Iron ore exploration and development company Equatorial Resources (ASX:EQX) has entered into a conditional agreement with privately owned company Companhia Rio de Ferro to acquire the Nimba Alliance Iron Ore Project in Guinea, West Africa.
The company reports this acquisition is consistent with its strategic focus on potentially large-scale exploration and development iron ore assets located within a cluster of ‘major’ iron ore projects where global mining companies and governments are working to develop large-scale transport infrastructure to enable efficient and economic production.
Under the agreement, Equatorial will acquire 100% of the issued capital of Companhia Rio de Ferro by issuing 5 million fully paid ordinary shares at an issue price of $0.15 per share upon settlement.
The company will also issue a further 5 million deferred fully paid ordinary shares at the same issue price upon either the renewal or extension of the Nimba West permit in accordance with the Guinean Mining Code to the reasonable satisfaction of Equatorial.
Companhia Rio de Ferro wholly owns Guinean private company Gui-Appro, which holds the Nimba West exploration permit and 56% of Guinean private company First Metal SARLU, which in turn holds the Nimba North permit.
Equatorial reports the Nimba West exploration permit grants Gui-Appro the exclusive right to explore for iron ore within the permit area. The Nimba West exploration permit was granted on 27 June 2019 with an initial 3-year term which is renewable twice for 2-year periods.
In 2022 Gui-Appro applied for the first renewal of Nimba West. The company also notes for each renewal, the permit area may be halved.
Meanwhile, the company says the Nimba North exploration permit grants First Metal SARLU the exclusive right to explore for iron ore within the permit. Nimba North was granted on 5 August 2020 with an initial 3-year term, renewable twice at 2-year periods.
Equatorial reports the consideration shares will be subject to a voluntary escrow period of 12 months from their date of issue, Completion of the agreement is expected to occur within a month, and the company notes if the conditions precedent are not satisfied on or before 30 September 2023, either party may terminate the agreement.
The Nimba Alliance Iron Ore Project covers an area of 483km-square in the Nzérékoré region of Guinea, straddling the borders of Guinea, Liberia, and Côte d’Ivoire.
Equatorial Resources is a Perth-based iron ore exploration and development company that currently holds the Mayoko-Moussondji, and Badondo projects in the Republic of Congo.
Images: Equatorial Resources Ltd
