The Simandou North Iron Project provides Arrow with an early-stage opportunity to access the premium iron belt, which has been locked up due to infrastructural constraints

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The project is located in south-eastern Guinea. (Credit: Michael Gaida from Pixabay)

Arrow Minerals has executed a non-binding term sheet to acquire up to a 60.5% stake in Amalgamated Minerals, which owns the Simandou North Iron Project in Guinea, West Africa.

Under the terms of the agreement, Arrow will issue 81,250,000 ordinary shares to acquire the majority stake in the Simandou North Iron Project through Amalgamated.

The Australian mining company may purchase a 33.3% interest in Amalgamated from Ropa Investments, subject to satisfactory due diligence and certain other conditions.

In addition, the company may provide $2.5m in exploration expenditure funding for the project and purchase an additional 27.2% interest in Amalgamated.

The Simandou North Iron Project provides Arrow with an early-stage opportunity to explore the premium iron belt, which has been locked up due to infrastructural constraints.

Arrow Minerals managing director Hugh Bresser said: “Global demand for high-grade iron ore continues to grow and the Simandou Range hosts the world’s largest undeveloped high-grade iron deposits.

“Simandou North Iron Ore Project allows Arrow to participate in the development of an area where until now mineral wealth has locked up due to infrastructural constraints.

“The emergence of a combined commitment between Government and Industry opens the way for Arrow to potentially establish itself as a major West African mining company.”

Discovered in 2002, Simandou North Iron Project hosts exploration permit 22967 in the northern end of the Simandou mountain range in south-eastern Guinea.

It forms an extension of the stratigraphy that hosts one of the world’s large undeveloped high-grade iron deposits, including Rio Tinto’s Simandou Project.

In March this year, the government of Guinea, Rio Tinto and Winning Consortium Simandou (WCS) signed a framework agreement for a $12bn investment.

The agreement included the construction of a 670km railway from Beyla to Forécariah and a deep-water port at Moribayah, Forécariah.

Last year, China Railway 18th Bureau Group commenced construction on the railway line under a contract from WCS. The line runs close to the Simandou North Permit.

Recently, the Guinean mines minister ordered to halt all the works related to the development of the Simandou mining and infrastructural project.