Arrow Minerals Limited (ASX:AMD) has entered into a binding agreement granting an option to purchase 100% of the Pannawonica Iron Ore Project in the West Pilbara of Western Australia from Red Hill Minerals (ASX:RHI), with the project holding a total Mineral Resource Estimate of 62.5 Mt at 53.4% Fe across two deposits.

Key Points

  • Arrow receives a 12-month option to acquire 100% of the Pannawonica Iron Ore Project for $1,000,000 in cash or shares, at its election
  • Option fee of $150,000 is payable in Arrow shares at a price equal to the 20-day VWAP prior to execution
  • Total Mineral Resource Estimate of 62.5 Mt at 53.4% Fe comprising Measured, Indicated and Inferred categories across the Whitegate and Redgate deposits
  • Project comprises four granted mining leases, two granted exploration licences and one miscellaneous licence covering a total area of 49.6 km²
  • Exercise of the option is conditional on ASX confirmation regarding Listing Rule 11.1 and Arrow raising a minimum of $5 million before costs

Pannawonica Iron Ore Project Mineral Resource Estimate

The Pannawonica Iron Ore Project's Mineral Resource Estimate, prepared by independent consultants Ravensgate and reported in accordance with the JORC Code (2012 Edition), totals 62.5 Mt at 53.4% Fe. The Measured category comprises 5.5 Mt at 53.8% Fe, the Indicated category 47.6 Mt at 53.4% Fe, and the Inferred category 9.3 Mt at 53.4% Fe. The two deposits, Whitegate and Redgate, have a combined strike extent of over 10 km, widths ranging from 200 to 750 metres, and thickness exceeding 50 metres in places. The project contains a substantial drilling database of 465 RC and Diamond holes for 14,475 metres.

Transaction Terms and Conditions

Under the binding agreement, Arrow will pay Red Hill Minerals an option fee of $150,000 in Arrow shares, issued at a price equal to the 20-day VWAP prior to execution under Listing Rule 7.1 capacity. From the date of execution, Arrow will cover combined annual holding costs and expenditure commitments of $370,614. Arrow may exercise the option within 12 months, subject to ASX confirmation that the transaction does not constitute a significant change to the nature or scale of its activities under Listing Rule 11.1, and Arrow raising a minimum of $5 million before costs. The acquisition price upon exercise is $1,000,000 payable in cash or shares at Arrow's election.

Project Tenure and Geological Characteristics

The Pannawonica Iron Ore Project consists of four granted mining leases, two granted exploration licences and one miscellaneous licence, with a total area of 49.6 km². The geology is consistent with Channel Iron Deposit style mineralisation, with known mineralisation found on elevated mesas demonstrating classic inverted topography of Robe Pisolite CID deposits. The company disclosed that no significant work has been completed to determine whether further CID deposits exist in buried palaeochannel settings beneath surrounding plains, representing an identified exploration opportunity. Development studies to fast-track the project to exports have commenced, according to the filing.