Republic Gold has signed a letter of intent with the Bolivian Government to jointly explore the El Mutun iron ore project.

The agreement with the Department of Santa Cruz in Bolivia allows the company to explore the half of the project that has not been covered in previous deals.

India’s Jindal Iron and Steel has already entered into a $2bn contract to develop an iron ore and steel operation covering 50% of the El Mutun concessions.

The project is estimated to contain an iron ore target resource of 40 billion tonnes grading 50% iron.

El Mutun is spread across 60 square miles, with 90% located in Bolivia and 10% in Brazil.

The El Mutun Mountain contains colluvial hematite on the surface and has a few drill holes that indicate iron ore up to a 330m depth downhole from drilling concluded in the 1970s.

The company is expected to use cash generated from its Amayapampa Gold Project to finance the early phase of exploration.