Australian iron ore developer Apollo Minerals has signed an agreement to acquire a free carried interest of 12.5% in the Kango North Iron project in Gabon, West Africa.
Following the acquisition, Apollo will increase its interest in the project from the current 70% to 82.5%.
The project is a potential near-term, low-cost development asset, which is situated around 70km from coastal export infrastructure, 20km from existing rail and power networks and near to the emerging West African iron ore precinct.
In January, the company entered into a memorandum of understanding (MoU) with a strategic partner for a farm in arrangement.
Under the agreement, which is subject to completion of satisfactory due diligence, the partner can fund drilling and delineation operations of high grade DSO and beneficiable iron ore, estimated at around $4m to acquire up to 50.01% equity in the project.
Apollo Minerals executive director Richard Shemesian said the acquisition increases the company's stake in the project to 82.5%, while consolidating the ownership structure, making it easier to attract investor finance.
"Apollo shareholders have exposure to a high-quality asset with a significant exploration target, close to major existing infrastructure connected to a deep water port which has straight-forward metallurgy and the potential to produce a premium 69% iron ore product," Shemesian said.
According to the company, the acquisition follows extensive discussions with several parties who have shown an interest in investing and financing the project.
Kango North Iron project is said to have significant DSO-grade mineralisation, with preliminary metallurgical test work indicating the potential to produce quality iron ore concentrates at relatively high mass yields. In the wake of these estimations, Apollo stated that the project can develop a low-cost, high-potential iron ore mine in a prime coastal location in an emerging iron ore province.
Image: Apollo Minerals' Kango North Iron project in Gabon, West Africa. Photo: courtesy of Apollo Minerals Limited.