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Muster Dam is now reported to have an inferred JORC 2012 resource of 1.55Bt grading at 18.7% iron and 15.2% mass recovery, following work to upgrade the original JORC 2004 resource prepared by Minotaur Exploration.
The company previously had total resources of 4.19Bt at its flagship Razorback development, and describes Muster Dam as a "natural expansion option".
Both deposits in south Australia's Braemar province have comparable physical and chemical characteristics, despite being 110km apart as they are hosted in the same geological unit.
Magnetite said the new resource only covered Muster Dam, but there is plenty of prospectivity around it at the Peaked Hill, Duffields and Surrender Dam prospects.
Muster Dam is 90km south of Broken Hill and just 40km from rail and road infrastructure.
The area was predominantly explored for Broken Hill-style base metal deposits until the potential of the Braemar iron formation was recognised a decade ago.
Magnetite was granted an exploration licence over Muster Dam in May, after winning a competitive bid process carried out by the South Australian government. It paid no money for the ground.
Minotaur relinquished the ground in 2021.
In September Magnetite switched its focus back to a larger-scale 5-7Mtpa Razorback development based on the accelerating market demand for premium iron ore products to help lower carbon emissions.
It believes Razorback can deliver a 67.5% concentrate.
Magnetite raised A$15.8 million at 2.5c via a rights issue earlier this year to fund its work and has around $13 million in the bank.
Magnetite shares, which have traded at 1.5c and 4.6c over the past year, were steady at 1.6c today, valuing the company at $61 million.
