ASX-listed Arrow Minerals has executed a nonbinding term sheet to acquire up to a 60.5% controlling interest in Amalgamated Minerals, a private Singaporean-registered company, which holds a 100% interest in the Simandou North iron project, in Guinea.

Simandou North is an early-stage opportunity that provides Arrow with access to the premium iron belt in West Africa at a time when significant infrastructural improvements are under way, the company states.

Simandou North consists of exploration permit 22967 which lies at the northern end of the Simandou Range and forms an extension of the stratigraphy that hosts one of the largest undeveloped high-grade iron deposits in the world.

Historical exploration work undertaken in the wider area confirmed the continuation of the iron hosting Simandou Group stratigraphy into the Simandou North permit.

Arrow highlights that, importantly, major capital investment is set to deliver shared purpose infrastructure to the area, expected to be completed by December 2024, enabling commercial production from mines in the area by 2025.

This resulted from the signing of a framework agreement on March 25 by the government of Guinea with Rio Tinto and Winning Consortium Simandou (WCS) for a $12-billion investment, which included the construction of a 670 km railway from Beyla to Forécariah and a deep-water port at Moribayah, Forécariah.

China Railway 18th Bureau Group began building the railway line in 2021 under contract from WCS, and the line is planned to traverse through and in close proximity to the Simandou North permit.

The Guinean Mines Minister recently ordered all work to be halted on the development of the Simandou mining and infrastructural project after both Rio and WCS missed an extended deadline to agree on a joint venture (JV).

The framework agreement signed in March guaranteed the State 15% of the Simandou iron product. as well as a free and non-dilutable 15% stake in the railway and port JV.

The Guinean mining laws mandate the Guinean State retains a 15% stake in these two mining operations, however, Rio and WCS are seeking clarity over the State’s stake in the infrastructure component of Simandou – a rail and port development.

The Guinean government has stated the Simandou iron project would be developed.

“The emergence of a combined commitment between government and industry opens the way for Arrow to potentially establish itself as a major West African mining company.

“Simandou North allows Arrow to participate in the development of an area where, until now, mineral wealth has been locked up due to infrastructural constraints, the company acclaims.

Any acquisition of an interest in Amalgamated will not affect the company’s proposed exploration activities on its projects in Burkina Faso.

Arrow has also announced the divestment of its non-core Strickland copper/gold project for $600 000.

These funds will be used to advance these projects.

Moreover, the company intends to undertake a placement to sophisticated and professional investors to raise about $350 000 (before costs), for the purposes of providing further funds towards the company’s Burkina Faso projects as well as for general working capital purposes, including funding the company’s due diligence investigations in relation to Amalgamated.