Apollo Minerals signs MoU for Kango North Iron Project, Gabon
Apollo Minerals (ASX: AON)
has positioned itself to advance exploration and development of its
Kango North Iron Project in Gabon, after entering a non-binding MoU.
The agreement allows the partner to earn up to a 50.01% interest in the project by providing US$4 million for drilling and delineation of high grade DSO and beneficiable iron ore.
Kango North is a potential near term, low cost development project and importantly is located in close proximity to key infrastructure in an emerging West African iron ore precinct.
Providing a potential path to market, Kango North is around 70 kilometres from coastal export infrastructure and 20 kilometres from existing rail and power networks.
The project has the potential to host significant DSO grade mineralisation, with preliminary metallurgical test work indicating the potential to produce very high quality iron ore concentrates at relatively high mass yields.
Apollo currently holds a 70% interest in the project with third party minority interests holding the remaining 30%, free carried until Bankable Feasibility stage of development.
The West African iron ore precinct is starting to become a hot spot, highlighted by the recent acquisition by International Mining & Infrastructure Corporation PLC (AIM: IMIC) of Afferro Mining Inc (TSX-V: AFF, AIM: AFF) in a US$200 million deal.
Kango North exploration target
The Kango North Exploration Target was recently upgraded to 2.0 – 3.5 billion tonnes at 30 – 40% iron, including 75 – 150 million tonnes at 45 – 60% iron.
Modelling in the southeast has identified a series of parallel northeast trending mineralised iron bodies which have been substantiated through review of historical Government data, and an Apollo surface rock chip sampling program conducted in 2012.
Apollo’s surface samples average 42% iron and range between 36% and 49% iron on a dry basis, with DTR results indicating high mass recoveries averaging 49%, and capable of producing premium grade iron concentrates of 69.7% iron, at a grind size of P80 at 75μm.
Additional details of the MoU
The MoU is with a major publically listed, diversified international company, and under
Detailed review and due diligence is underway and subject to agreeing formal documentation a binding definitive agreement is expected Before the end of the March quarter 2014.
Apollo entered the MoU after discussions with various interested parties.
The company said that its principal terms are currently non-binding however, it is expected that, subject to agreeing formal documentation, a binding definitive agreement will be entered into before the end of the March quarter 2014.
During this exclusivity period, Apollo has agreed not to commence or continue discussions with other parties interested in investing, or buying an interest in the project.
Apollo continues to progress Kango North
Apollo continues to progress key elements of the project, with a stage one mine development concept study currently being finalised, and follow up field mapping and sampling are also underway.
Apollo has also entered in a selection process to engage a group to prepare the Environmental Impact Assessment associated with the drilling and development phases of the project, and a decision on this is expected shortly.
It may only be early days and the MoU needs to be finalised into a binding agreement, but this is a promising step for Apollo Minerals with a market cap. of $7 million.
The MoU delivers momentum in increasing exploration at the company's projects.
Apollo's portfolio also includes some highly prospective IOCG projects in South Australia.
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