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.
Analysis
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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