Killi Resources [ASX: KLI]
Metals & Mining
WA’s Next Premium Iron Ore Opportunity, Backed by Proven Leadership
We initiate coverage on Killi Resources Limited (ASX: KLI) with a 12-month target price of A$0.60 per share, implying approximately 115% upside. The acquisition of the Lodestone Iron Ore Project has transformed Killi from a junior explorer into an emerging WA iron ore developer with immediate scale. Lodestone hosts an 110 Mt Inferred Mineral Resource, has demonstrated the potential to produce a premium 68– 70% Fe concentrate, and is strategically located alongside established rail, road, and grid power infrastructure, approximately 200km from Geraldton Port.
Only 20% of the 25km Mineralised Corridor is Currently in Resource
Lodestone’s existing 110Mt resource covers only approximately 5km of a broader 25km mineralised corridor, leaving more than 80% of the identified strike outside the current resource. Killi’s fully funded 20,000m drilling program is targeting approximately 15km of this system. Early drilling has already demonstrated continuity beyond the resource boundary, including an 80.2m intersection of coarse-grained crystalline magnetite approximately 100m south of the existing resource.
Premium 69% Fe Concentrate with Potential Processing Advantages
Metallurgical test work has produced a premium 69% Fe concentrate, well above the standard 62% Fe benchmark, with low impurity levels, including 3.9% silica and only 0.08% alumina. Lodestone’s unusually coarse 1–5mm magnetite grains can potentially be liberated at grind sizes of up to approximately 250 microns, which may reduce grinding intensity, energy consumption and processing costs compared with conventional fine-grained magnetite projects. We believe the combination of high Fe content, coarse grains and low impurities could support the production of a premium DR-grade concentrate and contribute to favourable processing economics.
Proven Leadership Strengthens Killi’s Development Capability
Killi has strengthened its leadership and technical capability through the appointment of former Fortescue Metals Group Managing Director and CEO Nev Power as Chairman. Power brings more than 40 years of experience across mining, mineral processing, infrastructure and steelmaking, including leading Fortescue from 2011 to 2018. The broader team includes Hamish Halliday, a geologist with approximately 30 years of exploration, project development and corporate experience, together with consultants Steve Parsons and Michael Naylor, who add significant expertise across resource discovery, project advancement, corporate strategy and capital markets. We believe this combination materially improves Killi’s capacity to advance Lodestone from resource expansion through technical studies and potential development.
Valuation Range of A$0.56–0.65 Per Share
Using a peer-based EV/contained concentrate iron valuation methodology, we derive a valuation range of A$0.56-A$0.65 per share for Killi Resources, with a midpoint target price of A$0.60 per share. We believe Killi is entering a highly catalyst-rich period, supported by ongoing drilling, potential resource upgrades, metallurgical validation and planned Scoping/Pre-Feasibility Studies. With a maiden 110Mt JORC Inferred Resource, significant exploration upside, and the potential to produce a premium DR-grade concentrate, we believe Lodestone provides Killi with a compelling platform for future growth. With approximately A$18.5m in pro forma cash, a fully funded drilling program and multiple potential catalysts across resource growth, metallurgy and development studies, we believe Killi is positioned for a meaningful market re-rating.