Arrow Minerals Limited (AMD.ASX) Acquires Pilbara Iron Ore Project Targeting Robe Style DSO Deposits
Arrow Minerals Limited (ASX:AMD) is pleased to advise that it has agreed to acquire a 70 per cent stake in a Direct Shipping Ore-grade iron ore project from Voyage Minerals Pty Ltd, a subsidiary of Leeuwin Metals Ltd (ASX:LM1).
Highlights
- Over 2km strike of DSO grade iron mineralisation at surface next to national highway
- Less than 15km from world class 65 Mtpa Rio Tinto Robe JV Iron Ore Operations
- Large footprint delivering 319 square kilometres of prospective tenure
- Potential strike extension to south east of the Ava copper-gold VMS target
The project is located on tenement application E08/3668, which is next to the eastern boundary of Arrow's Yarraloola Copper Project.
Leeuwin has also granted Arrow a 12-month option to acquire a 70% joint venture interest in an additional two tenement applications E08/3719 and E08/3777 in the area (Option).
The entire tenement package covers an area of 319km2 and is shown in Figure 1*.
The target area is less than 15km from the 65mtpa RRJV mine operations which have been in operation since the early 1970's, and shares tenement boundaries with permits associated with Robe River Joint Venture's (RRJV) acquisition of CZR Resources' (ASX:CZR) interest in the Robe Mesa Iron Ore Project for AUD $75 million in 2025.
Previous explorers on these tenements, most recently Leeuwin, noted highly compelling direct shipping grade Channel Iron mineralisation at surface shown in Figure 2*, and currently being mined by the RRJV on adjoining tenements.
With a mapped strike length of more than 2km and a width of more than 250 metres and concealed by cover in each direction, the anomalous CID unit, referred to as the BBQ Valley CID target by CZR Resources (ASX:CZR) in 2014 is also crossed by the major North Western coastal highway, where iron mineralisation is evident on the verges of the road.
The Company notes that topography and landform in the form of breakaways or mesas do not appear to constrain the depth or width potential of mineralisation which presents as a subtle and broad extensive landform flanked by transported cover. CID deposits generally range in thickness from less than 1 metre to 100 metres.
Following completion of the Tenement Acquisition, the Company intends to drill test the target area as soon as practical. Results from this drilling will be used to inform a decision to exercise the Option to acquire a 70% interest in the two associated tenement applications for E08/3777 and E08/3719.
Arrow Managing Director David Flanagan said:
"Our team is well aware of the tonnage and cashflowgenerating potential of channel iron deposits. We've mined them before and when they are close to quality infrastructure and markets, they present as highly attractive development opportunities. In addition to the iron ore potential, the initial JV tenement (E08/3668) shares a common boundary with our Yarraloola tenement E08/3010. This presents us with an opportunity to test for strike continuation of stratigraphy and mineralisation potential at the Ava target, which we look forward to drilling as soon as possible."
Key Terms
The Company and its wholly owned subsidiary, Yarraloola Holdings Pty Ltd (Buyer), have entered into a Tenement Sale and Purchase Agreement, and a Tenement Option Agreement with Voyage Minerals Pty Ltd (a subsidiary of Leeuwin Metals Ltd) (Seller). Key terms of these agreements is as follows:
Tenement Sale and Purchase Agreement (E08/3668):
- Arrow pays Leeuwin Metals $125,000 in shares at an issue price equal to volume weighted average price (VWAP) of shares traded on ASX over the 10 days immediately prior to the date of this ASX announcement (Issue Price) (Consideration Shares).
- Consideration Shares are subject to voluntary escrow period of 6 months from date of completion.
- Arrow receives a 70% interest in tenement E08/3668.
Tenement Option Agreement (E08/3719 and E08/3777):
- Arrow is granted a 12-month sole, exclusive and irrevocable option to purchase a 70% interest in tenement E08/3719 and E08/3777.
- Upon exercise of the option, Arrow will pay Leeuwin Metals a further $125,000 in shares at the Issue Price (Option Exercise Shares).
- Option Exercise Shares are subject to voluntary escrow period of 6 months from date of completion of acquiring the 70% interest in E08/3719 and E08/3777.
- Arrow will be required to maintain the tenements in good standing and meet minimum expenditure requirements.
The Buyer and Seller have agreed to establish an unincorporated joint venture in respect of the tenements in which Arrow holds a 70% interest (JV Tenements). Under the terms of a joint venture agreement:
- Seller will retain a free carried interest until completion of a bankable feasibility Study and Decision to Mine (DTM) in relation to the JV Tenements;
- At DTM, the Seller will have the option to contribute to maintain their 30% equity position or dilute to a 1.5% GSR royalty on all metals and industrial minerals.
- Seller retains a right to divest it's interest and Arrow will retain a first right of refusal.
The Consideration Shares and Option Exercise Shares are proposed to be issued under Listing Rule 7.1 capacity. An Appendix 3B has been released together with this announcement.
Key Risks
While the company considers the risks as industry standard and manageable, exploration for minerals and mine development involves taking risk. Exploration success and discovery involves a high degree of uncertainty. Key areas of uncertainty revolve around the ultimate presence of minerals, but further, after the successful discovery of economic minerals, permitting issues relating to flora, fauna, community, commodity markets as well as project financing work will need to be resolved. In this instance these exploration tenements are held in application and it is not guaranteed that they will progress to a granted exploration licence or that the state government will then grant a mining licence over the relevant portion to facilitate mining.
*To view tables and figures, please visit:
https://abnnewswire.net/lnk/Q6JGAE19
Arrow Minerals Ltd E: info@arrowminerals.com.au WWW: www.arrowminerals.com.au
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