Arrow Minerals Limited (ASX: AMD) today announced a binding agreement to acquire an option for 100% of the Pannawonica Iron Ore Project in Western Australia’s West Pilbara region from Red Hill Minerals (ASX: RHI). Arrow Minerals is focused on creating value for shareholders through the discovery and development of mineral deposits with the potential to evolve into long-life producing mines, with an ambition to streamline a pathway to a ‘starter mine’ that can be expanded. The Pannawonica Project boasts a total Mineral Resource Estimate of 62.5 million tonnes (Mt) at 53.4% iron (Fe), comprising Measured, Indicated, and Inferred categories. This acquisition signifies a strategic move for Arrow, targeting a direct shipping ore (DSO) iron ore project approximately 100 kilometres from a port.
The Pannawonica Iron Ore Project stands out with its existing infrastructure advantages, including granted mining leases, established native title agreements, and advanced flora and fauna environmental studies. The project’s geology consists of Channel Iron Deposit (CID) style mineralisation, similar to successful operations in the region, known for potentially low mining costs due to favourable stripping ratios. Arrow’s Managing Director, David Flanagan, described the transaction as “company-making,” highlighting the unique combination of proximity to port, granted mining licenses, and advanced heritage and environmental studies. He emphasized the priority to find the fastest path to production and cashflows.
Under the terms of the binding agreement, Arrow Minerals will pay Red Hill Minerals an option fee of $150,000 in fully paid Arrow shares. This grants Arrow a 12-month period to acquire the tenements outright for $1,000,000, payable in cash or shares at Arrow’s election. During the option period, Arrow will also cover annual holding costs and expenditure commitments totalling $370,614. The transaction is subject to conditions including ASX confirmation that it does not constitute a significant change to Arrow’s activities and Arrow raising a minimum of $5 million. Furthermore, Red Hill Minerals will receive a 1.5% Gross Sales Royalty on all mineral sales from the tenements. Arrow has commenced development studies aimed at fast-tracking exports from the project.
