Australia-based Arrow Minerals has obtained firm commitments to raise $10m ($15.16m) through a share placement priced at A$0.005 per share.

The funds will be raised in two tranches, with the first tranche involving the issuance of 1.9 billion shares to garner $9.5m, expected to be allotted on 21 March 2024.

The second tranche will see the issuance of 104 million shares to raise another $0.5m, contingent on shareholder approval.

The proceeds from the placement will primarily fund the exploration and pre-feasibility studies at the Simandou North Iron Project.

Additionally, the capital will facilitate the acquisition of the remaining 66.7% stake in Amalgamated Minerals, which owns the Simandou North Iron Project, thereby consolidating Arrow Minerals’ interest at 100%.

The funds will also cover the costs of the offer and provide general working capital.

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For the acquisition of Amalgamated Minerals, Arrow Minerals has agreed to pay the vendors $2m in cash within 30 days of signing the agreement.

A deferred payment of $500,000, payable in cash or shares, is due by 30 June 2025. Moreover, the vendors will retain a royalty of $1 per tonne on the project.

Arrow managing director David Flanagan said: “After visiting site earlier in the year I could see so many quality drill targets. I wanted to drill them all and grow our interest in the project as quickly as possible. The only constraint was funding. This raising will allow us to drill up to 150 holes in the tenement and test a lot of targets this year.

“Keep in mind the tenement is along strike from the world’s largest high-grade iron ore project and it hosts 40km of strike of the same host rock formation. Before Arrow started exploration in 2023, no one had ever drilled and assayed a hole for iron on the tenement and it is also next to a multi-user railway due for commissioning next year.

“Given the strong start we have made to drilling at Simandou North and our very positive view of the project’s potential, we have also resolved now to be the perfect time to increase our interest to 100% for $2m dollars cash payment.”