Key Highlights

  • Arrow has entered a binding agreement to hold a 12-month option over 100% of the Pannawonica Iron Ore Project, in exchange for a $150,000 share-based option fee.
  • The project carries a Mineral Resource of 62.5 million tonnes at 53.4% Fe across Measured, Indicated and Inferred categories, reported under JORC 2012.
  • Exercising the option requires a $1,000,000 Acquisition payment, a minimum $5 million Capital raising and completion of conditions precedent.
  • Known heritage sites lie within the project area, including significant sites overlapping mineralised ground at Whitegate, which require further survey before Mining there.

Arrow Minerals Limited (ASX:AMD) has announced a binding agreement granting it an option to purchase 100% of the Pannawonica Iron Ore Project in the West Pilbara region of Western Australia from Red Hill Minerals (ASX:RHI). The announcement is dated 10 November 2026. The project is a direct shipping ore prospect of about 62.5 million tonnes, located near existing haulage routes to two ports. The arrangement gives Arrow a defined period to complete its own assessment and to satisfy the conditions needed to acquire the tenements outright.

Option terms and payments

Arrow will pay a $150,000 option fee in fully paid shares, issued at the 20-day VWAP before the binding agreement was signed. From execution, Arrow will meet combined annual Holding Costs and expenditure commitments of $370,614. The option runs for 12 months from the later of the binding agreement and the issue of the option fee shares. Exercising it requires a further $1,000,000, which Arrow may pay in cash or shares at its discretion.

Exercise is conditional on Arrow raising a minimum of $5 million before costs and on ASX confirming that the transaction is not a significant change to the company's activities, unless that condition is waived in favour of seeking Shareholder approval. Arrow may withdraw from the option on 20 Business days' notice, provided it has met minimum exploration spending of $110,000 in the first six months or $220,000 thereafter. Half of any consideration shares would be escrowed for six months and half for 12 months.

Resource and project setting

The Mineral Resource totals 62.5 million tonnes at 53.4% Fe across two deposits, Whitegate and Redgate, comprising 5.5 million tonnes Measured, 47.6 million tonnes Indicated and 9.3 million tonnes Inferred. The estimate was prepared for the prior holder by an independent consultant under the JORC 2012 code, and the competent persons have confirmed to Arrow that the underlying parameters have not materially changed. The geology is consistent with channel iron deposits that are mined elsewhere in the region.

The project lies about 20 km west of Pannawonica and 70 km south of Mardie Port. Potential haulage routes run roughly 100 km to Mardie Port and 150 km to the Port of Ashburton. The tenure covers four granted mining leases, two granted exploration licences and one miscellaneous licence, across 49.6 square kilometres. The main focus is direct shipping ore, while one Lease is prospective for construction aggregates rather than iron ore.

Tenure, native title and heritage

The project lies wholly within the Kuruma Marthudunera Part B native title determination area, represented by the Robe River Kuruma Aboriginal Corporation. Heritage agreements exist between that corporation and the vendor, and these are to be assigned to Arrow as part of the transaction. The announcement also confirms that known heritage sites lie within the project area, including significant sites covering 1.24% of one lease that overlap mineralised areas at Whitegate.

The company states that further survey work and negotiation will be needed before mining can proceed in those areas. Mining lease M08/501 is not an iron ore target, and the announcement does not describe the timetable for resolving these matters.

Risks and next steps

The resource figures were prepared by the vendor and are not yet Arrow's own assessment. The company says it will complete its own technical and economic studies, and that development work to fast-track exports has begun. No economic study, production schedule or capital estimate has been published in the announcement.

Definitive agreements covering the asset sale, Royalty and Escrow are to be negotiated within 60 days, with a possible 30-day extension. Either party may terminate the binding agreement if those documents are not executed. The vendor will receive a 1.5% gross sales royalty on mineral sales from the tenements, plus a further 0.25% on production from any new project in the wider area of influence. Arrow's funding ability will be central to meeting the $5 million raising condition.

Final Word

The Pannawonica option gives Arrow a defined path to test whether a vendor-reported direct shipping ore resource can be developed, with tenure, heritage and funding conditions still to be met. The coming weeks will show whether the definitive agreements are signed and whether Arrow can complete the capital raising needed to exercise the option.