Newly listed West Perth-based resources company Apollo Minerals Ltd has taken a significant step forward in the development of its recently acquired Western Australian iron ore project, following the signing of a Memorandum of Understanding with Chinese I
Newly listed West Perth-based resources company Apollo Minerals Ltd has taken a significant step forward in the development of its recently acquired Western Australian iron ore project, following the signing of a Memorandum of Understanding with Chinese Iron and Steel Group.
The MoU was signed following a recent visit to WA and the Pilbara by senior representatives of the Chinese Iron and Steel Group and Apollo.
Under the terms of the transaction, the Chinese Iron and Steel Group has the option to subscribe for up to $3.3 million in Apollo shares at 34 cents per share and take an interest over 15 per cent in Apollo subject to relevant approvals.
The placement price is at a 36 per cent premium to the IPO price in October 2007.
The Chinese Iron and Steel Group will acquire immediately 2.94 million shares in Apollo (or 4 per cent of Apollo) for $1 million.
In addition under the terms of the MoU the Chinese Iron and Steel Group has; indicated its intention to take its interest in Apollo to a minimum 19.9 per cent subject to all necessary shareholder and regulatory approvals; the ability, subject to successful exploration and development, to negotiate in good faith an agreement giving the Chinese Iron and Steel Group the right to market iron ore produced from its Mount Oscar Iron Ore Project.
Terms are non-binding until a definitive agreement is reached between the parties.
The Board believes this agreement is a key milestone in the development of Apollo Minerals into a leading diversified resources house, with the significant backing of a Chinese partner.
Apollo will continue to review other opportunities in the iron ore sector and the signing of the MoU with a strategic Chinese partner provides a significant boost to Apollo in its iron ore acquisition strategy and intention of becoming a significant iron ore company.
"The Company's Mount Oscar Iron Ore Project is exciting not only in terms of its prospectivity, but also in terms of what it means to this developing company," said Apollo Chairman Sevag Chalabian.
"To have attracted such a committed Chinese partner so soon after listing is something that will provide us with significant strength and impetus as we move forward with this project's development."
In November 2007 Apollo signed an Option Agreement for the acquisition of an 80 per cent interest in exploration licence applications 47/1378 and 47/1379.
These two tenement applications cover a significant portion of the newly discovered Mt Oscar Iron Ore Project, located in the Pilbara region of Western Australia (see attached maps).
Within these tenements a number of areas with hematite and magnetite targets have been identified which could represent a significant iron ore resource.
Apollo is currently conducting due diligence on these tenements and, subject to the successful completion of this due diligence, expects to acquire these tenements and commence an aggressive exploration program by March 2008.
Details of the Chinese Iron and Steel Group will follow upon formalisation of the MoU.
