A simple and effective recycling approach of magnesium alloys can offer economic and environmental benefits. This study demonstrates that by simply remelting AZ91/AZ80 machining chips and shape casting, the tensile properties of the castings can be preserved and substantial grain refinement can be achieved, compared to casting from ingots using the same alloy. Cooling curves for the samples, obtained through the immersion thermocouple method, showed that nucleation event density in chip melts consistently exceeds that in ingot melts, particularly at low undercoolings. Tensile tests showed that chip castings exhibit a slightly higher 0.2% proof stress than castings from ingots, with increases of 5% and 1% for as-cast and solution-treated conditions, respectively, due to the Hall-Petch effect. Elongation to fracture was similar for both chip and ingot samples, with fractography indicating entrainment defects rather than grain size, predominantly determined this outcome. These combined results indicate that the shape casting of AZ91/AZ80 machining chips could be used as part of the closed-loop recycling of magnesium.