Apollo to acquire 80% stake in new WA iron ore project

24 November 2007 | 03:26 Code : 15960 Geoscience events
Newly listed Australian resources company Apollo Minerals Ltd has reached....

  Newly listed Australian resources company Apollo Minerals Ltd has reached agreement to acquire an 80% interest, under an option agreement, in two exploration licence applications covering an area of approximately 212sqkm (ELA 47/1378 and ELA 47/1379) located in the Pilbara region of Western Australia.Fox Resources Ltd previously announced the discovery of a new iron ore prospect, the Mt Oscar Iron Ore Project (Exploration Licence Application 47/1217). The geology comprises partially outcropping Banded Iron Formation (BIF) over an area of approximately 5km by 2km. The BIF outcrop is coincident with a regional strong magnetic high. Rock chip sampling confirmed surface iron ore enrichment in excess of 40% iron.This highly magnetic unit straddles both the Fox Resources tenement and the Apollo Iron Project Area. The Apollo Iron Project Area lies 32km east of Fox's Radio Hill nickel-copper mine and 25km south of Cape Lambert's iron ore project. Cape Lambert has targeted a 1 billion tonne plus magnetite project and is currently completing a feasibility study. The Central Target Area recently delivered a total resource estimate of 977 million tonnes at 32.4% Fe.Apollo’s Iron Project Area is believed to host the same potential iron ore unit as found at Cape Lambert. Iron ore assays from samples taken over Fox Resources.Under the terms of the option agreement, Apollo has an option to acquire an 80% interest in the two tenements. Apollo has paid a non-refundable option fee of $50,000 and has been given 45 days to complete due diligence on the two tenements. Subject to the successful completion of the due diligence, Apollo may elect to enter into a Joint Venture Agreement in relation to these tenements.The JVA terms will include provisions for the vendor to retain all uranium rights, a net smelter royalty entitlement of 1.5% and a 20% free carried interest (subject to Apollo having the right to re-acquire this free carried interest at any time).Upon the JVA being entered into, Apollo will pay up to $450,000 in cash and shares. A further $500,000 in cash and shares will be paid upon the granting of the tenements.Sevag Chalabian, Chairman of Apollo, commented: “The acquisition strategically places Apollo in the middle of a significant iron ore discovery at Mount Oscar in the Pilbara where other explorers such as Cape Lambert and Fox Resources presently are actively engaged in the development of similar types of deposits. We at Apollo are excited by this new opportunity.”Upon the JVA being entered into, Apollo will immediately commence exploration on the tenements. Work will include the acquisition of aeromagnetic and gravity data followed by modeling, detailed geological mapping and sampling and drill testing program.

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