GWR pivots to battery metals

Iron ore producer GWR Group is looking to initiate a move into the battery metals market by acquiring a large stake in Jindalee Resources' Prospect Ridge magnesite project in Tasmania. 

The miner informed the market today that it had signed a binding term sheet to buy a 70 per cent interest in the Prospect Ridge magnesite project, via its Tasmanian Magnesium subsidiary, from Jindalee Resources offshoot HiTec Minerals.

GWR chair Gary Lyons said he believed the project provided the business pathway into the “green” global magnesium market.

“The project will provide GWR with the opportunity to enter the “green” and EV space with potential for exposure to the high-capacity, fast charging, rechargeable magnesium-ion battery market,” Mr Lyons said in a statement.

Magnesite is the principal ore for magnesium, which is used in automotive and aerospace industries as well as magnesium-batteries.

“The Prospect Ridge magnesite project has had a substantial amount of work undertaken, including diamond drilling, metallurgical test work, environmental and aboriginal heritage surveys and feasibility studies.”

The Arthur River Deposit within Prospect Ridge has an inferred mineral resources estimate of 25 million tonnes of magnesite, grading 42.4 per cent magnesium oxide, 4.8 per cent silicon dioxide, 1.4 per cent iron oxide and 2.6 per cent calcium oxide.

Broadly, GWR said the proposed buy represented an opportunity to diversify and affirmed the move would not impact the recommencement of iron ore operations at C4 in Wiluna.  

Mining operations were put on hold from September to January due to subdued iron ore prices.

GWR has lined up $2 million from sophisticated and institutional investors after putting up shares at 17 cents each to fund working capital and work programs for the magnesite project.  

GTT Ventures was lead manager to the placement.

Consideration for the buy works out at about $1 million and comprises $250,000 cash and $750,000 of GWR shares.

The Tasmanian Magnesium subsidiary will need to spend at least $2 million on the project within five years of settlement, including establishing a scoping study.

HiTec will retain 30 per cent interest in the tenement until a decision to mine has been made, at which point the parties will form a joint venture.

GWR shares are down 2.78 per cent to trade at 18 cents.