Bedded deposits of magnesite known to exist within the southern Flinders Ranges, where they outcrop over a considerable strike distance extent in the country approximately 20 km east of Port Pirie, were identified by Magnesium Developments Limited (MDL) as a possible source of high-grade feedstock for the proposed magnesium metal processing facility intended to be built at Port Pirie. A hyperspectral airborne imaging spectrometer survey (HyMapT) was conducted along the strike of the host Skillogalee Dolomite formation in order to aid the mapping and estimation of the actual distribution of the magnesite resources in the area. Preliminary sampling of magnesite outcrops indicated that the magnesite is of a similar chemical and geological character to the better-known Leigh Creek area magnesite deposits. A package of at least 8 high-grade (26% Mg) magnesite beds has been mapped over a strike length of 6 km at MDL's Collaby Hill prospect, situated at the southern end of the Flinders Ranges within Exploration Licence (EL) 2828. The proximity of these deposits to Port Pirie greatly increases the value of this potential resource to the South Australian Magnesium Metal project (SAMAG). Magnesite outcrops have been mapped 20 km from the door of the proposed magnesium plant. A potential resource of 12 million tonnes of magnesite ore has been estimated at Collaby Hill, based on MDL's present knowledge of the prospect. However, this deposit has not been drilled, and thus an accurate grade and quantum of the resource is still unknown. Based on similar geological models of magnesite at Leigh Creek, the likely cost of mining magnesite adjacent to the proposed magnesium plant at Port Pirie is estimated at A$25/tonne of ore. Developing these magnesite resources in the southern Flinders Ranges could result in significant savings in mining and transport operating costs, and a lessening of capital costs for the SAMAG magnesium project. An exploration and development program has been proposed to define this potential resource for mining. A focussed, cost-effective exploration programme comprising the cutting of costeans, and diamond drilling, is proposed to determine the potential of these magnesite resources. The development schedule requires 21 months to complete. However, the programme has now been deferred until such time as a decision is made to either proceed with the proposed plant at Port Pirie or relocate the project elsewhere. The nearby Beetaloo Valley Community raised a number of environmental issues which resulted in MDL, in conjunction with the Port Pirie Regional Development Board (PPRDB), opening up the planning process for its proposed exploration programme for public consultation and stakeholder involvement. A Community Focus Group (CFG) was formed to review the impact of exploration and mining on the ecologically sensitive Southern Flinders Region. A Declaration of Environmental Factors was been prepared and accepted by all parties, and has been submitted for approval by the regulatory authority. The CFG met regularly on a monthly basis until the end of 2003, when it was placed in recess until the exploration programme is reactivated.