Minemakers expects to partner up with a foreign firm to develop an iron ore operation in the south of the state, after today exercising an option to purchase 80 per cent of the project.
The company today issued 886,866 ordinary shares to an unnamed entity, as agreed to in a 2005 deal, to acquire an initial 80 per cent in two exploration licences.
Shares in Minemakers were unchanged at 50 cents at 13:57 AEDT.
Minemakers said one licence contains the western extension of the Southdown magnetite system, an area which Grange Resources is also focusing its efforts.
Together the licences will be known as the Fraser project.
"Minemakers does not intend to try and bring the Fraser project into production by itself because of the likely high capital cost," the company said in a statement.
"Rather, it aims to add value for shareholders ahead of a future deal, probably with a foreign entity."
Minemakers added it will continue to develop its Wonarah phosphate project in the Northern Territory, its prime focus, at the earliest opportunity in order to generate early cash flow.