Leeuwin Metals (ASX:LM1) enters Pilbara Joint Venture and Option Agreement with Arrow Minerals
Leeuwin Metals has reached agreement with Arrow Minerals (ASX:AMD) under which Arrow will acquire a 70% joint venture interest in tenement application E08/3668, located adjacent to Arrow’s Yarraloola Copper Project in the West Pilbara of Western Australia.
Leeuwin will receive Arrow shares as consideration and retain a 30% interest, free carried through to a Bankable Feasibility Study and Decision to Mine.
Highlights
Arrow Minerals will acquire a 70% joint venture interest in tenement application E08/3668, located adjacent to Arrow’s Yarraloola Copper Project in the Pilbara of Western Australia.
The tenement includes over 2.4km of strike of direct shipping grade channel iron deposit iron mineralisation outcropping at surface, adjacent to a national highway.
Arrow has acquired a 12 month option to acquire a 70% joint venture interest in tenement applications E08/3719 and E08/3777, with the combined package comprising 319 square kilometres of prospective tenure.
Leeuwin will receive Arrow shares as consideration and retain a 30% interest, free carried through to a Bankable Feasibility Study and Decision to Mine.
Under the agreements, Voyage Minerals Pty Ltd, a wholly owned subsidiary of Leeuwin, will grant Arrow a 70% joint venture interest in tenement application E08/3668.
Arrow has also been granted a 12 month option to acquire a 70% joint venture interest in tenement applications E08/3719 and E08/3777, with Leeuwin retaining a 30% interest in each case.
Previous explorers on these tenements defined highly compelling DSO grade iron mineralisation at surface, with outcropping mineralogy consistent with the CID iron ore deposits currently being mined by Rio Tinto on adjoining tenements.
The iron mineralisation extends over a strike length exceeding 2.4km and is concealed by cover in each direction.
The ground lies less than 15km from Rio Tinto’s 65Mtpa Robe River iron ore operations, which have been in production since the early 1970s.
Arrow has advised that the initial joint venture tenement may host a strike extension of the Ava copper gold VMS target at Yarraloola.
The intention is to drill test the iron ore target as soon as practical, with results from this drilling to provide the basis for Arrow to exercise its option over tenement applications E08/3719 and E08/3777.
Leeuwin Executive Chairman Christopher Piggott said,
“The Company receives Arrow shares and retains a free-carried 30% interest through to a decision to mine. This enables us to maintain our focus and capital on advancing the Marda Gold Project, while generating value from non-core assets.”
Under the agreement terms, Arrow will pay Leeuwin $125,000, satisfied by the issue of Arrow shares, for the initial 70% joint venture interest, with a further $125,000 in Arrow shares payable on exercise of the option.
The issue price for the shares will equal the volume weighted average price of Arrow shares traded on ASX over the 10 trading days immediately prior to the date of the announcement.
All shares issued are subject to a voluntary escrow period of 6 months from their respective dates of completion.
Leeuwin retains a 30% interest in the joint venture tenements, free carried until completion of a Bankable Feasibility Study and a Decision to Mine.
At Decision to Mine, Leeuwin may elect to contribute to maintain its 30% interest, offer its interest to Arrow at fair market value, or convert its interest to a 1.5% gross revenue royalty on all minerals produced from the joint venture tenements.
The company’s next steps include drill testing the iron ore target as soon as practical, with results from this drilling to provide the basis for Arrow to exercise its option over tenement applications E08/3719 and E08/3777.