This study aims to recycle pure magnesium chips by a two-stage mechanical processing method. In the present study, the feasibility of recycling pure magnesium chips with the help of commercially pure magnesium powder was investigated. For this study, the magnesium chips mixed with different amount of magnesium powders in the range of 25-75 wt%, after mixing by hand and cold press, are subjected to hot extrusion to provide homogeneous microstructure. Furthermore, the effect of magnesium powder and their amounts on the mechanical properties and corrosion behaviour of the recycled magnesium alloys were studied. The results of the mechanical and corrosion test showed that the hardness and compressive yield strength decreased with increasing chip content, while increase in the chip weight fraction in the initial mixture resulted in a significant increase of corrosion resistance.