Western Mines unlocks magnesium kicker at monster WA nickel play

Western Mines Group has stitched up a savvy deal to monetise overburden waste rock at its colossal Mulga Tank nickel project in WA’s Eastern Goldfields, signing a deal that could see hundreds of millions of tonnes of waste turn into revenue.

The company has entered a non-binding agreement with private technology outfit Magnium Australia to investigate the supply of magnesite from Mulga Tank’s near-surface oxide cap at the project.

Although the zone is currently classified as waste rock in the company’s resource model, it could soon provide an essential feedstock for Magnium’s plans to become a leading producer of low-carbon magnesium metal.

Under the agreement, Western Mines will work to define the extent of the “magnesite cap” and provide bulk samples for metallurgical test work.

If the material proves suitable, the two companies will look to lock in a formal supply agreement to feed Magnium’s “Magsonic” carbothermic reduction process, a technology developed by the CSIRO to produce high-purity magnesium.

The deal presents a compelling opportunity for Western Mines to commercialise a 348-million-tonne oxidised domain that sits above its mammoth nickel sulphide deposit.

The company says the upper 10-to-20 metres of the project’s dunite intrusive has weathered to form a magnesite-rich layer, with recent X-ray diffraction (XRD) analysis of samples from the zone returning magnesite grades of up to an eye-watering 48 per cent.

For Western Mines, monetising a product that would otherwise be treated as overburden could vastly improve the economics at Mulga Tank.

Magnium says it is looking to build a pilot plant for its Magsonic process in Collie, WA and has been actively hunting out magnesium-rich material to feed its operation.

At Mulga Tank we have high MgO in abundance. The main body of the Mulga Tank Complex is a fairly unique piece of rock, being a huge +45% MgO adcumulate dunite. This oxide zone is treated as overburden in our resource model. Assuming successful results from the MoU it could be transformative for the economics of the project to generate revenue from this waste.

Magnesium is considered a critical mineral in Australia, with numerous applications in defence, aerospace and lightweight clean-energy technologies.

Magnium says Australia is currently entirely dependent on imports for its supply, with the scale of the magnesite cap at Mulga Tank making it a compelling opportunity for the up-and-comer as it seeks to commercialise its technology.

While the magnesite option adds an intriguing new layer to the Mulga Tank story, the main event remains the project’s gigantic nickel sulphide endowment.

Western Mines has outlined a resource of almost 2 billion tonnes, containing 5.3 million tonnes of nickel, 257,000 tonnes of cobalt, 161,000 tonnes of copper, alongside 1.1 million ounces of platinum and palladium. The sheer scale puts Mulga Tank among Australia’s largest nickel sulphide deposits.

The project has continued to deliver compelling results over the past three years, demonstrating a vast nickel sulphide system with both disseminated mineralisation and the potential for higher-grade massive sulphide accumulations at depth.

If this latest partnership pays off, Western Mines could sharply change its commercial outcomes, even in a now long depressed nickel environment. By potentially turning a massive pile of waste into a sought-after critical mineral feedstock, the company is inching closer to developing one of the world’s most impressive nickel sulphide systems.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au