PERTH (miningweekly.com) – Junior iron-ore developer Ferrowest was investigating the funding options for its Yalyirimbi iron project, in the Northern Territory, after securing a 60% shareholding in the project.

Ferrowest on Tuesday reported that it had completed its current payment obligations under the sales and purchase agreement (SPA) with project owner Ngalia Resources.

The ASX-listed junior has issued some 20-million shares to Ngalia and has now completed a A$500 000 cash payment in order to secure its rights to earn a 60% shareholding in the Yalyirimbi project.

To complete the earn-in, Ferrowest would spend a further A$600 000 on exploration and studies to establish an indicated resource.

An inferred resource estimate of 14.1-million tonnes of hematite, at 27.1% iron, has already been classified at the project, and planning was now under way for Ferrowest to complete a diamond drilling programme during the September quarter.

Additional reverse circulation drilling was also planned for a follow-up programme in the fourth quarter, which was aimed at further increasing the resource base.

Ferrowest noted that the remaining payment obligations under the SPA would only occur with key project milestones, including when a Joint Ore Reserves Committee-compliant resource to support some 10-million tonne a year of concentrate product was reported, and at the start of project construction.

A royalty would also be payable to Ngalia once production started.

Ferrowest reported on Tuesday that it had received a number of inquries about the potential for investment funding and product offtake at the Yalyirimbi project, and said that early-stage discussions were under way with several parties.

The company said that it was considering all opportunities to fund the studies and, subject to continued feasibility, to secure the funding necessary to move the project towards production.

Meanwhile, Ferrowest was also working to review the project scoping study with a view to optimising the design and cost estimates.