ASX- and OTCQX-listed Jindalee Lithium has launched a value optimisation programme to evaluate the recovery of magnesium as a potential by-product from its 100%-owned McDermitt lithium project, in Oregon, US.

The company said on Wednesday that the initiative aimed to unlock magnesium value from what was previously treated as waste in the 2024 prefeasibility study (PFS), positioning McDermitt as a potential dual-product operation supplying both lithium and magnesium in line with US critical mineral priorities.

Magnesium has been classified by the US Geological Survey as a high-risk critical mineral owing to its strategic importance to the defence, aerospace and automotive sectors, and the country’s heavy reliance on imports. The recent closure of the US’s last primary magnesium producer, US Magnesium, in 2025 has further highlighted domestic supply vulnerability.

Jindalee MD and CEO Ian Rodger said the programme would assess options for producing higher-value magnesium products, including precursors for primary magnesium metal.

“Although the McDermitt PFS focused on maximising lithium extraction, we have always been aware of the significant magnesium endowment at McDermitt,” Rodger stated.

“Our review is designed to investigate whether these streams considered as waste in the PFS can be converted into value-add magnesium products. If successful, this work could position McDermitt to play a strategic role in strengthening US domestic supply.”

Metallurgical testwork completed for the PFS confirmed that both lithium and magnesium could be efficiently extracted using sulphuric acid leaching, achieving up to 97% magnesium recovery and more than 87% lithium extraction.

While the PFS had identified magnesium sulphate as a possible by-product, its relatively low market value limited strategic interest. The new programme will explore downstream processing pathways to produce higher-value magnesium compounds, potentially suitable for use in magnesium metal production.

Jindalee said it would engage with specialist partners and US government stakeholders as part of the review. Findings from the programme would inform the project’s upcoming feasibility study and guide future updates to the market.