Arrow Minerals (ASX:AMD) has agreed to acquire a 70% interest in a direct shipping ore (DSO)-grade iron ore project from Leeuwin Metals (ASX:LM1) subsidiary Voyage Minerals.
The project sits on tenement application E08/3668, adjacent to Arrow’s Yarraloola Copper Project in the Pilbara, Western Australia.
Arrow has also secured a 12-month option to acquire 70% interest in two additional tenement applications, creating a 319km² exploration package.
The target area lies less than 15km from Rio Tinto’s (ASX:RIO) 65 million tonnes per annum Robe River joint venture (RRJV) operations. It also shares boundaries with permits associated with RRJV’s $75 million acquisition of CZR Resources’ (ASX:CZR) Robe Mesa Iron Ore Project.
Previous exploration by Leeuwin identified DSO-grade channel iron mineralisation at surface across a mapped strike length exceeding 2km and width of more than 250m. The anomalous channel iron deposit unit, referred to as the BBQ Valley target by CZR Resources, is crossed by the North Western Coastal Highway.
Arrow will pay Leeuwin $125,000 in shares at the 10-day volume weighted average price for the initial 70% interest in E08/3668, subject to a six-month voluntary escrow period.
Under the option agreement, Arrow can acquire 70% interest in the additional tenements for a further $125,000 in shares under identical terms.
The parties will establish an unincorporated JV where Leeuwin retains a free-carried interest until completion of a Bankable Feasibility Study and decision to mine. At that point, Leeuwin can contribute to maintain its 30% equity position or dilute to a 1.5% gross sales royalty.
Managing Director David Flanagan says the team is ‘well aware’ of the tonnage and cashflow-generating 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,” Flanagan says.
“In addition to the iron ore potential, the initial joint venture tenement 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.”
Following completion, the company intends to drill-test the target area as soon as practical to inform its decision to exercise the option.
Arrow Minerals is an explorer and developer focused on economic iron, bauxite, copper, and gold deposits across West Africa and WA.
Write to Paula Fabe at Mining.com.au
Images: Mining.com.au
