The options were exercisable at 5c by May 31.
Magnetite issued 150.4 million new shares.
Only 22.2 million options expired without being exercised.
"The overwhelming support from option holders for exercise has solidified our cash position and importantly our ability to advance development work for the Razorback iron project," Magnetie executive chairman Peter Schubert said.
"It is Magnetite Mines' intention to become an iron ore producer, and to do that in the in the most cost effective and timely manner possible. This financial contribution has supported that vision."
Magnetite now has $17.5 million in cash.
While the PFS for the 3 billion tonne Razorback project is due later this month, the option exercise allows the company to commit to programs to accelerate development, including metallurgical testwork, infill drilling, environmental impact studies, native title and heritage, environmental, social and governance initiatives and water drilling.
The company will also review the 1.5Bt Muster Dam project.
Shares in Magnetite rose 2.9% to 7.1c, pushing the company's market capitalisation through $210 million. The stock started the year at just 1.2c.