Apollo Minerals (ASX: AON) has attracted the likes of heavyweight Jindal Steel and Power, India's third largest steel producer, which has agreed to a A$1 million investment giving it a 9.25% stake in Apollo.
Jindal Steel and Power (NSE: JINDALSTEL) is part of the US$12 billion diversified O.P. Jindal Group and is a leading player in the nation’s steel, power, mining, oil and gas, and infrastructure industries with an annual turnover of US$4 billion.
Wholly owned subsidiary Jindal Steel and Power Australia will subscribe for 25 million shares at $0.04 each.
Importantly, the investment by Jindal Steel and Power is part of a greater A$3.6 million capital raising, which Apollo has received firm commitments for.
Apollo plans to use the funds for the exploration and development of its Commonwealth Hill Iron Project, where it is focused on delivering a JORC Resource for the Sequoia prospect to fast-track the development of a medium-scale mining project.
The company has completed its 1,829 metre, 13-hole reverse circulation resource definition drilling program and expects to deliver a resource for Sequoia this month.
Highlighting the high grades being returned from the prospect, around 20% of the mineralised intervals recently drilled have returned a grade of 40% iron or higher.
So far a total of over 3,100 metres across 22 holes has been drilled at Sequoia with high grade results including 66 metres at 38% iron from 18 metres, 24 metres at 42.9% iron from 114 metres and 24 metres at 41% iron from 4 metres.
The majority of this higher grade mineralisation is located at or near the interpreted gravity high which has been modelled down to a depth of over 500 metres.
The recent drilling followed the certification of assays from the December surface sampling program where samples returned up to 62% iron and an average grade of 52.2% iron.
Importantly, heavy liquid separation tests have produced a saleable direct shipping ore product of 58.1% iron at a yield of 73% from a head grade of 47.2% iron.
Sequoia currently has an exploration target of 40 to 80 million tonnes at 25% to 35% iron over a 1.2 kilometre strike length.
New discovery
Indicating the widespread nature of the mineralisation at the Commonwealth Hill Iron Project, Apollo has unearthed a new iron discovery at Sequoia East, 7 kilometres east of the Sequoia prospect.
Iron mineralisation at grades of up to 32% was intersected in two angled reverse circulation holes that were drilled deeper than 80 metres.
This bodes well for the definition of a resource at the Sequoia East prospect.
Infrastructure
The existence of necessary transport infrastructure, such as railways and ports, proximal to the Commonwealth Hill Iron Project means low capital cost options for the project.
Importantly, new competitive port and ship loading services are already operational and connect directly to the rail network that runs alongside the Commonwealth Hill iron ore prospects.
High quality resource
The iron mineralisation at Commonwealth Hill requires a very low strip ratio, is coarse and at surface, all of which improves the economics of the project.
Further upside is the high iron recoveries, high mass yields and the large tonnages that can be produced from the project.
Commonwealth Hill has demonstrated the potential for a very large resource and a long mine life producing direct feed ore and premium pellet feed.
The project is located in a major iron ore province in South Australia that hosts OneSteel’s (ASX: OST) Peculiar Knob mine, WPG Resources’ (ASX: WPG) newly acquired Giffen Well project and IMX Resources’ (ASX: IXR) 7.9 million tonne at 50.5% iron and 0.39% copper Cairn Hill mine.
The area is also home to IronClad Mining’s (ASX: IFE) 263 million tonne Wilcherry Hill mine, which is nearing production.
Comment
The investment from Jindal sends a strong signal as to how well Jindal perceives the upside at the Commonwealth Hill project. We would not be surprised to see further investment.
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