Australia-based Arrow Minerals has signed a binding term sheet to acquire the remaining 39.5% stake in Singapore-registered Amalgamated Minerals, which holds the majority interest in Simandou North Iron Project in Guinea, West Africa.

Under the terms of the agreement, the mining company will offer Amalgamated Minerals funds needed to conduct a pre-feasibility study for the Simandou North permit or spend A$15m ($9.7m), whichever is lesser. This will allow the former to earn 80% interest in the project.

For a 90% stake, Arrow Minerals has to complete a feasibility study or spend an additional A$22.5m ($14.55m), whichever is lesser.

The Australian firm can get 100% ownership after Amalgamated Minerals reaches a decision to mine in exchange for a $1 per tonne royalty.

Arrow Minerals managing director Hugh Bresser said: “Establishing these commercial terms with the shareholders of Amalgamated is a major step forward for Arrow. It provides a roadmap for Arrow to advance to 100% ownership of the Simandou North Iron Project.

”This outcome provides clarity to shareholders on the future ownership structure for the Project and enables us to advance our exploration activities and development plans with security and confidence.”

The Australian company has beneficial rights of 33.3% in the Simandou North Iron Project.

In July 2022, Arrow Minerals executed a non-binding term sheet to acquire up to a 60.5% stake in Amalgamated Minerals.

Located at the northern end of the Simandou Range, the project comprises exploration permit 22967.

Arrow Minerals aims to advance the project in the coming dry season for identifying and drilling test areas of high-grade iron within the project area.