studies to support permitting and approvals
 Major survey data collected, including geotechnical, LIDAR and access routing surveys
		 Appointment of Mr Sam Chee as Strategic Advisor to assist with project financing
		 Mr Jim McKerlie and Mr Paul White appointed to the Board as Non-Executive Directors
personalWe have a large resource, a total of 5.7 billion tonnes* of JORC compliant iron ore Mineral Resources within

Magnetite Mines' Executive Chairman and CEO, Peter Schubert, commented:

"In this last Quarter, your Company has made significant steps towards our goal of becoming a robust, high- grade iron ore business as we progress our Definitive Feasibility Study (DFS).

The DFS study work is on track to arrive at a go-forward mine plan that will provide the optimal commercial business case across a range of iron ore pricing scenarios. Importantly, the DFS envisages a capital-efficient,long-life mine producing an attractive, high-grade iron ore product. Iron ore grade is becoming increasingly significant to steelmakers globally as they look toward energy-efficient steel production, with premiums for higher-grade ores continuing to reflect this position.

the tenements in which we have an interest, inclusive of the recently upgraded 3 billion tonnes Mineral ForResource estimate at the Razorback Iron Ore Project1,5,6,7,8

We often highlight, but can't over-emphasise the fact that these resources are in a tier 1 mining jurisdiction with a supportive state government, access to abundant infrastructure and the opportunity of a very long- life mining operation. In my view, a rare combination.

We have continued our practice of working with best-in-class contractors, Hatch, GHD and Foraco and have expanded our internal team with the appointment of Sam Chee to assist with project financing and two new Non-Executive Directors, Jim McKerlie and Paul White.

Sam, Jim and Paul all bring significant experience, expertise and business networks to Magnetite Mines at this important phase in the development of the Razorback Iron Ore Project. We will continue our strategy

Magnetite Mines Limited | ABN: 34 108 102 432 | Suite 1, 22 Greenhill Road, Wayville, SA 5034 |	Page 1
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of working to industry best practice to ensure the study phases accurately estimate the parameters of the project we will build, and importantly, meet the standards of our potential partners.

We have continued to advance discussions with potential project partners and financiers throughout the onlyquarter, and note the project's ESG attributes are a critical factor for many industry participants.

As highlighted in our recent white paper, 'Where Will Future Iron Ore Supply Come From?' by Technical Director Mark Eames, we are at the beginning of a substantial shift in the iron ore industry and there will be undoubtedly winners and losers over time as commodity and asset markets evolve. In the iron ore market, this transition would likely be accompanied by shifts in the iron ore market to much higher premiums for higher-grade iron ore products (and potentially greater discounts for lower-grade ores).

useCapital markets are encouraging business models that support carbon efficiency. We believe that the Razorback product will be well suited to lower-emission steelmaking and are encouraged by the recent uptick in enquiry for the high-grade concentrate we plan to produce.

We thank shareholders for their continued support and look forward to further updating the market on our

personalprogress."

*The quoted total Mineral Resource estimate of 5.7 billion tonnes is inclusive of the Razorback Mineral Resource (3 billion tonnes at JORC 2012 Indicated and Inferred7), Ironback Hill Mineral Resource (1.2 billion tonnes at JORC 2012 Inferred8) and Muster Dam Iron Projects (1.5 billion tonnes at JORC 2004 Inferred6). The exploration licence application (ELA2020/00133) for the Muster Dam Iron Project tenement was awarded to the Company by the SA Government on 24 February 2021 and is currently undergoing tandard exploration license grant processes prior to official exploration licence grant to the Company6.

For

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RAZORBACK IRON ORE PROJECT

onlyuse personalForFigure 1. Razorback Iron Ore Project - Razorback Ridge forming prominent outcropping mineralisation - looking southwest

DEFINITIVE FEASIBILITY STUDY

Magnetite Mines Limited (ASX:MGT) (Company) is making substantial progress on the development of its 100% owned and operated Razorback Iron Ore Project (Project) located in South Australia. During the second quarter (period ending 31 December 2021), the Company progressed several key components of the Definitive Feasibility Study (DFS)1,2 including the appointment of key consultants and work on-the-

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ground at the Project. The following section describes key DFS activities undertaken during the reporting period.

onlyGeology and Mining

Metallurgical drilling and associated camp installation at the Project site was completed during the reporting period to complete 11 vertical PQ diamond drill holes. Drilling will provide samples for metallurgical and mineralogical testwork at the Iron Peak Prospect with existing core samples to be utilised for the proposed Razorback mining area.3 A second, shallow infill drilling program at the Iron Peak prospect was also initiated during the reporting period to provide additional data in near surface mineralisation.

A temporary 16-person camp was installed at the Project site to facilitate current the metallurgical and usefuture drilling programs, including shallow infill drilling currently in progress at Iron Peak and water

exploration drilling due to start in March pending permitting. personalFor

Figure 2. Drilling at the Iron Peak prospect at the Razorback Iron Ore Project

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Drilling at the Iron Peak Prospect aims to improve resource confidence in some underexplored sections of the current resource as well as providing significant improvements to the characterisation of mineralisation in line with DFS level interrogation of the ore-body.2,3 Results of the drilling program will initially focus on

onlyDFS critical path metallurgical testwork, with up to 8500kg of material to be delivered to domestic and international laboratories for analysis as described below. General resource assay including XRF, SATMAGAN and Davis Tube Recovery methods will follow with results anticipated in March/April 2022.

Mining experts AMC Consultants were engaged by the company to appraise current mining scenarios and provide initial stage reviews and optimisation pathways for the Project. In addition, AMC's geotechnical branch assessed current rock-wall stability geotechnical datasets towards mine pit design as well as provide a scope of work for upcoming geotechnical drilling programs.

useGeotechnical Studies

During the reporting period, the Company commissioned initial-stage geotechnical studies to delineate ground conditions for critical infrastructure including processing plant, non-process infrastructure, power and haulage pathways. Global engineering company GHD completed initial site visits and reporting towards

defining a scope of works for geotechnical work programs anticipated to occur in March/April 2022. personalHigh-resolution aerial LIDAR surveys were flown during the reporting period as part of geotechnical and

permitting studies to determine ground topography and hydrological characteristics of the proposed mine site area as well as proposed access and power pathways.

Metallurgy and process plant estimates

Metallurgical testwork following drilling is currently in progress for the Project. The metallurgical testwork program has been designed and managed by global magnetite and engineering experts Hatch. The testwork is utilising new diamond drill core generated by the metallurgical drill program for the Iron Peak deposit as well as existing core samples acquired in previous drilling programs for the Razorback deposit.

The program aims to further optimise and validate the processing flow sheet produced by Hatch to class AACE 4 standards during the Pre-Feasibility Study (PFS), announced in early July 2021.1 The outputs for the Forprogram will form the basis of design for the processing plant for the DFS, to be designed and costed to AACE class 3 standards. The testwork program will focus on both bulk and variable flotation testwork as well as improved comminution testwork datasets. Bulk flow sheet testwork will follow high pressure grinding roll (HPGR) and air classification testwork by mining equipment suppliers Weir, in the Netherlands. Additional metallurgical testwork to appraise bulk flow characteristics (rheology testwork) and sighter (early stage) testwork for vertical roller mill (VRM) comminution/grinding technology has commenced with

results anticipated in the following quarter.

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