Macro Metals Adds Yandi South Project to Pilbara Iron Ore Portfolio

Macro Metals (ASX: M4M) has agreed to acquire the Yandi South iron ore project in Western Australia’s Pilbara region for staged payments totalling $6.5 million plus a production royalty.

The acquisition covers three granted exploration licences spanning 56 square kilometres, and includes a historical indicated mineral resource estimate (MRE) of 4.28 million tonnes at 55.8% iron.

Yandi South is located around 17km southeast of Macro’s 27.3%-owned Extension iron ore project.

It also lies approximately 5km southeast of BHP Group’s (ASX: BHP) Yandi operation, and shares a boundary with Rio Tinto’s (ASX: RIO) Yandicoogina mine.

Macro has additionally applied for 46 sq km of adjoining exploration tenure that would expand its wholly owned position in the district to approximately 100 sq km if granted.

Historical Resource Adds Scale

The historical MRE includes a geologically continuous higher-grade core of 1.88 million tonnes at 58% iron using a 50% iron cut-off.

The overall resource has a calcined grade of 61.3% iron with 3.3% alumina and 0.07% phosphorus, while the higher-grade component has a calcined grade of 63.1% iron with 2.8% alumina and 0.08% phosphorus.

High-grade mineralisation begins at surface and reaches a known maximum thickness of 28m within the northern part of one of the exploration licences.

The estimate was prepared under the 2004 JORC Code and cannot currently be reported as an MRE under the 2012 JORC Code until sufficient additional work has been completed.

Limited Work Leaves Upside

The existing resource, drilling, and detailed mapping cover only about 10% of the acquired tenure, leaving extensive areas available for further exploration.

Macro has prioritised several mesas for mapping and rock chip sampling as it assesses additional CID and bedrock-hosted iron targets across the broader tenure.

The Tributary prospect represents one of the immediate follow-up targets after historical drilling returned 16m at 52.17% iron from 7m, as well as multiple high-grade surface samples grading from 51.98% to 66.9% iron along an interpreted southwestern extension of the prospect.

Macro plans to undertake field mapping and sampling across the priority areas before assessing the potential for further drilling at Tributary and other targets near the historical MRE.

The company also intends to update the resource model to the 2012 JORC Code and commence mining studies as it develops a potential production pathway.

Magnetite Adds Second Opportunity

Four historical diamond holes completed in the northwestern part of the project intersected magnetite-enriched horizons measuring up to 150m thick from surface.

A total of 82 Davis tube recovery tests produced an average concentrate grade of 69% iron from the magnetite core.

Average mass recovery was 16.2% and varied across the limited sample set, requiring further geological and metallurgical investigation before firm conclusions can be reached.

Macro plans to locate and relog available drill core, undertake further test work, and complete additional diamond drilling to improve its understanding of the magnetite mineralisation.

Staged Acquisition Terms

Macro will make initial payments totalling $250,000 before paying $1 million in connection with the transfer of the tenements, with a further $1m payable within six months of transfer and another $1.75m within 12 months or once the statutory approvals required for commercial mining have been secured.

The final $2.5m payment is due within 30 business days of first commercial production from Yandi South.

Western Iron Ore will receive a 3% royalty on realised sale proceeds from the first 4.275 million dry metric tonnes sold and a 5% royalty on production above that threshold.

Managing director Simon Rushton said the acquisition of Yandi South should allow Macro to leverage synergies between it and the Extension project, and might also benefit from its proximity to the BHP and Rio Tinto operations.

“With recent media coverage strongly suggesting both companies are actively seeking opportunities to extend the usable life of their respective infrastructure at this location, this could present additional collaboration opportunities for Macro,” he added.