Arrow Minerals ramps up iron ore drilling in Guinea


by Manny Anton

Manny Anton: Good morning. I'm Manny Anton for Finance News Network and today I'm talking to Arrow Minerals. Arrow has an ASX code of AMD and has a market cap of approximately $40 million. Today we're talking to the company managing director David Flanagan. David, welcome to the network.

David Flanagan: Absolutely great to be here.

Manny Anton: Why don't we start with how about you tell us a little bit about Arrow Minerals, what you've been doing, where you guys are at, and what the plans are?

David Flanagan: So Arrow Minerals have got the Simandou North Iron ore project in Guinea, as you'd expect. It's north of Simandou currently being developed by Winning and Rio Tinto. That is the largest high grade iron ore project being developed in the world. It's a massive project and we've been able to map the geology from those deposits running north onto our ground. We've drilled that. We've proved that we've achieved high grade iron mineralization on our tenements. And right now the company's completed a raising and we're on the ground drilling that right now with the intention of developing a resource and accessing the multi-user railway line and getting up and running and making very good returns for shareholders.

Manny Anton: Okay. And what are the sort of, you said high grade iron ore - what are the sort of grades these guys are using there?

David Flanagan: Yes, so the Simandou iron ore system is something just so special. It's just amazing. So Winning and Rio have 4.6 billion tons at 65%. So you do the maths on that, at today's prices, that's about a trillion dollars Aussie worth of iron ore. It's just amazing. So, we basically have only... In the history of our tenement 400 square kilometers immediately adjoining those deposits, there's only ever been 16 holes drilled. The total 16 holes drilled and sampled and that accounted for 800 meters. So it just scratched the surface.

So on that tenement, there's 40 kilometers strike of this prospective iron formation. And those guys who drilled those holes hit 12 meters at 60% in the formation. So that's confirmed its perspective. And now the job is to go and drill as much of that formation as we can and to excite the market and build a business.

Manny Anton: Simandou has been around for a while, so it's been there. And Rio I think we're sort of coming under a little bit of pressure to do something with it to develop it and it looks like that's now happening. So they've got their Chinese partner. Rio, I think the government was agitating to get them to get a move along and that's happening now, right?

David Flanagan: Why wouldn't you? Guinea is one of the poorest countries in the world. You've got a trillion dollar iron ore asset. Use it or lose it. That's the policy worldwide on resources.
So I think that they're at about 70% complete on that whole project now. So that Rio it turns out is actually a minor partner in the project. That the Chinese government and Winning and other local Guinea businesses comprise the balance of the project. So Rio's got about 20-22%.

And there's a 26 billion investment been made. 26 billion US, so 40 billion Aussie. So the railway line is cleared, it's full length. There's 18 kilometers of double track tunnel being completed.
The port is basically... I don't know how complete the port is, but if you look at it on Google Earth, it looks pretty substantially cleared and they're putting in rail car dumpers and things. So it's all go.
Rio have guided the market that they'll be shipping by the end of 2025, but importantly this is it, right? This is the most important thing. If we just had iron ore out in the middle of bush without access to rail, it's just kind of dirt. Here because our project's 25 Ks from the railway line and it's a multi-user railway line that will be double tracked, so it's not constrained by capacity and the infrastructure is being built and multi-user.

Manny Anton: The government has ensured that it is multi-user?

David Flanagan: Absolutely.

Manny Anton: There should be no...

David Flanagan: No doubt. So as recently as 4th of February they published another decree like reassuring people, it's for third party freight, it's for other mining company freight and that's fantastic.

Manny Anton: Yeah, that's great. I mean, so what's the end game here for you guys? Obviously you're targeting a resource is a natural acquirer of you likely to be a Rio or a Winnings?

David Flanagan: So at the moment the main focus is to get the holes in the ground. We have two rigs in the field and to drill as many holes as we can before the wet season. Wet season's due to start in July and we think we can do 4,000 meters plus of diamond drilling. And then use that and the results from that to be able to articulate to the market during the course of this year, the scale of the project. And then come in and give it another hit at the end of the wet season, say October-November and see what we can find.

Manny Anton: The relationship that you have yourself with the Guinea government, is that on pretty good terms?

David Flanagan: Yeah, look, so I suppose I don't have myself a specific relationship with the Guinea government, but the company does.
So the company's been a great corporate citizen. When we were in country we met a few key people over there, in February. Also in the field we met the local prefecture chair and all the local chiefs in the surrounding villages. Basically they want to see more companies, they want to see more investment.

When you arrive in the airport in Guinea, in the arrivals hall, there's a picture of a mine worker in high vis-kit. So if someone were to go in and increase the GDP there by 10 billion a year, which is feasible with iron ore mining, that's a 50% increase in the national GDP. So there's a lot of optimism, their pro development and I think that there's a good opportunity there for Guinea and companies going in to have a go.

Manny Anton: Okay, great. All right, well look, and just to wrap it up, you did mention you've got some drilling happening.

David Flanagan: Yep.

Manny Anton: When can investors and shareholders expect to hear some news flow on that front?

David Flanagan: Yeah, so we've only really had our first core cut and sent off just in the last week. So I would expect probably results early in the June quarter at the earliest. Yep.

Manny Anton: Okay. And then potential for the results?

David Flanagan: Look, we're not guiding. Like the idea is to sort of have the investors wake up one day and be pleasantly surprised by our results. And I would like to do that again. But yeah, we'll get that out as soon as we can.

Manny Anton: Okay, great. David, thank you for your time today and it was great to have you on the network.

David Flanagan: No, thanks for having me.

Manny Anton: Until next time.


Manny Anton

Sequoia Financial Group
Manny has over 30 years’ experience in financial markets, banking and corporate advisory. He previously worked at UBS, Credit Suisse and RBC, covering equities and equity derivatives, both domestically and internationally, based in London, Hong Kong and Sydney. Manny has also worked with corporates in IR and development in the energy and resources sectors.

Subscribe to our Daily Newsletter?

Would you like to receive our daily news to your inbox?