Arrow Minerals' West African iron ore play gains traction

Recent moves to unlock Guinea’s rich high-grade iron ore resources in the Simandou Range have been the catalyst for Arrow Minerals to progress its own asset in the region.

First discovered in the 1990s, the 110km Simandou Range is known to host the world’s largest undeveloped high grade iron ore deposits with at least 4 billion tonnes of ore at an average grade of 65.5% – amongst the highest in the world.

By way of comparison, BHP’s Australian iron ore production averages about 62% while some lower grade products from Rio and Fortescue can be under 57%.

This high-quality iron ore holds an added benefit outside of a premium price point – higher quality iron is the only way to make zero emission green steel.

However, despite strong interest from China – which believes that iron ore from the region could decouple their reliance on the supply of iron ore from Australia – previous plans to develop the iron deposits at Simandou have stalled due to politics, corruption, mining rights disputes and capital cost concerns.

That appears to be changing with the incorporation of the Compagnie du TransGuinéen (The TransGuinean Company) a joint venture company between Rio Tinto, the Guinean Government and China’s Winning Consortium Simandou (WCS).

The joint venture company will develop the multi-user infrastructure such as a railway and port that will be necessary for large-scale mining activity to begin at Simandou – activity that could reach as high as 200 million tonnes per annum.

Simandou North

It is this infrastructure development that has Arrow Minerals (ASX:AMD) so excited and focused on the potential of its asset in Guinea. It is the key to unlocking the value of its Simandou North Iron project, which lies immediately to the north of WCS’s Blocks 1, 2, and Blocks 3 and 4 that make up Rio’s Simandou project.

A portion of the underexplored 490km² project was previously held by BSGR and Vale and covers the northern extension of the Simandou Range and while there are no defined resources to date, managing director Hugh Bresser told Stockhead that the host lithologies of the itabirite ironstones in WCS and Rio’s ground are confirmed to stretch into Arrow’s landholding.

Historical airborne geophysical survey highlighted the continuation of the Simandou iron formations while limited historical shallow drilling by Vale confirmed the presence of iron-rich stratigraphy.

“We know that there’s ironstone formations on the ground and we are in the process of conduction exploration to define areas for drilling to advance the prospects to the point of being able to formulate a mineral resource estimate,” Bresser explained.

“Our aim is to advance the project to a timeline that sees us have a resource in place, negotiate a commercial access agreement and be in a position to tie directly into current infrastructure developments to bring the project to overall development.”

Location of the Simandou North iron ore project. Pic: Supplied

The company’s forward work program at Simandou North includes the detailed interpretation of the airborne geophysics, field mapping and geochemical sampling, identification of high priority targets, ground geophysics to assist in vectoring high-grade zones, and drill testing of specific targets to evaluate the potential scale of iron-rich zones.

Arrow expects to have drill rigs out on site by the end of this year or early next year to start drilling the ironstones and get an early indication of the magnitude of the opportunity.

“Exploration is going to be very much results driven. We are following a systematic, science-based approach where programs are driven by decision points, the results provide an indication of success and allows us to set our next key decision point,” Bresser added.

“While Simandou North has escalated in our plans we remain committed to continuing to grow Arrow and returning long term shareholder value.”

“The Company remains nimble and flexible to new commercial opportunities and will still move forward with additional work in Burkina Faso at the Dassa deposit to bring that towards resource definition and initial drilling at Kordie to verify the presence of high-grade gold” Bresser said.

The Company’s operations are assisted by its management’s experience operating in Africa and exploring for gold, iron and copper.

“The key is knowing how to operate in West Africa and deliver the outcomes that we want to increase the potential for shareholder value creation,” Bresser said.

“Operating effectively in West Africa requires commitment to ESG and maintaining a social licence to operate. For this reason we are pleased to know that WCS and Rio Tinto Simfer are committed to co-develop the rail and port infrastructures in line with internationally recognised environmental, social and governance standards. This rests well with our operating ethos and Company values.”

“Arrow makes certain we’re in constant contact with the government, the communities in which we operate so that we operate smoothly and we’re able to achieve outcomes while benefiting local communities.”

He added that the company was looking toward a future where Arrow would be able to supply DSO green steel quality iron ore per annum into the market.

Buyers are expected to be primarily from China’s smelting market though any iron producer seriously looking at green steel and decarbonization will find the high iron content quality product of significant interest with green hydrogen electric furnaces being considered for Indonesia and Japan.

“We have a significant amount of work to do to reach our aspirational target however I think the key overall for us is that we don’t have a peer in this space – we are an Australian listed emerging West African iron explorer, that is – sitting in the same field as the Rio Tinto’s and the Winning Corporations,” Bresser said.

“We are working toward becoming a serious player in the green steel market space, one that isn’t crowded and is developing as we speak.”

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This article was developed in collaboration with Arrow Minerals (ASX:AMD), a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.